Chief Executive Officer, Russ Bergeron, has been at the helm of Southern California Multiple Listing Service since its formation in 1993. As head of the largest MLS in the state of California and second largest in the nation, he is known throughout the world for his leadership in bringing technological advances to the multiple listing industry. In recognition of his leadership and innovation, he was named one of the 100 Most Influential Leaders in Real Estate for 2009 by Inman News.
Russ brings to SoCalMLS over forty years experience in technical management and leadership in high growth, high technology, computer-based services. He is recognized as a pioneer in the movement to place real estate listings on the Internet for which he won the Inman Innovator Award in 1998.
In what has become his most far reaching contribution to the MLS industry, Bergeron began many years ago to promote his concept of one large property database for all to access, thereby eliminating the need for members to join multiple MLSs. Russ jokingly dubbed his concept “MOAD” or “Mother Of All Databases.”
After working many years with others to overcome what he considers the four Ps of the industry - Paranoia, Politics, Personalities and Protectionism, his vision became the groundwork for CARETS, the largest data aggregation of its kind in the country. Currently CARETS is made up of seven MLSs in Southern California providing real time access to nearly 4 million listings for over 100,000 real estate practitioners, and CARETS shows no signs of slowing down.
Members of SoCalMLS and the other participating CARETS MLSs now need only join one MLS and use one system in order to gain access to the complete CARETS database. Brokers have been more than pleased because they can now receive a complete IDX and back office feed from CARETS and eliminate the need to aggregate from disparate systems. It is anticipated that the power of CARETS will now take it throughout the state of California and beyond. CARETS has been a win-win-win situation in Southern California for agents, brokers and consumers.
Russ sits on the board of directors of CARETS.
Prior to joining SoCalMLS, Russ was Director of Data Services at TRW-REDI Property Data. There he oversaw the nationwide acquisition of tax data and plat maps from over 1000 jurisdictions which were used to provide public records access in bulk throughout the real estate industry and to Federal, state and local government agencies.
For more than ten years, he was a member of the management team at Planning Research Corporation (now First American/MarketLinx). There he held several key positions including Product Manager, Manager of Systems Design and Development and National Installations Manager for a wide range of MLS-related products.
Russ is a Magna Cum Laude graduate of Marywood College where he holds a Bachelor of Science in Business Administration. He proudly served his country for four years as a member of the United States Air Force stationed both at home and in Pakistan.
He lives with his wife of 30 years in South Orange County. They have one daughter who, upon completion of graduate school at UC Irvine, joined the MLS services industry.
Most changes in our business can be described as “glacier-like”. Slowly, but surely, changes come about, but none should be a surprise.
New Business Models – Much has been made about the “new” business models (rebates, discounts, etc.). While these have been more successful of late – due mostly to the fantastic market and higher prices – what you will see is that in order to remain successful (read “profitable”) you will see the differences between these models and the traditional brokerage lessen. Those that do not generate a profit will disappear as soon as the market turns – just as they always have.
Is Bigger Better – I suspect that there will be continued acquisition activity by the larger franchises who are still trying to find those elusive economies of scale that merger and acquisition are supposed to bring.
Agent versus Broker – The bigger/better conundrum above is impacted by this dynamic. More and more the agent (especially the top producer) is acting more like a broker and less like an agent. The problem for the broker is that even though they are seeing increased transactions from the top agents, they are seeing less income because of lopsided compensation splits. The brokers and franchises are going to have to wrestle control back in order to see any meaningful gains in the bottom line. To do this they will need to come up with some significant services that the agent cannot get elsewhere. The result might be that you will see more top agents break out onto their own as brokers, or see the formation of more “broker only” offices. As an example, in our MLS, of nearly 31,000 customers, over 12,000 are brokers.
Compensation – Hand in hand with the above is the erosion of the compensation per sale. I believe the latest numbers show that the average compensation is around 5.1% today. I suspect that number will creep down over the next year or two. In California the main reason for this is that the housing prices have tripled over the past couple of years, yet the cost of doing business has not grown nearly that much.
Number of Licensees – I expect that the number of licensees will continue some slow growth in 2005. We will not see a needed drop in that number until the market has taken a significant nose dive which probably won’t be seen for a couple years. I just saw a scary statistic the other day – in
3rd Party Referrals – You will continue to see the growth of 3rd party referral sites (e.g., Lending Tree, HouseValues, etc.). However my prediction is that the growth for these companies will come from more independent brokerages rather than the large franchises. The larger firms do not want to have to share 25-50% of their compensation to pay for leads. They instead want to develop their own lead collection systems and keep those dollars in house.
