That was then and now is now. It is a far different air that blows through today’s MLS environment. In almost every marketplace in the country, the competitive rules, the cooperative traditions and even the role of the venerable old institution are in a state of radical change and transition. In more than two dozen markets, the MLS has now become the center of controversy, lawsuits and dispirited behavior.
Data generated by the fervor of the MLS process that used to be thrown away like slag from an iron mill is now the basis of a whole new controversy. It’s between brokers who are advocating a system that captures and credits its value, and MLS operators who seem to believe that all that touches their floor should be theirs.
While the cause of this situation will ultimately be determined by history, a number of factors can be identified today. First of all, the American real estate industry is in the midst of a transition unparalleled in its history. The service demands of an emerging consumer, the economic requirements of an increasingly investor-owned brokerage community and the constant pressure created by the information rich Internet are combining to destabilize the traditional MLS service function.
In addition, many of its 30-year-old governing rules were designed to regulate an industry that no longer exists. The fact that in many markets successful real estate service providers have for too long left the governance of this critical component to those who may be less than professionally successful has served to provide an historic venue for the current situation.
Change is coming and change is here. Lawsuits have been filed in California, Washington, Iowa and Kentucky. In some states, brokers are leaving the MLS to join or create new MLS units. And in others, lifelong productive relationships are being destroyed as one-by-one brokerage firms break with the past and join the efforts of those who see a different future.
In most cases, the courts have been supportive of these new pioneers and have ruled that the MLS cannot be used as an aneurism to progress and innovation. Increasingly markets and their associations are facing the threat of brokers who are supporting non-membership renewal and even more aggressive solutions.
Brokers beware! This situation is extremely dangerous and demands your immediate attention and best efforts.
Here are some steps to consider:
• The MLS can no longer be taken for granted.
• Ask the right questions and determine what course your MLS is currently following.
• Do not accept the concept that if it isn’t broken it doesn’t need fixin.’ Waiting until your fellow brokers are streaming out the door is not good leadership, but rather plain old denial.
• Assess where the relationship between your MLS and its brokerage community is today.
• If your MLS is taking actions that are intended to harass or annoy brokers who are seen as being “non-traditional,” use your best efforts to defeat this behavior.
• Do not allow anyone to use your MLS as a guardhouse of the status quo.
• Ascertain if your MLS has a vision regarding the future of the industry, the brokerage business model and the role of the MLS. Be sure this vision is encapsulated into an action business plan that is being implemented.
• Either get involved yourself or use your personal and professional power and influence to make sure that only those who can develop and follow through on visions and business plans are elected or selected for MLS leadership or governance positions.
• Most importantly don’t be fooled into thinking that the answer lies in starting an alternative MLS. Talk to the brokers around the country who have set up MLS shops in the past few years and they will tell you that it is not as easy as they first envisioned. Many of the brokers who have taken that step are now discovering that the joys of MLS ownership have faded into the pains of management and the horror of dealing with MLS users on a daily basis.
Of course all is not bad. In some markets the existence of multiple MLS operations are causing the monthly fees to be reduced and the service packages to be enhanced.
But keep one vital fact in mind, the real competition in this industry is not coming from a broker who, while changing his or her business model, still wants to cooperate within the MLS. The real competition is coming from those whose values and destinies are significantly different, those whose visions are tied to paperless transactions governed by third party intermediaries. Brokers, stand up, pay attention and keep your eyes on the MLS ball.
