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A National MLS Will NOT Work and Here Are 3 Reasons Why…

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On the Twitter vine there has been tweets about the National MLS possibilities, with people from both sides of the fence offering opinions. I have heard the argument for it to replace all the little MLS boards around the country with one National MLS. Although the people who think it is a good idea bring up some good points, I do not agree with them and will not be discussing those points in this post. (You are more than welcome to offer up those points of view in the comment section, but I will not be addressing them here.)

I do not think that a National MLS is a good idea. Nor do I think it will work. These are my 3 reasons why:

Reason #1: If Real Estate is Local, why should the MLS be National?

With the shifting real estate market, the big, loud noise of the moment is the Real Estate is local. I yell it at everyone I yell at. (I even speak it softly to everyone I whisper to.) It is a fact. My Colorado Springs real estate market is different from Ines’ Miami real estate market, different from Maureen’s Birmingham real estate market and even different from Kristal’s Denver real estate market. Each real estate market across the nation, like life, is like a box of chocolates and each chocolate has its own disgusting nougat center and no two disgusting nougat centers are the same. (I cannot tell you HOW they are different because I have no interest in biting into the mystery nougat-y MLS of any other MLS board.)

I am a big proponent of being an area, or niche expert. When I want to find a home for sale in Miami, I do not want to wade through a biased national MLS to find one. I want to wade through Google and find the real Miami Guru. Not whomever the national MLS leader deems as important.

Also, national MLS would lump all the different MLS areas together. The different MLS boards WORK because they are local. You may say that yours doesn’t work, but I guarantee they work better than if me in my high-altitude-no-water city tried telling someone in a beach-town how to structure the MLS input sheet or create guidelines on what should be disclosed in the remarks section, or whatever random “hyper-local” nonsense we each deem as important.

Which brings me to a sub-point of this reason #1

Each state has different contract and disclosure laws. How on earth would a National MLS accommodate for each state’s laws?

Example #1: In California you MUST disclose if a property is “known” to be haunted. In Colorado it is ILLEGAL to even hint at the fact that a property may have, at one time, possibly had something that slightly resembled a ghost. How would THAT play out in a National MLS? The MLS would turn into a Choose Your Own Adventure book.

Is this house haunted? If you select “yes” then turn to page 6. If you select “no” then turn to page 11. If you refuse to answer, then turn to page 15. However, turning to page 15 will make you guilty by non-association.

In a National MLS, who would be responsible for making sure that each entry was inputted to state contracts and disclosure standards?

Example #2: Our MLS demands that if you have a listing agreement where you are NOT advertising the property in the MLS (aka “pocket listing”) you must supply the MLS arm of our board with a copy of the listing agreement proving that your seller has agreed to this non-entry. And yes, every HelpAssist2SellURHome4Free company (who is even still around…) complies with this. I don’t even know WHO would be responsible for making sure a protocol like this was enforced in a national MLS.

Way too much room for error. A smaller, local board is the only way to handle such intricate, local, nougat-y things.

Reason #2: Someone will get rich off this lofty idea and since it is not me, I refuse to play along.

(Thank you Teresa Boardman, for this thought.) A National MLS is a HUGE pile of mess to throw under one umbrella with one ringmaster. One person-slash-company will have the grand idea to do a MLS mashup that all agents will have to partake in, make a bunch of money off of their little game of Monopoly. Call me a whiny crybaby, but I guarantee I will not have the option of being the shoe in this game. So screw it.

No really. I mean it. I get to be the shoe or screw it.

Okay, I also mean this: The accountability for a national MLS is undefinable. What does it mean to be truly accountable for an entire nation worth of overpriced listings? I mean, really! Someone will make a whole boatload of money off of the idea and cost us agents a boatload of money.

At least when my board charges me money for whatever it is they charge me money for, I have the ability to walk, no, drive down to their office and actually speak to a human, face-to-face who will answer all of my odd ball questions and remind me not to steal their pen … again.

And why would a potential home buyer CARE if their home search in Shreveport LA also had a link to a home search in Bellingham, WA? It’s like a Blogroll. No one cares except for the people on the Blogroll.

Reason #3: My MLS board rocks!

If we were to do a National MLS mash-up, that would require SOME MLS area standards to rise, while it would cause other MLS area standards to fall, just to come to a happy medium. Kind of like in the classroom when half the class is consistently bored to death because the other half of the class (or one kid in some cases) just does not “get” it. It is not fair to either group.

I refuse to lower my standards to accommodate a National MLS. We have a smokin’ cool MLS and a smokin’ cool support staff and a smokin’ cool board with smokin’ high standards. Nothing gets by our board … Nothing. Well, not at the MLS level, that is. If a National MLS is designed to bring some “standards” to the MLS game, then why would we want to reinvent the wheel when we already are there?

But my local board is not shiny and cool like Mariana’s!” If there is a problem with your local board, making it national is not the answer. What are you actually doing to make it better, besides complaining about it? Our board is “shiny and cool” because we all are actively involved in keeping it shiny and cool.

(Okay. I am off my soapbox, now.)

Ultimately, a national MLS is not even necessary anyway. The IDX/IDX2 options allow for the whole MLS to be accessed from almost any local real estate agent’s site anyway. I see no good reason to have access to a MLS to an area that I know nothing about. IF I were looking to relocate, I would want to search for a home in that area from an agent who actually was IN THAT AREA.

Anyway, there is already the Point2 NLS thingamagiggy which works for a supplemental umbrella MLS, even though it is still about as clear as mud in many areas.

In my oh-so-never-humble-opinion, the MLS needs to remain LOCAL and run by LOCAL boards to be effective.

Mariana is a real estate agent and co-owner of the Wagner iTeam with her husband, Derek. She maintains the Colorado Springs Real Estate Connection Blog and is also a real estate technology trainer and coach. Mariana really enjoys helping real estate agents boost their businesses and increase their productivity through effective use of technology. Outside of real estate, blogging and training, she loves spending time with her husband and 2 sons, reading, re-watching Sci-Fi movies and ... long walks on the beach?

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90 Comments

90 Comments

  1. Ines

    March 2, 2008 at 9:41 pm

    Hey @mizzle – what bugs me is that to think that to solve a minor issue with our local MLS is extremely difficult, imagine if we had to deal with a national one? I totally agree with the local aspect of real estate and our MLS – I think it would be a mistake.

    And I would also call you if I wanted a Colorado Springs Guru!

  2. Kristal Kraft

    March 2, 2008 at 9:46 pm

    LOL I was just thinking how it must have been REALTORS at the Tower of Babel. None of us speak the same language! That to me is what is WRONG with our industry right now. We are respected because to the consumer we look shifty (because the same words don’t mean the same things in different places) shoddy (for the same reason and inconsistent.

    Consumers need to be able to TRUST they are NOT getting screwed. If we continue to go in the direction we are going we will continue to get what we have always got.

    I’m for standardizing our nomenclature and practices across the county. Oh heck let’s do the world ok?

  3. Mariana

    March 2, 2008 at 9:50 pm

    Ines – Excellent point! If it takes and act of congress to change soemthing locally, it would have to take an act of GOD to resolve something nationally … especially with all the ego that is already simmering in the world of real estate.

  4. Mariana

    March 2, 2008 at 9:58 pm

    Kristal“Consumers need to be able to TRUST they are getting screwed.” LOL!