Customer – This is another of those slow change predictions. Even though statistics show that more and more consumers start their real estate search on-line, they don’t necessarily choose their realm estate agent on-line. Do they expect to get more timely service – you bet. So the successful agent/brokers will be those who cater to this new perception that quicker is better. What they really need to do is provide better service quicker. If they don’t do a good job today, doing it faster will not improve their bottom line.
Licensing of MLS Content – I foresee a reduction in the number of parties to whom MLS Content is licensed. MLSs and brokers are struggling to control the flow of data from our MLS systems. On one hand we are required by the nature of the MLS beast to make the content available to our participants and subscribers, we are also challenged with the task of trying to control where and to whom that data eventually ends up. Less licensing means less chance of the MLS Content being misused. Another area related to licensing of MLS Content is the privacy issue. I don’t think this has been investigated thoroughly enough to allow any of us to feel comfortable in the repurposing of MLS Content by 3rd parties.
CAN SPAM Act (S.877) – Most MLSs have converted to an Internet based MLS system. Inherent to those systems is the ability to e-mail from the system – agent to agent, agent to client, etc. The CAN SPAM act will impose some major restrictions and guidelines on the content of e-mails sent from these MLS systems which will necessitate some major changes to how e-mails are sent. Combine this with the new restrictions and crackdowns by ISPs it will become harder, not easier, to effectively send e-mails directly by the MLS systems in use today.
MLSs and Mapping – It will become commonplace for the user of an MLS system to start their search at a map – rather than filling in a set of search criteria. After all, what do we buy and sell – geography. So what would be more logical than to start at the map, have it automatically populated with the statuses desired and then let the user filter out those not wanted.
Here you can round up the usual suspects. From the “outside” players like Lending Tree, HomeGain, and HouseValues to the “insiders” like Cendant, Home Services, RE/MAX and the Realty Alliance. What is at stake? Since Billy Chee’s speech in 1993 organized real estate has been pushing to make the Realtor® the “center of the transaction”. The problem is that the center is not good enough any more – you need to be in at the beginning. And that is where the competition is coming from. And that is why you see the larger franchises putting resources into gaining that control back from the so-called interlopers.
Other players to be on the lookout for will be big lenders looking to literally take the lead – maybe opening their own real estate offices. I also predict a big push by HomeStore to get the NAR to allow them to start charging for leads in some way in order to compete with the other companies who are not restricted by an agreement with the NAR.
The winners will be the ones who can figure out how to generate qualified leads – not just a stream of e-mail addresses, but qualified buyers and sellers who can be identified as being at some point in the home buying/selling process.
This is a tough question because rarely does any one person have that much influence on this dinosaur we call real estate. However a few names come to mind.
Ian Morris – I first met Ian when he was setting up a little venture called HomeAdvisor® at Microsoft. I was immediately impressed with his smarts, vision, and energy. He has taken his talents over to HouseValues where he is now CEO and just oversaw a successful IPO.
Barry Diller – Not that Mr. Diller of IACI (owners of Lending Tree and RealEstate.com among others) knows that much about our industry, but he is smart enough to surround himself with people who do know a lot, and he is very comfortable dealing with big bucks and advertising on a grand scale.
Joel Singer – As EVP of the California Association of Realtors® Joel has overseen and directed much of the innovative and groundbreaking products and services with which the CAR has been involved, while at the same time managing the growth of the CAR to a 150,000 association. We can always count on Joel to be on the cutting edge of Association and MLS technology.
Jim Harrison – I have known Jim for several years and use him often as a sounding board for new ideas and services at the MLS level. Jim heads up NTREIS down in
Andy Rapattoni – Andy has been the leader in Association Management systems since the dark ages. When he entered the MLS arena several years ago everyone asked him if he really wanted to be in that business. He proved us all wrong and has proven to be a success, again. Even though Rapattoni might not command a huge market share, Andy and his team always seem to be one step ahead of the curve when it comes to innovative thinking and new products and services. If nothing else, he keeps everyone else on his or her toes.
Rep. Michael Oxley (R-Ohio) – Recently Congressman Oxley has begun an investigation into MLSs and their relationship to the consumer. I can only hope that during this investigation all sides of the issue are adequately covered. It is one thing to say that “data wants to be free”, it is another thing to cut the rug out from under an industry that relies on that proprietary database for their success. Congressman Oxley is also a an advocate in the privacy sector and I see his involvement here having a large impact on the licensing of MLS Content in the future.
