Is the MLS Going the Way of the Wooly Mammoth?
Access to accurate and relevant information is a key to any industry. That’s why gaining access to you local multiple listing service (MLS) is such a valuable tool. While each MLS is a little different, most sites offer information about property values, recent sales, trends in the market and a lot more. Realtors know the value of this service. But recent internal conflicts may yield a death blow to the relevance of the MLS.
Technology has provided incredible access to information. At no other time in history has mankind had millions of books, newspapers, photos, videos and other resources literally in the palm of our hands. The age of the internet has lead to an exchange of ideas which was unfathomable just a few years ago.
The result in the Real Estate world has been the birth of sites like Trulia or Zillow that offer public data to their subscribers through an MLS-style interface. Many local multi-listing services provide plug-ins which their subscribers can use on their own sites. This easy access to information may be leading to a MLS demise.
Multiple listing services are only valuable because they are constantly being updated by their members. Rules dictate strict guidelines about how quickly changes must be made to a listing, accuracy of information and even who must subscribe to the service. Close adherence to these rules and steep penalties ensure accurate and timely information for MLS subscribers.
The entire system works as one of necessity. Users adhere to the rules because they need the service. The service is only valuable because the users adhere to the rules. But most importantly, the information is only valuable if it represents the entire industry. That means everyone, or nearly everyone, participates.
What would happen if a large part of the Real Estate industry simply opted out? That’s the question currently on the minds of many familiar with NAR politics.
At a recent conference of the National Association of Realtors, a representative of the Realty Alliance gave notice for the end of the MLS (The Realty Alliance is a group which represents some of the nation’s largest brokerages. It’s smallest member has more than 1,000 agents). The Realty Alliance cited recent MLS policy changes which give consumers more access to listing information. The result is an independence of the consumer with respect to real estate agents – and a threat to the status quo.
If The Realty Alliance were to collectively pull their membership from the local multiple listing services around the country, the result would be to render the MLS obsolete. In some cases The Realty Alliance represents more than 90% of the transactions in the market.
What’s the good news?
First Pandora’s box provides a good lesson. Once an evil’s let out, it can’t be put back. In this case, the evil is access to information. In every industry, information is becoming easier and easier to find. Data that was traditionally only accessible to licensed industry professionals is now available to the massed. This is really only an evil if you’ve always been the gate keeper of the information.
Second, the MLS is not just going to shrivel up and die. The national MLS has made decisions trending more and more toward providing information to less and less exclusive groups. If they lose a large portion of their subscriber base, they’ll need to replace that income from somewhere. Why not tap the more public markets.
The bottom line is that more information to more people is a good thing. It’s not likely that the MLS will disappear. But it might just become a little more friendly to Real Estate investors in the years to come.