The largest multiple listing service in Colorado has become the first to rescind a controversial rule that previously prohibited brokers from displaying MLS listings with non-MLS listings.
REcolorado, which has nearly 28,000 subscribers and is owned by seven Realtor associations, has had the rule in place since about 2003 when the MLS — then called Metrolist— began offering Internet Data Exchange (IDX) listing feeds allowing its broker subscribers and their agents to display pooled MLS listings on their websites.
The rule, Section 18.3.11 of the National Association of Realtors’ Handbook on Multiple Listing Policy, reads: “Listings obtained through IDX feeds from Realtor Association MLSs where the MLS participant holds participatory rights must be displayed separately from listings obtained from other sources.” The rule, also known as the no-commingling rule, is no longer in effect at REcolorado as of Aug. 13.
While some NAR MLS policies are mandatory, the no-commingling rule has always been optional. Some Realtor-affiliated MLSs have chosen to adopt it while others have not.
It is REcolorado’s understanding that it is the first MLS to eliminate the rule after adopting it, according to Leesa Baker, REcolorado’s vice president and chief care and compliance officer.
“At the time MLS organizations began offering IDX, this optional NAR rule was a standard practice,” Baker told Inman via email.
“We’re taking a hard look at all of our rules to make certain they are not only current with today’s technology, but also pro-consumer, pro-competitive, and support transparency into the full marketplace,” she added.
According to Baker, REcolorado removed the rule after nearly two decades because of a shift in how the MLS and brokers are looking at real estate and a change in the role of the consumer.
“Collaboration between brokers/agents and the consumers means easy access to the most complete information available,” she said. “To enhance the role of the broker/agent complete data is the key.”
The no-commingling rule is the subject of a lawsuit discount brokerage REX Real Estate filed against NAR and Zillow in March 2021. The suit alleged antitrust violations, because the NAR rule prompted Zillow to separate non-MLS listings from MLS listings on its website including listings from REX, allegedly leading to less traffic for REX listings. The suit does not name any MLSs as defendants.
Baker said REcolorado had decided to rescind the “outdated” rule independently.
“REcolorado is dedicated to and passionate about creating a transparent, pro-consumer marketplace that empowers brokers of all sizes with robust data,” said Gene Millman, president and CEO of REcolorado, in a statement.
“The MLS makes the market work. To accelerate the advancement of our industry it is critical for us to embrace a forward-thinking mindset that streamlines access to all available data in the market for brokers and consumers.”
REX did not respond to multiple requests for comment, but Zillow applauded REcolorado’s decision.
“We believe this is a step forward in enabling homeshoppers to have a better search experience, with different types of for sale properties easily accessible in one place,” a Zillow spokesperson told Inman in an emailed statement.
“If changes like this are implemented nationally, buyers will have more options and sellers will receive better exposure — all leading to a more transparent market. Zillow strongly supports updating policies like these because they empower consumers with a more easily accessible picture of what is on the market.”
Brokers and their agents are still required to display listings from REcolorado with certain fields including listing broker attribution and an IDX logo that distinguishes MLS listings from non-MLS listings, according to REcolorado. The MLS provided an example of what this looks like:
Baker said REcolorado’s Rules and Regulations Committee had begun discussing the elimination of the no-commingling rule in early 2021, and the MLS’s board of directors approved the change last month. The committee has 20 members, all of whom are broker, agent or appraiser subscribers.
“Through IDX websites, you can now find more listings — and be aware of properties that are not currently in the MLS,” REcolorado told its subscribers in a blog post about the change.
“You can also potentially increase your business by marketing your services to off-MLS sellers.”
REcolorado is proactively updating its policies to increase transparency, ensure accuracy and provide access to the full market, according to the company.
For instance, earlier this year REcolorado created the Closed Off MLS property type, allowing agents to comply with NAR’s Clear Cooperation Policy while also entering listings into the MLS system that were not exposed to the market before being sold, the company added. The Clear Cooperation Policy requires listing brokers to submit a listing to their MLS within one business day of marketing a property to the public to curb pocket listings.
REcolorado subscribers can also choose to include Closed Off MLS listings in their productivity reports, according to the company.
“As a business partner with Colorado real estate professionals, we understand how important property data is to their businesses and to their success serving consumers,” Millman said.
“We are thinking differently about the value the MLS provides and can continue to offer in the future. The MLS is more than just rules and the books. With data as our foundation, REcolorado is building on our strengths and providing data-driven solutions for our subscribers.”