What C.A.R.’s statewide MLS means for you and your business
  

The year was 2005. C.A.R.’s president appointed an MLS Working Group to examine the state’s MLSs. The group’s findings came as no surprise to most real estate practitioners: There are too many MLSs and brokers are spending too much money on multiple MLS fees and IDX feeds.  •  These findings, however, spurred the C.A.R. board of directors to request that the group delve further and examine the feasibility of a statewide MLS, an affiliation that would assemble the state’s patchwork of MLSs into one REALTOR®-controlled system. Specifically, how would such an entity be structured? How would it impact local associations? What technologies would be required to support it? •  After much debate, in January 2008 the C.A.R. directors voted to direct C.A.R. to create a statewide MLS, and the California MLS was incorporated as a not-for-profit mutual benefit corporation shortly thereafter. With that step, CALMLS, your statewide MLS, is closer to launch. •  In order to update C.A.R. members about the development of CALMLS, C.A.R. recently convened two panel discussions—“CALMLS: A Forum on the Future”—at the recent CALIFORNIA REALTOR® EXPO. Moderator Chris Crocker, vice president, Programs, Research & Development, Realogy, NRT Western Region, was joined by Mike Silvas, CALMLS chairman and president and co-owner, Morgan Lane; Scott Kucirek, leader of development and implementation of CALMLS; Chris Kutzkey, CALMLS director; Andy Nazaroff, CALMLS director; and John Schulte, CALMLS board member and vice-president of Tarbell REALTORS®.

Crocker: What is the current status of CALMLS?

Kucirek: Our expectation is that in the first quarter of 2009 we’ll begin [signing] licensing agreements. We won’t actually provide CALMLS directly to members; instead, we’re going to partner with the local associations or the regional MLSs. We’ll just wholesale them the technology, hopefully at a very competitive price. They’ll handle the servicing at the local marketplace. If the local association is tiny or has some challenges in doing that, we’ll also offer them an opportunity to leverage some of our other partners to do that servicing.

My hope is in Q2 a few of these associations will be working on our primary system, using us as the MLS. Then, we’ll be negotiating what we call the “high-grade contracts.” That’s where you have your primary MLS that you’re using now—Paragon, Rapattoni, etc.—and you have a second MLS, CALMLS, that allows the people who’ve partnered with us to see the rest of the data.

This is going to be a property-based, property-centric MLS system.

Crocker: What does property-centric mean from the end-user’s perspective?

Kucirek: We’re trying to get every single property, even ones that have never been sold, into the database. If you want to learn something about any property in the state, our expectation is that in this database you can view a multitude of records—property records, photos, etc. We believe it would be better for our members if they actually had more knowledge than the consumers, or the ability to get more knowledge, so that they can get back in the leadership role.

Crocker: Can you describe the relationship of “wholesaling” the MLS so that the local associations still have a value to their members?

Nazaroff: Our members would not come to the CALMLS to get access to the statewide MLS. Instead, our business model is a wholesale business model using service centers. Those service centers could be local associations; they could be a regional MLS. The point is to allow the associations and the regional MLSs to remain the first point of contact with their members. If a service center [local association] decides to become a primary subscriber, [then] CALMLS is the database where they’re adding and editing listings and also searching. The member then would access all their MLS data through one system. If they were a “hybrid,” they would maintain their existing system and access the statewide MLS data through a separate CALMLS system.

Crocker: How would this model be beneficial for brokers?

Schulte: Brokers are currently required to maintain memberships in multiple associations and multiple MLSs so that their agents can do business in their local area. It’s a tremendous expense and a tremendous amount of administration.

The vision of CALMLS is that a broker will have to belong to only one MLS. That will give them access to the statewide MLS. Likewise, their agents, who are in different areas, can choose to belong to their local MLS as the access point for their MLS without the necessity of secondary MLS memberships on the part of their broker. It’s really going to simplify the process for brokers.

Crocker: How will a statewide MLS help REALTORS® remain at the center of the real estate transaction or conversation?

Kucirek: Zillow, which is überfunded, and others keep adding features, migrating the data, pulling in the data. When Zillow launched, it spent no money on marketing and was essentially a top 1,000 site on day one. That says buyers and sellers really wanted information. They and others like them are tapping into what consumers want.

Consumers, when they want to learn something, will do the research in amazing detail—to the point of who bought a property, who sold it, what color is the bathroom. That tells me as an industry we are letting them down.

Part of CALMLS’ strategy is let’s build that tool for our REALTORS® and put them back on the one-up. Because if we do it right, they should always have the best information.

Schulte: There are few times in our lives, careers, and our professions that we get an opportunity for what I like to call a “do-over.” This is our chance to really re-create this information engine that we can use for our benefit and to secure our industry. As we’ve been working on this exciting project, we often say, “This ain’t your mama’s MLS.” This is a completely different thing.

Silvas: What’s exciting about this is that we have an opportunity to go after something that’s transcendent of an existing MLS. We’ve [approached] this by asking what if MLSs didn’t exist? What would it look like if we started from scratch? Why are these consumer-facing sites so successful? What are they using? Why are they working so well?

Crocker: The thing that Google has taught us about the Internet is that he who controls the information, controls the marketplace. Are we racing against a third party, and will we be beholden to a third party if we don’t do it ourselves?

Kucirek: Google and Trulia and others have targeted brokers, and said, “Look, it’s more exposure for you.” Over time, they’ve amassed all the listings. Now, Google is the first site people go to. That tells me that consumers are voting with their hands and their eyeballs. What’s going on every time you search on Google? Who is on the side over there? Advertising companies. And who’s making that money? No one in this room, unless it leads to a lead that leads to a close. But the people who are really winning are the people who’ve aggregated the data. You see that’s how it’s playing out. These companies aren’t going away; they’re just getting stronger.

What it is

> CALMLS will be a statewide real property information system in California.

> CALMLS will have one set of rules and uniform rules enforcement for the whole state.

> CALMLS is a wholesale business model that will be available through local associations and MLSs.

> CALMLS will embody familiar MLS services, plus brand-new technologies.

> CALMLS will be built on next-generation technology.

> The CALMLS system will be launched in the first half of 2009.

   
To date, 68 associations and two regional MLSs have signed letters of intent.