Why associations need to consciously uncouple from MLSs

Every new calendar year seemingly gives birth to a host of soothsayers in the real estate industry and elsewhere. Although I have read many future casts regarding the MLS, I have yet to read similar thoughtful prognostications about the future of the Realtor association.

I find this to be very intriguing for a number of reasons, but especially as it relates to the association’s ability to stand on its own as a viable entity without being directly coupled with an MLS.

As I travel the country working with associations, it’s become abundantly clear that one of, if not the greatest, impediment to MLS innovation/consolidation is the predominance of the association ownership structure and an over reliance on the MLS as the sole determinant of their value proposition.

Where does the association’s value lie?

There’s an almost unilateral belief that to decouple the MLS from the association would be the equivalent of the association’s death nell, due to an utter loss of perceived membership value, along with the assured financial ruination.

This in not to say that predictions about the MLS are devoid of thoughts on the association’s role, but rather to point out that it’s most often a secondary thought or encoded in references about MLS politics, poor governance and slow decision-making structures.

The MLS Agenda 2020 report is a perfect example of how many of the industry’s brightest and most influential minds talk around the association’s role in determining the MLS’s future, but are in actuality very clear if you read between the lines.

Realistically what needs to be said, out loud and repeatedly, is that owners/decision makers must “stop screwing it up” and focus on what’s important before the MLS — and by extension the association — become obsolete.

A significant step toward “no longer screwing it up” would be for those same owners/decision makers to immediately separate the association’s relevance and reliance from the MLS and dramatically elevate the focus and resources dedicated toward the future of the Realtor Association.

To continue to intertwine the two futures as one is a complete disservice to each and is stifling the innovation that’s necessary for each to maintain any degree of relevance for members/subscribers and consumers.

Time for a breakup

As the association and MLS are currently coiled together like two large snakes in a small cage, it’s not as simple as just ripping them apart. It will take a conscientious approach to begin to untangle this unbalanced, yet symbiotic relationship.

In other words, you must be very strategic in decoupling the MLS from the association in a way that accentuates the strengths and minimizes the damage.

Fundamentally, the “future” of any entity is a long-term strategy and organizational question. When engaging organizations in strategic thinking, I challenge them to first identify their purpose, why they exist and then identify core competencies that will allow them to fulfill that purpose.

Right now, with the MLS and association coupled there’s far too much confusion about these important long-term strategies and organizational alignments.

So, what tends to happen is that the MLS’s purpose is dramatically watered down while the core competencies for the association are left undefined — or worse put aside all together.

Moreover, because the day to day tends to end up being driven by MLS minutia, many association executives and staff push the association’s needs to the back burner and, by default, associations are run on a part-time basis.

Because of this the association underperforms both from a value and revenue standpoint, which creates a paralyzing fear that the association would collapse without the MLS. Meanwhile, MLS service levels decline due to the inferred need to prop up the association rather than serving the needs of subscribers and consumers.

Where this happens the entire real estate industry, and those who rely upon services, are forced into a cycle of futility and frustration. The important thing is to recognize when the cycle you’re in is no longer sustainable or serving the community’s best interests — before that reality overruns you.

How to strategically separate

I’m bullish on the potential of associations to succeed as standalone organizations and believe it significantly improves the likelihood for a high-performing MLS system. However, with the remaining words left, I want to outline the basic steps necessary to begin to move toward decoupling decisions.

1. Like any good 12-step program instructs us to do, organized real estate must acknowledge that we have a problem or suffer its consequences.
2. We must intently reassess each organization’s fundamentals such as the budgetary realities, identified priorities, along with the governance and administrative structures.
3. To do this, organized real estate needs to conduct an honest and accurate assessment of the association’s financial dependence on the MLS to begin to understand the gravity of the situation. Once, that has been accomplished, there needs to be an aggressive plan established to move away from cross-organizational subsidizing of services.
4. While this is happening, each entity needs to begin to develop its own strategic plan focused on its unique purpose and core competencies. Then utilize the established priorities as a means by which to assess funding and organizational decisions.
5. Finally, once you have a thorough understanding of your association’s priorities and realities, you must exhaust all options available to position the organization in a way that fulfills your short- and long-term responsibilities to members, consumers and the industry.

If organizations are unwilling or incapable of taking the critical first steps to admit there’s a problem, conduct an honest assessment, create independent strategic plans and consider all options, then their future is destined to be determined for them by those who are.

Clint Skutchan is the CEO and facilitation specialist of TWO WAY C3 in Ft. Collins. Follow him on Facebook and Twitter.