It is not the flashiest or most dynamic part of the real estate industry. The concept of a Multiple Listing Service, or MLS, goes back more than 100 years when local boards would meet in a dusty office and exchange paper copies of listings. Eventually, these were consolidated into larger volumes accessible by members of local or regional associations, before the dawn of the internet blurred regional lines and gave broad access to listing data for both consumers and real estate professionals.
Today, the MLS landscape retains vestiges of that fractured, paper-driven local data sharing. But as technology has improved, regulations have tightened and consumers have found other avenues to access home listing data, the traditional MLS needed to evolve.
Exactly what this means, though, varies widely, and companies across the country are taking very different approaches to consolidation, expansion and tech investments—all of which could upend the traditional methods real estate data is shared and accessed.
“The real benefit is modernization, and giving the consumer something they expect in the year 2022,” says Michael Barbaro, President of SmartMLS in Connecticut
Like many regions, Connecticut was once divided into dozens of individual MLS organizations, which eventually consolidated into two larger companies with overlapping and sometimes arbitrary boundaries. Barbaro describes all-too familiar scenarios with agents paying multiple fees and signing into different systems, and consumers receiving clunky, redundant and inconsistent listing data.
But in 2017, following a blitz of meetings, surveys and compromises, SmartMLS became the state’s main—though still not sole—MLS service, consolidating the two previous systems and staff to serve over 90% of the state. This merger was the subject of a glowing case study report by the National Association of REALTORS® (NAR), which lauded Barbaro’s ability to foster relationships and come up with innovative solutions (having co-CEOs for the new company and realigning fee structures, among other things).
Almost five years later, Barbaro says this process—which took a lot of work but only about six months to put together—has allowed the combined MLS to better serve both real estate professionals and consumers while also investing in the technology that will be needed to keep SmartMLS from falling behind.
“We are looking to change the game of real estate,” Barbaro says. “I’ve been encouraged by the fact that MLSs are starting to see the writing on the wall.”
But in the enormous, diverse landscape of the U.S., how applicable is the experience of one small Northeast state? How realistic is it to expect big metros and tiny villages, huge national brokerages and small local teams to use the same platforms and data?
Not too unrealistic, according to Jon Coile, vice president of MLS & Industry Relations for HomeServices of America and former chair of BrightMLS, a large, multi-regional MLS in the Washington D.C. and Philadelphia area. Coile is currently helping lead NAR policy studies focused on the MLS industry, which has considered state-wide standards to help eliminate some of the obvious issues with the current landscape.
“I have a state license, I can sell anywhere in the state,” he says. “But in states where they don’t share data, I might have to and belong to 15 or 20 MLSs to get access to the data. Meanwhile the consumer, they just go to one website—Zillow or Redfin or whatever—and they can access everything. So, the consumer knows more about real estate than I know as a REALTOR®, and that makes no sense.”
Data-sharing, with some number of MLS companies creating a separate database that contains all their listing data and standardizes platforms or entries is not a new concept, and seems like common sense in the face of Zillow. Some have still resisted—Barbaro says there are a couple MLSs in small, affluent Connecticut towns that are holding onto their independence.
Brian Donnellan is the CEO of BrightMLS. He made it clear that the data-sharing approach is both “extremely effective” and widely beneficial to consumers, real estate professionals and the MLSs themselves.
“By providing both more access to listings on the buying side, and more exposure on the seller side, consumers have more choice among a wider range of listings,” Donnellan says. “The shift toward working from home for many buyers and sellers has opened up a larger area of possibilities for many consumers. More options presented in a simple and straightforward way helps agents and brokers serve consumers more efficiently.”
One solution to the regionalization problem is to disregard these local boundaries entirely. Dawn Pfaff runs My State MLS, which offers a national platform that attempts to create flexibility and an expansive, unrestricted listing landscape—including auctions and manufactured homes.
“The biggest advantage to My State MLS, is that you can list anywhere you are licensed,” Pfaff says. “We believe that cooperation is essential, and we agree to cooperate with everyone who is also licensed in the same state.”
Joe Rand is the CEO of another national initiative called the Broker Public Portal (BPP), which powers consumer portal HomeSnap.The idea is to create a set of standards behind a Zillow-type national portal that is more agent-focused and doesn’t monetize leads, instead creating a more level playing field that will still provide the national MLS experience for consumers.
