Blanche Evans
Realty Times
It's natural for individuals to bond together to form a larger, more
important union. That's why our government protects institutions from
marriage to corporations.
But what does it mean when MLSs merge? Is there more to the story that providing improved efficiency to members and consumers?
In
the January 6, 2006 edition of the Silicon Valley/San Jose Business
Journal, journalist Sharon Simonson wrote "Regional MLS merger at hand"
where she announced a merger at hand of six Bay Area multiple listing
services, calling it "the first step toward a massive overhaul of the
Northern California residential real estate industry."
The
new MLS would rank among the largest in the nation, and "cover a
territory stretching from the Central Valley across the East Bay to San
Francisco and Silicon Valley all the way to Monterey and San Benito
counties."
Jim Harrison,
former CEO of NTREIS, a north Texas consolidation of 18 association
MLSs, is leading the charge for ReinfoLink, the MLS that serves Santa
Clara and adjoining counties.
Among the reasons mentioned for the consolidation:
- disjointed listing information
- market boundaries that don't serve the marketplace well
Other
inefficiencies complained about by brokers and agents is paying
multiple fees in order to access MLS information in nearby
neighborhoods. After all -- brokers and agents are licensed by their
states, why should they be limited to selling only those neighborhoods
in which they pay fees to be members of multiple MLS organizations?
But
"politics, personalities and paranoia" may slow the merger or slow
other associations from joining a state-wide drive to consolidate,
suggests one pundit. Too many jobs and too much power will be lost.
Plus local brokers and agents may not want more agents competing in
what is already a slowing market state-wide.
Others
welcome a state-wide MLS. "This move will be necessary in order to
fight off those out there who only see the MLS as a database and not as
the amazing marketing tool that it is," says Russ Bergeron, CEO of
SoCalMLS. "There are several companies out there -- some who haven't
even announced what their "product" is -- who view the MLS as just a
bunch of listings and who will try to use the existing MLSs to build
their own competing models. As I have pontificated many times in many
forums, the MLS is based upon cooperation and compensation. It is not
the database that makes an MLS."
He
continues, "On the surface, for the brokerages, it allegedly answers
their demands for fewer MLSs (although it is only the large,
multi-market brokers who are making the demands -- there are tens of
thousands of one and two-man offices in California who could care
less). What I would like to see come of it would be to get the big
brokers into the governance of the MLSs:
- because they are obviously deeply affected by any decisions made at the MLS level;
- because they have better business sense than most of the people at the BOD table at most MLSs -- my MLS excepted of course; and
- it gives them a chance to put their money where their mouths are -- be careful what you wish for.
"Again
for the large brokers it does make it easier for them to extract data
in a common format to use in their back office operations. But on the
other hand, they have already spent millions of dollars developing
systems to collect data from various systems which has allowed them to
differentiate themselves from others. Under a common database -- every
broker, heck every agent would have the ability to have the same
information downloaded to their desktop or back office."
Bergeron
concludes, "I applaud the efforts of the Northern California group and
would like to see a similar initiative here in Southern California. If
done correctly both the real estate practitioners and the consumer will
be better served because everyone will have wider access to the
information needed for their part of the real estate transaction."
Pleasing
the big brokers may be the MLS industry's only choice. In fact,
Harrison told the Journal, "I think we should move as quickly as we can
because the brokers have lost patience."
In related news, a company called Point2 says it is announcing their "Private MLS brokerage solution."
Says
a spokesperson, "Point2 started what we believe is a shift in the role
that the public MLSs play in real estate marketing. A change that no
one saw coming."
In the
next two weeks, Point2 plans to announce a number of agreements to feed
listing data from Point2Homes.com to major search engines, says the
company. "This reflects part of our vision and strategy for changing
advertising in the industry -- turning it upside down. We expect that
this will be the beginning of a turn of online listing advertising
expenditures into revenue sources for brokerages, which we strongly
believe are the rightful owners of the data assets in the first place,
and should be able to capitalize on them instead of being penalized by
them."
Spokespersons say
that Point2 will be "the broker's own mini-MLS listing(s) that would
include the kind of rich data that consumers are looking for. Up to 24
photos, neighborhood data, Google Earth, Seller Comments, etc. That's
why search engines are interested in the content/data."
The
broker's listings, which also post on their and their agent(s)
websites, are created by Point2 Agent and automatically routed to the
Point2Homes.com marketplace, which is fed to the search engines and
other real estate online sites, says the company.
A
spokesperson explains, "The general view is that brokerages own the
data and right now pay to advertise it online while there are a number
of entities that would actually love to get their hands on that content
because it would help them to better differentiate themselves, provide
a superior experience to their site visitors and attract more eyeballs
to their sites. Needless to say, it would also attract more advertisers
to their site. Leveraging this need for rich real estate data, both the
broker who use Point2 Agent and our company can create a new revenue
stream."
While
companies have announced the "next great thing" many times before,
technologies like this come at an extremely sensitive time in brokerage
relationships, particularly considering the sword of Damocles still
hanging over the head of National Association of Realtors members. The
DOJ lawsuit that demands that brokers share their listings on other
brokers Websites unconditionally has not been withdrawn, despite a
petition by the NAR asking the court to dismiss the lawsuit.