In times of change, the discussion of the impact of change becomes much more frequent.
The link to the message made below is one that has resonated throughout this industry for decades. No matter how busy you are now as you read this email, I highly suggest that you take 12 minutes and to listen to this speech.
Although I am on record for not always being in agreement with Bill Chee, these many years ago and as it was related to the MLS, he was spot on. He had a clear vision for how the industry needed to address the issue of the secrecy of “the data”, and he called upon the NAR to thoroughly examine the situation and to take action. But note what Bill Chee did not say.
He did not suggest anything about the current frenzy related to owning the data that the industry is so obsessed with today. To the contrary, he suggested that the industry needed to be the open distributor of the information. The enabler for the consumer's access. And with that, he held a vote to move forward with exploring that further and as you saw, the motion was unanimously accepted by the NAR.
So then what happened? I’m sure not to anyone’s surprise, nothing. Crickets. So why?
I think it was because IBM, Sears, the telephone companies and all the others on his list of “lions” did not succeed. None of these “lions” were successful in pulling away the data from the MLS. Not tat they couldn’t have at the time, but they just didn’t. With the possible exception of the one party he did point to in his speech. And the only party to the transaction that this industry continues to underestimate.
Today the NAR and the MLS are involved in what I see as the biggest battle for their existence. For their relevancy. And so now it’s the consumer v. the NAR and the MLS.
This battle is not about the new entrants to the market v. the MLS, it is about a protest of the practices of the MLS as it relates to the consumer. It is about price fixing. It is about the lack of transparency with regard to payment of service fees to buyer’s brokers. It is about a challenge to the core of our industry in terms of the agreement for cooperation and compensation. This is big stuff that is not going away.
So what now? Lot’s could happen now. So think about this
If put to the test and given the option, how many buyers do you think would agree to shell out cash to pay for the services of a buyer broker? With that degree of transparency, my answer to that question would be few, if any. Why?
Because there would be nothing preventing the buyer from buying the property directly from the listing broker who is being paid by the seller at no cost to the buyer.
To date, all of the arguments with regard to the MLS industry have been contained within the industry. And that is why to date the has been NO change within the current MLS industry. I am one of the few people who has been on record for the past 5 years with deep concerns for the antiquated and outdated polices and rules of the MLS industry. Not to mention my open criticism of the MLS’s core policy of mandated cooperation and consideration.
So what is different now? The consumer is weighing in on such practices. And as Bill Chee said so well, “what the consumer wants, the consumer always gets.”
As it relates to who pays what for which services, I think the industry has better “brace for impact.” What if the seller were not forced any longer to pay the buyer broker fee as a part of the listing? And then what if the current buyer broker fees were to disappear from this industry? The change that could be the result from the current litigation against the NAR and the MLS could dramatically impact the future of the amount of real estate fees generated by a transaction.
And the question I will leave you with is this one. What if the only real estate fees that were agreed to by the consumer were those being paid to the seller’s broker? How would that impact your current business?
This combined with all of what I have commented on recently with regard to the true value of the “point of listing” and the “point of sale” and you might be looking into the not too distant future. Change is happening now with our without a vote this time from the NAR Directors. It's too late for that vote and the historical lack of progressive action on the part of the industry is now going to result in progressive change forced on the industry.
I have long said that “ the real gamble is always the speed of change."
Are we seeing change impact the future of real estate, today? I don’t know about you, but I think so.
Have a great day.