The fast answer is No, it is not. The long answer is…. Longer and more complicated. Where do I start? First, let me say that the MLS is the best thing that ever happened to organized real estate. It gave professionals knowledge, power and sustainability. Only through the sharing of information pertaining to listings, sales and all the data that derives from those, can Realtors be and remain relevant. You don’t know how good the MLS is unless, or until, you see how bad it is without it.
About 10 years ago, I did my share to help bring an MLS-type system of cooperation via common database and procedural rules to French professionals and some of their European neighbors. The place was a zoo. Pricing a property was kind of a shot in the dark since, for the most part, the listing agent was not privy to the price of other brokers’ comparable listings. Selling a property was even more hazardous since other brokers were not welcome to show the property to their customers and therefore multiply sales opportunities as well as optimize the terms of the sale.
In many countries, Realtors are resisting cooperation in the name of self-preservation, oblivious to the fact that, in the age of consumerism, full, accurate, free and fast information is not an option. Strangely enough, a lot of them would rather trust a technology aggregator with their information, not realizing that, by doing so, they are feeding the mouth that could later eat them!
Going back to our shores, there are signs suggesting that the MLS is going through some mid-life crisis. The hot topic, today, in real estate circles, is the growing number of listings which completely escape the MLS. In some of the most pricey markets across the US, as much as a third of the properties for sale are off MLS, thereby depriving most local Realtors of the ability to objectively judge values and trends in any pertinent way.
You might say this reality is a by-product of the buoyant market. With little supply and a growing demand, listing agents who bring only a few of their peers in the loop, can nevertheless achieve the objective: the sale. They may even argue that the fact that they cooperate with only a few, creates some urgency among the select group which could result in a higher price for the property, contrary to the adage that the more competition, the better the terms.
There are many other reasons that explain, if not justify, taking an off-MLS listing. Pre-marketing a house while it is undergoing some work, staging or just clean-up, is one. But the best reason, of course, is what the seller instructs us to do. Privacy and security are usually the main factors that guide this decision. Our job is to explain the pros & cons of not offering the listing to the entire real estate community, but, in the end, we must respect the seller’s decision.
Another sign that the MLS is being questioned comes from its own doing. Since its inception, when it only served to assimilate & disseminate information as well as reflect brokers’ agreement on compensation, the MLS grew “too big.” It now has a life of its own. I should say “they” as there are many MLSes all over the country and they are not alike. They can be financed, backed or owned by so many different masters, from trade associations to real estate companies, to publishing companies, to technology firms, to VC people…. Each has its own agenda and its own understanding of its role. The MLS is so successful that it may assume that what’s good for the house is necessarily good for the members. It was given birth from real estate companies, but today, you may wonder if the tail is not wagging the dog. One thing is sure; the tail is now bigger than the dog.
As a result, many brokers think that the MLS is now eating their soup, somewhat competing with their business, and too zealous regarding new constraining rules. I know some MLSes which offer all their members a vast menu of state-of-the-art apps which compete with similar services that the finest companies created, at great cost, to differentiate themselves from other brokers. The concept of level playing field sounds nice but business is not about altruism, it’s about competition. Keeping on life support companies which have little money, services, manpower and scope of coverage does not help the profession.
To add hot peppers to the sauce, more and more syndicated sites and real estate related service providers which feed off of the MLS, progressively divert the consumer from our sites to theirs and capture value-pieces of our business. Today’s partners may be tomorrow’s predators? We, Realtors, made it all happen overtime. History will eventually say whether this evolution is all good for the consumer and for our industry. The jury is out. One thing is for certain, the MLS, as such, will play a key role in our becoming. Let’s hope that it will not over-play the role.