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Why a Statewide MLS?

September 1, 2010

A Q&A with Cameron M. Paine, CEO of the Connecticut Multiple Listing Service and author of the white paper "How to Build a Statewide MLS (Or, Order from Chaos)." Who would benefit most from a statewide MLS?

A statewide MLS would be immediately able to lower costs through economies of scale, renegotiation of vendor contracts, and much higher levels of efficiency. MLS members who had been stuck between MLS territories would immediately save money by no longer being forced to pay multiple MLS fees, larger brokers would immediately save money on programming and Web site costs (multiple data feeds, down to one) and training (one set of MLS rules, and one MLS program) for agents.

Additionally, brokers can determine true market share and agents can bring up all comps under a statewide system. Finally, at the heart of it all, the consumer would be able to engage with a real estate broker with every confidence that when they want to see available properties, they would be shown all the available properties listed, not just those in the MLS their broker happens to belong to.

Why does a statewide MLS make more sense than large regionals?

To begin with, the NAR frame-work of 50 state associations already exists. Having statewide control of listing inventory allows the flexibility necessary to accommodate the different laws and politics enacted by each of the states. Second, by applying the standards required by licensing laws, the statewide MLS can help reduce unlicensed access to the MLS. Third, influence with NAR gets wielded by the state via regional representative bodies at NAR. Finally, although it may make sense for certain markets to override the objections noted above in favor of a multistate regional, with the ever greater demand for listing data comes the question of how much it is worth. Some states will be in high demand, and some will not. Having a statewide MLS allows -brokers within a state to control their own data use, its monetization, and protection, within the state’s statutes. Multistate regionals may have to contend with different data demands, expectations, and data protection laws from each participating state.

For brokers facing the cost and complexities of needing to join several MLSs, wouldn’t data-sharing agreements be an answer?

At its most basic level, data sharing as an excuse not to consolidate hijacks technology for the sole purpose of avoiding difficult political issues. Requiring an elaborate, expensive maze of hardware, software, and personnel, data sharing cannot resolve the underlying duplication and costs of multiple data sets, staffs, buildings, vendors, contracts, etc. Only one consolidated system can ensure all parties have equal access to complete, timely MLS data, and maximize reduction in costs through improved efficiencies and economies of scale. Forging a common path where everyone can be brought to agree on the merging of data, staffs, locations, and MLS systems is often so difficult that data sharing seems like a more reasonable choice because, in short, it appears achievable. Yet, consolidation can be achieved. Assemble the right people (i.e., people who can check their egos at the door) and change the conversation from what members will lose to what they will gain.

How would a local association survive without the revenue from operating an MLS?

Probably the greatest fear for any association-owned MLS is losing the income derived from its MLS operations. Most, if not all, associations that own MLSs operate them as a separate, for-profit corporation, but many use income from the MLS to support their nonprofit association-side needs and services. As a result of financial support from the MLS, many associations operate well beyond what their means would allow if operating as stand-alone corporations. The problem is, siphoning funds from the MLS dilutes the ability of the MLS corporation to enact change, add benefits, etc., and conceals critical core competency issues within the association business model. You may be surprised to find that the six Connecticut associations that gave up ownership of their MLSs to create the statewide found themselves better able (and better equipped) to concentrate on core association business-like -
education, training, and local and state political
issues. Consolidation of the 800-plus MLSs in the country into 50 would not, therefore, result in mass layoffs of association executives. Assuming that each statewide MLS operates as functionally independent (even if owned by the state association) from the state association, if the statewide MLS makes use of local associations for its service centers, attrition from consolidation would remain low.

How was Connecticut able to consolidate MLSs?

The push in Connecticut for a statewide MLS was no less difficult than anywhere else, but our progress was made easier by the efforts of a few forward-thinking AEs on both the state and local levels who, over years, persuaded, cajoled, and worked like crazy to keep the dream alive. Then again, there
were -others who fought tooth and nail against a statewide MLS (and still do), and others who fought against it, but are now our strongest supporters.

How can AEs learn more?

How to Build a Statewide MLS (Or, Order from Chaos) is a 76-page guide for any organization considering consolidation. It covers everything from making the argument and establishing a governance model to technical pitfalls and hiring staff. Access the PDF below:

 

Cameron M. Paine is CEO of Connecticut Multiple Listing Service Inc. Contact him at 203-697-1006 or cameron@ctreal.com.