RISMEDIA, March 19, 2007-Looking back in time the MLS was supposed to be simple: A seller – a listing – an agreement to share – a buyer – a sale. Everyone benefited, including the buyers and the sellers. It was built as a B2B model, a cooperative among brokers licensed under state law not a B2C model, Yet today under the flag of "all information should be free" everyone wants to promote the listing. As a result the MLS has evolved into a consumer marketplace and a quasi public utility. The proverbial horse is out of the barn.
So after four decades of everything working reasonably well the industry is now in such a state that brokers and agents don't really know what they have on their websites, or for that matter what information of theirs is on some else's website. Brokers complain that they have to belong to multiple MLSs and are required to spend thousands of dollars just to get their own data back.
"Clearly the future of the MLS needs to be addressed, and soon," says Stefan Swanepoel, author the new 2007 Swanepoel TRENDS Report (www.ReTrends.com). The Report delves into detail on the top 10 trends impacting brokers, agents, Realtor Associations and MLS Boards today and provides not only an analysis of the current status but identifies key players, lists numerous suggestions and provides various take away items to action.
According to the Report the existing MLS model in use today dates back to the 1960s when almost all brokers involved in transactions represented the seller; either as the seller's agent or as the subagent of the listing broker. The seller paid listing broker who was in turn responsible to compensate the broker working with the buyer. There are approximately 900 local MLSs that appear to be stuck in this old paradigm. However, all this changed during the 1990s with the evolution of buyer's agents, the advancement of the Internet, the subsequent and rapid sharing of real estate listing data online and the copyright door was thrown wide open.
Industry consultant Ken Jenny is quoted in the Report stating that the objectives of the MLS industry have never been further from the objectives of the residential brokerage industry than they are today. He feels strongly that the data assets of the industry need to be owned, managed and operated by the rightful owners of the assets – the brokers. He also feels that the time has come to take the governance and management out of the hands of NAR, the state associations and the local boards, who in his opinion only exist to level the brokers' competitive playing fields.
According to David Charron, CEO MRIS (the largest MLS in the country), unauthorized use of the content has hollowed out the margins of the brokerage business. At the same time brokers are understandably upset that they cannot gain easy access to their own content. The successful brokerage company has now been moved to the "edges" and has all but given up on controlling the distribution of its most valuable asset; the listing.
And so begins the MLS trend discussion in the Swanepoel TRENDS Report on page 97 titled "The Perfect Storm." Many other trends delve into the Internet, e-commerce, lead generation and the overall democratization of real estate information. Although it is impossible to even scratch the surface of this 159-page Report, we can add that Swanepoel concludes that "consolidation into larger MLSs is inevitable." He predicts that larger MLSs will inevitably lead to increased standardization, which in turn will fuel further consolidation and open the door for the creation of one national MLS. The Report also covers various key MLS players in the industry such as Google, Realtor.com, Trulia, Zillow, First American, Fidelity, Craiglist and even the DOJ.
While brokers grapple with the parochial issues – both practical and legal – consumer demand continues to grow for more and more real estate information with listing data atop the pile. If brokers wish to remain at the forefront of consumer awareness and the existing MLS system has any hopes of surviving intact, it will have to re-engineer itself into a standardized mega regional or national system that will be relevant and meaningful to brokers, agents and consumers alike.
The Report provides very extensive, in-depth information on every important facet of the residential real estate brokerage industry and makes for one very interesting read. This is one Report you must have on your table as you will be referencing it regularly throughout the whole year. Copies are available at Amazon.com, RealtyU Books and the Realtor Bookstore. For free shipping go to RealtyU Books at www.RealEstateBooks.org and use the code RISMedia.