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HousingWire real estate reporter Jeff Andrews sat down with John DiMichele, the new chair of the Council of Multiple Listing Services (CMLS), to discuss the state of MLSs and their future in a rapidly changing real estate environment.
This interview has been edited for length and clarity.
Andrews: Where do you see the MLS space right now and where do you think it’s going?
DiMichele: There’s a lot going on right now, but I think this is a real opportunity. The analogy I use is this: When you get in your car and you turn the key in the ignition, when you turn it, you’ve started the engine to fire up. And that’s sort of what the MLS is. It’s the engine behind the industry, and the industry is massive. It’s certainly a significant part of the economy and itself is an economic engine. We know that it injects trillions of dollars into gross domestic product.
But without the real engine behind it — which is the MLS — you have all these disparate databases within offices that don’t give that clear, transparent, timely, effective, efficient, accurate dataset that both the real estate professional and the consumer would expect for making this big decision in their lives. In my opinion, the MLS will be fine in the long term. Sure, there are things that have to be ironed out, but everybody will adjust.
Andrews: What do you think the role of CMLS should be and what is its value to the industry?
DiMichele: We are a trusted voice and a driver of healthy competition. The programs that we have in place, like Champions, ensure that the value is communicated to all parties. We are conducting research to ensure that we can ourselves bring evidence to the table on these things.
If you look at what we’ve been doing the last few years and what our outlook is, we certainly want to ramp up this concept of champions. We want to advance the best practices that drive competition, and we believe that the MLS is foundational to driving that competition.
The long shot for MLS and CMLS is to make sure that we communicate these things and that people understand how valuable they are. Our concept is, let’s keep moving forward. Let’s do the work that needs to be done. Let’s make sure we get and talk to policymakers. Let them understand what MLS is and how important the real estate industry is as an engine. So, look for some of that stuff as we go down this road.
Andrews: Obviously, one of the things going on is implementation of the new rules mandated by the antitrust settlement agreed to by the National Association of Realtors (NAR). Do you think the dust has settled on that?
DiMichele: Speculating on things like that is very difficult to do. I think, eventually, everybody will come to terms with that as something that has to be settled, as you say, but realistically, it’s hard to predict what will happen. There’s still back and forth going on there. I suggest that there will be some settling in the next little while, and what I mean by that is we’ll come to the realization that everything is where should be and how it should be.
Andrews: There have been some recently announced data sharing agreements between MLSs that involve overlap between home buyers and sellers. How do you see these and do you think we’ll see more of them?
DiMichele: Data sharing agreements are a natural progression as the world gets smaller and people start to realize how valuable this information is and how important it is to have transparency. It’ll take a bit of time, but you can see that people are making these types of decisions and moving forward in our market.
It’s a natural progression as this concept of overlapping market disorder where people would see listings that weren’t in their database in their marketplaces. That just makes no sense. It’s not efficient. The more you dilute that database, the less efficient it becomes, and the consumer actually doesn’t get the benefit of having that transparency so that they can make an informed decision confidently.
Andrews: The Clear Cooperation Policy (CCP) — where seller agents have to post a listing to the MLS within 24 hours of signing a listing agreement — is being challenged by some big names in the industry. What do you see as the value of CCP to both agents and consumers, and do you think this policy will survive this challenge?
DiMichele: We want the consumer to have the complete picture. You want the Realtor to have that knowledge base and data that helps facilitate the transaction on behalf of their clients or their customers or the parties that they’re working with.
I’m confused as to why this is a good thing to have disparate databases. If you’re buying a home, wouldn’t you want me to give you all the data that is going to be relevant? Let’s go back to the car engine analogy: If you start watering down that gasoline, that engine eventually starts to sputter, so I have a real hard time with the idea of sequestered listings or not having that transparency. So, I believe that to serve the consumer properly, the MLS needs to be able to do its job. CCP should be something we all respect and want.
Andrews: Some industry professionals say widespread MLS consolidation won’t happen, while others say it absolutely will. How do you view consolidation and do you think we’re going to see more of that? Is that beneficial for MLSs?
DiMichele: There will be natural movement in that area over time as the marketplaces grow. Certain areas need it. There’s still a lot of MLSs out there. People will start to realize that the marketplace is more important. We want to have an efficient marketplace. We want to be able to serve the member and the consumer efficiently with the data they need in order to do their jobs.
Let’s face it, the market’s been depressed for the last little while. It’s been challenged by many factors, but I think the dream of homeownership is still very, very alive and well. We know that owning a home is almost considered the fourth pillar of wealth management and retirement planning. It’s the first step into wealth, so the consumer will drive this, and I think that all those other issues will sort of fall off.
Andrews: Do you think there is room for new entrants and maybe even an MLS with a national footprint?
DiMichele: I’ve never really believed in that, simply because real estate is local. Having been out there as a practitioner, there’s certain things that you can standardize, so to speak, but there are a lot of local and regional issues. There are parts of the country that are very specific as to how real estate actually operates, so unless you’re gathering it all locally, you don’t have that expertise and that knowledge base.
The data can only go so far. It’s the knowledge that’s important that the Realtor brings to the table. I think that perhaps there will be regional change, regional consolidation, but from a national standpoint, I just don’t see it.
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