REALTOR® ASSOCIATION EXECUTIVE
Shared Services: MLSs Share data, costs
By Paul Beakley
MLSs have a long history of cooperation. A combination of urban population growth and the rise of the Internet in the 1990s has prompted MLSs to work together to share everything from vendors to listings.
MLS cooperation isn't a new phenomenon, although the Internet and cheap high-speed access has certainly made it easier for MLSs to work together. And as long as they can get over the fear of losing control of their proprietary data and trusting their partners, these alliances are extremely productive.
MLSs can cooperate at a basic level, such as by buying vendor services in bulk. Or they can integrate their databases so seamlessly that they're indistinguishable (to users, anyway) from a regional MLS.
At one end of the spectrum is the arrangement between the Vail Board of Realtors¨ and the Summit County Association of Realtors¨. These two Colorado associations formed an alliance in 1997 to split the cost of a new MLS system. The system was too expensive for either board individually (each has fewer than 500 members). But by pooling their resources, the two boards were able to invest in the system.
"Members of each MLS can access only their own board's listings," says Frank McKibben, Vail's MLS director. "Neither board has a desire to create a regional MLS. Summit County is 30 miles away from Vail at its closest point, and there's an 11,500 foot-high pass between us. Vail brokers don't go over to Summit County and vice versa." This shared system isn't about combining MLSs. It's simply an economic tactic that is working for both associations.
In New York, two far-flung boards have forged an even closer relationship. The Jefferson-Lewis Board of Realtors¨ and the St. Lawrence County Board of Realtors¨, which combined represent an area larger than Rhode Island, allow members from both boards to search both MLSs. However, members can only list property in their own system. These two boards came together because their long, shared border represents a lot of business.
According to Lance Evans, executive officer of the Jefferson-Lewis board (managed by the same company that manages the St. Lawrence County board), the biggest hurdle to creating the partnership was the protectiveness association members felt over their data. "One board was significantly larger than the other, and the smaller board was concerned it would be 'taken over,'" Evans explains.
In fact, AEs report that the most common barrier to full cooperation between MLSs is fear of losing control over proprietary data and learning to trust other associations. Yet, in most cooperative relationships, the associations get the best of both worlds: they form an economical alliance for both themselves and their members, and retain control of their data.
Allies, yet still individuals
"We have very different locations and very different MLSs in our alliance," says Mary Lou Williams, assistant executive vice president of the Southland Regional Association of Realtors¨ in Van Nuys, Calif. Her association is part of a six-MLS alliance that encompasses much of southern California.
"We've found that local boards are best suited to manage their own databases because each regional board knows its region best, and members know whom to call in their local area," says Williams.
Likewise, Massachusetts-based MLS Property Information Network Inc. has an alliance with Consolidated MLS in Connecticut and State-wide MLS in Rhode Island. All three MLSs use Re/Xplorer software, so the data can be easily shared and accessed.
"When we put this agreement together," says Kathy Condon, president and CEO of Property Information Network, "it was made clear to subscribers of all three MLSs that they needed to make sure they were following the other states' license laws, and that access to the data was not an automatic offering of compensation."
New England practitioners win by not having to pay membership fees to multiple MLSs for data access. "Listing submission to one of the MLSs of which you are not a member is $30 per listing, depending on the number of listings you submit," says Condon. The participant can make the call whether or not to hold full membership in another MLS or just access the data through the alliance for the occasional sale or referral.
MLS Property Information Network also has reciprocal listing submission agreements with Cape Cod & the Islands' MLS and Eastern Conn. Association of Realtors¨' MLS. These allow listing submissions only, not access to the data.
The Greater Tampa, Pinellas, and West Pasco MLSs joined their databases more than 12 years ago, long before the Internet would make such a move comparatively cheap and easy. Some 11,000 members use the combined list. Each MLS maintains its own billing, staff, rules, and vendor relationships, but Florida Realtors¨ enjoy the benefits of seamless one-stop searching.
"It was really quite bold and forward-thinking in 1991," says Ann Guiberson, president and CEO of the Pinellas Realtors¨ Organization, a member of the Tampa-area shared MLS database. "Our leadership still prefers autonomy, because they've been comfortable with the situation for so long that they have no incentive to change."
Merging management duties
Management of alliances is also a common contentious issue. In Michigan, an alliance of eight local MLSs covering 11 counties locked horns over the size of each of their voting blocs, says Gary Walter, EVP of the Southwestern Michigan Association of Realtors¨ and manager of the Southwest Michigan Regional Information Center. "We had eight boards, and two of them were much larger than the others, so the largest boards were concerned they would be outvoted by the small boards. We finally agreed to one person, one vote."
Another barrier to MLS cooperation is agreeing about data formats and rules such as fines for incomplete data. In some cases, the MLSs simply agree to follow their existing policies without coming to any mutual agreements. In others, the boards agree to a common set of rules. Southwest Michigan's MLS went so far as to form a limited liability corporation (LLC) in 1996 so its MLS vendor would have a single point of contact. The process took four years.
"The differences between our member boards are probably fairly minor," Walter says. "Most of us comply with NAR's recommended policies and rules. The only substantive differences between the boards in the alliance are in the fees each member board charges."
MLS cooperation typically occurs in dense urban areas, where salespeople freely move across blurry city borders. Southern California's multiregion MLS serves 75,000 members in Glendale, Orange County, Los Angeles, Pasadena, Van Nuys, and other small cities that run together in the Los Angeles Basin. Members can search all regions, but must pay the local MLS to list a property in each region. "Since we're in a metropolitan area, members would have had to join more than one MLS to do a good job without our alliance," Williams says.
Peter M. Cornell, CEO of the Ann Arbor Area Board of Realtors¨, says sharing MLS data with a large regional MLS in the Detroit area has saved his members several hundred thousand dollars by not having to belong to another MLS.
The future of MLS cooperation looks bright. In both urban and rural areas, allied boards are looking beyond their current borders to bring in peripheral members and further expand the searchable database for the benefit of all Realtors¨. In southern California, the alliance is looking to San Diego and Palm Springs, for example, although both areas are far from the center of the current alliance.
"There's a lot of potential for data sharing," says Williams. "We just have to get over the fears."
Paul Beakley is a freelance writer based in Tempe, Ariz. He can be reached at firstname.lastname@example.org.
Read more about associations Sharing Services:
Sharing Professional Standards Administration
Sharing Government Affairs Directors
Sharing Housing Opportunity Programs
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