    Maybe SOME things should be standardized, but not the whole banana. We are the United STATES of America, and although we are a nation, we have independent needs. I see the same for the MLS.

  5. Kristal Kraft

    March 2, 2008 at 10:02 pm

    Sorry I’m not going away. I have more to say.

    Having a National MLS would mean input standards would have to be alike across the country. By having uniform standards, vendors would be able to deliver add on products like IDX, front end super wiz bang whatevers at a much lower cost to me.

    (I am important and cheaper is good too. )

    I bet if the cost went down we would even have more vendors to choose from, that too would be a strong benefit.

    My suggestion is to turn your perspective around and look at it from the side of a consumer and end user.

    BTW I know your MLS, I’ve been a member of your board. It ain’t so hot (now that I’m gone :)). In fact PPAR uses lock boxes that put up a fence around your area. In Denver we use a system that welcomes any and all to come sell our listings.

    Now, if you were a seller wouldn’t you want your home to be marketed by the most agents as possible?

    Me thinks PPAR is doing the consumer a disservice by not providing the best exposure possible.

    I agree we don’t want to lower our standards, we need to raise them. BTW how do you know you will be lowering your standards by joining a national mls? Who says the standards will be lower?

    Years ago we started on knock down the barriers of the tribal board territories. Let’s finish the job by jumping into the 21st century and the world economy by leading the pack instead of pulling it back to where it was 20 years ago.

    🙂

  6. Mariana

    March 2, 2008 at 10:21 pm

    I was hoping that you were not going away. It is nice to have a varying opinion.

    “By having uniform standards, vendors would be able to deliver add on products like IDX, front end super wiz bang whatevers at a much lower cost to me.”
    Okay. That would be nice, but not enough of a reason to switch.

    “BTW I know your MLS, I’ve been a member of your board. It ain’t so hot (now that I’m gone :)).”
    Have you been a member since they switched over in 2005? It is MUCH better than it was.

    “In fact PPAR uses lock boxes that put up a fence around your area. In Denver we use a system that welcomes any and all to come sell our listings.”
    We use the iBox for security and I do not mind the “fence” as it keeps my listings safer, and I find it more convenient than tracking down the listing agent to get a code. Our showing desks are more convenient. But I do know there are viable arguments for each side, this is just my opinion.

    “Now, if you were a seller wouldn’t you want your home to be marketed by the most agents as possible?”
    Yes. But only by agents who work with potential buyers. Why should my Seller want their Colorado Springs house marketed on a website in Brooklyn, NY?

    “Who says the standards will be lower?”
    Because it would be easier to bring each board to a happy medium, than pull every board up to excellence.

    I think that there are too many local idiosyncrasies to mash-up into one conglomerate MLS. Ideally, it would be nice to have a well-oiled, uniformly standard, high expectation MLS. My thoughts are that it will not happen that way … WAY too many speed bumps. And if the local MLS is up to par, there really is no reason to change anyway.

    From reading your tweets, I am sure that we will not agree on this, but I enjoy the continued conversation! Thank you!

  7. Kristal Kraft

    March 2, 2008 at 10:51 pm

    Glad you like to debate. No, I’ve not experienced your new MLS, my statement was in fact pure sarcasm, didn’t your meter go off?

    I agree with Ines who said it would take an act of Congress to change things. Yes, change is difficult. I disturbs me to see people wanting to avoid change,because it is the very thing that is wrong with our industry.

    The total lack of universal standards is confusing not just to us but the public. Adapting a National MLS would be a huge and probably impossible undertaking. But with that said I still believe there would be value in it.

    BTW when I say “standards” I’m not referring the to SOP with COE. What I mean is the language we all use. As I recall Florida uses the term “transaction broker” in a totally different way than we do. Universal standard in language, measuring a house, closing costs, etc. would need to become uniform.

    I am actually laughing a little at how this conversation is going in reverse. You are the young one the future of real estate, I’m the one old as dirt, yet we have the opposite stances. How did that happen anyway?

    BTW thanks for correcting my typo, but now your comment doesn’t make sense!

  8. Jon Sigler

    March 2, 2008 at 10:54 pm

    Real estate is local. Enough said.

  9. Larry Yatkowsky

    March 3, 2008 at 12:38 am

    What I can tell you about a National system is that all of us will be in rocking chairs before it happens. Everything is a 25+ year plan. The unknown is the evolution of the web and how it continues to bring causal changes to the way we do business. It might well usurp all the dreams of a national system within 10 years. Point 2 is an example of web1.0 change. I’m not smart enough to figure out the next part but, it will be interesting and will take a generation or more to become reality.
    We almost have a national system up here but the geopolitical arguments parallel those being expressed here. Ultimately you are all correct. Upon reflection, I suspect it will reverse itself in a few years.

    It is interesting to note that Point2 has directed their product to a simple to use, standardized system that works internationally and is cost effective. The issue is who owns the data. That is the gold. And he who has the gold will rule.

  10. Toronto lofts

    March 3, 2008 at 5:07 am

    Nice point! I loved first paragraph – Example #1: In California you MUST disclose if a property is “known” to be haunted. In Colorado it is ILLEGAL to even hint at the fact that a property may have, at one time, possibly had something that slightly resembled a ghost. How would THAT play out in a National MLS? The MLS would turn into a Choose Your Own Adventure book.
    Funny but true! (number of bedrooms:4, bathrooms:3,5 ghosts:0 poltergeists:1) We use (in Toronto) GTA MLS and I believe it’s a good tool and I don’t think some forced changes would be very useful…

  11. Teresa Boardman

    March 3, 2008 at 5:27 am

    I have gotten in some heated and interesting discussions about a national MLS. I say real estate is local, and that most consumers look for homes in one state, not several when they are searching for real estate. Do consumers really want a national MLS? Also when we have some of the listings in a system and not all of them we are doing the consumer a huge disservice.

  12. Jim Duncan

    March 3, 2008 at 5:50 am

    . I say real estate is local, and that most consumers look for homes in one state, not several when they are searching for real estate.

    Consumers want all of the listings in one place, and they want it for free. Right now, that’s not happening (in my local market at least).

    But this is not a conversation about the consumer necessarily; it’s about the MLS. The MLS is not for consumers.

    I agree that a national MLS would be extraordinarily and unnecessarily complicated, convoluted and politicized. But what if you approached this conversation from a different angle?

    How about one national database of all the property information from which MLS’ could pull their data and display it for the local MLS and Realtors? MLS’ would then be better able to innovate if they’re pulling from standardized RETS data.

    One of the problems that would be solved would be that Realtors would only have to join one MLS. I know a Broker who pays eight MLS’. I belong to two (and I just left one). To fully service my clients and ensure that I’m getting nearly 100% coverage, I’ve considered joining two additional ones. Sure, real estate is local, but how do you account for the overlap that currently exists in many markets?

    The MLS Alliance that has currently been gaining traction in markets around the country is a good band-aid, but we need one place with all of the data.

    Someone’s going to do it. Whether it’s Cyberhomes, Zillow, etc.

    Disclosure – I am on a group with the NAR that has been studying and debating the above idea.

