- MLSs are uniquely American entities that encourage healthy collaboration and competition.
- They help agents give consumers the most accurate, up-to-date data and are the real estate community in a software package.
OK — enough, already!
For too many years now, we as the brokers and agents who actually make the sales in this industry have been told that the local MLS is an “antiquated technology” or about to be “completely disrupted,” or even on its last dying breath. In fact, no real estate seminar would be considered cutting-edge today without parading a whole host of “experts” on stage or in breakout sessions detailing the ultimate demise of our local MLS in [fill in city/region here].
Well, I beg to differ; in fact, I’d like to state that most local MLSs across the country are generally doing a great job, certainly in the residential arena. Not only are they the backbone of our industry, they provide the infrastructure that guarantees that buyers and sellers in the U.S. are able to interact with a transparency unparalleled in the world. Let me make that case right now, right here.
But first, let’s all gain some perspective! I love to train real estate agents — in fact, I do a ton of it, like a lot of you out there. If it’s a basic principles class, at some point we’re going to be discussing their local board and board functions, like the MLS.
I ask them to close their eyes and imagine that it’s noon on Friday and they need to prepare for an out-of-town buyer who’s arriving Saturday. They open up their computer, navigate to their local MLS — but the whole system is down and is going to be out for the next 24 hours! At this point, I tell them to open their eyes and I proclaim; “Welcome to the Realtor’s nightmare!”
Is that scenario real, you ask? Hopefully not! I’d be in pretty poor shape if it was! I’ve had experienced agents grab me after class just to say, “thanks” for reminding them what an essential part the MLS plays in their success. I’ve been licensed for 43 years and not once has the MLS ever failed to provide me with the information I needed to do my job.
I hate to admit it, but it’s like air — we get so used to it being there we don’t think about life without it. But in reality, the MLS is not a thing, it’s us as a community.
The MLS is a community
Let me explain. Years ago, when all the new Internet business models started to appear, our local board ended up in a lawsuit from one of the new-fangled Internet real estate models basically accusing the local board of stifling competition. We ended up in a room with the “feds,” who were bent on tearing down the rules we had applied if you were a member of the MLS.
What was amazing to me was that after an hour of discussion, it was obvious that none of the federal guys could grasp the idea of exactly how an MLS worked. And really, who could blame them.
Think about it!
You see, we all work in one of the most incredible communities in the world, where as members of our MLS systems, we wear two hats; as fierce competitors with each other and then as compadres doing everything we can to cooperate at the same time.
Your lawyer doesn’t do that; neither does a car dealer, or your banker or dentist or just about anybody you know who sells something. There are only a handful of industries that work together like this, and we’re far and away the most successful at it, period.
You want to buy a house in England? Fine, you drive to the first barrister and ask what they have, then you drive down the street to the next one and see what they have. Repeat this process for every barrister in London, and eventually one of them may have a house that works.
Sound like fun? It isn’t. And, oh, by the way, that barrister makes a whopping 1 percent commission on average.
And guess what — most of the world functions just like that.
A uniquely American concept
The truth is that years ago when residential brokers around the country started floating this idea about sharing their inventory, thus planting the seeds of the modern day MLSs, that was a uniquely American concept. There is a reason most of you have cooperative splits and use exclusive listing agreements as these early pioneers recognized that to make this cooperative idea work, everybody had to be on the same page. A lot of basic MLS protocols we use today were a product of refinements made with each passing year to the point where your average MLS is actually very efficient.
In fact, much like the harnessing of electricity at the turn of the century, I feel the modern day MLS is today the single most important idea ever dreamed up for our industry.
An MLS is not just a database; it’s a concept whereby you and your office, along with every active member of your MLS, acts as a cooperative community to get the job done! Can someone name me an industry in which the participants have created such a force of nature? I can’t.
As I patiently explained to these federal agents, it is precisely this cooperation between real estate agents that creates first-class exposure for the sellers and buyers that we work with. I told them, “if you guys were moving to Austin, Texas tomorrow, after a brief discussion about what you needed, simply by using my computer or today even a smartphone, I could expose you to everything available in town in your price range within seconds!”
And the data would be hyper-accurate! Heck, it would take them longer to find a dry cleaner.
What’s the value of the MLS?
If I am a seller using you and your local MLS, what’s the value of going into the MLS and instantly having access to every active buyer shopping with an agent — or in today’s world, having Internet access to the board’s inventory through a consumer portal or IDX program? Does this access to such a large “pool” of buyers ensure I am likely to get as close to market value as humanly possible? Well, duh!
And yes, there are a ton of specific areas in real estate that technology can help streamline. But there are many areas where too much technology is a solution in search of “problems” that we just don’t have. In many cases, you can only “dumb down” a real estate transaction so far. This isn’t banking or booking airline flights — purchasing and selling real estate is a bit more complicated.
And that’s partially why we’re still here, folks, and will be for some time to come. The simple truth is that across this wonderful country, the MLSs we rely on function pretty darn well and can easily roll seamlessly into this century with a few tweaks from time to time.
We all remember enough to complete the old adage, “if it ain’t broke ….”
Joe Williams is the co-founder of Keller Williams and currently operates JW Development Co.