This topic has been very popular over the past few years and, although the change in this area has not come as an avalanche as predicted, the consumer is becoming more demanding. What does the real estate consumer want – the same thing every consumer wants:
One way for brokerages to improve is to provide more training for their agents. With the huge growth of the industry (e.g., SoCalMLS has grown from 12,500 customers to over 30,000 in six years – without changing its geographical coverage area) the level of expertise has been sorely diluted and the result is that transactions do not go as smoothly and efficiently as they should were all the participants working at the same high level of expertise.
Use the Internet for more and more advertising channels, and reduce the hardcopy formats. The Internet advertising venues are much more targeted than newspapers. I can’t tell you how many times that an agent has said to me that they don’t get any leads from their web site. When questioned it turns out they do no advertising, nothing to drive people to their web site. Some don’t even have the web site on their business cards. To those I ask, “What did you do before the Internet – just wait for someone to dial a wrong number and accidentally get your number?”
Associations and MLSs have the same issues. Who are your customers? In our case it is the brokers and agents who use the products and services we provide. Realize that the MLS is there not to level the playing field, but merely to disseminate data to your constituents so that they can successfully run their businesses – don’t try to make them all look the same. A big broker with 1500 agents does not have the same needs as a one-man shop, but be prepared to provide both with exceptional service.
One-stop shopping – as much as is allowed under the antiquated RESPA guidelines. Let’s hope that HUD makes progress on really reworking those rules. It is good for the consumer, which in turn is good for the broker.
The above-mentioned advertising more on the Internet to get your own leads and not have to pay a premium to get qualified leads.
Provide excellent service to all of your customers - it will come back to you ten-fold in the long run especially in a business like ours whose success is often built on reputation and word of mouth.
Larger brokers can look to Transaction Management and Customer Retention systems to better handle their transactions, and to keep themselves in front of the customer – even after a transaction is complete.
Today the cost of the Association and MLS should be negligible to the agent/broker who uses those services. Technological advances over the past 10 years have made it much more efficient to provide a higher level of service than was ever thought possible. So the cost of Association/MLS should not be a burden on the members.
However, the level of service must be such that we don’t interfere with our subscriber’s ability to get their job done. Technology for technology’s sake is not what they need. Our philosophy at SoCalMLS has always been to provide an excellent basic level of service, while working with 3rd parties to develop ancillary products and services that can be purchased to enhance the MLS experience based upon the customers’ needs. To iterate, one size does not fit all – so we do not attempt to provide every possible service to every customer because they just don’t all need the same tools.
One of the things I find myself spending a lot of time doing is working with 3rd party vendors in trying to explain and specify to them what it is our customers need. Too many times a company has developed a cool technology, and then tries to force that tool on a customer base that is either not ready for it or has no need for it. Throughout my career I have fought the implementation of technology just for the sake of technology.
One of the most important things I do is to communicate with my peers across the country. The MLS Executives throughout the United States and Canada have an amazing, unstructured working relationship through which we can exchange ideas and experiences. There are dozens of people I could turn to in an instant to ask a question and quickly get solid feedback.
I am not one to read books on vision or management styles or trends. I have always been a seat-of-the-pants kind of manager – responding to the day-to-day needs of whatever organization I was with. I always strive to keep up with trends and technology within the industry so that I am prepared to recommend to my leadership a direction that would be good for SoCalMLS.
For brokerages I would say it is get to know your customer. It is confusing times. You have your Baby Boomers, Echo Boomers, Gen Xers, Gen “whys”, etc. All with different needs, all with different expectations. Try to figure out what each one needs and see how that fits into your situation – you might not want to service them all.
For Associations the struggle is in how to demonstrate to their constituents the value of belonging to a Realtor® Association. So much of what the trade associations do is not readily visible to the agent on the street. The Legislative, Legal, Risk Management, Tech Support, etc. that goes on at an Association (at whatever level) is a huge contribution to the success of brokers and agents but many do not realize how valuable that support is.
As to MLSs we need to continue to provide the same level of service with which our customers have come to expect from us over the years. If you tried to explain an MLS to any industry leader from outside of the real estate world they would be dumbfounded that such an idea could work – never mind be so amazingly successful for so many years. My guess is that you will see some areas of the country in which larger regional MLSs might actually split into several MLSs.
My prediction and hope for Southern California is that SoCalMLS and the surrounding MLSs here can work together to figure out the best way for our customers to take advantage of the new technologies coming our way, so they can in turn better serve their clients who already have levels of access that our members only dream about.
