- Of the five MLSs that serve the most populous county in Connecticut, two have decided to merge to form 'SmartMLS.' MLS consolidation can offer increased efficiencies for agents and consumers and, over time, better economies of scale.
- Small MLSs may offer a flatter structure where agent voices can be heard, though larger entities have the advantage of financing to support technology enhancements or other member requests, according to one broker.
If real estate agents and brokers want to do business in all of Fairfield County, Connecticut, they are virtually required to join more than one multiple listing service. Five MLSs cover the county. Five.
This, in the words of MLS consultant Kevin McQueen, is “unusual.” He couldn’t think of a single similar county.
But there is some relief in sight for the agents and brokers who belong to two of those MLSs. Connecticut MLS (CTMLS) and the Greater Fairfield County CMLS, which have more than 17,000 members combined, are merging to form one entity, dubbed “SmartMLS.”
Once launched, SmartMLS will be one of the nation’s 20 largest in terms of membership and provide MLS services to an estimated 96 percent of Connecticut Realtors, the MLSs said.
“The role of the MLS is to provide subscribers with the technology, information, and services they need to be professionals,” CTMLS CEO Cameron Paine told Inman via email.
“As the pace of technological innovation has quickened in the real estate space it has become clear that the MLS’s relevance to brokers and agents depends on our ability to provide technology products at least as good as what consumers currently get for free, access to comprehensive and accurate listing data, and superior customer service.
“Consolidation helps SmartMLS achieve all of these goals.”
More MLSs and associations are likely to consolidate this year, which could mean several benefits for agents and brokers on the ground, including better services, reduced fees and increased efficiencies.
Many MLS members wish their associations or MLSs would join forces, and a major win for merger proponents already came to life this year with the six-state coverage area served by the newly formed Bright MLS.
“The driving force behind the merger is the recognition that overlapping MLS systems require agents to belong to multiple MLSs and perform duplicate listing entry,” the merging MLSs said in a press release.
“Consumer expectation is that their agent and broker be able to access a complete inventory of properties for sale to produce the best possible pricing strategies for sellers, and the most comprehensive, timely, and accurate properties for homebuyers.”
Fairfield is the southwestern-most and most populous county in the state with a population just under 1 million. Combined, the consolidating MLSs facilitated more than 30,000 real estate transactions worth more than $13 billion in 2016, the MLSs said.
The estimated 1,500 agents who previously belonged to both CTMLS and GFC CMLS will “instantly realize” $522,000 in savings once SmartMLS begins operations, the MLSs said.
“The Connecticut MLS had been charging $29 member [per]month, so: $29 x 1,500 x 12 months,” Paine said.
Other savings from economies of scale will be delayed, however.
“The merged MLS [board of directors] will determine which contracts (products/services) to continue but cost savings from economies of scales, contract terminations, etc. will not be realized until 2019/2020,” according to a merger fact sheet.
The “initial fee” for SmartMLS will be $26 per member per month, the fact sheet said. This is what GFC CMLS is currently charging. Participant brokers will be required to be Realtors.
Derek Eisenberg, president of Continental Real Estate Group, is a broker member of both CTMLS and GFC CMLS.
“I am in favor of the CT/GF merger and most (not all) mergers,” Eisenberg told Inman via email.
“I am always for the consolidation if the fees are kept low and the voice of any single agent is heard with respect to requests for technology enhancements.
“The main benefit of smaller MLSs is that when an agent wants a feature added, they can be heard without layers of bureaucracy. The down side of course is that in some small MLSs, they have no money to do anything about adding features or have exorbitant fees to sustain them.”
Launch this summer
CTMLS and GFC CMLS are in the process of merging their assets and liabilities and will cease to exist on April 1, when Smart MLS will be the standalone legal entity, according to Paine.
Both MLSs use CoreLogic’s Matrix MLS system. The MLSs are already combining their backend MLS databases in Matrix to prep for a live launch this summer.
“If we hit all our benchmarks, SmartMLS will launch in August of 2017,” Paine said.
CTMLS chose to convert to the Matrix platform in 2014 in part so that there would be “no technology barrier to cooperation or consolidation with other MLSs using Matrix,” Paine, CTMLS’s founding CEO and a longtime advocate of statewide MLSs, told Inman News at the time.