  13. Michael Wurzer

    March 3, 2008 at 5:57 am

    You don’t need to have a national MLS system in order to have national standards for data. The Real Estate Transaction Standard (RETS), being developed by many MLSs, technology providers and others, holds promise for such standardization, without the requirement of eliminating local MLSs. Just last fall, the NAR MLS Committee passed a rule requiring NAR-affiliated MLSs to be RETS compliant by the summer of 2009. The RETS Schema Workgroup is developing broad and deep listing and property data definitions. The process is wide open to any interested in participating. The next major meeting is in Philadelphia, the City of Brotherly Love, on April 9-11. Even this week, there are meetings of the Syndication Workgroup recently formed to create a standard to make it easier for brokers wanting to send data to advertising sites like Google, Yahoo!, Zillow, and Trulia, all of which are participating on the workgroup. All of this is happening without requiring MLSs to merge or consolidate into monopolistic nightmares.

    I’ve been writing about these topics at the FBS Blog for some time and am really excited to see the conversation expanding. Of all the points Mariana makes, the most important from my perspective is this: “A National MLS is a HUGE pile of mess to throw under one umbrella with one ringmaster.” Yes, no doubt. Also, make no mistake, there are companies right now vying very hard to be that ringmaster, usually while saying exactly the opposite. There is a huge land grab going on right now to consolidate MLS systems, and it’s going to be very important to the future of local MLSs to participate in the conversation so that voices like yours can be heard.

  14. Florida Vacation Rentals

    March 3, 2008 at 6:27 am

    I agree with you on all points. Especially in this current market with the foreclosures and it is so hit and miss one area prices reflect increase due to the recent boom in market and one area not yet some try to lump it all into a zip code current market value.

    I see people on blogs argueing about how to enter a foreclosure into the MLS and when they do a print out because everyones done it differently it does not print all properties.

    Working with a realtor is key and with working your way thru the large inventory of homes right now it has never been more important for a realtor to assist thru this process and only someone local can do that. Great post!

  15. Brendan King

    March 3, 2008 at 8:17 am

    I believe that listings are assets that agents and brokers own to attract new buyers and sellers and to promote their brand.. It can/could stay that way if Real Estate professionals get off their butts and start marketing listings properly on behalf of their clients. If the industry doesn’t start to do this consumers and the market will find a way to correct it. The current state of the MLS’s are the biggest reason agents and brokers can’t/don’t effectively market listings.

    Don’t believe me? I have written about it extensively here: https://brendanking.ca/5/ and https://brendanking.ca/2006/12/25/60/

  16. Ines

    March 3, 2008 at 8:20 am

    It’s the little intricacies of each locality that would make it nearly impossible. I’ll give Kristal an example. I farm an area called “Miami Shores” and currently have 7 listings there. The Florida MLS does not recognize Miami Shores and puts it under the big “Miami” umbrella – which means any consumer or Realtor looking in Miami Shores, will miss those listings. It took me 2 months and about 15 phone calls for them to correct 5 similar cities……….I can only imagine the problems if it went National.

  17. Maureen Francis

    March 3, 2008 at 8:37 am

    As much as I would like the benefits of economies of scale that Kristal mentions (cheaper and more tools), competition is a good thing. Look what we have done with Realtor.com. Is it the most technologically advanced site? No. Does it serve us as well as it could as Realtors? Not in my opinion. Trulia is prettier. It is more intereactive. I don’t pay for it but it has more information about my listings…

    I don’t want my MLS in the hands of NAR or any other national group.

  18. Greg Cremia

    March 3, 2008 at 9:08 am

    I live in a resort beach town which makes it fun and convenient for agents to travel far from their areas of expertise to work. Just like I don’t know anything about what types of soil are inclined to slide down a slope most agents don’t know anything about flood zones and erosion or the consequences. We have homes that are ready to be swallowed up by the ocean and when one of them sells it is not by a local experienced agent.

    Currently, one of the big problems with real estate is the quality of agents. The lack of education and experience in our profession would only be magnified if we made it easier for agents to sell in all the fun far away vacation places.

    Dealing with agents who are out of their element is not a benefit to the consumer.

  19. Mariana

    March 3, 2008 at 9:17 am

    Kristal – (I didn’t correct the typo. Someone else must have… Oh well.) I do not think that I am being “old school” about this. To me it is very similar to big government vs. small government. Big government has its benefits, but can get corrupt easily. Smaller government allows each state to fill the needs of its citizens in ways that best suit their needs. I do not believe that there is ONE umbrella MLS that will truly benefit everyone. Consumers included.

    Jon – I agree.

    Larry – I completely agree with you when you say, “The unknown is the evolution of the web and how it continues to bring causal changes to the way we do business.” We really do not know how the landscape will change between now and even a year from now …

    Teresa – Personally, I do not think consumers care if the MLS is national or local as long as they ca see all the homes that are for sale in the area that they want to move. It think that national MLS is an issue more for profits and standards than what the consumer really wants.

    Jim – I only have one MLS that covers all (and more) areas that I work. I understand that there are more people like you than like me, and there DOES need to be a change, IMHO regarding that. And because of your situation and frustrations, I can see how a national MLS would look appealing. But, what about a regional MLS instead? Then it would have the local needs of yoru area met, while being more cohesive and less dainbramage than your current situation.

  20. Mariana

    March 3, 2008 at 9:29 am

    Michael – “You don’t need to have a national MLS system in order to have national standards for data. … All of this is happening without requiring MLSs to merge or consolidate into monopolistic nightmares.” EXCELLENT points! Yes. That would be awesome!!

    Ines – Thank you for that example. We have an area called “Cimmaron Hills” that EVERY national website (Point2, Zillow, Trulia, Google even) calls its own city. Once upon a time it was its own city, but many moons ago it became an unincorporated part of Colorado Springs. The address is Colorado Springs, yet no national MLS-like program allows us to list a home for sale in that area under Colorado Springs.

    Maureen – You bring up 2 excellent points: Competition and Power. I like the say that I have in our MLS/board. Dumping it in the hands of a national company would remove that power from me. I don’t like that idea.

    Greg – “The lack of education and experience in our profession would only be magnified if we made it easier for agents to sell in all the fun far away vacation places. Dealing with agents who are out of their element is not a benefit to the consumer.”

    You touch on a very interesting series of events … Would a national MLS cause license laws to become homogonized? Would agents now be able to sell homes in any area? How would agent accountability be managed?

  21. Mariana

    March 3, 2008 at 10:41 am

    Julie – (Toronto Lofts) Forced changes? In some areas maybe. In ther areas, it would just be a pain.

    Brendan – Thank you for your input. My opinion is that you can lead a horse to water but you cannot make him drink. The fact that I DO effectively market my listings is what sets me a part from my competition. The consumers WILL speak, by choosing the agents who do “get off their butts” … I do not think that a national MLS will change competency levels of agents.

  22. RE: https://www.flexmls.com/blog/?p=342 … There is a comment by Matt Cohen of https://www.callclareity.com : “I’m looking forward to hearing from NAR/CRT on the subject of the national MLS gateway…”]

    What IS the true definition of the theory of a National MLS?

    Is it owned by NAR or by a separate company? What IS the proposal and implications for each version of a National MLS?

  23. Daniel Rothamel, The Real Estate Zebra

    March 3, 2008 at 10:49 am

    Mariana,

    Great post. I have had a post similar to this one in my draft folder FOREVER entitled, “A National MLS is Un-American.” Glad to see you bring this up.