“I just don’t see how MLS systems can be cordoned off the way they used to be,” Rand says. “Smart MLSs realize they can’t shield themselves from the outside world. As brokerages get bigger, they’re increasingly frustrated by having to deal with multiple MLS systems that don’t collaborate with each other. Given that MLSs themselves espouse cooperation among brokers, it makes sense that they should also be cooperative with each other. “
Ruth Hackney is the CEO of the REALTORS® Association of Southwest Wisconsin, and former CEO of the Montana Regional MLS. She says Wisconsin has had state-wide data sharing for more than a decade now, with the platform owned by the three largest MLSs in the state while smaller companies maintain some independence. Those relationships have been defined by convivial discussion and consideration of each other—something that not every state or region can claim.
“Wisconsin is a very friendly place. Nobody wants to hurt anyone’s feelings or make anyone upset, so when we go forward, we want to make sure we’re going forward together,” she said.
Because everyone is essentially happy with the current system, Hackney says there is no strong impetus for further consolidation right now. But at the same time, having larger, more formal partnerships and centralized resources is becoming vital to the success of any MLS.
Tech Savvy
New York City is an almost incomparably unique geographic and political area, and therefore unique as far as real estate as well. The Real Estate Board of New York, or REBNY, is independent of NAR unlike most local associations, having essentially seceded from the national body in 1994 in a dispute over membership fees.
REBNY owns its own listing database which technically is not called an MLS, instead christened “RLS,” or “Residential Listing Service.” Other associations around and in the city—which are affiliated with NAR—continue to compete for territory and offer their own MLSs.
In this much more cutthroat environment, (REBNY Board of Governors member Fredrick W. Peters described the history of MLS in the city as “warring fiefdoms”) the priority is to provide a better product. Because MLS companies are tech companies at heart, that means having the best technology.
Ninve James is the senior vice president of the RLS serving 12,000 agents and $45 billion in listings. Set to launch in the second quarter of 2022, James touts “Citysnap,” a proprietary consumer-facing website and app exclusive to the RLS built by HomeSnap.
“I know it’s something the industry has been looking to have for a while,” she says.
For real estate professionals, leads are routed directly to the listing agent or broker at no cost, James says, and there are no listing fees. It is also meant to ensure all listings comply with the complex advertising and fair housing laws in the city.
Creating that product, which is molded to the unique NYC landscape, along with migrating the RLS to national software and data standards, is the “big thing” for the organization, James says, and Citysnap is an “all hands on deck” project. Though REBNY, as the oldest and most established real estate association in the country’s largest metro, has a huge head start on the competition, James makes it clear that they will not be sitting back.
“It’s going to provide much needed data transparency for New Yorkers, which is a huge win for our city’s real estate industry and consumers,” she says.
Donnellan highlights BrightMLS’s hub for showing service, which became an especially important tech integration in the “incredibly busy market” of the last year or so.
“It’s about speed—what’s coming on the market, what’s available at any given moment, etc. Agents and brokers need to be able to present the fullest, most complete representation of the market to their clients as quickly as possible,” he says.
Not everyone in the MLS world has reacted in a timely manner to innovations and opportunities, according to Barbaro, particularly around technology. Companies and products that are pushing the industry forward are being bought out at “ridiculous valuations,” and he argues there is no reason that MLS companies can’t begin investing in these products themselves rather than relying on vendors.
“I’ve been talking about this for years, I don’t understand why we don’t own the technology, why we don’t develop the technology,” he says. “We use them, we’re a captive audience. Now we’re finally starting to see [MLS companies] come out there.”
Barbaro points to one of the largest MLSs in the country, California Regional MLS, which recently invested $15 million in a venture capital fund to take a more direct hand in its own tech future. My State MLS also owns their own tech, and Pfaff says their clients can feel confident knowing their membership fees are being invested directly into improving software and data technology.
But even small MLSs can band together, he adds, and take control of their technology future, with Barbaro saying there are numerous cases of half a dozen or so small companies getting together to buy a product or invest in a technology, to the benefit of all.
“I think that the most important tech advancements are all about integration of tools by smart tech providers,” Rand says. “People want technology to be seamless, which you can’t achieve if you’re not ethically sharing data across platforms to better service agents and consumers.”