Of the four other MLSs in the state, only GFC CMLS also used Matrix at the time.
Paine and GFC CMLS CEO Kathy Elson will be co-CEOs of SmartMLS. There is no time limit to that arrangement, Paine said.
“It is clear that the two MLS are stronger together. SmartMLS has a co-CEO arrangement that allows it to benefit from the strengths of both,” he added.
Merger discussions between the MLSs began in December 2016. The boards of directors of both MLSs and the state Realtor association, Connecticut Realtors, unanimously approved the merger, the MLSs said. The memberships of each MLS also voted and approved the merger on March 6.
“I could not be more proud of the Realtor spirit of this merger whereby the combined leadership of the CTMLS and GFC CMLS Board of Directors made a conscious decision to stay focused on the best outcome for our Realtor members and the clients they serve,” said newly-named SmartMLS President Michael Barbaro in a statement.
“As a result we were able to make it to today’s announcement in record time of four months.”
CTMLS was one of the first MLSs to join the new National Broker Portal that launched in January under the Homesnap brand.
“SmartMLS … will be using Homesnap as both the mobile app and public-facing portal for the MLS,” Paine said.
CTMLS and GFC CMLS both use Supra lockboxes and will continue to do so.
“Since Supra keys and boxes are handled by the MLS in Fairfield County, but by local associations in the rest of the state, nothing will change with Supra keys and boxes. Keys will continue to work throughout the state, with the two system codes as we had prior to the formation of SmartMLS,” Paine said.
An MLS-saturated county
CTMLS was formed through the consolidation of six smaller MLSs into a statewide MLS in 2006.
Four other MLSs, all located in Fairfield County, chose not to consolidate: Greater Fairfield County CMLS; Greenwich MLS, which has 1,250 MLS subscribers; New Canaan MLS, which has about 300 subscribers; and Darien MLS.
Indeed, given the competing industry interests that come with MLS mergers, consolidation in general tends to chug along slowly.
“[T]iny little MLSs in Greenwich, Darien and New Canaan … have been hold-outs for years. Greater Fairfield County Consolidated MLS covers the rest of Fairfield County so this merger will put them with the rest of the state, but those three cities will each be separate for god knows how long,” Eisenberg said.
“Each one has dues comparable with what you get the whole rest of the state for. Greenwich especially is very exclusive. I think they hold out to stifle competition.”
In Greenwich, the median listing price is $2.5 million, according to realtor.com. In Darien, the median list price is $1.8 million and in New Canaan the median is $1.7 million. Meanwhile, the median list price in all of Fairfield County is $599,000.
In response to Eisenberg’s comment, Theresa Hatton, executive vice president of the Greenwich Association of Realtors and Greenwich MLS, told Inman via email, “Greenwich is a town of 60,000 residents and over 50 square miles. Our market area is large enough that it sustains most subscribers to be subject matter experts in our town and their businesses take place in Greenwich only.
“As Kevin McQueen has stated several times, MLS mergers make sense in ‘natural market areas.’ Our market area crosses the state line into New York. Our natural market area is not in the rest of CT; we are a bedroom community of Manhattan and when people are looking to move to Greenwich the areas Greenwich competes with are Rye, Larchmont and other waterfront communities in Westchester County areas in NY state.
“Greenwich MLS Participants are predominately NY-based brokerages or Greenwich-only based brokerages. GMLS surveys their members and the responses indicate that the level of service provided and the resources provided exceed the expectations of our subscribers.”
Other MLSs not invited to participate
“No one came to GMLS to request that GMLS participate in the merger,” Hatton said.
About 30 percent of Greenwich MLS subscribers also belong to another MLS, usually Hudson Gateway MLS or GFC CMLS, according to Hatton.
“Many who join us as an MLS-only and are members elsewhere usually subscribe to several MLSs,” she said.
“The Greenwich Association of Realtors has 875 members. The Greenwich MLS has 1,250. So the people who join only the MLS are typically primary Realtor members with Hudson Gateway, Stamford, New Canaan or Darien,” she added.
Joe Scozzafava, 2017 president of the New Canaan Board of Realtors, also told Inman via email that its MLS was not asked to participate in the merger.