    I think that a national MLS is a bad idea for all of the reasons set forth, but I do think that someone should be able to work a system that mashes-up all the data from disparate places and puts it together FOR FREE. As was pointed out on BHB recently, free is the new green. Let’s be real here, REALTOR.com is raking agents over the coals (heck, you can see the scars on my body, if you want). I would love to see a viable competitor in that arena.

    Jim brings up a very valid point– the MLS is not for consumers. I wrote about this a while back, but it remains true. Their needs to be a distinction between the MLS and the data itself. The data is for the consumer, the MLS is for the brokers. A national MLS is different than a national aggregation of the data. At least, that is the way I think of it.

  24. Daniel – You rock. I have been making references to our government and you just came right out and said it: “A National MLS is Un-American.” Thank you.
    I also agree that there should be more viable, free and comprehensive competition to Realtor.com. I have scars, too. A “national aggregation of data” is a much better alternative to a national MLS, because, again, you are right: “The data is for the consumer, the MLS is for the brokers.”

  25. Russell Shaw

    March 3, 2008 at 12:03 pm

    The Justice Department and the FTC seem to want to “nationalize” the MLS as it is. Having hundreds of separate MLS systems is our very best possible defense against such a takeover. I am all in favor of RETS and would encourage anyone reading this to read comment # 13 from Michael Wurzer again.

    Mariana, nice nice post.

  26. Kristal Kraft

    March 3, 2008 at 12:13 pm

    Michael Wurzer’s comments helped me realize what I am for is not the “National” part of MLS but the standardization of the data. Thanks to Michael for pointing out the distinction.

  27. Russell – Thank you. Yes. Michael’s comment is very important to this discussion. It clarifies quite a bit. (He also write more here: https://www.flexmls.com/blog/?p=342)

    Kristal – Ah! I guess we are more-or-less in the same boat now, as I am all for some more standardization, just not nationalization.

  28. Vicki Moore

    March 3, 2008 at 2:43 pm

    Since we as Realtors are all the same, why shouldn’t our listings all be the same, and our contracts and our marketing, and our websites, and our outgoing voice messages, and our email signatures, and our cars, and our clothes, and our signs, and…I can’t think of any more.

  29. … and our hair do’s, and our commission …
    Vicki! Awesome.

  30. Ines

    March 3, 2008 at 3:12 pm

    Mariana – you beat me to it – we’re all the same anyway except for our hair…….let’s standarize our hair as well and become penguins! 🙂

  31. Jim Duncan

    March 3, 2008 at 4:20 pm

    Mariana –

    The reason I think that a national database (again, not an MLS) from which the local or regional MLS’ could pull is simple – we need to think bigger. As boundaries collapse across county, city and parish lines, we need to do whatever we can to eliminate said boundaries.

    With regional MLS there will still be those boundaries on the fringes. If MLS can pull data from one centralized location, they will be better able to serve and target their customers – the Realtors.

    Not to belabor this point, but it’s an important one – somebody is going to create a <inter)national database of property information, and it could likely be Google. Realtors currently have a competitive advantage with the most accurate and trusted property information out there; I am concerned that we are liable to lose that competitive advantage in the (near) future. One of my fears that may or may not come to see reality is this – Google, or somebody, collects a better database of property information, reaches critical mass in the consumers’ eye, and then we are charged for access to that data.

    Now is the time to build a single repository of comprehensive and trusted property information, that will be used by and for the Realtors.

  32. Ines – this post just became more poular than my Penguin post … with your comment!

    Jim – I understand what you are saying. A version of this is inevitable, and I appreciate the fact that we need some cohesiveness that is better than the Realtor.Zillow.Trulia.Point2.com’s of the world. But I cannot hand over full control to a national entity w/o feeling like I am doing “local real estate” a sad injustice. Maybe it is a semantics issue at this point … ?

  33. Denver Mortgage

    March 3, 2008 at 6:57 pm

    When things get bigger, they almost always do NOT get better. The Department of Education should be abolished for many of the same reasons you listed here. Kids vary across the land, and a one size fits all education policy doesn’t work. Local communities know their kids, and local school boards should rule the roost just as local real estate folks should drive the local real estate market. Anytime people are talking about centralization, I think about who exactly wants to gain more power because that is exactly what comes from centralization.

  34. Eric Bouler

    March 3, 2008 at 9:39 pm

    Lets see a couple of states do it before even considering the move. Too much power in the hands of a few and to what end! Lets be creative and have hundreds. Are we all happy with realtor.com which come close to a national something. Not too many supporters here I bet.

  35. Mariana

    March 4, 2008 at 8:03 am

    Wade – You make an excellent point, comparing it to education: “Local communities know their kids, and local school boards should rule the roost just as local real estate folks should drive the local real estate market.” I couldn’t agree more.

    Eric – Personally, I think a truly comprehensive RE info aggregator would be a great idea, and RE.com is on the way to being that, but I do not know if NAR is the answer.

  36. Jim Duncan

    March 4, 2008 at 8:28 am

    Wade and Mariana –

    I’m invested in this discussion per my disclosure earlier; does this analogy work?

    Local communities know their kids, and school boards should rule the roost. But – don’t they all draw from the same historical record? If the local MLS’ are pulling from the same database, they can pick and choose what information to display to the local Realtors.

    The argument for the national data aggregator is simple – do we as Realtors want to control it, or are we content to let somebody else do it?

    Also, we need to separate the Realtor.com aspect from the argument. Very few are happy with it now, but it’s not specifically relevant to the MLS conversation; Realtor.com is for public access. An MLS is not.

  37. Mariana

    March 4, 2008 at 9:00 am

    Jim – I think there is a fuzzy line defining this conversation. I am almost certain that I agree with you, but not completely.

    I am all for a national aggregator, that all MLS boards can contribute to like Zillow, Trulia, Realtor.com to offer consumers home information.
    I am all for a system that standardizes the “lingo” for our industry.
    I am also all for a system that makes certain parts of disclosure in the MLS more consistent from place to place. i.e.: Filtering out ways that some agents game the MLS systems…

    I am not for a national system that dictates how my MLS is put together and what information I must include. It is my local board’s job to understand the specific needs of the Realtors(r) in Colorado Springs – how lockboxes are managed, how to disclose meth labs/mold/termites, how to show homes (we do not mandate listing agents to be there during showings), whether basement square footage is counted in the total living space sf or not, whether or not it is mandatory to disclose that a bedroom with no window is really a bedroom or not, how to disclose co-op’s, how to disclose buyer incentives to buy, and how much power I have to report a violation of our MLS terms and standards…. The list goes on. I do not agree with putting a national system in place that dictates all of that on a national level.

    Also, in my MLS board, my voice means something. If I see room for improvement, I can offer my opinion and they will look into it and make changes where they need to be made. At a national level, I do not see it being that easy whatsoever.

    What I see here, in this discussion, is the fact that the MLS boards across the country are all so different, that even THIS conversation is hard to have w/ someone not from the same board. Although it makes some things difficult, it is the diversity – not the homogeneity – that serves the individual agent in the town that they are in.

  38. Larry Yatkowsky

    March 4, 2008 at 9:55 am

    Mariana,
    As it is election season you should set up another post with one of those vote widgets and let’s have at it.
    National – y /n
    local – y/n
    same hairdo – y/n

    .>)

  39. Mariana

    March 6, 2008 at 12:08 pm

    Larry – Ha! That would be very interesting to see results from different areas.

