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It’s Not Just About Overlapping Market Disorder
I was talking the other day with my friend Kevin McQueen about MLS consolidation and regionalization. Both of us help MLSs through the process, and we like to talk and share our experiences with each other in order to help our clients better and move the industry forward. One of the challenges we discussed the other day was that, for MLS regionalization to gain momentum, MLS leadership at every MLS in the country – including boards of directors – need to better understand the need for MLS consolidation and regionalization. Many don’t attend industry conferences and are not aware of the larger strategic issues driving it. When Clareity Consulting discusses the strategic reasons for MLS regionalization, we often focus on the following objectives: 1. Reduction in cost 2. Improvement in MLS product / service scope 3. Associations can focus more on association functions 4. Reduction / elimination of arbitrary information and system barriers o Reduction of need for multiple memberships o Reduction of number of data feeds for participants’ information systems / websites o Providing more comprehensive and accurate statistics for overlapping market areas o Providing wider listing exposure for sellers 5. Reduction of the number of systems some members need to learn 6. Improvement of MLS rule and data accuracy compliance, providing uniform rules and enforcement 7. Providing efficiency for participants who want to be involved with governance / committees [Update: these days I have even more goals, including driving technology provider interest in our industry.] Many MLSs evaluating regionalization on their own initially consider only one or two of these objectives – for example, reduction in cost, or elimination of the arbitrary information barriers – and don’t evaluate the decision against all the items listed above. As a result, they might conclude something like, “We’re geographically isolated so we don’t need to consider regionalization.” But even the list of objectives above is incomplete, focusing on local and regional needs rather than the larger threats facing the MLS industry. If one looks at the NAR’s D.A.N.G.E.R. Report, one should consider how the current splintered MLS industry is – or is not – ready to deal with the threats detailed in that report, including, but not limited to: A more consolidated MLS industry would be better able to mitigate these risks. Back to my conversation with Kevin. He asked, “How do we reach executives and board members at association/MLSs that are resistant or uninformed about the possibilities for regionalization?” Kevin suggested one way was that we could speak on the subject more at conferences. But, so many of the people who need to be reached don’t attend these conferences, and certainly wouldn’t attend a session on regionalization if they’ve already made up their mind on the subject. We also discussed NAR mandating NAR- or CMLS-developed best practices for MLSs. While the core standards approach NAR took with associations could be useful, it leads to a very slow, incremental approach that may have been appropriate 20 years ago but is too slow to meet today’s challenges. Based on the MLS regionalization end-game described in my recent Inman article, NAR could simply mandate standards for MLS that do meet the condition of the end-game and initiate a fast process to get us there. But is a top-down mandate approach the best one? Kevin and I both believe that the best approach is a collaborative one, where association and MLS leadership engage in a consensus-driven process for regionalization. Clareity recently outlined this process recently in an Inman News article, republished here: “MLS Regionalization – Breaking Through” Are the threats to the industry and the benefits of MLS regionalization becoming clear enough that initiative momentum will radically increase? Will leaders take an active role in designing the best possible future for their organizations and the industry at large? Or will they continue to focus on their own organization and ignore what is ultimately best for their members and the industry? Or will they wait for one of the worse threats from the D.A.N.G.E.R. Report to occur and make all of this irrelevant?