Paine said the Greenwich, Darien, and New Canaan MLSs are welcome to be part of SmartMLS.
“Because of our aggressive timeline, it was decided to keep the initial discussion between GFC CMLS and the Connecticut MLS,” he said.
“The door is always open for discussions to explore ways to work together to assist our mutual agents better serve the consumer. We believe consumer expectation is that when they list or buy with a Realtor in Connecticut, they believe their property for sale or their home search will be from a complete data set of all Connecticut properties.
“Adding Darien, New Canaan and Greenwich would only improve that dynamic.”
When asked why this market has so many MLSs, Paine said, “I think [that question] is better answered by the MLS executives of the Darien, New Canaan, and Greenwich MLSs. I assume they have a rationale as to how limiting exposure of listing data to a small group or Realtors instead of the entire state is beneficial to the client, but I wouldn’t want to risk speaking on their behalf.”
‘We feel New Canaan has some unique characteristics’
When Scozzafava was asked if there’s anything about his market that would help explain why there are so many MLSs, he said, “[W]e feel New Canaan has some unique characteristics. It has a low-key, small town feel but is quite sophisticated in many ways.
“We are a little off of the beaten path at the end of the Metro North spur. Residents who travel into NYC for work or pleasure, enjoy the quiet and peacefulness that our location offers while still giving them easy access to Manhattan with direct trains straight to the city.
“Our agents fully understand the numerous facilities and resources the town has to offer and how to ‘sell’ the town to newcomers. Many agents feel that having a unique MLS helps to preserve that identity.”
In response to Eisenberg’s comment, Scozzafava said, “The New Canaan market has maintained its own MLS for many years and it has proven to be a useful vehicle for local agents. There is a great sense of collegiality in our market. We pride ourselves in working closely together, as agents, to the benefit of our sellers and buyers.
“The MLS not only serves as a vehicle for ‘cooperation and compensation’ but also for communication and control. We have rules and regulations that adhere to the highest ethical standards that are created, approved and enforced locally. The vast majority of in-town agents support the MLS even though it is not a requirement to do business here.
“The maintenance of our own MLS is in no way intended to ‘stifle competition’ or exclude agents from other towns from working here. About 98 percent of our listings are also listed on the GFC CMLS.
“There are two schools of thought on what the future will bring. Some feel that a merger is inevitable but others feel it would be best to maintain independence. It will be a full membership decision when that time comes.”
When asked why New Canaan MLS hasn’t merged with any of its neighbors, Scozzafava said, “If you are referring to Darien or Greenwich, there does not appear to be any overwhelming benefit in doing so.”
SmartMLS covers all of Connecticut, including Fairfield County, where it provides 99.6 percent of the listings in New Canaan, 100 percent of the listings in Darien, and 88.6 percent of the listings in Greenwich, according to Paine.
According to Eisenberg, his research shows the MLSs aren’t really stifling competition in two of the three markets. The Darien and New Canaan MLSs are “just holding an even keel,” he said.
Using the realtor.com Find tool, Eisenberg looked up how many listings come from each MLS, including active sales and rentals in each city for each MLS.
|Greater Fairfield Consolidated MLS
|New Canaan MLS
“What I would say is that GFCMLS (250) is already almost equal to Darien MLS (267) in Darien and GFCMLS (332) is almost equal to New Canaan MLS (336) in New Canaan to the point where agents won’t need a dedicated MLS in either of those markets soon to get market exposure,” Eisenberg said.
“They will eventually become obsolete as more and more brokers start using the statewide system. In Greenwich, GFCMLS (583) trails Greenwich MLS (782). There are 820 unique properties listed in Greenwich. GFCMLS has 71 percent of them. Greenwich has 95 percent of them.
“Still, 38 of them are in GFCMLS which is not the primary MLS for that city, and they are not in Greenwich MLS, which is the primary. That would suggest that a creep is starting and when GFCMLS merges with CTMLS, I think the momentum for a unified statewide system is coming.”
Darien MLS did not respond to a request for comment.
Editor’s note: This story has been updated with comments from Connecticut MLS and New Canaan MLS and additional comments from Greenwich MLS.