Report of the REALTORS Association of New Mexico s Statewide MLS Presidential Advisory Group September 2011
REPORT OF THE RANM STATEWIDE MLS PAG September, 2011 Preface The real estate industry is continually changing. The consolidation of separate MLSs into one is a change that is actively being discussed, written about, and implemented in many parts of the country. Currently there are nearly 900 MLSs in the U.S. Predictions are that this number will be 50 to 55 in just a few short years. The members of RANM s Statewide MLS Presidential Advisory Group were charged with putting together an overview of the issues surrounding creation of a statewide MLS and making a recommendation to the RANM President regarding whether RANM should go forward with this project. We wish to thank the Connecticut and Arizona State Associations, the NATIONAL ASSOCIATION OF REALTORS, as well as REALTORS from Utah, New Hampshire, and Alaska, among others, whose research and experiences in creating a statewide MLS were relied on for direction and guidance for the RANM group. From the first meeting of RANM s MLS PAG, it was agreed a statewide New Mexico MLS needed to be looked at even though there were many concerns expressed by local associations and existing multiple listing services. The members of the PAG all agreed, Consolidation is going to happen; REALTORS must be a part of it. This report includes a summary of the issues, pros and cons of consolidation, a vision of how a NEW MEXICO MLS would be a benefit to every participant/subscriber and their clients and customers, and a recommendation for further study. PAG Members: Dan Frady, Gallup, chair Teri Camacho, Las Cruces Sharon DeBraal, Las Cruces Connie DeNio, Roswell Eddy Gibson, Ruidoso/Lincoln County Connie Hettinga, Las Cruces John Kynor, Greater Albuquerque Lebron Little, Otero County Gavin Sayers, Santa Fe Brian Stenum, Taos County George Torres, Greater Albuquerque Dan Wright, Santa Fe Teresa Ramos, ex-officio, RANM President Vision To implement the latest standards, current and proven technology to create the next generation solution to empower REALTORS, through a NEW MEXICO MLS, with knowledge, tools, and services that enable them to excel in their profession. 1
The Issue/Pros and Cons of Consolidation There are ten Multiple Listing Services in New Mexico 1, which essentially all do the same thing: provide a facility for the orderly correlation and dissemination of listing information so participants may better serve their clients, customers, and the public; and provide a means by which authorized participants make blanket unilateral offers of compensation to other participants. Real estate in New Mexico is a fragmented, divided industry. There is a lack of direction, no central source of information, minimum standards of practice, and minimal accountability to users. Why does a statewide MLS make sense? A NEW MEXICO MLS would: provide brokers with more accurate and timely listing data from the entire state; potentially improve member benefits at no additional charge; offer standardized MLS rules and regulations; offer a standardized listing input form (with local options); provide greater responsiveness to member requests; and charge one MLS fee for statewide data and basic services, and a menu of other available services. Having statewide control of listing inventory, a NEW MEXICO MLS would allow brokers within the state to control their own data use, its monetization, and protection. Economies of scale and service to clients and customers must also be considered. One NEW MEXICO MLS means any listing now is advertised to all REALTORS participating in the MLS, thus providing wider exposure for sellers. And many REALTORS are finding buyers have more information than they do consolidation helps keep the broker at the middle of the transaction and gives them one place to find accurate information. We have one product, MLS data. Our ability to gather information on a large scale is valuable both to our membership and to other industries. A NEW MEXICO MLS would help protect MLS data. As an industry we are under increasing pressure to give away or sell our data. The problem is that very few of New Mexico s current MLSs have large enough geographic coverage to monetize their individual MLS on favorable terms. Currently, the only choice many of the MLSs have is a simple "yes" or "no" to offers. When an MLS represents an entire state s worth of data, it can realistically increase its power to negotiate favorable terms. Concerns have been voiced from local associations/mlss about a loss of Board control and income if there were a NEW MEXICO MLS where the members could access all statewide listings, especially if this new entity was more robust than an existing MLS, and it was available for the same or a lower cost. There have also been concerns expressed about users operating outside their area of expertise. 2
