Tales from the Techside

Michael Wurzer over at FBS Blog has asked for feedback regarding the statement of principles by the CAR MLS working group.

I will try to provide my perspective on the principles they produced and I hope that each of my readers will do the same if not on this blog then on the wiki or if not there then at meetings we need to continue this conversation and come to a conclusion before the decisions are made for us.

1. MLS data needs to be fully standardized with local options for data field variation.

We believe that local customization of MLS data fields has made the comparison of data between MLSs unnecessarily complex. A lack of uniformity has created artificial boundaries that impede the efficient operation of the market and the ability of REALTORS® to service their clients. We support universal data fields that are standard across all MLSs while also recognizing the need for adding local descriptors.

Universal data fields must be a priority, and those are the fields that never change bedrooms, bathrooms (and please somebody come up with a standard entry for partial bath) etc… With that being said the solution provided must provide the flexibility to account for local options. For instance I don’t give one whit about a cattle fence not to many of those in Pleasanton but my neighbors in Central Valley and Metrolist do, the same goes for floating homes not too many of those (none) in Brentwood but plenty in Alameda and San Francisco.

2. California REALTORS® should have universal access to all MLS data.

C.A.R. members are licensed by the state Department of Real Estate and as such are able to sell property throughout California. Consumers have access to statewide and even nationwide listings through a variety of data aggregation sites on the Internet. In order for REALTORS® to provide their clients with the information they want, California REALTORS® should have access to all listing data in the state. Shared databases and reciprocal agreements should be strongly encouraged.

I could not agree more with this. People are moving from north to south and vice versa agents need to have access to that information and should only have to pay one fee to get it. However this statement fails to recognize the need for reciprocity. If an agent is going to do business in an area he or she is not member of they need a guarantee of compensation. Also I would include the need to open up the lockbox agreements. If agents are going to be able to access listing information they should be able to setup and schedule viewings even if it is not in their immediate market area.

3. Use of MLS data and its distribution to third parties should be controlled by the brokers who provide the data.

We believe that a listing represents intellectual capital and that the process of creating a listing is a value-enhancing activity. Brokers entering into an exclusive agreement with sellers accept the responsibility for marketing the property and should have control over distribution of the listing data. The rampant and uncontrolled dissemination of valuable listing information on the Internet has increased the cost of doing business and devalued the role of the agent and broker in this process.

It is like I wrote this this principle, I believe these words should be etched in stone and given to every broker in the nation to sit on their desk when they consider making an agreement to share data with a third party aggregator that promises nothing more than exposure or views. For a more in depth perspective please read my post on Data Syndication.

4. MLS entities should exist for the benefit of participants and subscribers.

We believe that MLS fees should be set at a rate that gives the MLS and/or the Local Association a fair return for delivery of MLS services. We believe that Local Associations of REALTORS® provide valuable services to their members. These include services and activities that advocate for homeownership, ethics and professionalism in the industry. We believe that local AORs should be adequately and fairly compensated for these services, including those that may be directly associated with an MLS.

I am ecstatic that CAR took this position the entire idea that Local Associations should provide MLS services and not be able to reinvest in services provided is from my perspective completely ridiculous. To grow the service offerings the MLS should be able to reinvest in itself and improve the services of not only the MLS but the parent organization.

5. MLS rules should be uniform and enforced consistently.

Over the years the relevant market area for many brokers and agents has expanded beyond the artificial boundaries of now out-dated MLS regions. As a result, brokers are increasingly operating in multiple MLS environments and facing complex issues related to the disparities in rules, regulations and enforcement governing different MLSs. We believe rules should be established that simplify and enhance the experience of MLS users across systems. To that end we believe that the C.A.R. Model MLS Rules should form the basis to develop statewide rules and standards of enforcement.

To me this is great in principle but then so is communism and both are bad in practice. There are depending on geographic areas accepted norms of doing business and many of these norms or rules exist for a particular purpose. Does having area specific rules create an additional layer of bureaucracy yes, does it make the agent learn a whole new set of rules every time they take a listing in a new area depending on the situation, perhaps. However, to my perspective this is a necessary control and a reflection of the local market and should not have a cookie cutter model applied to it.

By saying all rules will equal the CAR model or be based on the CAR model may simplify the way agents do business but it also makes it very difficult for the organization to respond to changes in the marketplace. For instance if something new happens that the CAR rules don’t account for are we to wait for a general assembly to amend the rules? If the answer is yes then that will never work and if the answer is no within a hundred such amendments we will be back to having local area rules.

6. The MLS Board of Directors should include broker owners with appropriate regional representation.

We believe that broker involvement in MLS governance is critical. The MLS is the single most important business tool in the real estate industry and as such the provision of MLS services should be accountable to all participants. We believe it is imperative that brokers from both large and small firms be given representation on MLS Boards.

To me this is a no-brainer as already stated in principle 3 I believe the brokers are the owners of their data and should be the masters of where there data ends up and in what format. To that end I believe that brokers should have a say in every aspect of the MLS but a balance must be struck. Multi-Regional super-brokers should receive the same representation as the single office broker because in the end they both have to use the MLS to the same purpose. This is another reason I like keeping the MLS at the association level, brokers and agents are represented at every level of the business. By keeping the MLS local they can define the platform they need to do business in the local market.

Well you have read my perspectives what are yours? I am especially interested to hear from agents and brokers outside of California or outside the Bay Area. Regardless of your location I hope you will take the time to familarize yourself with the principles and visit the Future of MLS Wiki.

Mark Flavin

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