In Wisconsin, Hackney says the three largest MLS companies own the software that powers the state-wide shared database. She describes tech advancement as “staff-driven” and mostly starting with leadership in the larger organizations, with any big decision or change inclusive of all the members who share and use it.
“We just sit down and start to brainstorm,” Hackney says. “We’re just constantly kind of keeping our eye out—is an MLS already doing something and it’s working? Then how can we adopt that and make it work for our unique system?”
The Devil in the Details
It is not these big-picture questions that are hampering growth and cooperation in the MLS industry today, according to Barbaro. Nearly everyone has now woken up to the fact that consumers are turning to Zillow and Redfin for listings, and that technology can and must make the MLS experience simpler and more straightforward for real estate professionals.
What makes things difficult is every little structural and bureaucratic line that has been drawn. That can be everything from what data fields to use to staffing responsibilities, and can take an enormous amount of effort and time to find consensus among dozens of organizations with their own histories and structure.
Barbaro says the case study on SmartMLS did not allow any specific discussions about staff ahead of the merger and created a new streamlined fee structure and had the state association offset costs of legal fees and meeting expenses.
A lot of real estate professionals are happy with their MLS staff and service, Barbaro suggests, and even though there were obvious improvements to be made in Connecticut they still wanted to hang on to staff
“People are like, ‘I get good service,’ and I thought that was interesting. Most people really care about that, and there is an amount of that,” he says.
All these things were worked out, though, in a relatively short time through a lot of conversations and listening to people’s concerns, according to Barbaro—with the NAR case study saying his role was “highly praised” as he “created a partnership atmosphere” through the delicate process.
Though REBNY is not in the same situation as far as mergers or consolidation, James says that the RLS also must work hard to listen to their stakeholders, who are made up of a particularly vibrant and diverse real estate community.
“We’re in constant communication,” James says. “We have multiple committees across the city that basically get updates and meet on a constant cadence to make sure that we send out communications and stay in touch with our constituents.”
Understanding how New York City functions—whether that means adding data fields for things like which buildings have doormen and elevators, or mapping distance to parks and transportation—will be vital to the success of any system in the city, and James says the RLS is building that through feedback.
“When you look at Citysnap it will cater to what’s expected in New York City,” she says.
Coile says that the Real Estate Standards Organization, or RESO has come up with what he calls a “data dictionary” that can actually translate those regional differences automatically and eliminate the sticking points for MLSs. For example, checking the same box would result in a property being designated “waterfront” in one region or “shorefront” in another depending on the preference.
“All the computer knows is that field F42 is on or off,” he says. “There could be 10 different words in there.”
Fees and pricing will always be an issue and will definitely need to be worked out, though Coile says that consolidation almost always results in lower costs for technology as companies can get a lower price per agent if they serve hundreds or thousands instead of dozens.
Pfaff touts My State MLS for not having any fines or board membership requirements, which is another way to attract more business, and says that they also offer webinars on things like digital marketing to help add value to the service. Membership to a single, national MLS also makes sense in more rural areas where properties are spread out, she says.
Even though BrightMLS exists in a limited geographic region, Donnellan agrees that eliminating “digital boundaries” that are often arbitrary and mean nothing to the consumer will be the future of the industry.
“We…have the opportunity to continue to lead the way on further market transparency for the benefit of consumers,” he says. “Ultimately, this clear open market is in the best interest of all. Transparency and a complete most accurate picture of the market puts them in a position to help their clients succeed.”
MLSs are businesses, and at the end of the day if they are not serving the best interests of clients and consumers, they are not going to survive, and no amount of history or pushback from the old guard will change that.
Hackney says that she experienced some of the difficulties in getting different organizations to work together in her previous role in Montana, which was in the process of merging MLSs at the time. Now in the very convivial landscape of Wisconsin, she says she still holds on to that lesson: that an MLS is first and foremost a tool for clients and consumers. While everyone does their utmost to avoid disruption and maintain staffing, there still has to be a willingness—especially at the top—to accept the inevitability of change.
“The goal is to create efficiencies, and as staff it’s our job to serve the best interests of the member,” she says. “When you have a really strong MLS executive, those people are going to see the benefit of it, they’re going to be willing to make compromises.”
Jesse Williams is an associate online editor at RISMedia. Email him with your real estate news ideas jesse@rismedia.com