  40. Larry Yatkowsky

    March 6, 2008 at 1:56 pm

    Mariana,

    Ben (or some other brilliant tech-soul) might have some whazzoo gizmo that can set up a voting system for each state.

    I also agree, it would be interesting to see what the grass roots have to say about the National MLS and of course, the RHINOS – Realtor’s Hairdo Institute National Official Style. .>)

  41. Missy Caulk

    March 6, 2008 at 2:03 pm

    I like the comment above about us all being in rockin’ chairs.

    The MLS was created for Realtors, not the public. We lost that control when r dot com took our listings and sold them back to use with enhanced listings. Now there are other sites that do it better and are growing.

    We have been discussing a regional MLS with an elephant in the Detroit Metro area, It is laid with problems, so I think I’ll be rocking before it happens.

    Board of Realtors do more than provide the MLS to us, at least in my area. Being a cohesive group would totally disappear. Consumers are smart they go to the location of where they are searching.

    What would happen to all the time we have put in optimizing our sites for Ann Arbor Real Estate? LOL

  42. Randy G Morley

    March 6, 2008 at 8:58 pm

    Wow!! What a great thread!! Here are my 2 cents worth,.. which I am told are worth in the neighborhood of .25 of 1 cent,.. 🙂

    Much of what drives the concept of a national MLS is the individual fear of someone doing it that is not a Realtor and who does not understand the local markets. What I hear more often than not is the fear that google or some other entity will do just that,.. however let’s be realistic.

    To have such a board be successful, it would take the cooperation of every agent in “accurately” inputting every one of their listings into such an MLS,.. this would not be marketing to the public who is actually purchasing a property,.. but to a boatload of agents who are unable to help that buyer move from New York to New Mexico,.. or where ever because their license only extends to the state line.

    Also,.. any agent who proposes that they are able to effectively represent their buyer in a state or even an area that they are not well versed in,.. is only representing themselves in their commissions. No one can tell me that I am qualified to even know Denvers market well from 60 miles away. In all actuality, there are agents in Denver that won’t sell properties across town because the market is too large for them to know adequately.

    Mariana is correct,.. our MLS rocks,.. because it is local,.. because it’s members have a voice,.. an equal voice without regard to the size of their company or the number of it’s listings,.. because it’s members care enough to be involved and holds it’s members to a higher level of professionalism than in other area’s. We police our own listings, and hold one another accountable for their accuracy in tangible ways and in the end,.. we have properties that are accurately portrayed and represented.

    If I want to find a property for a transferring Seller in another area of the country,.. I will do a realtor.com search to let them know a ballpark price for where they are going,.. I will search for a Home Run agent in that area, and I will refer them,… for me to do anything less is a disservice to my Seller.

    The only one that I can truly see being benefited by a national MLS,.. are the people involved and on the payroll of that MLS,.. because it will not serve the Realtors, nor the public,.. there will be no accuracy in the Data, (Real Estate Agents are a creative bunch, many willing to say anything in the hopes a sucker will bite), no consistancy in the individual needs of any community.

    Fear should never be an incentive to embrace a bad idea, and change for it’s own sake is not always progress.

    There,.. told yah,.. 2 cents,.. worth .25% of 1 cent,… 🙂

    Great Posts All!!

  43. Mariana

    March 7, 2008 at 9:11 am

    Larry – RHINOS? LOL!

    Missy – You are right. The board does more than just the MLS, but running the local MLS is a very important part of what they do. And yes, consumers ARE smart. Very smart.

    Randy – Welcome! You are right – “change for it’s own sake is not always progress.”

  44. Jim

    March 7, 2008 at 11:24 am

    “change for it’s own sake is not always progress”

    Are you referring to the national MLS or the Presidential campaigns?

  45. Cyndee Haydon

    March 15, 2008 at 10:14 am

    Mariana – As a newer Realtor – I haven’t seen our board do anything but use the MLS like the Mafia. They even marketed to us to pay them an extra @$400 year to get the same IDX link that we already get for FREE from the Florida Association of Realtors – just didn’t know at the time – how is that treating “us” their clients with respect. I have experienced little positives. We have 2 MLS’s in our area and you still seem to network with the Realtors in your farm area since you keep bumping into each other. Actually has a KW invite this week – lol.

    I was told that to offer our clients more info they will ONLY sell it to the Broker for $2000/yr – which would FORCE us to leave our broker to deliver better service to our clients – how is that supporting our broker? I think the days of strong arm tactics are leaving as the info becomes more available.

    Not sure National is the answer but I’m not happy with the local one either.

  46. Mariana Wagner

    March 15, 2008 at 10:31 am

    Cyndee – You are exactly right. Some boards are horrific and there definitely needs some change. I just do not see the answer being a national answer so much as a local, or even regional one. I wish you luck with all of that.

  47. Heath Coker

    March 15, 2008 at 2:38 pm

    I am a listing broker on Cape Cod. CapeGroup.com I always find these threads long after they start. Anyway,

    I have been working to solve this for 8 years. I got tired of all the lead generators, IDXs, supposed NAR endorsed sites, and decided to create a solution for my work area. That grew into a national site. that is free to listing agents. I made a 2.5 minute YouTube about it. YouTube.com/watch?v=Y6aYxzfTa_8 .

    Real estate IS local. We need to get our MLSs to stop competing with us.
    If we are putting maps, and value estimators, and listings on our own sites, why do we need other sites advertising our listings and competing for traffic with us? MLS is for communication between agents and to organize/store information. Not to feed content to websites. Are you aware that the NWMLS stopped feeding its listings to Realto r.com? And what about the million+ licensees who aren’t in ANY MLS? How do they get found?

    Our websites are our online offices that anyone can enter anytime from anywhere. My site helps customers find those local offices. It doesn’t interfere with them, and it uses no data.

    Just my idea of a fix that doesn’t cost anyone else anything.

  48. Mariana

    April 23, 2008 at 4:40 pm

    Heath – That sounds interesting, I will check it out. Good Luck.

  49. Eddie Carr

    May 14, 2008 at 8:34 am

    I absolutely agree that the MLS needs to be managed on a local level. It doesn’t make sense for one organization to manage each MLS listing across the nation. Too many details would fall through the cracks. I do, however, love the idea of having access to MLS listings across the Nation in one place. I recently found a Google mashup that shows the Florida MLS and all other states. It’s a pretty useful tool and only manages data distributed by each area.

  50. Sue

    May 19, 2008 at 11:54 am

    Some things should be standard and consistent at a high level, but I believe local is best to address the differences in each area and also, if issues come up they will be much easier to resolve.

  51. Robin Sing

    May 21, 2008 at 7:15 pm

    A locally managed “something” may end up better than the current MLS management. The database stinks, it’s slow, it’s like they got ripped off when they hired the vendor. Plus another manager might make it required to enter pictures since these guys can’t get it to happen!

  52. Robin

    May 21, 2008 at 9:45 pm

    A locally managed “something” may end up better than the current MLS management. The database stinks, it’s slow, it’s like they got ripped off when they hired the vendor. Plus another manager might make it required to enter pictures since these guys can’t get it to happen!

