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In August, the REcolorado MLS board voted to allow the commingling of listings on broker sites. Zillow recently voiced its support in an Inman oped to allow commingling nationwide.
Let brokers display all the homes for sale
Homebuyers want to see all their housing options in one place. Brokerages want to be the go-to resource for real estate services. This is why Redfin is joining with other industry leaders to support efforts to allow brokerages to display all the homes for sale in a customer’s home search result.
Unfortunately, in many markets, we can’t offer this search experience due to MLS rules banning “commingling” of listings from the MLS with listings from non-MLS sources, such as for-sale-by-owner listings.
Where MLSs ban commingling, brokerage websites either can’t display non-MLS listings or must hide this inventory behind filters and log-in walls.
How to ensure the integrity of a listing
Rules against commingling are a relic from the industry’s anti-competitive past. The basic premise of a brokerage website is that a visitor gets a comprehensive view of the real estate market. Sometimes that means mixing data from different sources, it doesn’t mean building walls.
We can address questions about the integrity of a listing with the measures we already have for clearly labeling each MLS-sourced listing without preventing buyers from knowing about every home for sale.
4 out of top 10 MLSs prohibit commingling
Current NAR policy gives each MLS the right to choose whether or not to allow commingling. Most MLSs have decided to allow it; but 4 out of the top 10 and 8 of the top 25 MLSs (by member count) prohibit commingling. This can have an adverse effect on the broader market.
For example, a search for homes in Denver could show listings from up to seven MLSs, including REcolorado. The broker will follow the most restrictive set of guidelines, like those that prohibit commingling or risk being out of compliance on some of those listings.
This creates an inefficient patchwork of rules across the country, resulting in an inconsistent consumer search experience. Redfin has 14 search markets like this where commingling restrictions put non-MLS for-sale properties behind a filter — increasing the likelihood that they’ll go undiscovered by a prospective buyer.
In August, there were over 10,000 homes for sale that buyers couldn’t easily find on Redfin because of outdated MLS policies. As of last week 12 percent of all listings in Ohio are behind a filter and 10 percent in South Carolina.
Homesellers are the source of all listings
Some of the comments in response to Zillow’s op-ed argue that “the public has a right to know whether they are buying through a licensee where they have protections.”
The consistency of our representation should extend past the source of the listing itself. It doesn’t matter how the house comes to market; we can trust agents to handle conversations with their clients about the nuances of purchasing a home that is not listed in the MLS.
Prohibiting commingling is an answer to a problem that doesn’t exist. If commingling were a true problem, we’d expect to see less robust MLS marketplaces in areas that allow commingling today, but that’s not the case.
Protecting the sanctity of MLS-listed properties by segregating the balance of housing inventory supports a fragmented marketplace.
Realtors, this is ‘Who We R’
This is my first year on the NAR Board of Directors and we’ve talked quite a bit about “The Realtor Difference,” including how “Realtors adhere to a standard that requires equal professional service because all properties should be open and feel welcome to all.”
NAR’s national advertising campaign includes four heartwarming 30-second spots that articulate that difference. My favorite ad is called “The Search” because it perfectly captures a “this-is-the-one” moment. As agents, we’ve all experienced those moments with our clients.
These ads pull at your heartstrings because they translate “property search” into what it really is — our mission to help clients find home. Not “find your MLS-listed, non-filtered home.”
Who loses in a fragmented market?
Showing all of the listings for sale in a neighborhood is an important change our industry could make to provide equal access to housing. This is one of the reasons Redfin supported the “Clear Cooperation Policy,” requiring brokerages to share listings broadly.
Maybe the stakes aren’t as high with commingling restrictions when compared to pocket listings, because at least the inventory exists hidden behind a filter, but making sure everyone can see all the homes for sale is the foundational responsibility of our industry.
A growing number of exclusive, pocket and segregated listings results in a fragmented marketplace and has a negative impact on housing equality.
What comes next?
This was a hot topic at the recent NARNXT conference, and I’m sure it will continue to be heading into 2023 and NAR Legislative meetings in May. As industry leaders gather to discuss the future of the industry, it’s my hope that we can take action on this important issue by supporting any recommendation to NAR to remove the option to prohibit commingling and follow REcolorado’s lead at the MLS level to show our customers all the listings.
Editorial note: The data sourced in this article is from internal reports, and estimates from Redfin. Unreported listings and sales data is an ongoing issue for consumers, agents and MLSs.
Joe Rath brings significant industry experience as a Realtor, state broker and regional director at Redfin. Connect with him on LinkedIn.