Above: Craig Cheatham
As much as the broker/MLS relationship is complex and critical when it comes to better serving all those involved in the real estate transaction—it’s a relationship that’s been filled with frustration—and a conversation that’s been taking place on stages throughout the industry for many years now.
Craig Cheatham—president and CEO of The Realty Alliance—and a key voice in the space, shared his remarks with RISMedia about how the two can align for a stronger future prior to taking the stage at the Council of Multiple Listing Services’ (CMLS) Open House on Wednesday, Sept. 24 in Toronto.
Here, Cheatham takes us back 12 years to 2013 to revisit past concerns when it comes to the broker/MLS relationship and measure them against today’s realities.
“The mood back in 2012 and 2013 was rage and resignation,” Cheatham explained. “MLSs—often urged on by consultants and certainly vendors—were moving in directions that pulled them away from their brokers and put them in competition with many of their brokers. And the actions were enough to have created some serious tension, but on top of these moves by MLSs, brokers were sensing an ‘attitude’ from their MLS partners.”
This prompted Cheatham to ask his members to submit their concerns with the MLSs they work with locally, compiling a list of 40 items (plus several more considerations) that are likely to create/increase conflict between MLSs and participant firms. While the items remain valid guides for MLSs today, Cheatham noted that an updated list—a condensed version with mostly the same content—will be available in the next six months or so.
And while brokers have seen real progress on the relationship and the “list” in some MLSs, in other MLSs, brokers continue to have real frustrations, said Cheatham.
But what progress has been made over the past 12 years, and are there any parallels between 2013 and today?
While Cheatham noted that things are different in many ways today, what remains the same is the fact that not only must MLSs continue to educate the world on what they are, but they must also continue to educate the industry on their value while building and maintaining strong relationships with their brokers.
“I would love to say we could take several things off that list because those friction points have been removed in all MLSs, but I can’t,” said Cheatham, who believes that people in the industry would point to reaching out to your brokers and building authentic partnerships, or relationships of trust, as the most important piece of the puzzle.
One of the more actionable items, according to Cheatham, that is also one of the most urgent, centers around getting MLS data for legitimate purposes.
“One of the frustrations back in 2013 that had brokers white hot was when they would ask their MLS for data to which they were entitled, but would encounter all kinds of red tape and extra fees and would often end up being told ‘no’ at the end of the process,” he explained.
To that end, Cheatham noted that “our MLSs need a new tier of licensing—a true set of enterprise options—that both accommodates modern use cases and safeguards the cooperative model.”
While Cheatham explained that many MLSs restrict brokers by offering data licenses tied to narrow or even outdated use cases, broker participants are also at a disadvantage to outsiders due to the fact that some MLSs refuse to support their brokers in new ways.
“But perhaps even more often it is because the feeds and licenses for data are out of date and incompatible with current use cases that are different than MLSs anticipated decades ago,” he added.
Drilling down further, Cheatham pointed to many items on the list related to supporting broker success—whether it be expediting feeds, keeping the process and cost to a minimum or working with brokers to learn the formats and use cases that address what brokers need to keep up with consumer expectations.
“More and more of my brokers are talking about how, in the future, they would like to see MLSs getting out of the business of setting rules that regulate business practices, and instead, the only rules the MLS has are around the utility of data,” said Cheatham. This includes getting it into the system correctly, ensuring data accuracy, maintaining compatible data formats, protecting data integrity and ensuring distribution methodology meets current needs.
“Yes, brokers are moving away from wanting their MLSs to set rules around how properties are marketed and what kinds of business models and business practices brokerages employ,” he added. “They want the marketplace and various market cycles and consumer preferences to have more leeway and don’t want their MLS deciding everything about how business gets done.”
Cheatham went on to note that as agents continue pressing for 100%-splits while at the same time demanding robust support services, brokers would like their MLSs to move toward revenue-share programs while revisiting their fee structures and potentially adapting to current market practices.
Governance, another category on the list, has the potential to bring about the most positive progress as far as your relationship with your broker—according to Cheatham—yet it’s also the most difficult to change.
“MLS leaders, now more than ever, should be exercising ‘informal governance’ to supplement their official channels. Brokers support consolidation in many instances, but if they feel powerless already in your MLS, forgive them for not being enthusiastic about mergers that further dilute their voice,” said Cheatham.
“Most of all, brokers are increasingly hungry for equity—an ownership stake—which MLS alternatives out there are offering them. And most difficult of all: Just a reminder that brokers are more passionate today than they were a dozen years ago about separating MLS ownership and governance from boards and associations.”
In the end, Cheatham noted that brokers simply want their MLS to “just” be an MLS.
“As we were reminded about with Cracker Barrel, often your customers don’t want you to branch out from the original purpose,” said Cheatham. “They don’t want new products and services. They don’t want you to be ‘more than an MLS.’ They want you to deliver your core mission, and nothing more, behind the scenes.”
Brokers are also thinking about participation in ways they might not have been back in 2013, according to Cheatham, who expects the requirement for Realtor® membership to be included on the forthcoming list.
“By that, I mean brokers will say MLS participation should not be contingent upon Realtor® membership—and I expect brokers will reiterate that they believe MLSs should not be subsidizing local boards.”
Looking back, Cheatham pointed to three specific friction points from 2013 that are still present today:
- The need for MLSs to get data to brokers in the format they need and without red tape
- The need for MLSs to reexamine their reserves and their funding models
- The need for MLSs to revise governance to better serve brokers (and ownership, too, if they can)
Asked about his opinion as to how MLS policy should be shaped in the future, the CEO called for the National Association of Realtors® (NAR) to get out of the policy-setting arena.
“We have been watching what looks like NAR handing off more and more of policy decision making and policy enforcement to the local MLS,” said Cheatham. “We’ve actually given NAR permission to get out of the MLS policy business. They basically haven’t received a penny of dues from any MLS in more than 100 years, yet they’ll pay something approaching a billion dollars in settlements and legal fees because of MLS policy by the time this is over.”
Bottom line? “We are looking for a new venue for the development of MLS policies and best practices—for some existing organization to be designated or a new one to be created to facilitate that in the future,” said Cheatham.
