For a century, the residential real estate business in the U.S. has been built on multiple listing services run by local Realtor associations or Realtor-affiliated brokerages.
Want to join the MLS? In most markets, in addition to your real estate license, you’re going to have to join your local Realtor association, your state Realtor association and the National Association of Realtors.
There are some prominent exceptions — Northwest MLS, serving Seattle, is not Realtor-affiliated. But even some independent MLSs require Realtor membership.
Over the years, NAR has helped many MLSs fight lawsuits challenging their right to require that members be Realtors. Although the issue has never reached the U.S. Supreme Court, the 1st, 5th, 6th and 7th federal circuit courts of appeals have all sided with NAR on the issue.
“NAR believes that limiting MLS access to Realtors is legitimate and lawful, and that litigation challenging the MLS membership access rule can be successfully defended,” the trade group says in summarizing decades of court battles. “The outcome of litigation is always uncertain, however, and the particular facts involved may make success more or less likely. NAR has provided and will continue to provide assistance in a variety of ways … to associations and MLSs who face such litigation.”
The four states where MLSs cannot legally require that members be Realtors are California, Florida, Georgia and Alabama.
California courts determined in the 1970s that the state’s antitrust laws prohibit MLSs from restricting MLS access to Realtors.
Florida, Georgia and Alabama are all under the jurisdiction of the only Federal Circuit Court of Appeals to side against NAR on the issue — the 11th.
It was “a considerable surprise” to NAR in 1991 when the 11th Federal Circuit Court of Appeals held that if an MLS has “market power,” it’s violating federal antitrust law if it restricts MLS access to Realtor association members without a “countervailing pro-competitive justification.”
NAR has drawn up guidelines for MLSs that must, or want to, admit nonmembers. NAR says it’s OK for MLSs to charge nonmembers higher fees to make up for the portion of association dues earmarked for operation of the MLS, for example. NAR also notes that MLSs may also be able to successfully argue that they are not required to provide “conveniences” to non-Realtor members, like comparable sales data reports or access to the lock box system.
Realtor associations “often fear a substantial drop in membership if membership is no longer required as a condition of MLS access,” NAR says, but “it appears that those fears are without foundation. Most associations that have either voluntarily or involuntarily eliminated the requirement of association membership for MLS participation have experienced little or no substantial impact on membership.” Source: realtor.org.