Brokers Should Audit Their MLS

2014 may well be the year of the broker, or as they are referred to in MLS speak, the year of the Participant. If your MLS has adopted the National Association of REALTORS® template for MLS Rules and Regulations, you will find that brokers are Participants and agents are Subscribers. As a Participant in the MLS, you accept responsibility to adhere to MLS rules and regulations. The MLS does a pretty good job of enforcing those rules. But who among you is making sure that the MLS is not running afoul?

WAV Group MLS clients are traditionally the largest MLSs in the nation. If the MLS has a member count of less than 2000, it is unlikely that WAV Group has ever facilitated a strategic plan for your MLS. From this perspective, WAV Group has learned that large MLSs rarely run afoul of staying current. The place to spend time auditing your MLS is the small MLS. These MLSs are unlikely to attend NAR's National or Mid-year meetings where MLS policy evolves. They rely on NAR emails to stay current. Moreover, the MLS board of directors is also unlikely to stay current with MLS policy, which erodes their appreciation and ability to make informed policy decisions. Beyond NAR, there is also the Council of MLS or CMLS. This is the industry trade group for MLS executives that has regular meetings to discuss best practices of operating an MLS. Ask your MLS if they attend these meetings.

The goal of this post is not to pick on small MLSs. The reality is that they do not have the resources to participate in all of these things. Where WAV Group discovers small MLSs that have fallen behind is when we audit large brokers for rules compliance. Large brokers proactively engage in an audit each year to make sure that all of their systems are in compliance with local rules and regulations. This process is as much a vendor audit as it is a broker audit. MLSs often change rules and the broker or vendor miss the memo on the rules change. Alternatively, the NAR rules change and the MLS does not revise their rules to keep current. Either way, the broker is out of compliance, and is liable for fines and other disciplinary action.