The Gradual Dismantling of Real Estate's Central Marketplace

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Date:

15 Apr 2025

For over a century, the Multiple Listing Service (MLS) has served as the backbone of residential real estate transactions in America. Now, that foundation is showing signs of stress as multiple forces—from technology platforms to policy changes to the strategies of large brokerages—challenge this long-established centralized system.

Courtney Poulos, founder of ACME Real Estate and a keen observer of industry trends, offers a stark prediction: “The actual impact of [clear cooperation] is going to be the elimination of the MLS. It will go away because it has such large loopholes that large brokerages and portals can exploit their own off-market portals that MLS no longer is seen as necessary.”

Evolution and Disruption

The MLS began modestly in 1885 when real estate brokers gathered to share information about their property listings. This collaborative approach evolved into today’s network of regional databases where member agents share listings and agree to compensate other brokers who help sell those properties.

The internet fundamentally altered this dynamic by democratizing access to property information. “For a long time, there had been talk in our industry of a nationwide real estate platform that people could search, probably since the invention of the internet,” notes Poulos.

That vision materialized through platforms like Zillow, Redfin, and Homes.com, (notably not Realtor.com which was once owned by NAR but was sold off to private investors in 2014) which created consumer-friendly search interfaces aggregating MLS listing data. These platforms have gained substantial market power, with Zillow alone reporting 236 million average monthly unique users in Q2 2023.

Policy Backfire

The National Association of Realtors’ Clear Cooperation Policy, implemented in 2020, required brokers to submit listings to the MLS within one business day of marketing a property to the public. While intended to protect the cooperative nature of the MLS, Poulos argues it had the opposite effect by creating a significant loophole: the “office exclusive” exemption.

“For some reason, it became one broker for the entire state, and then every agent registered with that brokerage in the entire state could have access to the off-market listings,” Poulos explains. “This created a huge imbalance for big brokerages versus small brokerages.”

The consequences are tangible for industry professionals. “It keeps closed sales off of our MLS. When we’re pulling comp data or any kind of data, we have to go to actual title records to ensure we’re getting comprehensive information,” says Poulos.

Commission Structure Changes

The recent settlement of antitrust lawsuits against NAR has further destabilized the traditional model by eliminating the requirement that sellers offer compensation to buyers’ agents through the MLS. This change alters the cooperative financial structure that has underpinned the system for generations.

Surprisingly, Poulos sees potential benefits in this shift: “Eliminating that pre-negotiated buyer agency fee allows the buyer agent to establish their value in a hierarchical way, based on experience and what they believe their expertise is worth.”

Early market indicators are reassuring. “I think there were positive outcomes. By and large, if you look at how it’s impacted sales, there hasn’t been a huge decline in commissions,” Poulos notes, “though these large protocol shifts have largely come as a result of the policy.”

Emerging Pay-to-Play Model

As the MLS system’s centrality diminishes, Poulos identifies an emerging alternative: pay-to-play listing platforms.

“If big brokerages start to leave the NAR so they can do what they want within the law, then companies like Redfin and Zillow could end up being pay-to-play for agencies,” she predicts. But for now, the industry has been rocked by Zillow, and Redfin following, have announced that if a listing has been marketed “off market,” it will be banned from their portals. Since currently Zillow and Redfin utilize MLS listings for their portals to function, this seems like a short-term hedge.

This transition is already underway, with differential pricing structures appearing. “The way Homes.com charges agents is by their volume… What I see is that Zillow, Redfin, and Homes.com, could end up being pay-to-play for agents,” explains Poulos.

Such a model would fundamentally alter property marketing. Rather than the cooperative system where all MLS listings receive equal exposure, marketing power would increasingly correlate with financial resources.

NAR’s Declining Influence

The National Association of Realtors, despite its approximately 1.5 million members, appears to be losing its industry-shaping power. Poulos doesn’t mince words: “NAR has always positioned itself as a major lobbyist for home ownership and agent interests. I don’t think they’ve been effective.”

As NAR’s membership and influence potentially wane, the organization faces questions about its future role. Without the binding power of the MLS and mandatory compensation rules, the value proposition for membership becomes less clear for many agents and brokerages.

Industry Adaptation

For agents and brokerages, adaptation will be crucial. “We are at a critical crossroads. With Zillow, Redfin, NAR and big brokerages playing chess at a national level, we all need to be prepared for big changes,” suggests Poulos.

The core functions the MLS has historically served—aggregating inventory, facilitating cooperation, and creating market efficiency—remain essential to real estate transactions. What’s changing is how and where these functions are performed.

Poulos advocates for structural reform to preserve equity in the marketplace: “Either Clear Cooperation needs to be thrown out completely, or they need to apply it equally, which means get rid of office exclusives exemption, and make Compass and every other big brokerage put their private off-markets or office exclusives into the MLS.”

As the industry navigates this period of significant transition, professionals who understand and adapt to the redistributed landscape of property marketing will be positioned to thrive. The real estate marketplace isn’t disappearing—it’s evolving into a more diverse ecosystem of platforms, networks, and business models that may ultimately create new opportunities for innovation and service.