Here is a Guest Perspective comment from NAR President Thomas M. Stevens published in Inman News Sept 5, 2006 at http://www.inman.com/hstory.aspx?ID=56240

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MLS: The essential difference
Guest perspective: Interbroker cooperation defines the system
Tuesday, September 05, 2006

By Thomas M. Stevens
 Thomas Stevens, NAR president 

Ever since brokers and Multiple Listing Services began posting abridged
versions of MLS listings on the Internet some 15 years ago and real
estate consumers have been able to see for themselves what's available
in their neighborhoods, the public has confused MLSs with online auction
sites like eBay or electronic classified ads like CraigsList. To the
layperson, the MLS looks like any other marketplace where properties are
bought and sold. But nothing could be farther from the truth. 

What makes MLSs special is not just that they introduce extraordinary
efficiencies into the real estate transaction, or that they level the
playing field so that the newest, smallest, greenest broker has just as
much ability to profit from the system as the biggest guy in town. Even
the fact that they are probably the safest databases on the Internet --
thanks to the standards of quality and care exhibited by the
organizations that own and run them -- is not the single most
distinguishing feature of MLSs.

What makes MLSs unique in the business world is that they exist first to
facilitate cooperation between brokers, and that includes interbroker
compensation. 

Lately a number of people -- among them those who don't understand the
MLS system at all and those who do but would like to change it to fit
their own agenda -- have voiced concerns with the principle of a
seller's broker compensating a buyer's agent. They believe the practice
is anachronistic, illogical, or that it should be ended because it
raises suspicions among federal regulators who, in my opinion, truly do
not understand how and why the system works.

To eliminate interbroker cooperation in the MLS is to eliminate the MLS
as we know it today. Once compensation offers are stripped from the
system, no longer is there a significant reason for the MLS to remain a
broker-to-broker system and it can become what so many outsiders would
like it to be -- a simple database that can be opened to all and mined
for the value resident in the real estate listings it contains. Welcome
to the MLS as a public utility.

There can be no doubt that stripping compensation from the MLS will make
interbroker cooperation infinitely more difficult. What the current crop
of reformers fails to recognize is the value the current system brings
to the buyer and the buyer's agent. The current system has made the
proliferation of buyer's agency possible, and with it, the vital
benefits of professional representation for home buyers, especially
first-time home buyers. 

Consider for a moment the importance of buyer's agency -- and
interbroker compensation -- to the cause of minority home ownership in
America. Progress toward parity in home ownership has been
excruciatingly slow, and now the housing economy is slowing it even
more. Interest rates are ramping up in response to the Fed's policies to
check inflation, and many expect rates on a 30-year fixed mortgage to
exceed 7 percent. Higher rates coupled with high property values make it
more difficult than ever for lower- and middle-income families to cross
the threshold of their first home. 

Now comes the Consumer Federation of America with a proposal that will
make minority home ownership even harder to achieve. CFA would restrict
the ability of sellers to offer partial commissions to buyers' agents to
pay for their services in the real estate transaction, forcing buyers to
be responsible for some or all of the cost of professional
representation. The result could be that buyers' agents would not be
paid from proceeds of the transaction received by the seller but by fees
charged directly to buyers. For thousands of lower-income and minority
buyers, professional help would be out of the question under these
conditions.

The CFA plan, proposed in a white paper issued June 19, would also have
a devastating impact on the small but growing corps of minority agents
and brokers that specializes in turning minority renters into
homeowners. Those professionals help their customers access an extensive
array of services such as credit counseling and home-ownership
education. Without help from those professionals, people unfamiliar with
the home-ownership transaction may never make it over the financial and
cultural hurdles standing between them and their first American Dream.

Don't get me wrong: We believe in change. The MLS has evolved over the
years to meet the needs of the marketplace and will continue to do so.
At NAR, we have created a Presidential Advisory Group to look at the
future of the MLS, and the PAG will consider a wide range of options on
handling compensation. It's anticipated (but not guaranteed) that a
report with recommendations will be made to me at the Convention in
November. The PAG has met with people from outside the Realtorfamily
like Michael Adelbeg of Google and Pete Flint of Trulia. I'm sure that
its findings will make a very positive contribution to the debate -- and
foster changes that will improve the service that MLSs provide for
consumers and the industry alike.

Thomas M. Stevens
President
National Association of Realtors