The end of the MLS is near… maybe

It has been said many times throughout history, “the end is near.” Nostradamus, the Bible, and even the Fortune Teller under the Boardwalk in Atlantic City have predicted it. In the MLS space, many have predicted the end of MLS. Consultants, MLS gurus, association executives, and the Fortune Teller under the Boardwalk in Atlantic City have all predicted MLS will go away.

All these predictions have been wrong… so far.

Love/Hate Relationship With MLS

For some, the end of the MLS would feel like the end of the world, but some seem to be gleefully looking forward to it. There is a love/hate relationship between Realtors and the MLS. Notoriously an independent group, Realtors hate the rules, fines, restrictions, and frustrating technology of the MLS. At the same time, they love the comprehensive data, easy distribution of listings, and the rich business tools that feed off of the data.

Realtors also love and/or hate the cost of the MLS. If you only have to join one MLS to operate in your marketplace, the MLS is generally a good value and very few complain about the price. Unfortunately, marketplaces have expanded over the years and many have to pay multiple MLS fees to operate their business. Only a few things make Realtors crankier than having to pay multiple MLS fees.

It is easy to understand why paying multiple times for the same service is not popular. What if you had to pay one phone service to call people in your city/area, another one to call people in the city 50 miles to the east, and a third carrier to call folks 50 miles to the west? And, you could not call other states unless you had that state’s phone license and paid various vendor fees in each of those states?

Even worse than having to pay to join multiple MLS systems is the fact that you have to enter the same data into each of those systems. And the final straw? Each system operates differently, with different technology and different rules.

So to recap, having to join multiple MLS systems means Realtors have more costs, more work, more systems to master, and more rules to learn. No wonder this makes them cranky, and no wonder some are begging for a national MLS.

So, Why Don’t We Fix This?

The problems with the current set up of MLS are easy to understand, but the solutions are much more complex. First, let’s start with the fact that there are 800+ MLS systems in the United States. That’s 800+ different sets of rules, 800+ different databases, and 800+ different groups of professionals providing local services to members. That’s almost 50 gazillion different variables to overcome.

Even if you suspend disbelieve and assume that we can actually overcome the organizational challenges, the human challenges are much more complex. The complexity of the human side of the issue can be compared to Congress, another significantly inefficient and dysfunctional American institution. Most Americans think their member of Congress is not the problem. Most Realtors, in much the same way, think their MLS is not the problem. In both cases, it is the rest of the country that’s so screwed up.

Like politics, all real estate is local. We have trouble looking beyond our own little world to see the bigger picture. In addition, like politics, we have a bunch of people willing to point out the flaws, but few leaders are willing to step up and lead us to a solution. Perhaps no leaders have appeared because the problem is so complex and emotionally charged that the likelihood of a solution is not worth the effort.

MLS is the third rail for Realtor politics.

Tough Love and Tough Leaders Needed

A wise person once said, “don’t just bring me your problems, bring me your solutions.” All right, here are the five steps to fix the problem:

1. NAR must stop ducking the issue and publicly declare it is in the best interest of the industry to have a National MLS. The issue will never be fixed on a comprehensive scale by the state or local associations without national leadership.
2. Create a policy that local associations have to stop using MLS revenues to subsidize non-MLS programs. Currently, many associations have not raised dues to pay for rising association expenses because they use MLS revenue to subsidize other activities. This will likely require a 5-year transition.
3. Develop a mandatory common database structure, with standard fields and field names. We got halfway there with RETS (Real Estate Transaction Standards), but each MLS is allowed to do things differently. This has to stop. Lock ten really smart people in a room and don’t let them out until they develop a standard we are all required to follow. Again a 5-year transition may be required after the standard is developed.
4. After standardization, merge the 800+ databases into one national database backbone that hosts the data for all MLS systems. Realtors already have three national databases with NRDS, RPR and realtor.com, so while we’re at it, let’s make sure they all work on this same common database.
5. Scrap the name MLS and come up with a new one that can be branded by the Realtor organization and delivered as a dues-based service. Members will have access to the common database as a member benefit included in their dues, and non-members will have to pay for access. No more “joining” the MLS; instead each member will purchase the software of their choice to access the Realtor database and the access to the data will be included in dues.

Will this be easy or popular? No way. Will lots of great people who run MLS systems lose their jobs? Unfortunately, yes. Will the leaders of NAR take a lot of heat? Count on it. No matter what the solution, this is going take tough love to push associations/members away from the status quo and tough leaders who can stand tall and take the heat.

Will this be the end of MLS? Maybe, but it is better to dictate your own changes, than lay in wait for others to dictate them to you.