NEW YORK — First things first. The multiple listing service (MLS) itself is not doomed.
But yours might be.
That’s according to panelists at the Inman Connect New York conference Wednesday in a session titled “Are the MLSs Doomed?”
‘Don’t be too happy yet’
Some attendees erupted into applause when moderator Brian Boero of brand, marketing and design agency 1000watt declared his confidence in the survival of the MLS right off the bat.
But he quickly said, “Don’t be too happy yet.”
“The MLS provides order to a market that is variable, volatile and consists of thousands of independent contractors that all do business somewhat differently but all agree to certain rules and certain norms,” he said.
“But while I don’t think the MLS is doomed, I do think there are persistent and, in some instances, quite serious problems.”
Some brokers and agents feel the MLS space is too fragmented and feudal, Boero said. There are 750 or so MLSs across the country, some big, some small, mostly Realtor association-owned, some broker-owned, some with overlapping geographic boundaries.
Other brokers and agents consider the MLS monopolistic, slow, out of its scope and anticompetitive, Boero said.
“The MLS is not doomed, but virtually every MLS today is doomed,” panelist and real estate consultant Rob Hahn told attendees. Hahn is known as The Notorious R.O.B. on his prominent blog.
He believes there will be 11 or 12 regional MLSs in the future, sometime in the next three to 15 years.
“The current paradigm of association of Realtors-controlled MLS is doomed,” Hahn said.
“The governance sucks. All this political electoral stuff. It just doesn’t work.”
MLSs are “not fast enough, not nimble enough. There are too many. You’re too small. And you’re too poor,” he added.
“Every MLS is run, even if it’s a for-profit entity, like a non-profit.”
That means they focus on cutting costs and not delivering cutting-edge technology to agents and brokers, according to Hahn.
He’d like to see Realtor associations and MLSs get divorced, more MLS consolidations, and have those fewer MLSs charge more money to be able to provide better tools and services.
Panelist Denee Evans, CEO of the Council of Multiple Listing Services (CMLS), doubted that even if MLSs ran at a higher profit margin that they could spend anywhere close to the $200 million that real estate tech giant Zillow Group spends on research and development annually.
“I don’t know that an MLS could get to that point,” she said.
‘Brokers don’t want to worry about MLS issues’
When asked whether Chicagoland MLS Midwest Real Estate Data (MRED) would survive, Hahn said, “MRED is fine as long as they do [a] midwest super regional [MLS].”
Panelist and MRED President and CEO Rebecca Jensen agreed with Hahn that there should be about 12 MLSs.
“MLSs are not all built the same way. We definitely have a variance in the level of service,” she said.
“You might have an MLS that is heavy on technology spend, other MLSs’ brokers have said, ‘We don’t need you for that,’” and would prefer the MLS focus on data aggregation, she said.
While Jensen doesn’t see the industry forming a national MLS, she thinks regional MLSs make sense.
Boero asked, “As an MLS CEO of a large MLS, what is your criticism of your industry specifically?”
“What I hear from brokers is that they’re having to worry about MLS issues,” Jensen responded.
“They don’t want to worry about MLS issues, they want to worry about brokerage issues.”
Brokers want MLSs to protect their data and tell them where it’s going, but they don’t want to hear stories about the people running the MLS using it as a competitive weapon, she said.
Hahn added, “I think a big part of broker unhappiness is governance. Harold Crye [of regional brokerage Crye-Leike Realtors] is not going to spend his entire working life going to board meetings of rinky-dink MLSs.”
He said he hadn’t heard a single broker complain about large MLSs like the Houston Association of Realtors MLS (HAR), MRED, or what is now Bright MLS.
It’s those 150-member MLSs that the world does not need or want, according to Hahn.
So how do you get to a dozen MLSs?
“I think the issue is going to be to understand that associations are the problem,” Hahn said.
“The people who are volunteers and leaders of associations, they recognize it.”
They know most members are only there to access the MLS, he said.
“[Associations] have defended the American Dream for one hundred years. How about you let the MLS do the MLS?”
Jensen disagreed with Hahn on that point.
“I don’t think associations are definitely the problem. In some markets they are,” she said.
“We work hand and glove with our associations. It is through our associations that mergers can happen.”
Associations and MLSs would be better off separately, Hahn said.
Right now, most agents that want to do business must join a local Realtor association in order to access the MLS. That means there’s little distinction between agents and Realtors.
The Realtor problem
“At some point Realtors are going to get tired of being painted with a broad brush,” Hahn said.
“The no. 1 problem of the working Realtor today is the agent on the other side” who is likely a “card-carrying, dues-paying Realtor,” he added.
This isn’t him saying this, Hahn said — it’s the National Association of Realtors through its DANGER Report.
The no. 1 threat to the real estate industry is “masses of marginal agents destroy reputation,” according to the report.
But as valuable as the report is, it’s a report, not action, Boero pointed out.
“I’ve been coming to the Inman conference since 1997 and every year there’s a session like this where we wring our hands” and nothing changes, he said.
But Jensen responded, “That might have been true a couple of years ago but I heard a statistic that there were over 100 MLS consolidations last year. That’s a lot.”
Delivering excellence and efficiencies
CMLS’s Evans said she thought MLS consolidation overall was a good thing in that it can help MLSs “deliver excellence” and “efficiency of scale.”
But she stressed that MLSs should be talking with brokers and agents about what they need and delivering that.
“We all have the same goal,” she said.
Moreover, even if the number of MLSs were to go down to 12 super regionals, those MLSs will have service centers across the country, similar to the electrical grid, she said.
“There will be some consolidation of resources. Limiting the number of bureaucracies … would definitely be a good thing,” she said.
Boero polled the audience, asking how many think there should be 12 super regional MLSs. About a third of hands went up.
He asked how many think everything is fine the way it is. No one did.
Jensen said she expects there will be fewer MLSs five years from now because of consolidation.
“Even if that doesn’t happen, … MLSs can work together on shared services, shared standards, shared licensing agreements,” she said.
Boero summed up the panel in this way: “The MLS is not doomed. [But] many MLSs are doomed because consolidation is gaining steam.”
Email Andrea V. Brambila. 