  53. Frank Jewett

    May 21, 2008 at 11:20 pm

    The industry will end up with one or more national MLS platforms because that is what consumers want. You can leave the field and surrender to Google, Trulia, and Zillow or you can figure out how to make it work because if you don’t create it, outsiders will create it and you’ll have to deal with them to reach the consumers. Having dozens of local MLS companies made about as much sense as having dozens of local “Realtor-owned” spreadsheet companies. You’ve wasted billions on substandard, redundant software. It’s time to get out of the software and database industry and stick to selling.

  54. Heath Coker

    May 22, 2008 at 7:05 am

    Why do agents want their listings found more than their businesses? Most people don’t buy the house they call on or visit. Isn’t more of an advantage to the business of real estate for businesses to be found?

    Of the 2.5 million real estate licensees, only 1.3 of them are in ANY MLS.

    Consumers want to find real estate and make a good purchase that meets their needs and desires.
    Businesses help find the most, and best, real estate, not picutres on the Internet.

    Consumers are being fed by the advertising budgets of the aggregators – “don’t use a business; you can do this on your own. All you need is pictures and addresses.” The “outsiders”, as Frank calls them, have more interest in spreading dis-trust because it benefits their cause – not because it benefits the consumer.

  55. Bob

    May 22, 2008 at 7:47 am

    Why do agents want their listings found more than their businesses? Most people don’t buy the house they call on or visit. Isn’t more of an advantage to the business of real estate for businesses to be found?

    People seldom call on ads for an agent or broker, but they do call on ads for property. What they want is a product, not a service.

  56. Heath Coker

    May 22, 2008 at 8:09 am

    What they want is a product, not a service.

    I can see that you think people just want pictures and addresses from your site. It appears that your approach is to be the wal–mart for real estate where they walk in, take one off the shelf and go the the cash register. And, for some customers and agents, this can occasionally work.

    However, I have found that people come into my office and onto my website (capegroup.com) to get good information, to get the assistance of someone who looks at real estate every day and knows the forms, the process, the liabilities and the nuances of the area they are looking in. Maybe the buyers on Cape Cod are different that in San Diego.

    Even when I am looking in another state, I use a pro. If for no other reason – to save time. The things I can learn and pitfalls I can avoid by employing a full-time, experienced, broker, are valuable in time savings alone.

  57. Mariana

    May 22, 2008 at 8:40 am

    The #1 thing internet home buyers look for when online is HOME FOR SALE. Nobody cares about the agent or company until they have satisfied their initial need to look at homes.

  58. Frank Jewett

    May 22, 2008 at 10:20 am

    The real estate industry earned the distrust of the public through years of abuse. We’ve all heard the bragging. It’s an open secret. Transparency will give consumers access to better information and help level the playing field for brokers and agents who want to do business the right way.

  59. Susan

    May 23, 2008 at 10:33 pm

    I agree with Mariana and Bob, people on the internet just want to see the houses for sale. Most of the leads that I have received are generated by someone looking at a specific home that they saw on my site or a listing partner.

  60. Justin in Kauai

    July 22, 2008 at 3:21 pm

    I have plans to get rich off a National MLS! So I’m on the other end of the spectrum Marianna, but I do understand your views, and you make a great argument.

  61. Bob

    July 22, 2008 at 4:38 pm

    “I can see that you think people just want pictures and addresses from your site”
    Heath, that strikes me as an odd comment given that your home page is mostly just listings, whereas mine is not.

  62. Heath Coker

    July 23, 2008 at 7:43 am

    Actually, Bob, my point with the “pictures and addresses” comment is that the buyers I work with want both – like the two columns on my site; one of information and one of my own listings. But more importantly they want a local person with experience. A site with pictures and addresses does nothing to display experience. A site with only information and MLS listings does nothing to enhance the professionalism of agents/brokers. In fact, it seems to minimize the importance of using an agent, because it makes searching for a home seem simple – look at pics, pay on the way out….

    (I have both information and pictures of houses in columns. The pictures of listings on my site are my own listings. If you rely on other’s listings, and thus need an MLS link to keep customers on your site, maybe you are only a lead generator like Realto r.com. There is a place for that I guess, but my experience is that serious buyers are looking for more than pics and addresses. Thus, a national MLS is less useful than finding local agents and brokers web pages which display their knowledge of the local market as well as listing pictures. I hope that adds clarity to my comment, Bob.)

  63. Barry Cunningham

    July 25, 2008 at 5:32 am

    I bet ross Perot could have come up with a product that would have worked…privatization is the key.

  64. Eugene Real Estate

    August 30, 2008 at 9:10 pm

    This is a timeless article about a very emotional issue with so many people. A National MLS is a greedy idea brought to you by big money that wants to profit.

    I could not agree more with Reason #1 given above and its examples which could be expounded on a great deal.

  65. Mariana

    August 31, 2008 at 8:48 pm

    I am very interested to see how the different MLS systems adapt as the next few years unfold.

  66. David Jones

    November 5, 2008 at 3:39 pm

    The National MLS is only a software tool. The policies and procedures could be the same regardless of being a national database. Here in North Alabama we have one MLS database that is shared by 4 different boards. The biggest problem for a national MLS would be getting access. A national lockbox? That would be difficult.

  67. Donald J. Leske II

    December 15, 2008 at 8:26 am

    Hi Mariana… in the beginning of this post you said: (You are more than welcome to offer up those points of view in the comment section, but I will not be addressing them here.) –

    HARD to stay away with such an interesting topic huh?! 😉
    I have read a few reply posts… but not all, so hope my comments are in line.

    Anyway.., I am a Broker with my own office and I have also been a Webmaster for over 10 years.

    1. I believe that it would not be a big problem to develop the needed software to simply “plug in” to every MLS database out there.

    2. I believe that all MLS operations should stay “as they are” totally, with the exception of shared information to a National Database.

    3. Those who wish to stay as they are locally can then do so and not subscribe to the National Data Base. EZ stuff.

    4. By leaving the infrastructure as it is we also avoid charges of having a Monopoly.

    5. The local boards can benefit by sharing with other boards… much as we do with our political structure here in the USA. Each State has their own laws and rules, yet each State belongs to the Union or… part of the Nation.

    6. We are a mobile Nation. Our people do move around a lot, especially Military families. Many of us Agents/Brokers would like to offer a simply standard National Search that could be easily directed to where the end user wishes to go.

    In the end each MLS would retain is its own unique identity, processes and rules…, yet each can benefit from the National exposure and strength of a National United MLS. The NAR has done it already in terms of uniting Realtors.

    Some agents may not like the thought, so they would be able to just keep on keeping on as they are in their warm comfortable place that they are happy with. No biggie. – Those Agent who would “share” and join with a National effort to grow, would of course benefit in other ways.

    Some MLS Boards may not like the thought, so they would be able to just keep on doing what they have been doing…of course, but by allowing access to a National Board they would at least derive benefits for those of their members who could use the exposure. They would give up NOTHING. They would gain EVERYTHING. – In fact I see several ways that a local MLS could bring in additional income from the process and bring added benefits to the Public.

    Would it be in the Public interest to have a National Board of MLS Agencies? Well of course it would, how could it not. Getting past the sentiment of those who do not play well with others.., we can see a whole new and exciting opportunity to help the Public.

    The fear: some MLS boards will fear loss of power and fear control by a larger Big Brother. It does not have to be that way.

