It’s no surprise that the National Association of Realtors (NAR) is the authority in residential real estate. NAR and MLS control the industry — enforcing ethics, policy, professional standards and more. Even though anti-NAR sentiment is high, NAR has provided a critical structure for the industry that otherwise would be under government control or in complete disarray.
In reality, we desperately need NAR, and that’s exactly the problem.
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NAR’s CEO Nykia Wright recently announced the organization’s new strategic plan, which is dedicated to upgrading legacy systems and providing better tools for agents in an attempt to “outrun irrelevance.” However, unless NAR and MLS foster a true technological ecosystem under their umbrella, innovation will continue to happen around them — posing a serious threat to their influence and long-term relevance.
Technology is no longer a nicety, but a necessity. The companies that can’t figure it out will eventually fade away. Nobody wants to be the next Blockbuster — an iconic brand that lost to Netflix by failing to reinvent itself. With AI accelerating innovation, not innovating is no longer optional — except for NAR and MLS. They face no competition pushing them to improve.
I personally feel these frustrations because my brokerage has spent years developing an incredible all-in-one system. But when it comes to commercializing it for the industry, NAR and MLS make it so complicated and expensive that it’s almost impossible.
It makes you wonder: How many amazing technology products have met the same fate? The way NAR and MLS maintain power is inherently stifling technological innovation — and the agents and brokers they claim to serve are the ones paying the price.
The MLS mess
In another article, I called for the need to consolidate Realtor associations and MLSs at the state level. That piece outlined the history of how local associations and MLSs gained their stranglehold on real estate data, and the inefficiencies that followed. Local MLSs made sense before the internet; today, the fragmentation is a major drag on the industry.
The pain point agents feel the most is the MLS technology itself. Name a system — Matrix, Flexmls, Paragon — they all feel more like Windows 95 than modern software. Agents depend on tools that are outdated and confusing, while consumers flock to friendlier platforms like Zillow. The front-end interface that agents experience is awful, but the back end of MLS data is a nightmare for technology companies.
Some MLSs outsource APIs to vendors like Bridge Interactive (owned by Zillow) or Trestle by Cotality (formerly CoreLogic), but many do not. MLS Grid has a vision of unifying MLS feeds into one API and compliance policy, but they currently only have 32 MLSs on board.
There is no unified or standardized way to aggregate MLS data, resulting in no easy way for a broker or vendor to access it. Although the industry has been inching toward RESO standards to structure the data, it’s still not solving the problem of the fragmentation across the nation.
Software vendors must build partnerships with hundreds of individual MLSs. Each relationship requires time, money and endless compliance. On top of that, data can only be used for IDX, VOW or back-office tools — meaning entire categories of potential innovation are blocked from the start.
Every MLS has unique compliance rules — status definitions, listing limits, even footer wording. To stay consistent across markets, vendors often default to the most restrictive standards. After months of integration, they still face audits, legal reviews and constant monitoring — all multiplied by hundreds of MLSs.
Building a platform based on MLS data is so treacherous that many companies simply don’t try. If you’re underwhelmed by your IDX options available, now you know why. Consolidation would change everything. Agents could join one MLS for their entire state.
If each state had one MLS, vendors would face 50 partnerships and data feeds, not over 500. The cost and complexity of creating real estate technology would plummet, and innovation could finally flourish.
Forms: The golden handcuffs
If there’s one reason agents cling to Realtor membership, it’s access to standardized contracts and forms. These documents are the golden handcuffs that make leaving the association nearly impossible.
Realtor forms reduce legal costs and are practically a requirement in most residential sales. Forms are central to every transaction, and for many agents, the least favorite part of the job. How painful the process is depends largely on the software they’re forced to use.
The catch is, they are copyrighted by associations, and non-members cannot legally use or distribute them. Associations enforce these rights aggressively. A prominent example is when the California Association of Realtors sued PDFfiller for $136 million for using their forms without a license.
If a new software platform wanted to offer e-signing with Realtor forms, it would be required to strike expensive licensing deals with every state association, each with its own costs and compliance requirements. These astronomical costs create a massive barrier for startups, locking out competition from the start.
Associations also pick winners and losers by striking deals with the leading e-sign providers. Associations bolster some software companies, while making it hard for new platforms to gain traction.
A prime example is NAR’s exclusive partnership with DocuSign. It doesn’t prevent agents from using other platforms, but it prevents NAR from promoting or offering member benefits for other platforms. However, reducing member offerings to one exclusive partnership is not a “benefit.”
To allow more innovation, NAR should mandate the guidelines on how state associations license their forms. The cost and compliance should become standardized, and the financial barrier to entry should be lowered. It’s the only way to push innovation further and simplify some of the most tedious aspects of being a Realtor.
The wrap-up
NAR and MLS must confront a hard truth: They are a primary reason the industry lags in technology. The ability to access property data and draft forms is arguably the two most important needs of real estate agents. Competition is the reason all companies innovate, and without encouraging competition, real estate technology will always fall short.
The power and control NAR and MLS experience from their licensing blockade have been passed down to a handful of technology companies. It probably wasn’t intentional, but rather the outcome of a gigantic, convoluted system. Either way, every Realtor is being harmed by the hindrance of technological development.
Imagine the innovation we’d see if NAR and MLS weren’t holding technology back. Agents don’t want clunky, fragmented systems; they want tools that make life easier. So if you’re frustrated by the limited technology options in front of you, now you know where to point the finger.
It’s not your broker or vendor’s fault. All these years, NAR and the MLS have been pulling the strings on what shows up on your screen.
Worst of all? As technology advances exponentially fast, the industry keeps falling further behind. One day, disruption might catch up to us all — and real estate will face its Netflix moment.
