Much has been written about the case (for further reading click here). Read the white paper and then tell me – do you think the MLS will survive this? I am beginning to think NOT.
I believe much of this began back at the NAR convention ( I think it was 1995? ) with the famous Lion’s at the Gate speech that gave birth to Board of Choice and IDX. I was there and it was certainly an exciting time to be at NAR. The industry was a buzz with change back then, much like it is today.
There was much said about not depending on the MLS, but the good real estate market made it seem like that Day of Reckoning was greatly exaggerated and we all settled back into doing business as we always had.
If you look at the website it would seem that NAR is in a impossible position – it is a No Win Scenario. The DOJ will force the hand and make the MLS nothing but a posting site for inventory – sound familiar? It seems to me that the new influx of listing sites may be positioning themselves as a replacement.
So you might be asking yourself… What will happen to our Realtor Associations? Will the membership drop substantially because members now only belong so that they can participate in the MLS? What will you do? How much of your business is MLS dependent? My guess is quite a bit. Your website is built on thousands of listings which are fed from other brokers. You work with buyers based on what you find doing an MLS search. How much of your income has been generated by that offer to cooperate?
What does life without the MLS look like?
Here are some theories…
1. The internet will function as a listing clearing house. Not as efficiently as the MLS has always done for us. At first there will be a huge number of sites popping up clamoring for listings, ultimately it will settle into a more manageable number – but you will have to load listings into more than one place. We will either pay to list on the sites or people will pay to subscribe, or there will be a “pay per click” scenario.
2. There will be little or no offer of cooperation. The offer of compensation is that box in the MLS sheet that we put in the amount of commission we are offering a cooperating broker. If you read that DOJ website, they conclude that commissions are kept artificially high because there is an offer of cooperation. In other words, if we did not share our commissions with other brokers, commissions would go down.
Commissions could shrink which is really what I think this is all about. It is certainly possible that buyer’s will have to pay if they want to be represented, if not they will go to the listing agent directly.
Potentially, a buyer could hire you to go scour the sites to find property for them, but most of all they will pay you for what you know and how well you will represent them.
This was a hotly debated topic at Inman in January. I have been waiting for the video to be posted but it is still not up yet. Stay tuned on that one.
3. Many, if not all, of our Realtor Associations may disappear. As a former Board President, this probably upsets me the most. I believe that being a Realtor should mean something, that we do subscribe to doing the right thing. Somehow this message has been lost and we have no one to blame but ourselves on this one. A majority of membership sees little value for the dues they pay. Ask yourself – would you pay your dues if there was no MLS?
4. Your web site will be content based. If you can’t have thousands of listings on your site – you better start building that content if you want people to find you. This is a BIG industry trend and one we will delve into quite a bit in 2008.
5. There will be many fewer agents in the business. Think here about what has happened to the travel industry. We Realtors have been poo-pooing this comparison for a while now – but if your business model functions only on other people’s information you may have to rethink your career.
6. The consumer will be harmed. Yes, they will have access to all of the information, but they are jumping out of a plane without a parachute. There will be sites with listing information from all sources… agents, owners, neighbors- in other words, no rules – anything goes.
Like it or not, Realtors have become the front line for disclosures on property condition, zoning issues, lead based paint, radon, mold, to name a few, just think of all the stuff we have been charged with putting out there to the public.
I can think of things like price changes depending on who is looking at the property, fair housing issues – will an individual seller care about that? Do they even have to?
The consumer will perceive they are getting better values because the commission is the focus – but in the end, recall why Realtors came to be in the first place… for consumers to go to people they can trust.
Related reading:
So what if the MLS does go Away? Do you have any thoughts? I would certainly like to hear them… please comment 😉
7 comments on “Five Things you need to Know-Part 3”