Typically, it’s the larger multiple listing services that call upon me for professional services regarding MLS consolidation – but I’ve also been lucky to have been called on by some small MLSs to help them explore consolidation with a larger neighbor, and it has provided me some perspective that all MLSs may find valuable.
The Reasons Why
Some small MLSs may not understand why the larger MLS is approaching them. They may understand issues related to overlapping membership and geography:
- No one MLS has all the ‘comps’ for CMAs
- No one MLS has accurate listing statistics
- Consumers need prospecting emails from multiple MLSs to see listings in their area of interest Agents must belong to multiple MLSs to provide service to these consumers
- Agents must look in more than one MLS to find a listing a consumer is calling about
- Agents must enter listings into more than one MLS to give listings exposure to the market
- Brokers must aggregate listings from multiple MLSs for websites and back-office systems
These can be accommodated by a data share. But, especially if there isn’t a lot of membership overlap, it’s important to discuss the larger strategic reasons for MLS consolidation. For instance, a large consolidated MLS can address business risks (like those in the D.A.N.G.E.R. Report that NAR commissioned). Also, if we want to create a welcoming environment for technology innovation, we can’t force innovators to approach 500+ MLSs for decisions.
Honest Communication
To come together, MLSs need to communicate with each other – that means both being honest in speech and being a good listener. Small MLSs may have all manner of concerns, including, but not limited to:
- Association revenue
- Association/MLS jobs
- Loss of local services
- Loss of control (e.g. local fields, business rules, compliance)
Larger MLSs need to listen to those concerns and be accommodating where possible for a consolidation effort to be successful. It’s important to ask the right questions to learn what the hot button issues might be and need to hold that information in confidence as a part of the process. Smaller MLSs need to articulate their concerns while larger MLSs may need to understand that sometimes past aggressive past consolidation efforts may be getting in the way of open communications.
Being a good listener means each organization not immediately saying “no”, but rather gently exploring the “why” and being creative about meeting the other organization’s concerns and needs. The organizations can often find common ground.
First Steps inside the Smaller MLS
If you run a smaller MLS, the first steps are understanding what’s on the table in terms of consolidation. Does a larger MLS have a “term sheet”? Would they create one, custom for your organization, once they better understand your needs? Or is this a larger consolidation effort where all parties are going to work together to create a whole new MLS with an entirely new model for ownership, governance, product and service mix, and budget, and where leadership, staffing and service centers, and more – where everything is an open topic for discussion?
Tooting the horn
Decide if you need a facilitator – to structure the effort and make sure it moves forward with appropriate speed, to facilitate meetings, to “sell” the idea to your members, to pre-position objections (“They’ll come sell our inventory!”), to help represent your interests in the process, to collaborate with your attorney to make sure business issues are legally addressed, and to help with communications and other aspects of the MLS consolidation effort. I’m experienced and can help supplement your existing skills and help increase your chances of project success.
Other resources:
· MLS Regionalization: Setting the Goal
· MLS Regionalization: Breaking Through
· MLS Regionalization: Beyond the Needs of Any One MLS
· MLS Regionalization: Pre-positioning the Objections