The two pillars of the MLS are (A) cooperation and (B) compensation.
The two pillars are merged in the Cooperating Broker Agreement.
Lawsuits filed over and over on this subject have been met by the argument that networking (the flow of information made possible by the MLS in its role to create a market), and the compensation mechanism (created by the cooperating broker agreement) together created the marketplace where goods were exchanged.
Under the new (pending appeal) jury decision of a Missouri court the two (cooperation and compensation) are under attack. The November 2023 jury found the NAR and several large agencies were liable for $1.7B owed consumers.
At the heart of the many anti-trust suits filed in multiple states is the argument that the cooperating broker agreement artificially increases prices to consumers.
Edward Zorn, is VP and general counsel of California Regional MLS. Zorn believes the case tried in Missouri and pending in several other states will end in a settlement where the compensation paradigm we have all come to know will shift … in order to reach a settlement with the Department of Justice.
Over the next few years while this change in thinking takes place, Zorn says, the MLS and our industry will survive. He argues we need to look carefully at a compensation model
Zorn also manages his own real estate agency. His solution, as yet untested by the courts is simple. His buyers sign a buyer representation agreement before he starts showing them properties and then when they make an offer on a property, there’s a provision in the contract that says the seller will pay his compensation at closing and that the amount is a negotiable term between the buyer and the seller.