The Arizona Association of Realtors is a board vote away from acquiring the state’s largest multiple listing service as part of a larger plan to build a statewide MLS.
At their Aug. 8 meeting, board members of the Arizona association will consider a proposal to become the sole owner of Tempe-based Arizona Regional Multiple Listing Service Inc. (ARMLS), and discuss governance and financial issues surrounding the operation of a statewide MLS.
Shareholders of ARMLS have signed off on a tentative agreement to be acquired for $4.75 million, and proponents of the deal have prepared a business plan that envisions other Realtor associations signing on to a statewide MLS over time.
The Arizona Association of Realtors would draw on $2 million in operating reserves to fund the purchase, and obtain a loan for up to $2.75 million. No increase in state association dues is anticipated, as a statewide MLS is expected to pay for itself, even if not all 21 Arizona Realtor associations sign on.
If the acquisition is approved by the Arizona Association of Realtors’ board of directors, it is expected to close by Sept. 30. ARMLS CEO Bob Bemis has agreed to lead the effort to build the statewide MLS, Arizona MLS.
"This will not happen overnight," proponents acknowledged in their business plan. "Some MLSs are likely to remain as they are today," but the majority "will find compelling reasons to join Arizona MLS," the report predicted. Arizona currently has 14 separate MLSs.
ARMLS is owned by four associations: the Phoenix Association of Realtors, the SouthEast Valley Association of Realtors, the West Maricopa Regional Association of Realtors., and the Scottsdale Area Association of Realtors. It also serves a fifth association, the Western Pinal Association of Realtors, which is represented on the ARMLS board.
Proponents of a statewide MLS say the third-party publishers like Trulia and Zillow are attracting both real estate professionals and consumers.
"Failure to anticipate changes in consumer behavior make placing listings on traditional MLS services less and less valuable, leading to decline in usage similar to the decrease in newspaper ad readership," the business plan warns.
A larger MLS system would provide better economies of scale, and be in a better position to compete with third-party publishers like Zillow and Trulia, proponents said.
All local associations would be invited to participate in the statewide MLS, either by buying MLS services at wholesale and continuing to provide services like MLS training and compliance enforcement, or by contracting with Arizona MLS for a complete turn key solution.
ARMLS vendor FBS and its flexmls system would power a statewide MLS. TARMLS and the Santa Cruz MLS, which are already using flexmls, would be invited to share their experience and help build Arizona MLS.
MLSs not currently using flexmls would be invited to participate in designing a framework to include data-fields, reports and business rules. A number of local associations have already said they’re interested in participating in designing the framework, proponents said.
The state association has been studying a statewide MLS for more than a year, and a preliminary business plan was presented to the board of directors in March.
The California Association of Realtors has taken a similar, but slightly different approach in developing a statewide MLS. CAR subsidiary California MLS Inc. got of to a rocky start and its calREDD service was mostly confined to a few rural counties in Northern California.
CAR then signed off on a merger of CMLS with the much larger Multi-Regional Multiple Listing Service Inc. (MRMLS) in Southern California. Efforts to build a statewide MLS in California continue under the auspices of the merged company, California Regional MLS Inc. (CRMLS).