Participants in an effort to consolidate six San Francisco Bay Area property-listing services are studying whether the ownership structure of the new group should be tweaked to accommodate more expansion.

The consolidation will create one of the largest multiple listing services in the country.

Gregg Larson, CEO of Clareity Consulting and a spokesman for the consolidated MLS organization, dubbed the Northern California Real Estate Exchange (NCREX), said today, “Ownership is probably one of the top two issues, if not a top one.” Under its current structure, the NCREX entity is wholly owned by participating local Realtor trade groups and governed by a group of brokers who are serving as a temporary leadership board.

During a meeting Tuesday, participants and interested parties discussed some possible changes to the group’s structure that could attract other MLSs to join. The merger of the six MLSs “is huge — it’s a historic event almost,” and additional participants would make the feat even more grand, Larson said.

The consolidated group will allow more seamless flow of property listings data through standardized rules for data exchange among real estate professionals, and will likely save agents time and money by combining multiple sources of property data into a single source. Currently, some real estate agents pay membership dues to a variety of MLSs in their operating area, and the consolidation effort would reduce the need for multiple MLS memberships.

There are a couple of other MLSs in the region that could potentially join the consolidation effort, though there are no commitments from the groups at this time, Larson said. “We are trying to find the right structure that will allow all eight MLSs to merge. That is really one of the things that brokers would really like to see. One of their main points of pain … they feel there are too many MLSs in the area. We’re looking for solutions”

Borrowing an analogy from baseball, Larson said that the consolidation of the core group of six MLSs “is like a two-run home run and if you got one of the others to join it’s like a three-run home run and if you had all of them then it would be a grand slam.”

NCREX leaders are specifically examining whether a joint ownership structure — with local Realtor associations and brokers sharing ownership of the entity in some way — could be a win-win for participants.

Participants are scheduled to meet next week to discuss ownership and other issues.

NCREX is already set up as a limited liability corporation. The six Realtor association-affiliated MLSs are owners of the corporation, and a temporary board includes two representatives from each member. “It is our intention to have an all-broker board” that will serve as the permanent leadership for NCREX, Larson said, and the nomination has already begun for this permanent board, which will have 15 members.

The founding members of NCREX include: REInfolink, Contra Costa MLS, Bay East MLS, East Bay Regional Data, Central Valley MLS and the San Francisco Association of Realtors MLS.

The Bay Area Real Estate Information Services MLS has sent representatives to attend meetings of the NCREX participants, but has not committed to joining the effort, said Jim Branscombe, BAREIS CEO and president.

“We’re evaluating and looking and doing our own studies about the needs and there is no decision that has been made to date to be a part of that,” Branscombe said. “We’re in a heavy evaluation period. Most of the associations that are involved in the NCREX merger have worked together for many years through their relationship with their MLS alliance. This (consolidation) is a great and a natural next step. We haven’t determined what’s best for the members of BAREIS.”

BAREIS is an independent MLS that is not owned by a Realtor association. By contrast, most MLSs across the country are owned by local Realtor trade groups. BAREIS membership includes about 2,000 brokers and 9,000 agents. “We have to be concerned about what the total broker community and agent community feels is the next most logical step for BAREIS,” he said.

BAREIS was formed in 1997 through a similar process to NCREX, Branscombe said. Several association-owned and independent MLSs agreed to form BAREIS as the culmination of a five-year process. “We know how difficult this is. It’s not an easy task. We applaud their effort,” he said. The entity’s MLS region includes Napa, Sonoma, Mendocino, Solano and Marin counties.

Larson said that MetroList MLS, which serves areas in Sacramento, Placer, El Dorado, Yolo, San Joaquin, Stanislaus and Merced counties, is a potential participant in NCREX. MetroList has about 24,350 members, according to the entity’s Web site. Tome Beede, president at MetroList, could not immediately be reached for comment about the regional MLS consolidation.

Larson said there are discussions planned with other MLSs, too, including an MLS in upper Northern California, another in Central California and other MLSs in Southern California. If MLSs do not want to consider full participation in the consolidated MLS, there is the potential to set up data-sharing arrangements as a starting point, Larson said. “There are other opportunities to take baby steps. You can do data sharing so listings from each system would appear on the other system. Those would be steps toward a merger.”

The focus of the participants is on getting the core NCREX framework up and running, he said, noting that other regionalization efforts across the country have taken five or more years to fully establish.

With six MLS participants, NCREX is expected to have 46,000 members, and with additional members signing up, the entity could nearly double by 2009, Larson said.

“The stars are kind of lined up. It’s a good time to do it,” he said of the consolidation effort, adding, “There are still people issues and political issues to deal with at this point.”

Property databases for NCREX should be completely merged by June or July, he said, and participants are expected to choose an MLS system vendor by June. The regional MLS is scheduled to be fully operational by the end of 2007.


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