Multiple listing services stand in the way of change, and they owe it to their subscribers to push for data standardization and regionalization, said David Charron, president and CEO for Metropolitan Regional Information Systems Inc., the largest MLS in the nation.
Charron, who delivered this message to an audience of MLS executives during a National Association of Realtors conference earlier this month in New Orleans, said that politics pose more of a stumbling block than technology in accomplishing this aim.
The future direction of MLSs was a frequent topic of discussion during the trade group’s annual conference, as an advisory group formed by association leadership presented a vision for an MLS of the future during the conference and the association’s board of directors voted on MLS policy changes in response to federal antitrust actions and investigations.
Several MLSs operating in major U.S. real estate markets are pursuing consolidations and regional data-sharing agreements that are breaking down traditional boundaries, and brokers are in some cases driving this regionalization and are pushing for more power in the governance and operation of MLSs.
There are about 900 local MLSs that appear to be stuck in the paradigm of “trying to deliver content management to a customer base that has outgrown the local nature of the MLS,” said Charron. “Even today the local nature of the MLS continues to inhibit, I think, the potential of a contemporary MLS.
“I believe that human and political factors can hinder the transmission of content and data as much as technical factors. As an industry we have not delivered on the promise of regionalization to our brokers. If we had, why so little change in the last 10 years?”
He added, “We as MLSs fail to consistently see beyond the local market, and if we do sometimes we don’t like the view. Maybe we are protecting our cash cows … maybe those of us who are charged with creating the future have too great a stake in the status quo.”
Managers for MRIS, which has about 60,000 members in the Maryland, Washington, D.C., Northern Virginia, West Virginia and Pennsylvania, and the Real Estate Information Network Inc., which has about 7,200 members in Virginia, announced in October that they are discussing ways the two MLSs could share content and other resources to benefit their members.
“Data sharing is a nice idea, albeit somewhat dated. Just because it’s 10 years old doesn’t mean it’s wrong. Some markets have moved in this direction and I think that’s great,” Charron said.
He also noted that MLSs in some markets “are making a huge leap” in developing common databases, and promoted a vision for “an even broader technology consortium comprised of an array of MLS markets — this idea is evolving but I think the concept has real legs. As leaders of this industry I think we need to be even more open to new ideas that facilitate sophisticated data and technology sharing.”
MLSs have two core assets, Charron said: content and infrastructure. “Content … we assemble lots of it but we don’t assemble enough of it and we make the brokers go through hell to get it. Consumers have an easier time than our customers do.”
Broker cooperation is integral to MLSs, he also said. “Every MLS, regardless of its size or location, has the same mission to facilitate cooperation. Part of (that) involves aggregating and disseminating information from all of the participants.”
MLSs should seek to cooperate with each other, too, he suggested. They should seek commonality in their systems, “and promote the adoption and deployment of standards that support this commonality,” he said. “Let’s do this first and let the governance catch up and the politics catch up. Otherwise I think we’re going to be mired in politics, we’re going to be mired in conflicting policies while all of our customers go out of business.”
A good starting point, he said, is in adopting a real estate industry data standard known as RETS, or Real Estate Transaction Standard.
He suggested that the adoption of such standards could serve as a cure for “Overlapping Market Disorder,” in which MLSs using different data standards, rules and systems may operate in some of the same market areas.
Charron also said that MLSs must “exert greater management and control” over their critical information systems. “I strongly recommend that you do not cede responsibility for your most important asset — your content — to any third party that might go through some form of business change or make a decision on your behalf that doesn’t ultimately benefit your brokers.”
For those MLSs that do give some control to third parties, he offered this advice: “Make sure you have absolute control over it. This is not a theoretical or it’s not idle rhetoric.” Charron said that MRIS is a participant in an overlapping market study that involves 16 contiguous MLS markets, 60 brokerages and MLS vendors.
“I really encourage you to take action in your markets to cure what I think is just an incredible frustration for our brokers,” he said, referring to problems in overlapping MLS markets.
Charles Melidosian, vice president and chief information officer for Chicago brokerage company Baird & Warner, said he attended a session for large brokerage companies during the National Association of Realtors conference and there “was a very consistent theme” with brokerage companies “taking back control of the MLS.”
In the Chicago market, brokers were given additional representation on the board for the association-operate Multiple Listing Service of Northern Illinois board in recent years, and the board and shareholders have voted to approve a governance restructuring and consolidation with a broker-owned MLS operating in the Chicago area. But in that example, a group of MLS shareholders that opposed the consolidation have said that there is the potential for large brokers to represent their own interests over the interests of smaller brokers who are members of the same MLS.
Melidosian said there is a national trend in brokers seeking MLS changes. “The focus needs to be put back onto what’s the maximum value (the MLS) can provide to the Realtor at the best possible price,” he said.
Some MLSs can clash with brokerage companies when they offer products and services that the brokerages already provide to their agents, Melidosian said. “Those sorts of decisions and ‘whiz-bang’ systems that have been approved by MLSs are starting to be rethought and removed from budgets. The MLS should more so be about core data-related services to their subscribers and not be venturing off in these (ventures),” he said.
Regionalization of MLSs is “a natural evolution,” Melidosian said. Many MLSs are owned by local Realtor associations, and these local groups may become less necessary as the MLSs become more broker-based and regionalized. “Some have argued that you don’t even need local associations,” he said, adding that it’s important to “always try to keep the best interest of the Realtor first, over the needs of the associations.”