    The facts: it may take a court order to get some MLS boards to comply.

    Aaaaah so. Complex it is, but it does not have to be. I have talked with a couple other high end Techs and together we have thought of legal ways to tap into MLS databases to do just this very thing, make a National MLS Database. It will happen in time in some way.

    IMHO, the local MLS offices can each join together and have some say and control in the future of a National MLS… or they can hide their heads in the sand and watch people like me or others, who will take the lead and bring on a group of Lawyers to find the legal way to force them to comply or at least share their information. I hate the thought of giving Lawyers that much money and “forcing” anyone to comply, but it doesn’t have to be that way.

    Things are in the works already. Just sit back and watch or encourage your local MLS boards to work together for the Public interest and ultimately in the end, their membership.

    Kind regards to all,

    Don Leske II / Broker-webmaster
    BCIwire / BCIrent / Homesandproperties

  68. Heath Coker

    December 15, 2008 at 9:17 am

    Here’s is an interesting glitch/fact: less that 1/2 of all licensees in the US are in an MLS. They are operating without an MLS now. The incentive would have to be pretty large to join one when they are already doing business without one.

    And, the trend is actually away from consolidation and toward agent and company sites. KW, Windermere, Pru, CB, C21, etc., are all working on internal MLSs.

    The consolidation idea surfaced when agents and companies had no sites themselves. Now, many experienced agents prefer to publish their own listings rather than have their customers filtered through someone else’s site.

  69. Mariana Wagner

    December 15, 2008 at 9:37 am

    Donald – Thank you for your comment. I am all for an aggregate site that pulls data from all MLS’s. My issue is with having one national company overseeing a site that every agent HAS to go to to find home-for-sale data. That would be a disaster. No one on a national (or even regional) level could maintain a MLS to the quality standards that a local board can. (not that they all DO, but those who DO should not be punished by having it taken away from them.)

    Hi Heath – Wouldn’t searching ONLY homes for sale by your own company be a grave disservice to the client? The company-specific “MLS” is a nice way to get a bunch of listings together and push them out to other aggregate sites (like the KWLS does), but they are not a great resource for SEARCHING for homes.

  70. Heath Coker

    December 15, 2008 at 10:32 am

    Most Full Time agent sites provide a link to an MLS search as well as showing their own istings. And, showing that they actually list property themselves, and that as such they are active in the market, shows viewers that they are a real agent that is actively working. There are many part timers and many “lead generating” sites that aren’t operated by real local agents.

    Many agent sites also include listings that are not in MLS.

    As for those who only show their own listings, they appear to be able to do business that way.

  71. Mariana Wagner

    December 15, 2008 at 10:49 am

    Heath – As a full time licensed real estate agent, the beauty of OUR MLS is the ability to search for and find that perfect property for our clients – regardless of who is listing it. It is a cooperative effort between ALL of the agents in our area. In fact there are VERY FEW listed homes that are NOT listed on our local MLS.

    Actually there may not be ANY non-MLS listed homes, now that most of the local alternative pricing model companies that used to do “pocket listings” have either changed their business models or closed their doors…)

    Of course I highlight MY listings on my site and link to a full-MLS search, as many other agents do.

    My point is that our MLS is VERY VERY good and competent. Nationalizing it would water it down and make it less effective.

    However, again, I am ALL FOR an aggregate site that pulls data from the different MLS’s (as your site appears to possibly be capable of), so long as mu local MLS remains in tact and managed/ran locally.

  72. Donald J. Leske II

    December 15, 2008 at 11:08 am

    Hey there again.., ?

    So.., what my thoughts was is to leave EVERYTHING as it is. All MLS offices should continue to process their listings as they are doing and control their own businesses. This keeps local controls in place and probably a better end result. –

    What I was proposing was that a National MLS would simply pull its search listing direct from each MLS as needed, not begin to do their own input per State…. why re-invent the wheel.

    And as for each office and type of “Brand” doing their “own thing” so to speak… well I ok with that too. Is it for the Public good, or does it just help those who have the most ability dollars and power? Infrastructures can be local and yet, tie into National or even World Wide resources.

    This is American (as people put it) and we as Americans are very independent. We want our “right” to bear arms.., we want our “right” to smoke cigarettes, even if it is proven to harm others. Ah.., the freedoms we have.

    More than 50% of Licensed Real Estate Agents do NOT belong to the Board of Realtors and actually have no right to call themselves Realtors. Its true…, but all agents enjoy the freedoms, rights and privileges that legislation has brought about by this very group.

    Expansion happens. Some people will never want to share and will try to corner their own little piece of the market.., and that’s ok for them. This is America. But for those who want to share and have a bigger idea of what can be…. That’s ok too. IMHO.

    Kind regards,
    Don

  73. SANDRA GLEICHER

    February 25, 2009 at 6:15 pm

    Regarding the National MLS: “If we are all going to dance in the same ballroom…let’s dance together, not apart!!”

  74. Art Lane

    March 20, 2009 at 7:51 pm

    I apologize for jumping into this discussion so late in the game. I happened to stumble across these posts through a link on RealtySoft.com this evening.

    A national MLS access point initiative for GRI designated REALTORS was launched in February, 2009. Exclusive territories (counties) are being assigned on a first come-first served basis. The design is based upon a map using drill-down capability to access individual states and then counties supported by GRI websites that use embedded IDX links.

    This is a WIN-WIN: the benefit to the consumer is that they can easily search for properties of interest, and the benefit to the GRI is that they stand a chance to be contacted directly for support.

    More details:

  75. Robert T. Boyer, Ph.D.

    May 13, 2009 at 11:44 pm

    Please note, I am putting on my Teflon and Kevlar and Charmin for the … storm I might launch with this comment.

    This discussion is irrelevant. You are discussing if buggywhip X should be used for all horses or if each person should use their own homemade buggywhip. The MLS’s are a dying breed.

    Zillow, Trulia, GoogleBase, FinestExpert, and dozens more are on their way to attempting to eradicate the MLS’s. It may not be explicitly stated that way, but then again, once the camel’s nose gets under the tent…

    The easily recognized need for real estate agents and our MLS’s is disappearing. Gone are the listing books. The MLS is no longer this high-tech thing that is absolutely required to get your house sold. Guess what? The consumer now has all the technology at their fingertips. Don’t something like 87% of all home searches start on the web now. The “only” thing lacking out in the consumer controlled world is standardization; but, it will come.

    I know there are arguments that agents and our MLS’s are needed and I think you’d better get them polished up before we all get voted off the island.

  76. Heath Coker

    May 14, 2009 at 9:52 am

    Interesting note Dr. Bob. I am just a lowly real estate broker. You’re a PHD, and actively involved with your cash flow games and financial advising for your wife’s real estate company.

    But which is better for your business:

    Buying “leads” from places that use your wife’s listings to generate those leads?
    Or,
    People surfing directly into her own web site (your online office so to speak)?

    Or maybe you let those same companies stand outside your office at Lago di Grata Circle and interfere with people from entering your office? Unless, of course, they give their personal information to the company first so they can go in and tell you they want to come into your office.

    Why is it better for her listings to be used to interfere with people walking into her own office unimpeded?

