Broker sees uncertain future for MLSs and associations 

Preparing for industry rule changes won't end when the NAR deadline hits on August 17. Brokerage owners and team leads also will have to navigate the increasingly complex MLS system, as well as regional and national association memberships, as the industry resets its approach to cooperative compensation. 

Adam Conrad, broker-owner of Pennsylvania-based Perry Wellington and board member of Bright MLS, believes that the value of MLS membership to working agents will change dramatically in the coming months. And the onus is on MLSs to provide that value, Conrad believes.

Associations are facing similar questions. And with crafting new forms in particular, will the industry continue to look toward associations for leadership, or is there opportunity for others to step up to the plate with options?

Smaller MLSs will likely lose members

Conrad's brokerage is a member of seven different MLSs — one fewer than a year ago, when Real Estate News spoke to him last, as the Mifflin Juniata County Association of Realtors has since dissolved, he said. Conrad has to subscribe to so many organizations because some individual counties in his territory have their own MLS.

"The reason I joined [a small local MLS] in January is so that I would be guaranteed cooperative compensation," he explained. "And then the settlement comes out and basically no longer guarantees that. There's going to be a point at which it doesn't make sense to belong."

However, Conrad suspects MLS participation will still be necessary in the short term for agents, but also predicts membership in the smaller, regional MLSs will drop "not by a small amount" in the coming years. A couple of issues holding up progress among MLSs, Conrad believes, are association executives who are focused solely on self-preservation and some brokerages who utilize small MLSs to "protect their turf" by only guaranteeing cooperative compensation through MLS membership, he said. 

"This is an NAR problem, in my opinion — the NAR has allowed these guys to operate this way and put up these walls and barriers and play this silly little fiefdom game and has put us in the position where we're so fractured," Conrad explained. 

Is there still value in association membership?

Conrad also questions the value of local and national association membership, particularly NAR. And Conrad isn't alone. In a livestream immediately following the NAR settlement in March, eXp's now-CEO Leo Pareja said that the most common question he received over the weekend that followed was whether or not agents could leave NAR. 

"I call it the union, because we have to belong to NAR. And if you don't belong to the union, you're not able to operate," Conrad said, adding that he and his agents are also in a similar quagmire with the Pennsylvania Association of Realtors (PAR).

Even if he were to leave PAR, the cost to license its standardized forms would be roughly equivalent to membership, Conrad explained. "Without standardized forms, you can't break away from the union." 

Standardized forms could 'change the game' 

Post-settlement forms for both buyer and listing agent agreements have been under increasing scrutiny in recent weeks as consumer watchdog groups and the Department of Justice review what the industry has produced — and it's likely these forms will continue to evolve and change even after the August 17 deadline. 

"If somebody had a standardized set of forms for agents we could go to, you could change the whole game. Because if agents had a choice not to belong to NAR, they wouldn't belong — they don't perceive any value whatsoever," Conrad said, adding that he's surprised a company like Lone Wolf Technologies or its competitors hasn't stepped up to the plate. "They probably don't want to tick off NAR," he speculates.

In recent weeks, eXp has earned praise from the Consumer Federation of America for its simple, two-page buyer agreement which the consumer watchdog group described as "fundamentally pro-consumer." CFA senior fellow Stephen Brobeck told Real Estate News that he hopes to see more "market competition" on forms, particularly as "associations are where the blockage has occurred."

However, a complete free-for-all with forms would be challenging and likely not in a consumer's best interest, Conrad believes, especially for buyers and sellers who are trying to move quickly. 

"The Real Estate Licensing and Registration Act in Pennsylvania says it just has to be a written document, but practice-wise, agents are going to look at the contract and go like, 'Wow, that's not a standardized agreement. You're going to have to go to an attorney to interpret it, because I don't know how to help you with that.'"