Editor’s note: The Inman News perspective, “A different MLS model for NAR,” opened a “what if” discussion over what to do with the national MLS database that Homestore in partnership with the National Association of Realtors has put together on the Web over the last six years. The article explored the notion of creating a non-profit, national MLS model. Dirk Knudsen, a broker/owner in Beaverton, Ore., wrote the following comments in response to the idea.
The primary purpose of the National Association of Realtors is to promote the business of the hard-working Realtors that spend their evenings and weekends out chasing down new business. They clearly have not to-date done that. The NAR management is much like the political process we have in place in which senators pander to special interest groups and totally forget the little guy back home that pays all of his taxes and hopes for a better future.
Add to that the fact that Homestore has repeatedly benefited from our data and not included us and you have a formula that is inherently wrong. There is no way that the average broker and his agents can show me any real benefit to their listings being out on a national MLS like Realtor.com. Only a very small percentage of agents and brokers actually pay Homestore for enhanced services and as a result we are lucky to even get our names on our listings, let alone a phone number.
The dream of a national database that is all-inclusive, not-for-profit and consumer-driven is alive and well in the hearts and minds of most people who are in the know. The problem is that this poor set of data has been mismanaged, and by now, many new business models and referral platforms have made a dent in the traditional brokerage models, giving them more and more incentive not to participate at all any more.
The consumer would win in a world where the data is free to access and would connect the consumer with the listing agent. That world would be great. Buyers agency folks have ensured in many ways that this will never happen and are adamantly opposed to the display of listing data that would connect clients with sellers and listing brokers, while at the same time many buyers prefer dealing with the listing broker for a multitude of reasons.
Here is the thing: The database will shrink from this point on. Realtor boards and large brokerages will and are beginning to question their allegiance to NAR and moreover to Homestore. There is little perceived benefit to be with them. When consumers look at homes they look local. They enter local information into Google and look for local experts and properties.
I used to dream of a “perfect market,” and in theory it is desirable. However, there is no such thing as a perfect market. We find our sales and profitability have actually increased by holding certain listings closer to the vest–sometimes off the MLS–and we have been able to offer our sellers reduced-fee structures as a result.
In a good housing market with a long list of buyers lined up, it is totally feasible to forego the listing of properties in any database. It increases demand (people want even more of what they cannot easily find out about), leaves the negotiating power with the listing broker, and makes a smoother process for the home seller with less total showings needed to complete the sale.
In addition, the referral platforms and new business models that threaten the traditional models cannot play in that sandbox. No data equals no role in the value chain. Expect this trend to continue as brokers begin to wake up and smell the proverbial coffee.
I used to dream of a perfect MLS and listing source–a one-stop shop. But we are moving further and further from it and there is only NAR and the poor decisions that were made to use the data for profit that have brought us to this place.
Dirk Knudsen is broker/owner of RE/MAX Metro in Beaverton, Ore.
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