Behind The Curtain
MLS. These three little letters have for years struck fear and loathing into the hearts of some real estate executives in New York City? And as the industry debates its relations with those dread letters, reporters have one after another misunderstood the meaning of an MLS in the context of our marketplace, blaming the lack of one for practically every real estate ill to which an urban area can fall heir.
The concept of a Multiple Listing Service is quite straightforward: a community of real estate brokerages band together and retain an outside vendor to build a listing system which they can all use, both internally so each firm’s brokers can search a database of listing information to find appropriate properties for their buyers, and externally so each firm can share its exclusive listing to the other firms in the consortium. Beyond that, an MLS may choose to create a public website that displays to the consumer all of the listings in the MLS, enabling members of the public to search for listings on their own. Or it may choose not to do so.
Why so much concern and misinformation about such a simple concept? Well, THAT is complicated. But I think it is important for the public to understand the back and forth which has led the industry to the interesting place in which we find ourselves today.
In New York, perhaps even more than in other places, reaching consensus can be like herding cats. When discussion about instituting a single MLS listing system first arose at REBNY (The Real Estate Board of New York), most firms had already invested in systems, which they had either built themselves, as Corcoran or Elliman did, or customized to their specifications from local vendors like RealPlus or OnLineResidential. Of course, no one was able to agree about which system to use or how to organize it. So that didn’t happen. And when the MLS public website issue first arose, different firms believed they had different advantages which they were reluctant to abandon; this one believed its size gave it an enormous market advantage because it could drive traffic directly to its OWN website, while that one thought its incredibly fancy and expensive listings too good for the hoi polloi online to be sniffing at. So the community did nothing about the public website either.
We did create, in 2004, the RLS (REBNY Listing Service), which exchanges listings between the firms, enabling all to have the full inventory of listings in the marketplace at our desktops, but as noted above we did neither of the other two practical things which could have saved us all effort, money, and control. We did NOT all agree to all use the same listing system both internally and externally, as brokerages do across most of the country, thus saving themselves hundreds of thousands of dollars per year, nor did we create a public website. I think for many in the industry, it was only when StreetEasy was created to do precisely what we had failed to do, create transparent public access to listing data for consumers, and then sold to Zillow for $50 million, that they realized the value of the data which had been given away.
Here’s where the failure of reporting comes into play. One after another, reporters have written about the lack of an MLS in New York as if that means there is no central exchange of listing data which guarantees that every agent has access to, and the ability to show, every listing. Actually we do have such access through the RLS. No buyer or seller is ever disadvantaged by the need to retain more than one agent in order to either buy or sell. Every one of us has access to every listing in the RLS database, which includes the listings of every member of the Real Estate Board of New York and quite a few numbers (which for all practical purposes is everyone.) Our self-inflicted wounds, as a result of which we all still pay for our own different listing systems, and we have permitted StreetEasy to dominate the market for consumers looking on line for homes in New York, hurt only us. The misunderstanding of reporters, however, has simply exacerbated the problem.
And even these issues evolve, if slowly. This past January, the Board of Directors of the REBNY Residential Division, of which I am a member, raised annual dues to enable us to expand the staff which runs the RLS to both improve data quality and the way we exchange data with each other and third party sites like StreetEasy and Zillow. This will mean better, more accurate data for everyone, delivered in a more consistent and timely fashion. 2017 looks like the year we finally begin to put fear and loathing behind us and work together towards our industry’s future.