Pennsylvania broker-owner: Small MLS ‘fiefdoms’ hurt agents and clients 

If having to join two or three MLSs to do business in your territory feels cumbersome, imagine being in seven different MLSs. That's the case for Adam Conrad, broker-owner of Perry Wellington Realty in central Pennsylvania.

Conrad, who manages about 125 agents, spoke to Real Estate News about how being involved in so many MLSs affects agents, brokerages — and clients. 

"Having to belong to all these little local MLSs harms our ability to get agent attention on the property," he said. "Without access to information, you're setting your buyers up at a disadvantage because there's this little fiefdom out there that's keeping the data locked up and away from the other agents [who aren't subscribers]."

At one point, Conrad said, he had to join nine different MLSs. In recent years, however, two merged with Bright MLS — a mega-MLS with more than 100,000 subscribers across the Mid-Atlantic — where Conrad serves on the board. Some of the smaller MLSs only serve a single county. Some are volunteer-run. Conrad said these smaller MLSs don't always show up for agents who need immediate assistance.  

Territoriality can hamper deals, affect compensation

Small, "archaic" MLSs — or "fiefdoms" as he refers to them — foster an anti-competitive business environment for non-member agents, Conrad said. He cited an instance where one of his agents, who had a buyer client, tried to reach out to a listing agent who belonged to a small MLS where Conrad's agent wasn't a subscriber. The listing agent suggested Conrad's agent just pass the client lead along to them.

"It creates a situation where agents are trying to double-end their own deals or keep them in house. If they don't cooperate with people outside of that little zone, then that's a huge problem," he explained.

Compensation can also be an issue. Conrad said some MLSs have rules that restrict a listing agent from compensating a buyer agent who isn't a subscriber.

"If you don't belong to that local MLS then there's no guarantee of compensation. Not to say that people don't cooperate, but they can play games," he said.

Ultimately, the challenges presented by being involved with so many MLSs can detract from the consumer experience, Conrad believes. "It doesn't serve the consumer in any way, shape or form," he explained.

Consolidation — an ongoing trend — can reduce headaches

The number of MLSs, generally speaking, is trending downward. According to real estate consultancy T3 Sixty, between the end of 2019 and the end of 2022, the number of MLSs dropped 7.6% to 522, while the average MLS subscriber count grew nearly 30%. (Note: T3 Sixty and Real Estate News share a founder, Stefan Swanepoel.)

Rene Galicia, executive vice president of customer advocacy for Bright MLS, said consolidation is likely to continue. Bright MLS is composed of 42 smaller, "shareholder" MLS organizations.

"MLSs are seeing that we're better together and we can benefit from each other's initiatives, technology, and resources," he explained.

Further consolidations — of entire MLS operations or just databases and product support — should help reduce the complications and headaches for agents and their brokers, Galicia said.

But consolidation is not the only option.

"We're certainly open to sharing data with anyone without a need for consolidation and that alone would solve some of those pain points," Galicia said.