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The challenge of doing business in an archaic industry

Don’t Judge a Realtor by the company they keep

I don’t know about you, but access to my MLS is governed by my local Realtor association. So when I wanted to become a Real Estate Agent, I had to join my local board. And joining my local board meant that I was also joining my state association and the National Association of Realtors. Board membership is mandatory to be an MLS participant. MLS participation is mandatory to have a successful real estate career. Joining my board was a business decision, not a political one.

There’s the business of real estate: the hustle for clients, the unpredictable (yet flexible) hours, the commission based income, the interesting people and fascinating homes. Then there’s the politics of real estate: the numerous MLS fiefdoms, IDX policies, data aggregation and syndication, and, national, state, and local association rules, to name a few.

Why join the board

Most agents that I know are like me, and joined the board because they had to. It was a business decision. This may explain why so many agents I know go out of their way to avoid the politics of real estate. Ask most agents for their position on IDX rules, data aggregation and syndication policies, and you’re likely to get a blank stare. Not because agents are stupid or short-sighted, but simply because agents focus on what they feel they can control, and most agents I know feel extremely disconnected from the decisions being made on their behalf at the local, state and national level.

Speaking quite frankly, I feel that many local boards have spent the last few years advocating policies that will perpetuate their existence, regardless of if the policy is good for their members or real estate consumers. For many agents there is an enormous disconnect between their day-to-day business practices and the policies adopted by our local, state, and national Realtor Associations.

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As an example, let’s take the continued existence of almost 1,000 MLS systems across America. If you can look me in the eyes with a straight face and tell me that the real estate industry is better off with hundreds of local MLS systems rather than one (or a few) national systems, then I’m going to bet you’re a local MLS or association executive.

Consumers don’t think they should have to know that as soon as they cross a county line they need to start searching a different website for home listings. They want to go to one place, type in any address in America, and find out what’s for sale nearby and how the market is doing. Don’t believe me? Go visit Zillow. Or Trulia. Or even Realtor.com.

The evolution of the MLS

Our patchwork of MLS organizations developed in an era when cooperative listing information was shared on paper index cards updated weekly by a clerk at a local office. The clerk has long since retired (and perhaps died), the index cards have been relegated to the novelty drawer and yet we still have hundreds of little MLS systems across the nation. The logic for their existence is long gone, we should help them die a graceful death.

While I don’t have an issue with one (or several) national MLS systems, I think the real estate industry – at a minimum – needs to get serious and make 50 statewide MLS systems (each adapted to their own unique state laws about real estate) a reality. Because if our associations don’t make this a reality, some plucky entrepreneur will make it happen, either with or without our help.

The presence of hundreds of MLS systems when a few could accomplish the same task is indicative of the challenges that associations have created for their members. Associations, when faced with an onslaught of change, have – for the most part – each hunkered down and done everything they could to protect their little island of real estate data. In my area, for example, it has taken more than three years for seven local associations to agree to lockbox key interoperability. For comparison, Apple transformed computing with the introduction of the iPad in less time than seven associations could agree to share keys.

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The conundrum

It’s a conundrum that I can’t quite wrap my head around: some of the most entrepreneurial, dynamic, and interesting people I’ve ever met are fellow real estate agents. But all of these individuals are doing business in one of the most rigid and archaic business frameworks I’ve ever encountered. I’d really love to hear what your thoughts are about how agents can help the real estate industry give itself a long overdue remodel?

Written By

Matt Fuller brings decades of experience and industry leadership as co-founder of San Francisco real estate brokerage Jackson Fuller Real Estate. Matt is a Past President of the San Francisco Association of Realtors. He currently serves as a Director for the California Association of Realtors. He currently co-hosts the San Francisco real estate podcast Escrow Out Loud. A recognized SF real estate expert, Matt has made numerous media appearances and published in a variety of media outlets. He’s a father, husband, dog-lover, and crazy exercise enthusiast. When he’s not at work you’re likely to find him at the gym or with his family.

9 Comments

9 Comments

  1. Jeff Brown

    February 18, 2012 at 1:14 pm

    Hey Matt — Out of 1,000 home buyers, how many would you estimate are looking for their new home in an area larger than 5-20 square miles? Thanks

  2. Glenn Ashby

    February 18, 2012 at 1:54 pm

    Get rid of all referral networks. Agent to Agent is fine, but 37.5% for someone to pull a name out of a hat is not doing the consumer a service. It is nearly extortion.

  3. Ed Neuhaus

    February 18, 2012 at 2:52 pm

    I think this world be great. I know people already working on it.

  4. Karen Brewer

    February 18, 2012 at 5:07 pm

    OMG….youre talking about my life. I am now on the Board of the hyperlocal Board and it is astonishing to me howmuch people want these things to stay the same. In my case, the MLS adds NO value since we are officially dominated by a larger MLS in the state.Most of the budget (membership $ just goes to perpetuating the existence of the board.Amazing.

  5. Russell Shaw

    February 18, 2012 at 9:56 pm

    We already have several "national" methods the public can search for properties. I have never seen a national MLS as a Realtor or a public benefit. To the contrary, a national MLS or even 50 state wide MLS systems is just asking some DOJ lawyer to attempt to nationalize the entire system. All the little MLS systems are our best defense against such crap.

    To suggest that the committees at the state or national level are somehow possessed of better insight or judgement does not seem to be supported by the facts. Just look at the silly set up NAR gave Realtor.com or the latest piece of pretty much useless crap – RPR. I don't do a lot of my business out of my area. Neither does anyone else who is actually in the real estate business.

    In California it is beyond me why an agent in the Bay Area needs access to data for Los Angles. I don't believe a Los Angles broker is competent to advise a buyer or a seller about buying or selling a home in San Francisco.

    • Jeff Brown

      February 19, 2012 at 4:00 pm

      Hey Russell — I've been sayin' the same thing for a few years now. Also, notice nobody's stepped up to the plate to answer my first question here. The reason is cuz I suspect the answer proves your point.

  6. Eric Estate

    February 19, 2012 at 9:36 am

    I'm just a student, but coming into this system with a pair of fresh eyes to the situation. There is absolutely NO need for any MLS system at all. If an agent were to just post their listing on their own website, search enginges like Google or Bing could easily index them, nationwide.
    This would also separate out the best agents because they would have the most popular sites, with the best, most up to date info on their listings.

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