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Will the MLS Be Reformed?

The official website of the National Association of Realtors® reported on August 2, 2007, that a survey conducted among real estate professionals by the NAR Center for REALTOR® Technology shows an increasing interest in reforming current MLS standards. Entitled “2007: MLS Technology Survey,” the study’s purpose “is to better understand MLS technology trends” (Survey, p. 3). It was conducted via emailed links to over 25,000 NAR members (agent and brokers), as well as over 1,300 MLS executives. Questions on the survey attempted to gather information on “such topics as general business practices, MLS consolidation, RETS, security, data integration, etc.” (Survey, p.3).

Among the survey’s findings were the following statistics: a majority (34%) of MLS Members felt the ideal size for a consolidated MLS is statewide; of those directly affiliated with a MLS, however, a full 53% felt the ideal MLS size is by market area or metropolitan statistical area (MSA). These numbers indicate that more people are beginning to favor the expansion of MLS service regions.

Of the methods by which MLS can be reformed (data sharing, creating a massive property database and the consolidation of several MLS’s into a larger, regional MLS), consolidation seems to have taken the lead, with 30% of responders reporting that their MLS has already consolidated with one or more MLS; another 38% are considering consolidation. Brokers who operate in several MLS regions are now resorting more and more to data sharing agreements between MLS’s (NAR, “Realtor Survey Reveals Increased Demand for MLS Consolidation, 02 Aug 2007).

A greater concern for information security was also indicated by respondents to the survey. One-third of the respondents now watermark their property photos, though a full 6 out of 10 do not utilize data tagging or “seeding” which helps MLS’s identify themselves as the original source of listing information (NAR, 02 Aug 2007). Only 42% of those surveyed said, “yes”, their MLS organization has a written security policy; 46% responded “no” (Survey, p. 37). Among the Members group surveyed, 52% said they did not receive information security education as part of their MLS training (Survey, p. 38). These and other security-related survey questions arose from indications that data sharing technologies related to MLS are growing exponentially. For example, since 2005, a 47% increase has been seen in the use of RETS interfaces, allowing brokers, third-party software vendors, Realtor® associations and MLS’s to share real-time data, no matter what software they use (NAR, 02 Aug 2007). To address security issues, more MLS’s are now requiring a two-factor authentication process, as opposed to the traditional User ID and password combination, to access MLS information.

Another trend in MLS reform includes the greater ability to integrate different types of data into an MLS listing. Besides the traditional photos, address and tax information, more than half of those who responded to the survey reported being able to attach documents to their MLS listings, including contact information, maps and tax or public record data (NAR, 06 Aug 2007).

NAR President Pat V. Combs stated that “Realtors® have invested a lot of time and millions of dollars in building and advancing real estate technology...Improvements in technology have made it easier for Realtors® to expand their geographic territories, which often results in greater demand for data sharing and integration among MLSs. Consolidation among MLSs will most likely continue in overlapping markets and where it’s most appropriate. This will help bring down costs and enhance service for many Realtors®.” However, an InMan blog posted on 02 August 2007, noted the daunting task ahead for those dedicated to MLS reforms like those noted above, due to the vast number of differing geographies, political affiliations and varying opinions across the country (Inman blog, “MLS Issues”, 02 Aug 2007).

Regardless of your stance on the current functionality of MLS, it appears as if all the trends are moving toward a re-vamping of this much-used system. As difficult as change can be, the benefits to today’s Realtor® seem certain. As geographical distances become shorter and shorter as a result of the quickly-advancing technology and communication industries, real estate professionals are expanding into wider territories. By expanding the scope of MLS’s all over the country, Realtors® will surely appreciate a greater availability of information at quicker speeds.