    Maybe people can’t find her site very easily. But isn’t that partly due to the pollution and competitiion caused by the sites you say are taking over the real estate business? The other part is due to her own effectiveness at hiring a programmer to SEO her site ahead of the very sites you appear to be surrendering to.

    The fact is (although not publicized because of the funds behind the large sites) that many MLSs are not sending their data to those sites any more. Couple that with the fact that over 1/2 of the licensees in the US are not in any MLS, and their problems are amplified.

    Listings are the gold. And brokers have remembered the golden rule – the one with the gold….

    By the way, I am linking to your wifes site from all the towns she lists property in – so customers have another way to walk into her office without interferance.

    Tell Anne-marie: Happy listing and selling! And, I play the cash flow game, too. It is a fun and educational alternative to monopoly.

  77. Eugene Real Estate

    June 14, 2011 at 9:02 pm

    Great Post! I especially like #2. One other thing. Some agents might try to over reach there knowledge and try to work in areas that they no nothing about. This can only hurt home buyers and sellers.

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Residential

Short sales: the top 3 title insurance troubles

Short sales are not without challenges, but knowing the answers to the most common obstacles and questions can aide in a less stressful transaction.

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The importance of title insurance

When my husband and I purchased our first home, I was very young and very green. At the closing, our agent passed us our title insurance policy and said, “Put this in a safe place, and do not EVER throw it away.” At the time, I had absolutely no clue about title insurance, why it was important, and how it could save you from a world of trouble.

Decades later, working short sales, it’s the title reports and those dreaded liens that seem to be what gets us into all sorts of trouble. In fact, most of the reader questions that I received this past week related to title woes.

Three common short sale questions

Question: When I run the Statement of Information for my seller, it comes up with a child support lien and a mechanic’s lien. My seller says that he is aware of those liens, but has no money to make good on those debts. What should I do?

Answer: In short sales, the first lien holder will authorize funds from the proceeds to pay off a variety of expenses associated with the sale. These include commission, settlement fees, title insurance fees, and other mortgage liens. However, it is extremely uncommon for the short sale lender to offer to pay off a seller’s personal debts. Before you spend months and months processing the short sale, I’d strategize to ascertain whether you will be able to help the seller make good on these debts prior to closing. Otherwise, you should probably run like the wind.

Question: I am dealing with the IRS on a tax lien that needs to be released prior to short sale closing, and the IRS won’t budge. What should I do?

Answer: First off, it’s always a good idea to get non-institutional liens released early. At the time that you take a short sale listing, work with the title company to run a Statement of Information on the property owners. That way, if something comes up (like an IRS lien), you have plenty of time to work it out.

Generally, the IRS and the state tax authorities have mechanisms in place to remove these liens from title at no charge, since there is no equity coming from the sale. A tax attorney can guide you through the process. However, ask your title officer or title representative if they can work with you on this problem. The good news is that some title companies can help agents and you can avoid working with the IRS.

Question: I have a second lien on title with Chase Bank. Yet, when I contact Chase Bank, they tell me that the loan has been charged off and I need to contact the company where they transferred the loan. However, they do not have a record of where it was transferred. I’m between a rock and a hard place. What do I do?

Answer: This kind of chaos happens all the time with short sales, and it is very frustrating. Generally, if you contact the executive offices at the bank where the loan was held originally (in this case, Chase Bank), they can have their research department obtain information about where to call.

Another option might be to ask the lender for a “zero demand”. If they charged off the loan and show a balance of zero, then maybe they will send a zero demand and not further short sale negotiation would be necessary for this lien. Hey… without a second lien on title, maybe this won’t even be a short sale any longer!

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Coaching

How to avoid short sale buyer frustrations

Minimizing the frustrations that come with a short sale is often seen as a mythical possibility, but with these simple tips, any short sale transaction can go more smoothly.

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Short sale frustration all around

Representing a buyer in a short sale can often be very frustrating. Primarily, that’s because of the unknowns associated with the short sale transaction. For one, nobody knows how long it’s going to take to obtain short sale approval. Actually, you don’t even know if you will get short sale approval. Not only that, but you also have to wait a fairly long time to learn the approved terms of the purchase. It’s frustrating to wait and wait, and then learn that the direction of the short sale is not the direction that the buyer is interested in taking.

Good communication is the key to short sale success. It’s vital for short sale listing agents to make communication with the buyer’s agent a regular and systematic part of the week. No matter how insignificant the short sale task, it is important to communicate with the buyer and the buyer’s agent and let them know that there are baby steps towards short sale approval.

One significant step towards short sale approval often comes after the bank’s valuation (BPO) when the bank makes a counter offer. Depending upon the short sale lender, this counter offer can come via email (in an email message), via telephone, or through an online platform such as Equator.

And then there are the counter offers…

Buyer’s agents and buyers often request to see the counter in writing. However, depending upon the short sale lender, this is often just not possible. Bank negotiators have contacted the short sale agent via phone, reviewed the settlement statement, and alerted the short sale agent as to what they will approve and what minimum net they might take accept in order to move forward with the short sale.

Since these counter offers usually do not come in writing, it’s important for the buyer’s agent to set the buyer expectations accordingly. Make buyers aware that there is lots of ‘verbal’ back and forth during the process. Many times it is only the short sale approval letter, the document that allows them to close, which comes in writing.

If buyers are willing to wait and keep the faith and understand that this process is a little more challenging and unique then most, they may find that they are getting a great deal on a wonderful property—often in better condition than the abandoned REO down the street.

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Coaching

Short sale: are there situations when agents can’t earn a commission?

Short sale: are there actually situations where an agent would not get paid? There are some complicated situations when it comes to short sales, and we address one here today.

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A short sale listing agent recently reached out to me to ask whether an agent principal can earn commission in a short sale transaction. This agent, Agent Alice*, was told that there are certain situations where licensees cannot earn a commission when buying a short sale.

The question:

Agent Alice received an offer on her listing from Agent Alex. Agent Alex is both the buyer and the principal. Agent Alice wanted to know whether the bank would pay a commission to Agent Alex at closing, since he is both the buyer and a principal.

The answer:

All of the major lenders including Fannie Mae and Freddie Mac employ some sort of arm’s length affidavit in which the buyers, the sellers, and the agents acknowledge (often in front of a Notary Public) that none has a business or familial relationship with another party outside of the transaction. Between this affidavit and investor guidelines for short sale commission, it is uncommon for the short sale lender to permit a commission to be earned by an agent principal.

Agent Alice then asked me whether Alex’s Broker, Broker Bob, could represent Agent Alex and earn a commission. While I do not work for the short sale lenders and cannot predict each short sale lender’s response, I’d say that it would be best to avoid this scenario, since the two have a business relationship outside of the transaction.

My two cents:

When I recently posed these scenarios to a group of agents, many shared creative ways to obtain a commission for Agent Alex. Remember that any creative solution whereby Agent Alex earns commission must also show his commission on the HUD-1 that is approved by the short sale lender prior to closing. As such, it is highly unlikely that there is a legitimate workaround for this problem.

The solution:

The easiest and safest way for Agent Alex to purchase Agent Alice’s listing is to seek representation outside of his brokerage. Not only will this assure that the buyer’s agent earns a commission, but it will also assure that all parties comply with the requirements of most lender short sale addenda.

 

*The names of the agents and the brokers in this post are pure fiction. Any relation to real listing or buyer’s agents is merely coincidental.

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