This is the first episode in our new video series depicting the seismic shift in the representation of buyers in 2025, cementing long-standing public policy.

This series will dramatize:

  • the origin of the “same-percentage, same-split” industry custom;
  • the pre-1980s industry-wide MLS subagency misnomer, and the decades-long evolution of buyer representation in California;
  • the contents of the recently mandated buyer representation agreement;
  • new rules surrounding retainer periods, and how buyer representation may be extended or modified; and
  • your practical use of the buyer representation forms as depicted through various sample transactions.

Why this episode matters to your practice: Understanding the past helps brokers and agents orient themselves in today’s rapidly shifting landscape of real estate agent fees.

Same percentage, same split: good as holy writ

In 1955, a group of California residential multiple listing service (MLS) brokers agreed the fee charged to a seller on all home sales was to be 6% of the price a buyer paid.

This 6% became sacrosanct — as good as holy writ.

Further, the 6% was to be shared 50/50 between the seller broker and the buyer broker, who at that point in time was referred to as the “cooperating broker.”

However, this “same percentage, same split” was ruled a violation of anti-trust laws as a price fixing scheme. Regardless, it remained fully enforced by defiant residential brokers using the MLS system.

Member brokers continued to publish listing information on the MLS, including the total fee agreed to by the seller — again, conscientiously always 6% — to be divided evenly between the seller broker and buyer broker, historically called the listing office and selling office.

When a seller agent did not comply, all the other fee-fixing MLS brokers and their agents were instructed by the trade union to either refuse to deal with the nonconforming office, or to unilaterally refuse to share fees (50/50) on the sale of their listings sold to a buyer by the offending broker.

Enforcement by residential brokers of the 6% and 50/50 rule was made possible through binding arbitration via the union’s local board, not the MLS.

Critically, the local trade union owned or controlled the MLS. At that time, compulsory membership in one — the trade association with its binding arbitration agreement — was a prerequisite for the other — a subscription to the MLS.

The enforced custom of the time: membership and subscription, or no access to the MLS.

Thus, when a broker using the MLS violated its price-fixing policies regarding fees, the trade association was the instrument conforming brokers used to enforce their unlawful price fixing activity through board arbitration.

After a short period of fellow broker-inflicted financial injury, the fee-cutting listing office — derogatorily called a discounter — would eventually capitulate to the 6% and 50/50 routine — or go out of business.

To the benefit of licensees and the buying and selling public, this conduct was prohibited in 1981 under the landmark People v. National Association of Realtors case. [People v. National Association of Realtors (1981) 120 CA3d 459]

Restrictions on MLS access

Consider a real estate trade association that operates its own MLS. A part-time broker applies for MLS access without being a member of the trade association.

The association denies the broker’s application, stating MLS access is limited to full-time real estate professionals who are members of the trade association.

The broker seeks to compel the association to allow access, arguing the trade association’s policies are anti-competitive.

Is the trade association compelled to grant the broker access to an MLS subscription without maintaining a current membership in the association?

Yes! The association may not prevent brokers and their agents from accessing the MLS. The reason: access to the MLS is necessary for professional employment rendering services to members of the public as a real estate licensee.

No trade association membership required

In California, MLS subscribers do not need to be members of a trade association to post listings and access the MLS database, even when the MLS is owned by the association. Thus, MLS subscribers avoid the suppressive instrumentality of trade association membership. [Marin County Board of Realtors, Inc. v. Palsson (1976) 16 C3d 920]

Yet, many real estate licensees are still erroneously taught to practice real estate in California they need to join the:

  • National Association of Realtors (NAR®);
  • California Association of Realtors (CAR®); or
  • local Association of Realtors (AOR) branch of CAR®.

Worse, these trade union leviathans are too often falsely equated with the Department of Real Estate (DRE) due to their past top-level political liaisons.

For a real estate sales agent, the obligation to become a trade union member depends on their broker’s type of membership with the AOR.

The agent needs to parallel the broker’s membership or non-membership in the AOR since the sales agent acts on behalf of their broker — an agent of the agent.

For access to the MLS, AORs give brokers the option of being:

  • an AOR member, which includes CAR® and NAR® membership along with MLS subscription; or
  • an MLS participant/subscriber only.

No restrictions apply to MLS access for real estate brokers. Real estate brokers and their agents may continue to access an MLS without paying excessive and unnecessary dues or entanglement in a trade union’s membership bureaucracy, codes and arbitration rules.

Editor’s note — Stay tuned for the next episode in our buyer representation series.

Related article:

Brokerage Reminder: CAR membership NOT required for MLS access