WASHINGTON, D.C. — There are several possible cures for overlapping market disorder, a condition afflicting multiple listing services in markets across the country, according to a discussion paper prepared by an industry consultant with support from a group of MLSs.

Overlapping market disorder describes situations in which an MLS’s boundaries overlap or are adjacent to another MLS, leading brokers and agents to subscribe to multiple systems in all of their operating areas.

WASHINGTON, D.C. — There are several possible cures for overlapping market disorder, a condition afflicting multiple listing services in markets across the country, according to a discussion paper prepared by an industry consultant with support from a group of MLSs.

Overlapping market disorder describes situations in which an MLS’s boundaries overlap or are adjacent to another MLS, leading brokers and agents to subscribe to multiple systems in all of their operating areas. This can lead to higher costs and other business inefficiencies for subscribers, as different MLSs may have a different set of rules and data standards, for example.

Consulting company Pranix Inc., which had assistance from a group of 16 MLSs, estimated the cost of this so-called disorder at $150 million to $250 million per year — “this number includes duplicate fees, duplicate MLS costs such as systems, facilities and staff, as well as brokerage firm costs to aggregate data from multiple MLS organizations and comply with different rules.” The paper was presented during a National Association of Realtors meeting in the nation’s capital last week.

This estimate, according to the “Creative Solutions for Overlapping Market Disorder” paper, does “not include the lost productivity of the agents and the lost opportunity costs of brokers and the affected MLS organizations,” and also states that “the biggest cost may be the industry’s inability or willingness to focus its resources on positioning the brokers and agents to compete effectively in the future and better meet the needs of the consumer.”

Consumers “want access to a broad range of information and will seek out those sites that provide what they want. Even when the information is less accurate, they will still go to where they perceive they can find all of the information,” the paper states, and MLS boundaries don’t matter to consumers who are looking for online information. “Consumers are looking at sources other than the brokers and agents for real estate information on the Internet.”

There are several potential solutions to the market-overlap woes, including data-sharing agreements and regionalization or consolidation, the report suggests.

A shared computer system and single sign-on, access to complete and full property information among multiple MLSs, common data-exchange feeds for participants’ Web sites, standard rules and regulations, and the elimination of duplicate fees are among the steps that MLSs can take to break down boundaries, according to the report.

Regionalization and consolidation efforts are the solution “that most fully resolves the impact of OMD on the brokers, agents and consumers,” the report states, because it provides for “one technology solution, one fee structure and one overall organization,” but it can also lead to the loss of control, jobs and revenue for MLSs that are dissolved under such plans, which makes it “the most politically challenging solution to accomplish.”

The real estate industry should explore other tech-enabled opportunities, too, such as the possibility of creating a nationwide database that includes a common data standard, a backend system for aggregating property information and a cooperative agreement among all MLS organizations, for example.

Also, brokers could operate their own in-house MLS systems or set up a peer-to-peer system to search properties among participating brokerage firms.

“Ultimately, the challenges of overlapping market disorder will be resolved,” the paper concludes. “The questions are when it will get solved, who will solve it and who will lead the charge to resolve it. It is ultimately the responsibility of the MLS organizations, the brokers and the agents to take the necessary steps to ensure that the best solutions are implemented.

“This will require joint analysis, cooperation among competing MLS organizations, significant discussions and an agreement to place politics on the sidelines and take the measures that reflect the best long-term interests of the brokers and agents.”

If they don’t address the overlap problem, it “will dramatically reduce the influence and traditional dominance that brokers and MLS organizations have in today’s marketplace,” the paper states.

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