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While we still wait for the proposed National Association of Realtors (NAR) settlement to be finalized and for answers to a lot of how-will-it-work and what-will-be-allowed questions, it seems clear that no matter the details of a final version, we’re in for a shift in the way our industry runs.
If nothing else, there will be an immediate impact on agent workflow, but less obvious is the long-term impact on the multiple listing service (MLS). It’s this aspect of a potential settlement that interests me most because of my long-standing role as an MLS advocate, advisor and, now, technology provider.
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In my capacity as an advisor, my team and I have executed several strategic plans and consulting engagements for MLS organizations across the country in recent months.
Some of these MLSs are association-owned, some broker-owned. Some are operated by small, cohesive boards of directors, and some operate with a large and complex leadership structure.
Despite these differences, all of them have the familiar pains around technology and governance, data share opportunities and strained vendor relationships.
A tale of two reactions
As news of the settlement worked its way across our screens and inboxes, I had numerous calls with my highly positioned MLS friends. Interestingly, there were just two reactions to the news and what we might experience as a result. One opinion was that the end is near. Go ahead and start loading the MLS lifeboats, they said. We had a good run. Women and children first, they said. We’re cooked.
The other reaction, an opinion spoken quietly yet confidently, was a bit more optimistic. We’re about to (finally) see MLS get the focus and attention it has long deserved. To summarize, in a marketplace where data is the currency, the source of the cleanest and most reliable data will suddenly come into focus and become far more valuable than anything reproduced downstream. That’s the real value of what MLS brings to the marketplace, they said. Time to wake up and tell that story.
Dead or alive?
After hearing repeated versions of these two opinions — one, that MLS is dead and one, that MLS is finally alive, I have come to the conclusion that both opinions are actually correct. I’ll explain, but first a little context.
An early-stage exercise of our version of MLS strategic planning is an analysis of agent production. In order to make big decisions on behalf of a community of agents supported by MLS technology, it’s important to get a sense of how that community uses technology.
It won’t surprise you to know that these studies reveal a predictable pattern. Regardless of size or geography, every MLS supports a significant number of agents who aren’t actively participating in the business. This isn’t news. Everyone in the MLS universe knows this. There are a whole lot of agents out there holding licenses who don’t wake up every day to work in real estate.
Why does this matter? Because the most forward-thinking MLSs are well aware of this and are using recent news as leverage to launch important new, targeted initiatives.
They are adjusting their models to be far more strategic about how they deliver value to their broker members, the agents they support and the consumers they serve. Now more than ever, those MLSs that are paying attention are realizing that a stagnant menu of services managed by a small set of providers, particularly in a rapidly evolving technology landscape, is no longer viable.
Delivering value to members with targeted products and services catered to how they do business is one immediate indicator that will separate the MLS organizations that thrive from those that merely survive — or don’t. Simply banking on staying still and hoping all this goes away isn’t going to work. It’s time to either reinvent your MLS or stand back and watch it bleed to death.
The MLS golden age (for some)
This reality poses the question: What is MLS now? How does MLS maintain its position as the unquestioned center of the data landscape, assuming compensation is no longer part of the equation? The obvious answer is to double down on the things that have always been valuable to the membership (and their clients) but haven’t always been on the marketing one-pager, so to speak.
Direct access to the cleanest and most reliable data is the big No. 1 answer. Although not sexy, the MLS is very good at being the data police. Clean data, delivered quickly, based on a set of standards (thanks, RESO), will always fuel the entire vertical.
A close second key MLS point of value in this new environment is data compliance. Where there is clean data, there’d better also be a way to deliver and then monitor that data effectively. MLSs haven’t always been great at compliance, but it’s part of the core mandate and about to take on a whole new level of importance to the industry.
There are certainly more talking points for MLS value beyond what’s mentioned here, but these two concepts, in my humble opinion, should be at or near the top of any MLS executive’s vision for the immediate future. The top MLSs are already investing heavily in their reach, core values and longevity.
Scaling up and final thoughts
MLS Aligned is establishing economies of scale around shared technology services. CRMLS has created a venture capital arm and partnered with BrightMLS to create REDistribute. FMLS, UnLock and StellarMLS have become very involved in helping our European friends imagine how to create an MLS environment for themselves.
It’s ground-breaking stuff, and it’s absolutely necessary in an age where MLS is evolving beyond simply an introverted, mildly paranoid, walled-off community.
That’s the encouraging news, but there’s another side to this narrative. Much like those agents who carry a license and have no active position in the marketplace, it appears to me that some MLS leaders are simply carrying on as if nothing is happening, or worse yet, they are aware yet paralyzed by indecision, waiting on someone else to do something. They’re here but not really participating.
The gap between proactive organizations and those in denial is only going to grow, particularly in a post-settlement arms race to reinvent the MLS model. Therefore, I firmly believe an MLS golden age is upon us, but only for those who have the vision to see it coming and boldly act on that vision.
Bill Fowler is a 24-year veteran of real estate technology, having spent time as an MLS software provider, in leadership positions (Industry Relations) at both Zillow and Compass, MLS consultant and strategic advisor, and recently president of independent MLS database and data management provider SourceRE.
