The multiple listing service of the future may be less protective of property information, more broker-friendly and broker-centric, and more standardized, according to a discussion paper prepared by an industry consultant in cooperation with a group of MLSs.

The paper, “Future of the MLS,” prepared by Ann Hale Bailey, president of Pranix consulting company, suggests that “MLS organizations must incorporate the brokerage firms as key decision makers for MLS policies, strategies, products and services,” and tosses out several possible models for a new MLS system.

Options include the creation of a national MLS, statewide MLSs, metropolitan-area MLSs, or a hybrid solution that “could allow each market area to establish its own governing and decision-making structure but would include a national cooperative agreement among all entities. The cooperative agreement would include one data standard and the ability of a firm to have access to a ‘pipeline’ of data based on the states where they are licensed and doing business.”

The discussion paper, dated April 19, is timely given the rising debate over how to handle widespread sharing of property information on the Internet. Real estate data and control issues are central to the U.S. Justice Department’s antitrust lawsuit against the National Association of Realtors over the sharing and display of online property information.

This hybrid MLS model highlighted in the discussion paper, which features both local control and national standardization, was identified as a “key finding.” This model “might have an independent governing structure established by the brokerage firms or might have a governing structure supported by (the National Association of Realtors). Either an independent governing structure or NAR could establish this national MLS framework.”

A group of 15 MLSs and Realtor groups contributed to the report, including Carolina MLS, Heartland MLS, MLS Inc., Metrolist Inc., Metropolitan Indianapolis Board of Realtors, Mid Florida Regional MLS, MRIS, Northwest MLS, Realtor Association of Greater Fort Lauderdale, RE Infolink, Regional MLS, Southern California MLS, Southland Regional Association of Realtors, TREND, and Wasatch Front Regional MLS.

Several MLSs created a “think tank” to address industry issues, and this group met in February to discuss the future of the MLS, according to the paper. Participants included 37 broker-owners, branch managers and senior officers; 35 MLS and Realtor association staff; 15 lawyers; and 17 MLS leaders who are re-evaluating the role and core purpose of the MLS. The discussion paper “is not meant to be an all-inclusive view of the future of the MLS, but simply to identify some of the issues and potential solutions,” according to the report’s executive summary.

“MLSs across the country are facing increasing challenges with the advent of the Internet, entrance of new business models into the industry, MLS service areas that do not accurately reflect expanding market opportunities for brokers, technology that makes it feasible to serve a larger market than in the past, and outdated governance and ownership structures that make effective decision-making difficult,” the paper states.

The paper also states that there are some markets, “particularly in California,” where there are more MLSs covering a smaller area, “which makes it increasingly difficult for the brokers and agents to meet the needs of the consumer. This is in contrast to brokers who continue to expand their respective footprints in order to meet the needs of the consumer and map to an even larger area.”

While MLSs were originally intended to facilitate cooperation and compensation among real estate professionals, many MLSs “have reached far beyond the original mission and offer products and services that are readily available from other sources,” the paper states.

MLSs face different broker demands in some areas, the paper notes, and MLSs face a difficult task in serving brokers while steering clear of competition with brokerage firms.

“There are those who believe that the MLS should be only a cooperative and broker utility while others see the MLS providing a broader range of services. While some of the larger firms prefer the MLS to provide only baseline services, many of the agents look to the MLS to provide far more,” according to the paper.

Because the MLS system provides a method for broker cooperation by establishing rules and providing property and compensation information, it will not likely go away soon, the paper states. “This is true because the MLS creates an orderly marketplace that benefits the consumers. While some brokers challenge if they need the MLS … the MLS is too valuable and serves the buyers and sellers too well to eliminate it.”

Among the preferred ingredients for a future MLS: protection of information and content; one data standard; ability of brokers to load listings in their own systems and then upload them one time to the MLS; one search for all information, one common set of rules, policies and data display requirements; and one set of fees, the paper suggests.

While MLSs have traditionally served as aggregators of property information, “at some point in the future this may not be the primary role the MLS fulfills,” the paper states. Brokers could, for example, adopt a common data standard and establish their own portals or peer-to-peer networks through which agents and brokers can extract property information. “This would not necessarily mean the end of the MLS, simply the end to the aggregation of MLS content by the MLS.”

Under another possible model, brokers could upload information to a large regional real estate data center, so that brokers “retain full rights to where the MLS content is distributed.”

There is ongoing debate about whether MLSs should operate public Web sites that display property information, and MLSNI and the Cincinnati Association of Realtors dismantled their Web sites after opposition from large brokerage firms, as an example. The paper presents numerous reasons why MLS-operated public Web sites or portals can be effective, though some large brokers “view the MLS public Web site as competing with them.”

The paper also states that there is “no right or wrong answer,” though “an MLS-operated public Web site may need to be reassessed to determine if there is a place for it in the future.”

Protecting MLS content from misuse can be a difficult and costly process, the paper states. And while MLSs play an important role in securing property information, brokers “may demand that the rules be relaxed” in order to ensure greater access, use and control of MLS content. “The complexities of trying to track MLS content on the Internet and the impracticality of staying on top of it are creating a tremendous drain of resources by the MLS.”

The paper also presents a discussion of MLS governance and ownership issues. “Brokers throughout the country are discussing how they can change the ownership and/or governance of the MLS organizations. At the very least, brokers want vastly increased if not complete uninterrupted control of the MLS,” the paper states.

Some brokers have said that greater control over the MLS will allow them to ensure control of information they supply to the MLS, maintain independence from National Association of Realtor policies, and operate more efficiently without paying dividends to Realtor associations, among other reasons.

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