Category: Agent

Cracks in the MLS Very Old System

by HOMEiZ Blog Team Posted: 06/04/2017 Views: 1120

The world is changing whether we like it or not. Sometime soon NAR, your local association board, and the MLSs will be a thing of the past.

There is a war out there between the new world`s system of doing business who is based on transparency, to the old system of doing business. The social media sites broke all the old rules. The curtain that NAR and the MLSs built around their business model, is not acceptable anymore, especially not to millennials who will take over very soon.

The main subject here, how to save real estate agent`s future. The old real estate regulations do not go together well with the new way the world is doing business nowadays. The MLS system was founded in the late 1800s, that is almost 200 years ago. The new world`s system of doing business, is transparent and with nothing to hide. Transparency created many cracks in that MLS very old system. Those cracks will grow bigger in time and will create a big hole, until the entire MLS will go through a major earthquake and will collapse. It is just a matter of time because this is how things are moving in the new world of doing business.

Real estate Agents are at Risk

Realtor.com, Zillow are making a killing with the help of NAR and the agent is paying to loses out

Many real estate agents are fear for their future as agents. There are many good reasons to that. But, the main reason is for that, NAR and the MLSs are continuing to be in a defense mode against new innovations in the real estate industry and by that they are stopping the agents from moving forward into the modern world, destroying the agent`s future. Once the consumer will become more educated and will gain more confidence to have the entire buy/sell transaction on line, all those listings coming from the agents will be left in the MLSs and the 3rd party portals will become a FSBO platforms who will grow tremendously due to that scenario.

Real estate agents who will want to stay relevant, will have to take their future in their hands and reinvent their system with more transparency that fits to the new world of doing business. It can only help to their future. Staying in the current situation hiding behind the curtain that NAR and the MLSs built around their business model, will not protect their future.

NAR and the MLSs are Rich

All those MLS associations and the NAR organization, are laughing all to way to the bank, on the back of hard working real estate agents. Real estate agents are paying millions of dollars every year to the MLSs and NAR, just to be protected for their future. But, there is no protection coming from the MLSs and NAR anymore! So, the question is why continue paying? For what? NAR sold the most precious asset that the agents had “Realtor.com” who is acting as a 3rd party portal. This is a fact! Real estate agents nowadays, finding themselves fighting alone to save their future in the industry. This war will bring many casualties to the agents. We see many new platforms and new discount brokerages who are coming to the market, with many new business models of selling and buying real estate, who a real estate agent is not needed. Is that what your MLSs and NAR want?

Show me the money

Like most unions and boards who propose to look out for your interest, they get fat off your dollar, then make you dependent on them and finally control how you make a living. The NAR and the local MLSs are playing this game with real estate agents. Real estate agents act like zombies and are very unorganized. These boards do what they want to do and are never challenged. Their budgets increase yet their value to the agents and to the consumer diminishing. The promises from NAR to real estate agents to become better real estate agents, are nothing but nonsense. Become a "Realtor", you will become a better agent, you will take ethics class every year. Being able to use the word “REALTOR” does not mean much in the real world. You can have a million letters following your name, but if a client doesn't trust you, then they are all worthless.
The only reason I see NAR wants you to become a “Realtor” is, money greed. Yes, money greed. Many agents I know are saying; “NAR is a member of NRA - they put a gun to your head and hold your career hostage for megabucks just because they have a monopoly on the data. It's ridiculous. All they want from the agents, is to Keep sending money.

Monopolize the agents for their money

Real estate agents work so hard to get little money, but dish out so much to be in the business.
In a recent conversation, I had with a top producer real estate agent here in Los Angeles, that is what he said to me:
“I have been licensed for almost 37 years. I quit the board years ago. They took my money, and delivered nothing in return. I have easily saved $25,000 in fees” the Board of Realtors is a concept that is no longer needed, they offer nothing one can't do on their own. Their claim seems to be they offer continuing education, but you can go online and find classes for half the price. Being forced to join these organizations is unconstitutional. The agents should be able to decide what they want to join. The cost of doing business as a Realtor is a JOKE”
 
Yes, slowly but surely, going straight to the consumer will be the way to sell real estate. The "realtors" pushed hard for the buyer's agent concept, and all the listing agent does these days is, to stick a sign in the yard and put the listing up on the MLS, and then sit back and let another agent bring in a customer and sell it. Most consumers can stick a sign in the yard and post pictures on the web. With so many Web-sites now available, there is no need for the MLS to feed those portals with listings anymore and to have control on the data. Real estate agents can and should have the freedom to post their listings on each and every portal out there they choose, to get more exposure. So many of those portals are free to list, or for just a small fee you get great exposure and a great looking listing and much more data than the MLS is offering. That is what the consumer wants.

The one thing that is really makes me wonder is, why real estate agents are being forced to join the MLS? What that supposed to be? Why in the world real estate agents who live in the U.S the nation of freedom to all, are being forced to join an association if they think they don`t want. Many agents cannot afford this luxury simply because they do not have the money to join. In San Francisco agents are required to join NAR in order to obtain its MLS. The MLS leaders use this phrase; “Pay to play” and I am saying, welcome to the easy money.

The MLS was founded 200 years ago and lost its validity

The MLS lost its validity in the internet era, but for its leaders it is hard to digest it. Those MLS leaders want to keep the MLS closed to the public, they want to have full control on the data. By having a full control on the data, they profit millions of dollars. Real estate data is a public record and no one should have a monopoly on the data, especially in an industry who gives service to the public.

Having a control on the data creates a monopoly who gives power over the others. The MLS leaders know very well that once the MLS will become fully transparent and open to the public, they will lose millions of dollars, their power and its foundation will crash. The reason the MLS was founded 200 years ago was, to secure compensation between brokers. Today we do not need that anymore. Agents do not need the MLS to secure their commission. Any agent can have his/her commission put down on the PSA and secure the commission with no problem. Agents don't need the MLS to advertise listings anymore, in the interment era the world is open to advertise those listings in millions of websites.

Listing Accuracy

MLSs leaders complain that 3rd party portals are lack of listing data accuracy. That has some true in it, but no one is perfect even not those listings on the MLS also lack accuracy.
As a real estate agent, myself I have seen so many listings in the MLS in the past 10 years, status marked as active and were not for sell. When I called in the listing agent to submit my client’s offer, I was told it was under contract or sold. What, you want to tell me that those MLS members forgot to update their listing status? NO! They just like to talk bad on others to prove themselves as better. Nothing but a B.S!

The name MLS does not mean anything to the average consumer and to many real estate agents. Just keep this fact in mind, commission will decrease in coming years as more discount brokers coming up to the market. The validity of the MLS will decrease as agents and their brokers will want to double end the transaction to make more money. That will create a situation that many agents and their brokers will keep their listing in house “pocket listing”.

The only way to get the zip forms is to join CAR

Another monopoly in the real estate industry is coming from CAR. As for the Los Angeles, CA area, without joining CAR you don't get the zip forms to make an offer, or lease a property. The only way to get the zip forms is to join CAR, which requires you to join your local board. When you do that on top of the MLS service fees, it's almost $900 for the year. That's a lot of money for anybody in this business. 

There is a solution

As it may sound weird, real estate agents should detached themselves from the MLSs and NAR for saving their future. NAR and the MLSs will not save your future. Real estate agents must have the freedom to choose. In the current MLSs system, there is no freedom for real estate agents to choose.