The idea of a national multiple listing service is not entirely new to the real estate industry. But now that one of the industry’s biggest CEOs has brought this idea to life, it might get a little more attention.
During an appearance on Inman Connect New York on Feb. 3, Compass International Holdings CEO Robert Refkin called for banks to work together to restructure Visa and create a national MLS similar to the one that took it public around 2008. Mr. Levkin also proposed that the new MLS be owned equally by the brokerage firms and run by a fully independent board of directors.
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In theory, this idea may sound like a good one to many real estate professionals. Listings will become more accessible to everyone, and all brokerages will be governed by a common set of rules, at least when it comes to listings.
But the plans for such a business, whether it would be possible to bring all intermediaries on board and whether that could leave the industry vulnerable to further litigation are all separate issues that need to be addressed, luxury executives told Inman.
Mr. Inman contacted Compass about this matter, but the company declined to comment beyond Mr. Levkin’s Connect statement.
logistics
Beth Friedman, CEO of Brown Harris Stevens, told Inman in an emailed statement that the idea sounded appealing but raised “many questions about how it would work” that likely could not be answered “right away.” These questions include who will operate the MLS and how information will be shared. He also echoed Levkin’s suggestion, noting that an independent board of directors is necessary to avoid conflicts of interest.
Beth Friedman
But Friedman noted that many brokerages currently have conflicting views on what constitutes a fair market, which could make it difficult to reach consensus.
“I remember 20 years ago when real estate companies in New York City tried to create an MLS. So this was obviously a much smaller scale than a national database. But some agents were reluctant to share all the information,” Friedman said. “They felt this would take away web traffic and potential customers. Of course, that left the door wide open for StreetEasy to come in and become the de facto MLS.”
Nick Segal, managing broker at Carrollwood Estates, added that resistance can come in many other forms. For example, brokerage firms in nondisclosure states may be reluctant to adjust their disclosure policies regarding sold inventory. The many jobs that could be lost in such a move would also certainly be an incentive to keep the local MLS alive.
nick segal
Segal said the value created by MLSs competing with each other may be another reason brokerages are moving away from the idea.
“One of the key values of the local MLS competitive structure is the fact that some MLSs are investing time and money in new technology and services to retain and attract members,” Segal told Inman in an email. “If you had a national fleet, how motivated would you be to build and expand your network of services if there was no competition?”
Tiffany McQuaid, regional director of strategy and performance at SERHANT., expressed concern that national MLSs have the ability to enforce violations within the jurisdiction of local realtor boards.
“A real estate sign, a real estate agent, a little thing with a photo of the person in the photo… our market doesn’t allow us to include that. I think it’s best to keep everything very generic in that format,” McQuaid told Inman. “So who is going to monitor that and ensure that there is consistency in both the market and the size of the intermediaries?”
Tiffany McQuaid
The luxury goods expert added that he was also concerned about how smaller, independent companies still have an equal say in governance and how this could affect consumers.
“I think you’ll find that on local boards, whether it’s on the boards of real estate agents in the market, the larger companies that have representation have less of a voice than the smaller, more independent brokerages,” McQuade said. “I think that’s a concern not only from a broker or intermediary perspective, but also from a consumer perspective. So just making sure it’s fair across the board.”
compass and polarization
Overall, Eddie Shapiro, founder and CEO of Nest Seekers International, told Inman there is no downside to creating one MLS for all brokerages nationwide.
eddie shapiro
That said, Shapiro noted that Levkin’s motive for proposing this idea may not be simply to make business more seamless for real estate professionals. Rather, such a potential move could be a play in a larger spat with Zillow.
“I think the underlying motivation is, first and foremost, to try to further separate and extract power from Zillow Group,” Shapiro said on the conference call. “And I said, ‘Let’s see how that affects the rest.'” [the industry]”
But Shapiro made it clear that he, too, “supports the fight against Zillow,” and that he has worked to organize his business so that agents are not dependent on portals or MLS.
“My personal business model is to never put all my eggs in one basket, no matter what,” Shapiro said. “And having a strategy that is overly dependent on Zillow, Trulia and StreetEasy makes us very vulnerable. So whatever we can do to break away from that dependence, we need to do it 100% as an industry.”
Jason Oppenheim
Meanwhile, Oppenheim Group founder and president Jason Oppenheim insisted to Inman that Refkin’s pitch was all about positioning Compass more powerfully.
“Listen, that’s his job,” Oppenheim said. “Every CEO pretends they’re trying to do God’s work and pretend they’re trying to fight for consumers, but give them a break. It’s very clear in his case.”
Are you going to file another Sitzer-like lawsuit?
Stuart Siegel, president and CEO of Engel & Völkers Americas, told Inman that Levkin’s use of the Visa restructuring as an example of creating a domestic MLS is interesting given its antitrust implications.
Stuart Siegel
“I think Visa was originally Bank of America, but then it became a bank cooperative,” Siegel said. “And from the late 1970s to the 2000s, there was a flurry of antitrust violations and problems. It was seen as restrictive. It was seen as fundamentally 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 variety of ways to access data and information about listings, and he wonders whether one MLS in this country would actually benefit consumers.
“My concern with a monolithic national MLS is not just how the data is managed, but who can post the data and when, who can access the data, and how quickly is the data posted?”
“I think this is a really interesting idea,” Siegel continued, “but when you start peeling back the layers of the onion, you start to question whether it’s really a consumer-based effort, and that’s what I think.
“Second, if you had a national MLS, data aggregation would be much easier and cheaper. That’s a benefit for me as well as any other national company, but is it really in the consumer’s best interest? Compass and Compass International I know it’s certainly true for very large national companies like Le Holdings and their brands, but it raises the question of why this is really a benefit for consumers. I don’t know why.”
If anyone can do it, it’s Levkin.
The luxury leaders made it clear that there are many hurdles to overcome for anyone looking to establish a unified, national MLS. But Shapiro argued that if anyone could pull it off, it would probably be Levkin.
“What he accomplished in 15 years has never been accomplished in our industry,” Shapiro said. “No company has ever been able to raise $1.8 billion, rebuild Compass, burn half of it, survive, and then go on to buy the second-largest company.” [by sales volume] or bigger first [by agent count] It becomes an industry entity and can raise another $800 million or $900 million.
“I mean, his war chest is huge, it’s great, and it’s bigger than that. I don’t know if we’ll ever see something like that again in our industry…I wouldn’t be surprised if that’s the next big move because he’s proven he has the ability to do things that no one else in our industry has been able to do. But it’s a top priority right now. I know it’s more of a battle with Zillow than anything else. So if it’s MLS, and I’m sure he’ll be able to prove to his investors and his debtors that he’s going to bring even more of the bottom line, I’m confident he’ll get as much capital and support as he needs to achieve that goal. ”
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