Consider that 5 state association presidents have been in office since approval of the 6 with various treasurers, president elects, SPF members, etc. Five years worth---but the march toward statewide relentlessly moves forward--sorta suggest that the volunteer leadership is either all intoxicated with Kool Aid or the impetus for a statewide MLS is coming from a shadow leadership that doesn't change or executive staff--regardless of what's happening out in the real world.
Much as I hate to (shudder!!!), it's probably time to look at the principles in depth (which few have done, without considerable confusion) and ask how each affects ALL the stakeholders: the state association, the local associations, the brokers, the MLS vendor and the agents. OH, maybe we should include the Buyers and Sellers. The Principles hardly mention them--never forget the state association represents (sorta, when it's convenient) the members, NOT the public. Recently, only the bold heading text of the 6 Principles has been used in copious New Statewide MLS propaganda, but the subtext has real meat. Oh, I'm going to break this up into a 2-3 posts--you might fall asleep otherwise--and I might do the same. Clarity and logical consistency is lacking. My comments will be in contrasting type beneath each Principle.
FIRST--a word on behalf of our "sponsors".
The perspectives of Buyers and Sellers (AKA the sponsors) are, or should be, paramount in trying to identify Statewide benefits.
Buyers want to buy the RIGHT HOUSE at a fair price, in a timely way, with minimal inconvenience or liability. RIGHT HOUSE means the one representing the wisest overall purchase decision considering ALL the houses available for purchase at the time. Can you imagine the Buyer wanting anything less?
Sellers want to find the RIGHT BUYER in a reasonable time, a buyer that will pay an acceptable price and close the deal with a minimum of inconvenience and liability for the Seller. The RIGHT BUYER covets a particular house and is motivated to purchase it above all others. How many Sellers don't want to find the RIGHT BUYER?
Those goals largely define the best interests of the public, pulling in the issue of fiduciary duty. Although that seems pretty straight forward, the roles of other stakeholders (including the MLS environment) in attaining those goals are more fuzzy that you might think.
NOW we're ready to begin--you're so patient!
MLS Working Group Statement of Principles
(Adopted by the C.A.R. Board of Directors 9/24/2005)
1. MLS data needs to be fully standardized with local options for data field variation.
We believe that local customization of MLS data fields has made the comparison of data between MLS’s unnecessarily complex. A lack of uniformity has created artificial boundaries that impede the efficient operation of the market and the ability of REALTORS� to service their clients. We support universal data fields that are standard across all MLS’s while also recognizing the need for adding local descriptors.
Ok, right out of the chute-- are they saying data should be fully standardized but. . . not fully standardized? What the heck? How do local options fit in with "fully standardized"? Formats could be standardized, but when we read down we see that customization of data is BAD. It makes comparison of data between MLS's complex because of a "lack of uniformity" and impedes the efficient operation of the market and the ability of REALTORS to service their clients (that last is an VERY ODD turn of phrase--we used to kid new agents whenever they said that). Do clients care about the efficiency of the market? Have you ever asked clients how they feel about the efficiency of the market? Are the clients willing to sacrifice their best interests so the market can become more "efficient"? Are they comfortable reducing the odds of finding the RIGHT HOUSE or the RIGHT BUYER to assist the market in operating more efficiently?
This first Principle seems to say that each MLS has unique aspects to its dataset and that creates inconvenience because it introduces complexity. Who is inconvenienced, under what circumstances and is there a beneficial trade off for that complexity? Agents and the Public (who now have access to large chunks of the data) could certainly encounter complexity when COMPARING data across MLS boundaries as they consider property within the coverage area of more than one MLS. Why would they doing that? One possibility is that there is NO DISCERNIBLE DIFFERENCE between the two MLS areas, at least for the types of houses and area attributes they deem important. The other possibility is that they like typical attributes of properties in one area (and MLS) but prefer other attributes in another area (and MLS). They are comparing contrasts across MLS boundaries--not easy to do with one dataset if it doesn't include the contrasts.
