It’s 2021. If you operate an MLS organization, or if you’re a REALTOR® who’s involved in oversight of your MLS, there’s never been a more complex time to make decisions about the MLS’s future.
In this five-part series on MLS planning for 2021, we look at questions that all MLSs should be discussing as the year unfolds. The theme is affirmative transparency: earning trust by shining sunlight on the MLS’s pro-competitive and pro-consumer practices.
Part 4 of 5: Consumer Access to Additional MLS Benefits
Previous segments in this series covered participant access to a range of MLS services, from listings to lockboxes and even the physical space an MLS uses, as well as consumer access to listing data.
- Part 1: Participant Access to Listings, Showings, and Data
- Part 2: Participant Access to Additional MLS Services
- Part 3: Consumer Access to Listings
Part 4 dives into a broader range of consumer services.
Consumer Access to Showings
In Part 1, we discussed MLS participant showing access: Lockboxes for all licensees, address information availability, and listing agent screening are all current concerns. Major discussions are also taking place today regarding agent compensation, including whether buyers should be paying their agent’s commissions directly. Are MLSs prepared for potential change, and what might be the functional effects of such a change? Ignore, for the moment, whether compensation paid directly by buyers is a good idea. MLSs should be doing a SWOT analysis to explore scenarios in which buyers want to go it alone for some portion of the buying process or want to access property directly on their own—and whether the MLS will be involved.
The recent agreement between the National Association of REALTORS® and the U.S. Department of Justice means that REALTOR® association-operated MLSs will need to be able to give lockbox access to non-subscriber licensees. It’s worth also thinking through how single-access capabilities could work in serving unrepresented buyers. Properly identified and vetted by a listing agent, might buyers be able to get one-time use codes to view homes on their own through your MLS? We know the technology is already in use with iBuyers. The broader MLS could be next.
Consumer Access to Rental Opportunities
Most MLSs have a section for rentals. It’s often a ghost town. There are myriad reasons for the sad state of rental data in our MLSs, and there are just as many opportunities to improve the situation.
If the MLS is to think like a proactive, business-building real estate agent, it must think about growing its funnel by offering new value and then fulfilling expectations with a quality consumer experience. Treating rentals like resales won’t do, and the perceived limitation on rental compensation shouldn’t take away from the value of bringing these consumers into the MLS.
The Real Estate Standards Organization recently talked with rental powerhouses Apartments.com and RentalBeast about the future of incorporating rentals in the MLS to enhance both participants’ and consumers’ experience. This is a huge marketplace that leads consumers to work with brokers early in their real estate life cycle. How can the MLS tailor the fields, forms, and processes that brokers use to enhance their opportunities to bring renters into the MLS space?
Which companies can the MLS partner with to grow its rental listing inventory? The ability to collect listing information from property managers or listing aggregators will be critical to broker adoption of rental activities in the MLS.
Consumer Access to Compensation Information
The public display of offers of compensation to buyers’ agents is a hot-button topic in some circles but a yawner in others. It’s already a reality in some marketplaces and the consumer-professional marketplace continues to work just as efficiently as it always has.
In Seattle, the local MLS, Northwest MLS, has been publicly displaying buyer-side commissions for more than a year. Little has changed. Consumers have transparency, and a wide range of options exist with regard to service and compensation.
It’s understandable that real estate professionals object to mandates making their compensation public when it’s difficult to find another private profession that’s subjected to similar rules. But the outcome doesn’t seem to support the anxiety. And if more transparency helps consumers trust the MLS process, the potential positives should be weighed against the status quo.
Consumer Access to Aggregated Marketplaces
The MLS is the original aggregator. It brings a marketplace together for business efficiency and consumer transparency.
But consumer real estate preferences are shifting. Remote work and pandemic trends have home buyers searching broader geographies with greater flexibility on where they decide to live.
What is the MLS’s role in enhancing consumers’ ability to seamlessly search for real estate across marketplaces? Do MLSs have an inherent responsibility to cooperate with one another and facilitate the consumer’s digital travel across shifting MLS service areas?
From the view of REALTORS®, who’ve committed to cooperation by virtue of their membership in NAR, it seems they do. Professional standards exist to allow organizations and individuals to compete while ensuring a baseline of cooperation that benefits customers. If a broker is licensed to sell real estate across a state and a REALTOR® has a duty to cooperate with all other members, is there any reason a consumer shouldn’t be able to get statewide MLS-driven data without artificial barriers or borders?
The Code of Ethics requires brokers to only practice real estate in geographies where their knowledge and skill set are appropriate. But it doesn’t say that consumers’ access to information should be limited by those borders.
Consumer Access: Fair Housing Compliance
When discussing consumer access to housing, there’s no brighter light to stand in than the scrutiny of fair housing regulation. Every access decision that hinges on which kind of people deserve what kind of information should be analyzed with this in mind.
- Listing availability: only if you know the right kind of broker?
- Showing availability: only if you work with the right kind of agent?
- Address, history, offer timelines, and terms: only if you’re part of the right crowd?
These kinds of questions will only increase. Organized real estate’s role as gatekeeper to basic property information was relinquished many years ago. Those seeking to reclaim it are the voices that drag organizations down.
Though the MLS serves participants directly, it has also taken on the role of providing equal housing access opportunities for our communities as a whole. Embracing that responsibility will help the MLS organization enhance its net positive effects on its marketplace and avoid unnecessary regulatory scrutiny.
Consumer Access to Logical Terminology
Speaking of information gatekeepers, the way professionals describe real estate to each other can appear like a foreign language to a consumer. The SOC on an ADU in Active-C status might make sense to local agents, but when it ends up on a public website it’s gibberish.
We owe it to ourselves and our consumers to coalesce around more descriptive and transparent terminology. While there will always be some inside baseball behind the curtains, there’s no need for the industry to confuse consumers with acronyms and cryptic terms that don’t clearly express what they mean.
Standard statuses, definitions, and increased commonality across markets would go a long way to better informing consumers about how real estate works. What we do across markets is much more similar than most think. In the link, you’ll see an analysis of just a few MLSs’ local listing statuses. You can see how the idiosyncrasies are more about wording than different professional practices. A summit of industry leadership to propose moving further toward an industrywide standard could provide the consistency needed to help consumers understanding a listing’s life cycle.
What is your MLS’s approach when local needs create a request for change? Does the MLS start with resources from the Council of MLSs, RESO, and NAR, or does it look for a quick local fix first and only fall back on national practices when local ideas fail?
Before you add that next custom field, status, or rule, look outward. Maybe someone else has already done it in a way that makes sense to consumers, not just agents. If we’re going to use nonsense terms like Active-C to identify properties, it falls on every agent with every consumer in every market to explain why. This is not ideal.
In Part 5 of this MLS planning series, we’ll talk about mandatory NAR policies for MLSs. When are they appropriate? When are they unnecessary? How do we make those decisions? We’ll take an in-depth look at some options for adding transparency and objectivity to this process.