John Breault has been vice president of MLS & Member Services for the Rhode Island Association of Realtors since 2018. He recently responded to news regarding the impact of a $418 million settlement stemming from a set of landmark antitrust lawsuits, which still must be approved by a judge, including rules regarding multiple listing services. Breault also belongs to the board of the Real Estate Standards Organization, joining the nonprofit in 2021.
PBN: What is the MLS system that real estate agents use, and how does it operate?
BREAULT: The Multiple Listing Service, or MLS, is a subscription service that enables real estate professionals to exchange information about their listings. It acts as a conduit to feed that information out to hundreds of third-party websites such as RILiving.com and Realtor.com so buyers can see the same property information on all properties for sale by real estate brokerages on a variety of different sites.
PBN: How does the MLS system bring value to the Rhode Island real estate marketplace?
BREAULT: Unlike community-based services such as Craigslist or Facebook Marketplace, MLS is a subscription-based service that requires its customers to adhere to certain usage guidelines. These rules provide quality control to make sure that the information entered into the MLS system is timely and reliable. Without rules to regulate interactions in the marketplace, consumers are unprotected from unethical practices that could harm them financially.
PBN: As part of the recently proposed settlement reached by the National Association of Realtors, there is an agreement to prohibit agents’ compensation from being included on listings placed on multiple listing services. What’s your point of view on this?
BREAULT: In my opinion, thanks to the ability for buyers to attain information about homes for sale on the internet, few buyers rely solely on agents to determine which homes they are shown. In that regard, it is in the best interest of agents, who gain business primarily through friends and referrals, to show all the homes that would be the best fit for their buyers, and particularly the ones their clients show interest in after doing their own online search. A satisfied customer leads to referral business.
Also, it is important that buyers know that offers of cooperative compensation are published to ensure transparency. That MLS guideline lets buyers see if they are being directed to listings based on their levels of cooperative compensation.
PBN: How will the proposed changes affect consumers?
BREAULT: Under the proposed changes, buyers would have to pay their own representative directly, ask the seller to pay, or go without representation when trying to purchase a home listed on the MLS.
Unfortunately, many first-time homebuyers are doing all they can to afford a starter home. Adding another expense could bar them from their own Realtor representation because they would have no way of paying for it since most lenders don’t allow it to be written into a mortgage.
Also, veterans and service members using VA [Veterans Administration] financing would be barred from representation entirely because that type of financing does not allow them to pay broker representation at all.
PBN: You sit on the board of the Real Estate Standards Organization. What does that role entail?
BREAULT: RESO is a community-driven, nonprofit organization that establishes and promotes technical data standards to help improve the way real estate data is moved through our ecosystem. With over 400 MLS [systems] in the country using a variety of backend computer systems, it is important that data can be standardized so that brokers, agents, vendors and websites who provide services across MLS markets are able to do this efficiently. RESO volunteer directors work to fulfill [the] mission to create and promote the adoption and utilization of these standards.
Marc Larocque is a PBN contributing writer. Contact him at Larocque@PBN.com. You may also follow him on Twitter @LaRockObama.
