The idea of a national multiple listing service is not exactly new to real estate. But it may gain a bit more attention now that one of the biggest CEOs in the industry is plugging the idea.
During an appearance at Inman Connect New York on Feb. 3, Compass International Holdings CEO Robert Reffkin called for a national MLS that would be formed similarly to how banks cooperated to restructure Visa and take it public around 2008. Reffkin also suggested the new MLS be owned equally by brokerages and run by a completely independent board.
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In theory, the idea might sound like a good one to many real estate professionals. Listings would be more accessible to all, and all brokerages would be governed — when it comes to listings at least — by one set of common rules.
But the logistics of such an undertaking, whether or not it would be possible to get all brokerages on board, and whether it could make the industry vulnerable to further litigation are all separate questions that would need to be addressed, luxury executives told Inman.
Inman reached out to Compass for this story but the company declined to comment beyond Reffkin’s Connect remarks.
The logistics
Brown Harris Stevens CEO Bess Freedman told Inman in an emailed statement that, although the idea sounded appealing, it raises “a lot of questions about how it would work” that likely can’t be answered “anytime soon.” Those questions include who would run the MLS and how information would be shared. She also echoed Reffkin’s suggestion of an independent board, noting that this would be necessary to avoid conflicts of interest.
Bess Freedman
But Freedman pointed out that many brokerages now have conflicting opinions about what a fair market is, which could make it difficult to reach a consensus.
“I remember 20 years ago, New York City real estate firms tried to create an MLS — so obviously this was a much smaller scale than a national database — but some brokerages were not willing to share all the information,” Freedman said. “They felt this would take away from their web traffic and leads. Of course, that left the door wide open for StreetEasy to come in and become the de facto MLS.”
Resistance could come in a number of other forms as well, Carolwood Estates Managing Broker Nick Segal added. Brokerages in non-disclosure states, for instance, might be hesitant to adjust their disclosure policies regarding sold inventory. The many jobs that would potentially be lost in such a move would also surely be motivation for keeping local MLSs in place.
Nick Segal
The value created when MLSs compete with each other might be another reason that brokerages would steer away from the idea, Segal said.
“One of the major values of local MLSs’ competitive structure is the fact that certain MLSs invest time and money on new technologies and services to retain and attract membership,” Segal told Inman in an email. “If you have a national vehicle, to what degree will they be motivated to create and expand their network of services in the absence of competition?”
Tiffany McQuaid, regional director for strategy and performance at SERHANT., expressed concerns about a national MLS having the capacity to police violations within local Realtor board jurisdictions.
“Little things from photos that have real estate signs or the agent or people in the photo … we’re not permitted to have that in our market, and I think it’s best to keep everything very generic in that type of formatting,” McQuaid told Inman. “So who is going to police that and ensure there’s consistency both in market and in size of brokerage?”
Tiffany McQuaid
The luxury expert added that she was also concerned about smaller, independent firms still having an equal say in governance and how that could potentially impact consumers.
“I think you see, in the local boards anyway, the bigger guns that have representation, whether it’s on the board of Realtors in the market, versus the smaller, more independent brokerage, their voice is not as heard,” McQuaid said. “And I think that’s something that would concern me from the perspective of not only the broker or brokerage, but also from the consumer perspective. So just ensuring that it’s fair all across the board.”
Compass and polarization
Nest Seekers International founder and CEO Eddie Shapiro told Inman that overall, he doesn’t see a downside to creating one MLS for all brokerages across the country.
Eddie Shapiro
That said, Shapiro noted that with Reffkin pitching the idea, his motives might not entirely be for simply making business more seamless for real estate professionals. Rather, such a potential move could be a play in his larger quarrel with Zillow.
“I think at the core of it, the motivation is to detach more and try to extract power away from Zillow Group, first and foremost,” Shapiro said on a call. “And then saying, ‘let’s see how it affects the rest of [the industry].'”
But Shapiro clarified that he himself “supports the battle against Zillow” and has worked to organize his business in such a way that his agents are not dependent on any portal or MLS.
“My personal business model is, no matter what, don’t ever put your eggs in one basket,” Shapiro said. “And having a strategy that’s too reliant on Zillow, Trulia and StreetEasy makes us very, very vulnerable. So whatever we can do to detach from that dependency, we should, as an industry, 100 percent.”
Jason Oppenheim
Meanwhile, Oppenheim Group founder and President Jason Oppenheim argued to Inman that Reffkin’s pitch is all about positioning Compass more powerfully.
“And listen, that’s his job,” Oppenheim said. “Every CEO pretends like they’re trying to do God’s work, pretends like they’re trying to fight for the consumer, but give me a break. It’s just so transparent in his case.”
Positioning for another Sitzer-like lawsuit?
Reffkin’s use of Visa’s restructuring as an example for creating a national MLS is an interesting one, given its antitrust implications, Engel & Völkers Americas President and CEO Stuart Siegel told Inman.
Stuart Siegel
“Visa was originally started, I think it was Bank of America, and then it went to a cooperative of banks,” Siegel said. “And in the late ’70s through the 2000s, it had one antitrust violation or issue after another. It was seen as restrictive. It was seen as basically anticompetitive, and its structure allowed thousands of independent banks to act as a single combination of interests. Sound familiar?”
Siegel added that consumers already have a number of ways to access data and information about listings, and he wondered if one MLS for the country would actually benefit consumers.
“My fear on a monolithic, national MLS is data is not only controlled, but who gets to post the data when? When do I get to access the data? How quickly is the data posted?”
“I think it’s a really interesting idea,” Siegel continued, “But when you start to peel the layers of the onion away, you really got to start to question, is it truly a consumer-based initiative? That’s my takeaway.
“The second thing is if you have a national MLS, it makes data aggregation a lot easier and less expensive. That benefits me as much as any other national player, but is that really in the consumer’s best interest? I know it certainly would be for a very large, national player like Compass or Compass International Holdings and its brands, but I got to question why this would really be a consumer advantage. I don’t know the answer as to why.”
If anyone can, it’s Reffkin
Luxury leaders made it clear that there would be a number of hurdles to overcome for anyone looking to create a unified, national MLS. But Shapiro argued that if anyone were to pull it off, it would probably be Reffkin.
“What he’s managed to achieve in 15 years has never been done in our industry,” Shapiro said. “There’s never been a single entity that managed to raise $1.8 billion and build Compass to what it was, burn half of it, and still make it out alive, and then go out and buy the second largest [by sales volume] or first largest [by agent count] entity in the industry and be able to raise another $800 or $900 million.
“So his war chest is massive, it’s magnificent and it’s larger than — I don’t know if we’ll ever see that ever again in our industry … He’s proven that he’s capable of doing things that no one else in our industry has been able to do, so I wouldn’t be surprised if that’s the next big move. But I do know that what is now front and center priority is the Zillow battle more than anything. So if it is an MLS, and he can prove to his investors and his debt holders that he’ll bring more profitability to their bottom line, I’m sure he’s going to get as much capital and support as he needs to achieve that goal.”
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