Those putting forth these protectionist claims and pretending consolidation means nonlocal brokers will suddenly flood markets they have no business being in, should be reminded that currently, the only "barrier" to entry into their market is an MLS fee. Any broker wanting to "cash in" on their listings is already there and a member of their MLS. The reality is that brokers in less affluent parts of the state typically have no more interest in traveling to unfamiliar high-end markets than high-end brokers have in traveling to lower-priced areas. On the contrary, practitioners in Connecticut and other states with statewide MLSs have experienced an increase in the number and in the quality of referrals. 2 The RANM MLS PAG recognizes these concerns and recommends any statewide MLS be created through a partnership between RANM and local associations working together to best serve the participant/subscriber and their clients and customers. The best service, at the lowest cost, for the user, must ALWAYS be the first concern. The Data Sharing Option Versus a True Statewide MLS Forging a common path where everyone can be brought to agree on the merging of data, staffs, locations, and MLS systems, is often so difficult that data sharing seems like a more reasonable choice because, in short, it appears more acceptable. Simple data sharing requires an elaborate, generally expensive maze of hardware, software, and personnel. Data sharing cannot resolve the underlying duplication and costs of multiple data sets, staffs, buildings, vendors, contracts, etc. Only one consolidated system can ensure all parties have equal access to complete and timely MLS data, and the maximum reduction in costs through improved efficiencies and economies of scale. Rather than being a technical solution, data sharing has many technical issues that cause inequalities between data sharing partners, data inaccuracies, unequal access to timely data between partners, enormous hardware requirements, heavy tech staff time requirements, and often bloated expenses. Potential Benefits of a NEW MEXICO MLS Consumer assurance that their broker can show them every property listed by every participant in the NEW MEXICO MLS. One database and MLS system without geographical limitations - available to every participant/subscriber. Seamless integration of RANM productivity tools including ZipForm, and third party integrations (county records, school information, crime stats, community information, virtual tours, etc.). Possibility for a dashboard to allow users to monitor and manage all contracts, listings, and transactions. 3
Searches of all statewide listings and available public records in one MLS system. Offers of compensation and cooperation to all participants across New Mexico. Best available public records integrated with MLS data; auto-population of new listings. Tighter integration between MLS, public records, RPR, forms and transaction management. One source of IDX feeds for all listings, in a standard data format with uniform IDX rules. Uniform MLS rules and data standards; the best new technology, software apps and innovation. Simplified email communications between members and between members and their clients. Most cost-effective way to save time and money based on mass purchasing power of potential 6,000+ users. More choices for participants/subscribers, innovative tools, and solutions. One time listing information entry and one MLS fee. Access to statewide data (even commercial and farm and ranch listings) which creates a potential for REALTOR member/user growth and more users means lower fees. One source of data which provides an opportunity to increase REALTOR membership across the state and provide an expanded market for commercial practitioners. Less duplication of buildings/staff/volunteer time green savings both $$$ and ecological. Higher standards for all. Summary New Mexico REALTORS have one of the most powerful, broad information networks of any industry, yet our industry is threatened by the unknown, change, and most of all, the loss of control. Rather than seeking to improve our industry through expanding broker access to comprehensive information, MLSs often seek to keep their information proprietary and protected. Their attempt to keep data from potential competitors (such as Zillow, Google, Yahoo, AOL, Trulia, and even neighboring state REALTOR Associations) who are knocking on the gates wanting access and control of their information, has resulted in unauthorized scraping of data and inaccurate information on many sites. We need a better model. Rather than looking for enemies, let s look for allies. Rather than erecting barriers to try and protect what we have, let us instead build our strength through cooperation and partnerships. Together, we can accomplish what alone we cannot. We are at a crossroads; our decisions now will shape the future of our industry; and the real estate industry must move to another level to succeed. 4
The decision not to consolidate willfully limits the member s ability to compete and the consumer s rights to comprehensive, timely, and accurate listing data. Power. Strength. Protection. Our future. All come from consolidation. Recommendation The creation of a NEW MEXICO MLS entails commitment, compromise, and funding. It is the recommendation of the RANM MLS PAG that the Board of Directors of the REALTORS Association of New Mexico: embrace the concept of a NEW MEXICO MLS; establish a NEW MEXICO MLS Implementation Task Force; approve funding up to $75,000 from Growth and Enhancement Funds to implement this service. Estimated costs: o facilitator $25,000 o meeting costs for volunteers $15,000 o travel for volunteers and staff to attend national meetings $22,ooo o administrative costs $2,500 o legal fees $5,000 o PR/Education to members $2,500 o miscellaneous $2,500 1 New Mexico Multi-Board MLS (Carlsbad, Clovis/Portales, Deming/Luna County, Gallup, Hobbs, Las Vegas, Sierra County), Greater Albuquerque (SWMLS), Santa Fe, Taos, Las Cruces (Southern New Mexico MLS), Otero County, Roswell, Ruidoso/Lincoln County, San Juan County, Silver City. The Commercial Association of REALTORS operates a Commercial Information Exchange (not an MLS). 2 Cameron Paine, Connecticut Multiply Listing Service Inc. CEO, MLS: Yes to Consolidation, March 2011. 5
