The following is a transcript of Matt Cohen’s speech at the Council of Multiple Listing Services 2008 Convention
The long-term relevance of MLS organizations has been questioned at numerous conferences and on Internet sites over the past few years, but I believe these organizations are uniquely qualified and positioned to deliver technology and support needed by the industry. If we determine strategically what the MLSs need to provide to help the real estate professional service the modern consumer and participate in the real estate transaction of the future and we work vigilantly toward that end, the relevance of MLS organizations – and the value of real estate professionals – will no longer be questioned.
We all know that consumers are often coming to the table with more information than professionals. Even when that information is poor – like the original Zestimate – consumers think they are ‘one-up’ on the professional, and believe that the value of the professional is diminished. Our real estate professionals must differentiate by having clearly better, professional-grade tools, knowledge, and processes. Most brokers are not getting this done on their own, and our whole industry is painted with the broad brush of poor service and unjustified commissions.
Successful deployment of real estate information systems has typically been both the charter and strength of the MLS organization. However, there has been some tension because the MLS system (that has been the MLS organization’s primary function) was chartered solely as a system to facilitate cooperation and compensation. Today’s real estate systems need to go beyond that, including not just the MLS, but Public Records, Transaction Management, Forms, Digital Document Management, Lockbox systems, Showing scheduling management and feedback systems, listing syndication, professional-grade automated valuation modeling software, real estate customer relationship management and lead management – and a bevy of other tools. There is also a great deal of additional information needed to provide professional services, including unlisted property information from homebuilders and FSBOs, mortgage and foreclosure information, environmental information, agent and property ratings, as well as community, school, and demographic information. To be clear, I’m not talking about just providing a library of additional information – I’m talking about well-integrated tools and information that help the professional provide efficient and timely customer service, unparalleled capability in interpreting the plethora of property and population information available, and highly reliable and secure settlement processes.
If the MLS organization is not re-chartered, re-missioned, and re-branded more generically as providers of information systems for organized real estate, we will continue to see pushback against the MLS organization offering systems that don’t solely address cooperation and compensation. I know that some of you have mission statements that are already broadened – I see them when facilitating strategic planning sessions – but in most cases your board doesn’t even know the mission statement and understand its broader implications, and if they do, your members certainly don’t. If our industry doesn’t reposition its MLS organizations or find some other means of improving the toolset and processes of the real estate professional in an organized, consistent manner, our industry will continue to lose its value perception with the consumer. And, as ex-NAR president and broker Bill Chee said to me back in 2002, “The lion really coming over the hill is the consumer.”
This technical effort of which I speak must be executed in concert another effort, working with our trade associations, as well as ARELLO and state licensing organizations – working in concert at every level, we need to change what it is to be a real estate professional. Too long have some members driven their industry toward the lowest common denominator. Some brokers will keep a whole market in the stone ages on digital document management and transaction management ruining any possibility of cooperation in the electronic transaction of the future so they can have a six month technology advantage over one of their competitors. And, most MLSs recognize that less than 20% of subscribers use the bulk of tools the MLS already makes available to them — and better is not required of those subscribers. Henry Ford, automotive pioneer, once said, “If I’d asked people what they wanted, they would have said faster horses.” Can our industry thrive if being driven by these people?
I’m not ignorant of the tensions it would cause if real estate organizations started trying to tell independent professionals what to do, and I’m also aware that many real estate associations are incented to keep barriers to entry low and membership numbers high. But there needs to be more of a balance between listening to members and leadership in defining our industry, if we want it to thrive. David Charron recently asked me, “If 75% of the … folks that surf real estate are using functionality that is not provided by the MLS or the broker, what does that tell us?” What does that tell us about our industry’s relevance, about our part in the real estate conversation? Lamplighters … typesetters … movie projectionists – none of those professionals or professional organizations were protected by resisting the future. Industry leaders aren’t doing their members and subscribers a favor by letting our industry be driven by those that want to maintain the status quo. We can’t be afraid of the future and, as Alan Kay of Apple computer once said, “The best way to predict the future is to invent it.”
Look at how libraries are being reinvented. Look at how the insurance industry reinvented their independent agents as “financial planners”. To sustain – or even improve – the long term value of the real estate professional, real estate industry leaders must redefine the profession, and MLS leaders must envision, build or license, maintain and support the new real estate information systems, requiring that technology vendors adopt standards and interoperate, providing real estate professionals with professional grade tools, integrating better with tools already fielded by brokers. Those could be the challenges our industry takes head-on, via organized efforts at national, regional and local levels.
I see many industry news articles, blog posts and speakers at conferences saying the MLS – or even the whole industry – is irrelevant, that it should be gone in a few years, that there’s no future for it. I disagree. I have a vision of the future of our industry and for the MLS – both the system and the organization – that is more vibrant than ever. Can we attain that vision? Can “organized real estate” actually organize to get the job done? Can we re-charter, re-mission and re-brand the MLS? I don’t believe our industry can afford to fail in redefining and creating an exciting future for itself. I don’t believe we can sit back and let outsiders take control of the real estate conversation and create the future of our industry. The effort wouldn’t be easy, but that’s the leadership challenge I put before you.
About the author: Matt Cohen is Clareity Consulting’s Chief Technologist. Matt has spoken at many conferences, workshops and leadership retreats internationally, and is a well-regarded real estate industry expert on real estate software, product and project management, risk management and information security.
Clareity Consulting was founded in 1996 to provide information technology consulting to the real estate industry and its related businesses. Clareity has successfully executed a vast array of projects, including:
- Request for Proposals (RFP) for MLS, public records, and transaction management systems
- Regionalization and data share facilitation
- Strategic planning
- Contract negotiation
- Executive Recruiting and Placement
- Information security and business continuity assessments
- Project planning and management
- Software and system design and review
- Mergers, acquisitions and strategic alliances
- Market research including surveys and focus groups
- New product marketing and business plans
For more information, visit http://www.CallClareity.com
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