All eyes are on MLSs as they seek to reinvent themselves

Realtors are not the only ones gathering in Boston this week for the National Association of Realtors‘ NXT conference. On Thursday, MLS leaders took center stage at several conference sessions, including discussions of the business practice changes driven by the NAR commission lawsuit settlement and how the role of the MLS — and the MLS-broker relationship — has evolved as a result.

“I know that this year, to say the least, has been quite a memorable year,” said Charlie Lee, NAR’s senior counsel and director of legal affairs. “And I know that it has required tireless work from all of you in all of your endeavors, and ensuring that our members are equipped with the right information, tools and resources, so that they can avoid those unintended risks and be able to do what they do best, which is serving in the consumers’ best interest.“

But while MLSs have, for the most part, successfully helped their members navigate the business practice changes, it appears that many in the real estate community do not see value in the MLS.

According to a survey conducted by the WAV Group that was cited on stage by co-founder Marilyn Wilson, 55% of respondents believe MLSs are less valuable to real estate professionals now that offers of buyer broker compensation are no longer allowed to be shared there.

“I think a lot of it is that people are mad right now, especially those in the $2 billion club, and I can’t blame them. If I had to hand someone a check for $65 million, I’d be mad too,” Wilson said.

“But I think, what is most important, is that we have to remind ourselves and our members that we are a whole lot more than compensation. Yes, it was a meaningful component, but in fact, the MLS is really the center of how the industry operates.”

’We can’t go backward’

NextHome CEO James Dwiggins believes the negative attitude toward the MLS is one of the main things fueling opposition to NAR’s Clear Cooperation Policy, which requires listing brokers to list a property on the MLS within 24 hours of public marketing efforts.

“We as an industry have spent 30 to 40 years building the greatest marketplace ever in the world of real estate for home buyers and sellers,” Dwiggins said. “We have a responsibility in this room to continue to build that system and that marketplace to the degree that it is today and even more, so that down the road, we can’t go backward.”

Additionally, Dwiggins believes that MLSs have not done a good job of late in articulating their value to a growing group of new real estate professionals. Instead, they have been focused on other things such as helping agents navigate the post-pandemic housing boom and the commission lawsuits.

“You have to constantly articulate your value and reinforce it because people that are just getting into the business don’t have that historical perspective,” Dwiggins said. “I remember when my parents would get an MLS once a month and they would be so excited to find out what was for sale, but even then, some of those properties were no longer available because they were already sold. We’ve come a long way since then.”

With the business practice changes having been implemented a few months ago, MLS leaders believe it is time to return the focus on helping brokers and agents solve everyday pain points.

“We have to recognize that people are cranky,” Wilson said. “One of the things I would suggest you do is to start with the broker. Brokers are the ones dealing with the agents and the consumers and all their problems while trying to keep themselves calm, while handing over millions of dollars as part of a settlement and figuring out how to sell real estate in today’s market. Start with them and understand what they are most challenged with, and make them your partner.”

Additionally, many in the MLS space believe it is time for the platforms themselves to evolve. This could mean that more MLSs will sign data sharing agreements, ensuring that data is comparable and compatible across different companies. They may also need to embrace new technology.

“Everyone has been so head down and focused on implementing the business practice changes, and now we are a little tired, but we got through it,” said Denee Evans, CEO of the Council of MLSs (CMLS).

“But now I’m hearing so many executives say they are finally looking up and saying, ‘Let’s get back to the business of growing, evolving and running our MLS,’ and there are a lot of things we need to do.“

Evans said she has been concerned that so many in the industry were “not looking where the puck is going” and planning for future. Now that the industry is past the initial phase of implementing the business practice changes, she believes that will change.

Data sharing solutions

One way in which many MLS executives are looking to evolve is through data sharing agreements.

“MLS organizations that do data sharing told us that they do it because their customers’ borders are different than their borders, and their brokers sometimes are in multiple markets and multiple states, and both consumers and agents want access to better information,” said Sam DeBord, CEO of the Real Estate Standards Organization (RESO).

“They want access to the information they can get from outside technology organizations, but they want to get it directly from their MLS organization.”

These agreements can also help MLSs clean up their existing data, said Michael Wurzer, CEO of Financial Business Systems.

“One of the easiest problems to solve with a data share is for overlapping MLSs where you may have duplicate membership and duplicate listing entries,” Wurzer said. “Sometimes you see where there is an overlap in some markets and you change the price in one MLS but not in another, then the portals don’t know what the list price is. These are real problems that are relatively easy to solve with data sharing.”

Brad Bjelke, CEO of UtahRealEstate.com, also believes MLSs need to be more open to sharing at least some of their data with entities outside the MLS and brokerage space.

“I think a cooperative approach with some of the entities trying to solve big problems like affordable housing is the right way to do things,” Bjelke said. “The mindset across the country is that we can’t share our data or make our data available, and I think that has to change.

“I think there are certain parts of our database that are confidential and private, but there are other pieces that can help solve big problems. And I think it’s time to be a good partner, not just with your brokers and agents, but with other organizations in your communities to help make some change.”

In order to share data, MLSs need to ensure that it is compatible and comparable. While comparing datasets and displays are a good way to see if MLSs are compatible for sharing purposes, DeBord also believes this is a great way for MLSs to gain insights into other types of data they could provide to agents.

As the MLSs begin to look to the future and better serve brokers through added value, Dwiggins believes that different datasets are a great place to start.

“The MLS has been a utility,” Dwiggins said. “I think there is a tremendous opportunity for the MLS to shift. As an example, we should have a buy-side MLS — it shouldn’t just be listings. What about a reverse prospecting system, where you can find out what a buyer is looking for to see if you have a listing that matches? What about creating a database of every single active buyer who is working with an agent, so if you are getting leads, you can immediately check to see if they are worth pursuing or if the buyer is already working with someone else?

“There are tons of opportunities that we could explore as an industry to reinvent the MLS, so that the broker and agent go, ‘I can’t do business without this service.’ We have to reinvent the MLS to be something bigger.”