Frequently Asked Questions and Answers 1. What is the New Mexico MLS? The NEW MEXICO MLS is proposed as a tightly integrated solution for members in New Mexico. The MLS system would include the best information and tools including public records, digital maps, electronic forms, digital signatures, REALTORS Property Resource (RPR ), and Brokerage back-office system support. 2. Why is this being considered? Our objective is to create one MLS for the benefit of all the REALTORS in New Mexico. This MLS would provide standard procedures and access to the best available tools. It would be one source for all property listings in the state and a property database including the best public records available statewide. At the present time, there are 10 separate MLS systems in New Mexico, each with different data, rules, and software. By consolidating statewide listing data, the NEW MEXICO MLS will offer participants more choices, increased innovation, and ease of use by adopting industry standards and leveraging the maximum possible buying power of 6,000 members across the state. 3. Will Participants/Subscribers have to pay more? There may be a one-time start-up fee, however. monthly fees, due to increased participants/subscribers and more leverage in negotiating with vendors, should be more affordable. There will be more information and more services from which to choose, including access to the best tools available. 4. How will the MLS accommodate our Association s members needs? The NEW MEXICO MLS will be designed through cooperative efforts. Representatives from associations across the state will design uniform listing input forms (data) and reports, and Rules and Regulations, which meet the combined needs of the rural and the metropolitan markets. 5. Why don t we just use RPR - it s free right? RPR is not an MLS system. There are no offers of cooperation and compensation, listing entry, business rules, integrated forms, transaction management or data exports (IDX, third-party software or Brokerage back-office), and there is no way to plug in other software apps. RPR may be a good thing, but it is not an MLS by design. 6. Who will run the NEW MEXICO MLS? Operation will be determined by the Participants. The New Mexico MLS would be its own entity, run by its own separate governing documents, Board of Directors, MLS Advisory Board, and staff. There are various models from existing regional and statewide multiple listing service groups that will be used as reference. 7. What are the benefits? The NEW MEXICO MLS will offer a comprehensive system available to all 6,000+ REALTORS in New Mexico by offering listings across the state, a single sign-on to login once for access to a robust menu of services. Brokers will be able to search all listing information in one MLS system for one fee. It will generate more exposure for listings and more accurate information for consumers. It will also generate more referrals from other brokers around the state. 6
8. What will be different? Once it s fully functional, participants and subscribers will have access to new services, tighter integration of business tools, plus additional data from the other New Mexico markets. All users will pay one MLS fee to access combined listing information from across the state. Other services may also be provided by the NEW MEXICO MLS. 9. My association is concerned about lost MLS profits and the survival of our association. The NEW MEXICO MLS will provide the most cost-effective MLS system available in New Mexico by leveraging the buying power of 6,000+ members. It s up to each local association and/or MLS board of directors whether the services and value proposition of the NEW MEXICO MLS is right for them. All Member Boards and local MLSs will be invited to partner with the NEW MEXICO MLS. Many local associations and/or MLSs may reduce their operating expenses by contracting with NEW MEXICO MLS in place of the current vendors. 10. If there are profits, how will they be used? If there are any net profits from operations, it is recommended they be used first to invest in new subscriber benefits and second, for potential dividends to users and reduce tax liabilities for NEW MEXICO MLS. 11. What if my board doesn t participate? If your board chooses not to participate, Qualifying Brokers may participate directly with the service and receive the benefits of and access all of the combined information in the NEW MEXICO MLS system. Local associations have the option to participate, but there are no mandates that they must. 12. When will the NEW MEXICO MLS be operational? The target date for the NEW MEXICO MLS to be live is January, 2013. How can I learn more? Watch for updates in RANM publications OnLine News and REALTOR Voice, as well as reports and updates at future RANM meetings and Caravan. 7