A bitter and controversial political fight among real estate brokers, large and small local trade associations and a cast of other characters in the Chicago area has turned ugly, and could lead to the dumping of the management team of the Multiple Listing Service of Northern Illinois, according to Inman News sources.

The Chicago Association of Realtors yesterday voted to recommend the ouster of certain MLSNI management, including CEO Jay Huffman, sources said. However, the shareholder meeting scheduled for Monday ultimately will decide the outcome and the Chicago association may well change its plan before then. A spokesman for CAR would not comment on its actions, and neither would CAR CEO Darcy Dougherty.

Shareholders at Monday’s meeting also will discuss the results of a recent forensic audit of MLSNI and Huffman that was ordered in April. The results were handed out at a meeting earlier this week, but no action was taken at that time. A forensic audit is different from most audits in that it involves auditing, accounting and investigating.

Another piece to the controversy within MLSNI, which is one of the largest Realtor association-owned MLSs in the country, is the chain of big brokers who’ve pulled their listings from MLSNI in favor of the smaller, broker-owned MAP MLS.

There are a variety of opinions over what’s at the heart of the Chicago squabble, including:

  • The struggle between brokers and the MLS over who will control MLS listings.

  • A move by big brokers to exert more control over the MLS.

  • Allegations of mismanagement by MLSNI and conflicts of interest involving management and business investments.

  • The opening of old wounds among local association executives.

It’s still unclear what is in the forensic audit. At the time the audit was ordered, Huffman said everything he and management had done consistently had the board’s approval.

“I’m a little scared, but not threatened by (the audit). I’ve done nothing wrong,” he said in an April interview. “Everything I’ve done has been for the corporation.”

Huffman today said he was unable to comment on the audit results or next Monday’s shareholder meeting.

Huffman was MLSNI’s first employee in 1991. Under his direction, the organization consolidated 13 MLSs in the Chicago region into one. Today, MLSNI has more than 37,000 members in about 6,000 realty offices throughout the region.

Since April, MLSNI has conceded to some broker requests, including shutting down the MLS consumer Web site ChicagoMetroRealEstate.com. The site previously enabled consumers to browse for sale listings, but now points users back to MLSNI.com, which doesn’t include information about specific homes for sale.

Gregg Larson, CEO of Clareity Consulting, called MLSNI a “progressive” organization with a history of being creative and pioneering. MLSNI was the first association-owned MLS to display all its listings on the Web and maintain daily updates of the listing information for consumers and agents. Larson has done consulting work for MLSNI.

“It’s a sad day for consumers in Chicago,” Larson said, referring to the shutdown of ChicagoMetroRealEstate.com. Many consumers preferred browsing listings in a neutral and comprehensive setting, rather than via a broker or franchise Web site.

The battle in Chicago is just one piece of the national argument taking place over who controls home listings on the Internet. In May 2003, the National Association of Realtors adopted a controversial online listings policy that enables brokers to opt out their listings from other brokers Web sites. However, that policy is pending an investigation by the U.S. Justice Department’s antitrust division.

Online listings is a touchy subject with many brokers. Some brokers are adamantly opposed to other brokers or MLS Web sites displaying their listings. Listings are a lure brokers and agents can use to attract online consumers to their Web sites, and the fueled debate over who’s allowed to display and who’s not is indicative of the ongoing industry struggle to be the consumer’s first point of contact in a real estate transaction.

In Chicago, some brokers who weren’t happy with the way their listings were being handled by MLSNI started taking their listings elsewhere.

Coldwell Banker was the first brokerage to begin pulling listings from certain offices out of MLSNI. The brokerage in March pulled all of its for-sale listings from 10 of its offices in Chicagoland’s North Shore region, and instead posted the listings exclusively with MAP MLS.

Stephen Baird, president of Baird & Warner, in June confirmed that four of his company’s offices in the North Shore region pulled listings from MLSNI and would instead post listings exclusively with MAP MLS. He said the company’s reasons were consistent with Coldwell Banker and Koenig & Strey, which also pulled listings out in May.

“We’re not happy with what’s going on at MLSNI and think this is a better avenue for us,” Baird said at that time.

Send news tips or a letter to the editor to Jessica@inman.com; (510) 658-9252, ext.133.

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