Directors for a statewide multiple listing service initiative in California are considering whether to buy up one or more regional multiple listing services, according to a status report posted at the trade group’s Web site.
CALMLS, a nonprofit subsidiary of the California Association of Realtors that is pursuing the statewide MLS system, has plans to "acquire the assets of at least one regional MLS and potentially two or more in cooperation with their local association leadership and membership," according to the online information, and to borrow $3 million from the state Realtor group, to be repaid within seven years.
The information was part of a "CALMLS Status Report and Request for Funding" that has not been formally approved by CALMLS directors or the California Association of Realtors board. A directors meeting is scheduled next week.
The report also states, "In the last 60 days, CALMLS identified several regional MLS providers from different areas of the state who are willing to take a leading role to become the base provider of services to launch the statewide effort. CALMLS has started serious negotiations with two of these regional MLS providers and expects to reach agreement with one or both of them in the first quarter of 2009."
The acquisition would "provide an immediate base to accelerate the time in which members can join one MLS and get access to statewide information without the payment of multiple fees and different MLS rules."
And "with a large group of initial … participants and cooperation with current data-share partnerships, CALMLS will start with a large relevant data set and move rapidly to complete coverage of statewide data," according to the status report.
CALMLS, as envisioned, will have two tiers of participation: The entity will serve both as a primary provider of MLS technology and statewide data to those local Realtor groups that choose to join, and it will also accept data feeds from local Realtor groups and regional MLSs that wish to continue to operate their current MLS systems.
There are several other collaborative MLS efforts under way in the state, including CARETS, a data-sharing and standardization effort by a group of mostly Southern California MLSs that is intended to eliminate the need for agents and brokers to join multiple MLSs in the region, and to standardize MLS rules.
Meanwhile, a group of seven Northern California MLSs — including members in a collaborative MLS effort dubbed Quattro — in September announced plans for a data-sharing and exchange system to allow members of any participating MLS to search across multiple MLSs and to enter property listing information in the most appropriate MLS.
Another effort, MLSAlliance, is data-sharing effort with participation by MLSs in Northern California and Southern California.
Representatives for the California Association of Realtors trade group and CALMLS did not offer comment about the plan on Friday.
Art Carter, CEO for MRMLS, a Southern California MLS that is a participant in CARETS, questioned the plans by CALMLS to purchase a regional MLS or several regional MLSs.
"It seems like they’re using money to go after member assets," Carter said. Why not be supportive of what’s already there?"
He also noted that MRMLS "is not among the regionals that they’ve approached" in seeking an acquisition.
"From our standpoint it’s a little disappointing that (CALMLS representatives) have basically gone to the leadership — the directors at CAR — and asked for the permission to go out and create something new," Carter said.
Last week, Carter shared the stage with Joel Singer, executive vice president for the California Association of Realtors, during an MLS panel discussion at the Real Estate Connect conference in New York City, and Singer said he was hopeful that CARETS would play a role in the statewide MLS initiative.
"Our approach is not to say, ‘Here’s a statewide MLS,’ " Singer said. "Our approach is to work collaboratively. We’re very hopeful we can do something with CARETS. We think they’ve moved the ball very far downstream." Scott Kucirek, who heads up the CALMLS effort, participated in an earlier session at the conference (see Inman News).
CARETS has been implemented across five Southern California MLSs already, with a letter of intent to share data with MLSListings, a Northern California regional MLS — that could happen by the end of this quarter, Carter said.
Ed Krafchow, CEO for Prudential California/Nevada/Texas Realty, commented Friday, "I do think that CAR is smart enough to recognize they lack institutional memory of the MLS business and need to seek support. How they do that is anybody’s best guess."
CALMLS has plans to use "new MLS technology" from a vendor to complement systems from MLS providers it acquires "and be one more MLS technology for the statewide system," according to the CALMLS status report.
Among the expected benefits of the CALMLS acquisition plans, according to the status report:
–Reduced costs and enhanced service offerings for participating associations.
–Operational expertise: "CALMLS will leverage existing regional MLS employees and leaders to guide future strategic decisions and ensure that MLS participants and subscribers receive outstanding service."
–New technology with less risk: "Bringing on a new MLS technology partner that complements current successful MLS technology allows each participant or subscriber to select the provider that works best for them."
–Improved efficiency: "Eliminating conflicting database standards utilizing a single backend will significantly reduce operating costs for CALMLS and participating brokers (and) agents."
CALMLS is projected to generate $13.8 million in revenue in 2009, growing to $24 million in 2011, according to the report.
The entity is expected to operate at a $720,000 loss this year, not including the $500,000 costs related to its launch, and is expected to have net revenue of $1.53 million in 2011. Also, the report anticipates "a user base of more than 110,000 members" in 2011.
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