Some time ago, in preparation for an industry publication, another industry consultant asked me, “What are the most significant issues facing the MLS by 2020, what actions do you propose be taken to address these issues and what are the desired outcomes?” Following are my answers:
Expand what cooperation via MLS means. If the perception of MLS is just about a place to advertise the homes with some private fields, MLS is very vulnerable. If we make it more explicit that cooperation is about a lot more than that, the MLS can grow stronger.
To accomplish that, we can:
- Develop standards for compliance and enforcement: data standards and business rules, data distribution, maintaining “fair” online advertising using the compilation (IDX / VOW) and other uses.
- Develop core standards for MLS data integrity business rules.
- Consider the kind of government regulation the industry could be facing with regard to wire fraud and get ahead of it – MLS can be a part of that, if organized. Information security practices will be a part of that – much of the steps needed to deal with wire fraud take place during the “cooperation” phase where the MLS is, or could be, involved.
- Develop and implement standards for brokers and agents (“With teeth”) re: responsiveness to showing requests, participation in secure electronic communications and transaction management. Develop these as MLS monitored areas with supported core functions as needed. As elements of cooperation, these would seem to fall within the jurisdiction of MLS. What other areas, technological and otherwise, could be considered “cooperation” and be an MLS function?
There are many challenges ahead for MLS – I think it would be ideal to firm up its value and capabilities in this area.
Consolidation: A unified industry would be more capable of managing risk.
To encourage consolidation, we could:
- Develop and mandate core standards for MLS, based on CMLS best practices.
- Drive recognition of strategic issues driving consolidation BEYOND the local service needs and Overlapping Market Disorder (OMD) – for example, managing risks described in the DANGER report, information security, and legal challenges (without depending on subsidy from the national level). Positioning based on OMD alone was unfortunate because that is only one of the drivers for consolidation.
- Determine the MLS consolidation end-game (per my earlier blog on the subject). When I speak on the subject or consolidation or am helping MLSs achieve it, I create a map based on consumer-oriented data that allows us to productively discuss the end-game. This market-driven endgame map should drive tactics to achieve consolidation, driving them based on consumer needs and the professional access needed to serve the consumer rather than existing industry structures. Add the other broker and core standards factors and we should have a better picture of the end-game we are aiming for.
- NAR itself could get the right people from each organization sit down together to work consolidation out. Peer to peer asks have had some effectiveness, but progress is slow. Not everyone comes to MLS conferences like the Council of MLS or the Clareity MLS Executive Workshop to understand why consolidation is so important.
- Some of the states have, in the past, worked against consolidation – this must be discussed at the national level. Shared services at the state level solve some problems, but are stopping others from being solved.
Front End of Choice
Most MLSs are not ready to unbundle for FEoC: providing a core “pipe” of information and allowing for product choice, including products provided through the MLS organization, through brokerages, and purchased by agents themselves. Though I don’t think this is an especially important trend to move forward – other others described above are much more urgent – I don’t think this trend is going to go away. If the industry is going to support this trend, potentially incompatible licensing processes and the per-user cost bundles MLSs have created will need to be addressed. A few large MLSs (MRIS, CRMLS, Northstar MLS) developed the technical infrastructure to support this – and it is not easy! Others have focused on providing FEoC for alternate means of MLS data access while providing a single core MLS system. Once further data standards are created that are needed to support this type of business, there may be increasing competition for this core infrastructure.
Now, brokers are dealing with a similar issue today, with some deploying suites but many more deploying best of breed products, integrated as best they can without data standards. While many brokers are happier when they create this best of breed solution, but it’s expensive and difficult because of that lack of data standards. There’s more inertia in the MLS space to stick with the single-vendor suite plus a few integrated products approach due to licensing models, but data standards in the MLS space are more advanced than in the broker space and alternate front ends are starting to emerge – so I expect this is going to happen. Again, “How urgent and important is this?” is a question that needs to be asked when considering this initiative – and the answer is not going to be the same for every MLS.
Other Issues
Every MLS has different issues to address in strategic planning. For example, in the last few plans I have facilitated in 2018, “Front End of Choice” didn’t come up at all from subscribers or the leadership, while the other two issues did in one form or another – along with other local issues. Some of those local issues are ones I’ve seen recently in several organizations and could well be covered in another blog post.