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As more agents and brokers chafe under the requirement that they become Realtors in order to access multiple listing services, local Realtor associations stand to make more money at the expense of their state and national counterparts by offering a non-Realtor MLS option.
A little over a week ago, a months-long battle between the National Association of Realtors and Phoenix Realtors concluded with the latter agreeing to update its MLS Choice offering, which does not require Realtor membership, with a new name: “non-member MLS access.”
Subscribers to Phoenix Realtors’ non-member MLS access pay $249 per year, which is $114 more than an annual membership to Phoenix Realtors: $135. Therefore, Phoenix Realtors stands to make 84 percent more in revenue per agent or broker making the switch to non-member MLS access.
“Let’s assume about 95 percent of the 10,000 PAR members are on the legacy plan, paying $135/yr. Which is around $1.3M/ yr,” wrote real estate consultant Greg Robertson on his Vendor Alley blog last week.
“If they get 50 percent to switch to ‘Non-member access’ plan, then their annual revenue will jump to 1.8M/yr. An increase of $500K! That’s almost a 40 percent increase in revenue.”
Robertson and fellow consultant and blogger Rob Hahn first pointed out the potential revenue jump through this option on their Industry Relations podcast last week.
“We’ve all been worried about how associations would survive without revenue from the MLS. And it turns out the answer is to offer a membership plan that doesn’t include State or National membership!” Robertson wrote.
Why agents and brokers would switch has to do with a controversial NAR policy known as the three-way agreement, which requires agents and brokers to join Realtor associations at all three levels — local, state, and national — if they want to be Realtors.
Because of NAR’s three-way agreement, agents and brokers who are also Realtors pay a total of $466 in member dues:
- Phoenix Realtors: $135
- Arizona Association of Realtors: $175
- National Association of Realtors: $156
That figure goes up to $511 when NAR’s $45 assessment to pay for its consumer ad campaign is added.
Therefore, an agent or broker who chooses non-member MLS access would end up paying $262 less compared to Realtor members.
“That’s real money,” Robertson wrote.
Both members and non-members would also pay $468 per year to the Arizona Regional MLS (ARMLS).
Andy Fegley | Credit: LinkedIn
Asked about the blog post’s assertion that Phoenix Realtors stands to make more in revenue by promoting its non-member MLS option, Phoenix Realtors CEO Andy Fegley told Inman, “It wouldn’t be appropriate for us to comment on the conclusions drawn in third-party content.”
According to Fegley, Phoenix Realtors currently has more than 10,000 members and has “received substantial interest from brokers in the non-member MLS access subscription option, though it is too early to provide specifics around subscriber count.”
Under the non-member MLS access option, subscribers get access to state-compliant transaction forms, though not those created by the Arizona Association of Realtors; free continuing education classes; FastStats market data reports that are also available to the public; Supra lockbox access; and Listing Media Services photography and image services.
Such subscribers do not get legal aid or access to local business discounts as they would have under the previous MLS Choice option (see below).
Phoenix Realtors’ MLS Choice benefits comparison
“There is no fundamental difference between MLS Choice and non-member MLS access — This is the same offering, only the name has been changed to eliminate confusion,” Fegley told Inman.
“Most importantly, the new name makes clear that licensees who purchase this subscription option are not Realtors, cannot use the Realtor mark, and do not belong to local, state or national Realtor associations or have access to the many benefits of Realtor membership.”
Phoenix Realtors has offered an MLS-only option since 1994, when NAR eliminated the requirement that participants in Realtor-association MLSs must be Realtor association members, allowing MLSs to choose whether or not non-Realtors could subscribe to their platforms.
It is unclear, however, how many of the above benefits came with that and how much that option cost. Phoenix Realtors declined to comment when asked.
One factor that may impact how many agents and brokers switch to the non-member MLS access option is that both Phoenix Realtors and ARMLS must continue to follow NAR rules and require subscribers to follow NAR rules.
This means that agents cannot choose for themselves whether or not to be Realtors other than in their choice of brokerage. Under NAR rules, brokers — also known as “principals” — decide whether or not they and their agents will be Realtors.
If brokers choose to be Realtors, then dues must be paid for all of their agents under NAR’s “fair share” dues formula — a rule that at least one antitrust lawsuit has challenged. If brokers choose not to be Realtors, none of the licensees in their firm may hold Realtor membership.
Editor’s note: This story has been updated to note that Phoenix Realtors declined to comment when asked which benefits were included in its previous MLS-only option and how much it cost.