Comparison is complicated in the different MLS market areas that might tend to differ in attributes--DUH! Why do Buyers (as did Sellers when they bought) choose one area over another area in the selection process? Because of distinctions in attributes arising partially from area characteristics. The complexity that the MLS Working Group thought was a problem may be the essence of why Buyers make the choices they make--assuming they really want the RIGHT HOUSE. The 6 Principles seek to make it easier to choose by standardizing data and easing comparison of SELECTED data across MLS boundaries. This is also often called loosing information. What if the standardization process removes information that some Buyers might deem critical to their goal of finding the RIGHT HOUSE? What if, in an ideal, efficient market, the underlying goal of the MLS was to promote the sale of houses, regardless of whether they represented the RIGHT HOUSE? Sounds fine for many of the stakeholders, but what about the BUYERS and SELLERS and their best interests?
There are those Local Descriptors, but what are they and where are they. Lately we don't hear much about local options. The 10 MLSs that are using the NEW Statewide each have different datasets, but I heard in Sac that those distinction have delayed data sharing and will probably be removed before the one mega data container is configured for ATM (after the merger). Does that mean that local descriptors are OK, but contrasting MLS datasets aren't? Contrasts are contrasts and they are important to Buyers and Sellers, but will they survive the urge to merge? Standardization of formats and labels is fine, but leave the information in the data container. See Michael Wurzer's blog on Statewides in a previous post.
End of the day, what does Principle #1 seem to say? Data should be easy to compare so the real estate market is efficient and transactions are smooth and abundant.
What does that have to do with a statewide MLS? Very little and here's the reason. "Statewide" was still a very naughty word in 2005--the concept was there, but the word made many members livid. Since 2005 mega regionals and aggregation arrangements have organically evolved to solve much of the perceived fractionation of similar market areas by MLS boundaries. That phase is largely over and the state association missed the boat.
At that point, the ONLY way for the state association to leverage itself into the picture on the way to garnering more power, control and profitability was to go whole hog for statewide and suggest that anything on a smaller scale was vastly inferior. They finally got the state directors mellowed out (multiple Kool Aid keggers) about statewides in 2008, THREE years after the 6 Principles were approved. Is that any way to run a tech company?
Read ahead, if you like and I'll tackle #2 in a day or so (got to recover from #1!! ). Principle #2 is totally surreal--OMG!
Ok, right out of the chute-- are they saying data should be fully standardized but. . . not fully standardized? What the heck? How do local options fit in with "fully standardized"? Formats could be standardized, but when we read down we see that customization of data is BAD. It makes comparison of data between MLS's complex because of a "lack of uniformity" and impedes the efficient operation of the market and the ability of REALTORS to service their clients (that last is an VERY ODD turn of phrase--we used to kid new agents whenever they said that). Do clients care about the efficiency of the market? Have you ever asked clients how they feel about the efficiency of the market? Are the clients willing to sacrifice their best interests so the market can become more "efficient"? Are they comfortable reducing the odds of finding the RIGHT HOUSE or the RIGHT BUYER to assist the market in operating more efficiently?
This first Principle seems to say that each MLS has unique aspects to its dataset and that creates inconvenience because it introduces complexity. Who is inconvenienced, under what circumstances and is there a beneficial trade off for that complexity? Agents and the Public (who now have access to large chunks of the data) could certainly encounter complexity when COMPARING data across MLS boundaries as they consider property within the coverage area of more than one MLS. Why would they doing that? One possibility is that there is NO DISCERNIBLE DIFFERENCE between the two MLS areas, at least for the types of houses and area attributes they deem important. The other possibility is that they like typical attributes of properties in one area (and MLS) but prefer other attributes in another area (and MLS). They are comparing contrasts across MLS boundaries--not easy to do with one dataset if it doesn't include the contrasts.
