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Most MLSs rapidly adopted the residential real estate practice changes ahead of the implementation deadline. But how are they continuing to evolve to meet the needs of the industry and the public in this new landscape?
That question generated a lot of buzz at NAR NXT: The REALTOR® Experience in Boston earlier this month. In various forums, MLS executives, brokers and attorneys discussed the challenges of data sharing and privacy, how MLSs communicate their value, and how individual players will fare through the continuing disruption taking place in real estate.
An Efficient Marketplace
Although the panelists at a Nov. 9 discussion entitled “The Future of the MLS” brought a range of views, none wanted to contemplate transacting real estate in a world without MLSs.
“If MLSs didn’t exist, we’d have a very fractured market,” said Art Carter, CEO of the California Regional MLS, with more than 100,000 users.
“If we didn’t have [MLSs], we would invent one,” said Errol Samuelson, chief industry development officer for Zillow. He spelled out the intrinsic values of MLSs: namely, that MLSs give sellers maximum exposure for their home and a source for strategic pricing information; they give buyers equitable access to homes on the market; and they give real estate professionals and policymakers an authoritative source of timely, accurate data.
Those who compare the experience of U.S. consumers to those of other countries often fail to understand the costs and barriers that exist in other places, Samuelson said. “[People] compare home sales [in the U.S.] to how they’re done in Australia, but Australia is a … subpar experience. … It’s cheaper to transact in the U.S. than in Australia, because we have a very efficient marketplace.”
The discussion was moderated by Brian Donnellan, president & CEO of Bright MLS, which serves more than 100,000 real estate professionals in the Mid-Atlantic region. The other two panelists were Kymber Lovett-Menkiti, president of Keller Williams Capital Properties in the Washington, D.C., metro area, and Robert Reffkin, founder and CEO of Compass.
“I do believe in a strong MLS,” Reffkin said. “In New York City, where there is not a strong MLS, cleaning the data costs more money than in every other MLS combined. If every MLS were the same as New York, it would sink brokers.”
In years past, the industry often referred to MLSs as the source for cooperation and compensation information. Referring to the rule that REALTOR® association–operated MLSs may no longer show offers of compensation for buyer’s agents, Donnellan asked the panelists whether MLSs could survive with offers of compensation removed.
In answer, Carter pointed to research conducted by CRMLS. “We asked brokers what they valued most in the MLS. There was not one mention at that time of compensation being listed as key,” he said. “It was the transparent marketplace and the accuracy of the data.”
“What matters is that it’s accurate and fairly presented. [For example], I can’t pay more to bump my listing to the top,“ said Lovett-Menkiti. Her agents are adapting to the practice changes—and are getting paid, she said. “Our agents work very collaboratively across different brands when they need to get information.”
Looking Ahead
As the systems evolve, Lovett-Menkiti said, “we have to [continue to ask] ‘what’s the benefit to the consumer?’ If it’s beneficial to our industry but if it doesn’t serve the consumer, is that value in the long run?”
Reffkin said he’d like to see MLSs better balance the interests of sellers and buyers. For example, “if buyers deserve to know days on market, sellers deserve to know how long a buyer has been looking,” he said.
He also urged MLSs to prevent third-party sites from hiding or downplaying the listing broker’s name. “In almost every one of the places where listings are exposed, they’re hiding the listing agent,” he said.
“I agree with you on that, Robert,” Carter said. “We [require that third parties show listing broker names and contact information]. A lot of MLSs have accomplished it.”
The National Association of REALTORS®’ Internet Data Exchange (IDX) rules require members who use listing feeds on their website to show the listing firm’s name and contact information (email or phone number) in a prominent location. In addition, the listing firm and agent’s name must be clearly identified in a visible color and typeface. But third-party sites aren’t subject to the rules, according to NAR Director of Engagement Rodney Gansho. “An MLS could include that requirement in their license agreement to any syndicator, but that’s a local determination.”
While each MLS operates independently, the panelists agreed that there’s a benefit to standard rules.
Consistency benefits consumers by helping the industry move toward a more satisfying user experience, Samuelson said. “The consumer doesn’t understand why a listing on this side of the street is treated differently from a listing on that side of the street,” he said, adding that differences “attenuate the ability of people to bring innovation to the market.”
Carter said it’s good old-fashioned competition that will drive innovation and serve consumers best. “Brokerages compete on service and price, and MLSs should, too,” he said.