Comparison is complicated in the different MLS market areas that might tend to differ in attributes--DUH! Why do Buyers (as did Sellers when they bought) choose one area over another area in the selection process? Because of distinctions in attributes arising partially from area characteristics. The complexity that the MLS Working Group thought was a problem may be the essence of why Buyers make the choices they make--assuming they really want the RIGHT HOUSE. The 6 Principles seek to make it easier to choose by standardizing data and easing comparison of SELECTED data across MLS boundaries. This is also often called loosing information. What if the standardization process removes information that some Buyers might deem critical to their goal of finding the RIGHT HOUSE? What if, in an ideal, efficient market, the underlying goal of the MLS was to promote the sale of houses, regardless of whether they represented the RIGHT HOUSE? Sounds fine for many of the stakeholders, but what about the BUYERS and SELLERS and their best interests?
There are those Local Descriptors, but what are they and where are they. Lately we don't hear much about local options. The 10 MLSs that are using the NEW Statewide each have different datasets, but I heard in Sac that those distinction have delayed data sharing and will probably be removed before the one mega data container is configured for ATM (after the merger). Does that mean that local descriptors are OK, but contrasting MLS datasets aren't? Contrasts are contrasts and they are important to Buyers and Sellers, but will they survive the urge to merge? Standardization of formats and labels is fine, but leave the information in the data container. See Michael Wurzer's blog on Statewides in a previous post.
End of the day, what does Principle #1 seem to say? Data should be easy to compare so the real estate market is efficient and transactions are smooth and abundant.
What does that have to do with a statewide MLS? Very little and here's the reason. "Statewide" was still a very naughty word in 2005--the concept was there, but the word made many members livid. Since 2005 mega regionals and aggregation arrangements have organically evolved to solve much of the perceived fractionation of similar market areas by MLS boundaries. That phase is largely over and the state association missed the boat.
At that point, the ONLY way for the state association to leverage itself into the picture on the way to garnering more power, control and profitability was to go whole hog for statewide and suggest that anything on a smaller scale was vastly inferior. They finally got the state directors mellowed out (multiple Kool Aid keggers) about statewides in 2008, THREE years after the 6 Principles were approved. Is that any way to run a tech company?
Read ahead, if you like and I'll tackle #2 in a day or so (got to recover from #1!! ). Principle #2 is totally surreal--OMG!
2. California REALTORS� should have universal access to all MLS data.
C.A.R. members are licensed by the state Department of Real Estate and as such are able to sell property throughout California. Consumers have access to statewide and even nationwide listings through a variety of data aggregation sites on the Internet. In order for REALTORS� to provide their clients with the information they want, California REALTORS� should have access to all listing data in the state. Shared databases and reciprocal agreements should be strongly encouraged.
3. Use of MLS data and its distribution to third parties should be controlled by the brokers who provide the data.
We believe that a listing represents intellectual capital and that the process of creating a listing is a value-enhancing activity. Brokers entering into an exclusive agreement with sellers accept the responsibility for marketing the property and should have control over distribution of the listing data. The rampant and uncontrolled dissemination of valuable listing information on the Internet has increased the cost of doing business and devalued the role of the agent and broker in this process.
4. MLS entities should exist for the benefit of the participants and subscribers.
We believe that MLS fees should be set at a rate that gives the MLS and/or the Local Association a fair return for delivery of MLS services. We believe that local Associations of REALTORS� provide valuable services to their members. These include services and activities that advocate for homeownership, ethics and professionalism in the industry. We believe that local AOR’s should be adequately and fairly compensated for these services, including those that may be directly associated with an MLS.
5.. MLS rules should be uniform and enforced consistently.
Over the years the relevant market area for many brokers and agents has expanded beyond the artificial boundaries of now out-dated MLS regions. As a result brokers are increasingly operating in multiple MLS environments and facing complex issues related to the disparities in rules, regulations and enforcement governing different MLS’s. We believe rules should be established that simplify and enhance the experience of MLS users across systems. To that end we believe that the C.A.R. Model MLS Rules should form the basis to develop statewide rules and standards of enforcement.
6. MLS Boards of Directors should include broker owners with appropriate regional representation.
We believe that broker involvement in MLS governance is critical. The MLS is the single most important business tool in the real estate industry and as such the provision of MLS services should be accountable to all participants. We believe it is imperative that brokers from both large and small firms be given representation on MLS Boards.
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