Hybrid Regionalization – Right For Your MLS?

by Mike Audet on February 10, 2014

Hybrid Power - SpeedometerWe all know there are too many MLSs in the US and over the years the real market areas have expanded forcing agents to belong to multiple MLSs in many areas.  This means more costs, data inefficiencies and often the need to learn and operate multiple MLS systems.  It isn’t good for brokers, agents or consumers so why hasn’t their been more consolidation of MLSs more quickly?

The answer, of course, is protectionism.   Even though consolidation would be in everyone’s best interest there is still a local desire to maintain control and identity at the MLS level.  Brokers also worry that outsiders will come in and steal their business.  Whether this is true or not isn’t important because perception is everything and controls the day.

Did you know there are really good options available today in MLS systems that would allow you to provide most of the member benefits of regional MLS without having to lose your local identify and control?  If you knew this would it allow you in your local market to consider regionalization at a faster pace?  Read on to learn what can now be done with Hybrid regional approach, it might be right for your market area.

 

The Hybrid Regional

A Hybrid Regional is one in which multiple MLSs decide they want to work together to share the same MLS technology but they don’t want to dissolve their local MLSs.  They want the benefits of a broader database and the economies that come with a larger MLS.  They don’t want to have to learn and operate multiple MLS systems.  For these MLSs the Hyrbrid Regional makes a lot of sense.  In addition, thanks to enhanced regional features in MLS systems today, there is still the ability to control many elements of the system at the local MLS level.

 

The Structure

Most Hybrid regionals we work with are managed by a regional task force made up of members of each MLS.  This group works together, as needed, to make those decisions impacting all of the members of the regional such as property sheet layouts, report designs and when to install upgrades, etc.  In some cases, actual approval for some decisions may have to go back to the individual boards of each member MLS but, the process works.  It works because the participating MLSs have placed a high value on being part of a broader regional system as well as maintaining control over their local market.

 

Regional Technology Has Improved

Another element that makes a Hybrid Regional more attractive is the fact that technology today allows for more individual control at the local level, even down to the field and business rule level.  Today, in a Hybrid Regional member Boards or MLSs can individually control elements of the system, including:

  •  Field specific edit rules
  • MLS/board specific reports
  • Field display rules
  • Parent/child data rules
  • Required field rules

Having this type of flexibility can often help overcome some of the resistance MLSs have faced when considering joining a regional.

 

Politics Can Be Sidestepped

While creating a full, traditional regional may ultimately be the best solution we all know that politics and control issues can keep this from happening for many years.  In the meantime brokers and agents lose the benefits that come with shared MLS technology.  The Hybrid Regional approach is a great first step that bypasses most of these issues.  Nobody loses his or her job.  You don’t have to form a new company or dissolve your existing organization you simply agree to a set of shared services and technology.   The only real challenge is agreeing on what technology platform you will use and setting up an agreed upon process to select and manage the shared services.

 

Benefits You Don’t Get in a Hybrid Regional

There are benefits not realized when you use the Hybrid Regional approach that come with a traditional regional.  The main one is the ability to consolidate services and eliminate duplicate roles, which should reduce overall costs to the members.  But this is also one of the highest areas of resistance in regionalizing so it may be a worthwhile trade off.  Decision making, within a single organization may be easier as well, but in truth the Hybrid MLSs we work with do not seem to have any issues managing their technology.  Probably the toughest challenge with multiple MLSs in a Hybrid Regional is managing the process of choosing a new MLS system.  If the Hybrid Regional is managed by a handshake agreement, as it is in many cases, selecting a new vendor can be an interesting process, but once regionals are in place and brokers, agents and consumers are realizing the benefits there is little chance that they will dissolve into small independent MLSs again. 

 

Understand Your Regional Options

We help MLSs understand the pros and cons of data sharing and regional approaches on a regular basis.  If you would like more information on how we can assist your MLS in this area call at 716-839-4628 or email us at mike@wavgroup.com.

 

{ 4 comments… read them below or add one }

Russ Bergeron February 11, 2014 at 4:42 am

Good article but only solves half of the brokers’ issues with multiple MLSs. The databases must be combined and not segregated so that a broker serving both markets gets one data feed. But even more important is the need for a common set of rules. Without that the broker is still faced with the issue of having to follow multiple sets of display rules which is just as bad as having multiple databases. The two – common database and common rules – go hand- in- hand.

Reply

Mike Audet February 11, 2014 at 5:40 am

Russ, I agree with you 100% and I should have been clearer pointing that out. The MLSs/boards using this approach can/should do this and the good news is even with the common database it maintains the ability to report on data from each participating MLS/board. I do think there can be benefits in terms of economy even without the combined database but if the driving factor is overlapping markets then it only makes sense to have a combined database and common display rules. I do know of specific instances where field level input rules vary between participating MLS/boards but this doesn’t impact a common data feed or listing display. Ideally both would all be uniform but this approach allows for some flexibility overcoming what might be the only obstacles toward regionalization.

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Kipp Cooper February 11, 2014 at 2:49 pm

We have a fantastic model in Huntsville, AL. While we own the MLS (NALMLS), we allow each of our local boards that have joined representation on our MLS Board, and offer a very generous royalty program… yes you heard me correct, we pay a portion of the MLS dues collected from the various boards members back to their board. This payment has enabled small and medium local boards from the nine counties we service, the ability to subsidize the cost of their dues or help pay for part time and full time staff. They benefit and receive free leads from our highly trafficked public facing site valleymls.com (over 6,000 unique viewers per day), the number one real estate search site in North Alabama as well as our MLS Direct Syndication program that in three months has already provided hundreds of thousands of dollars in premium ad placement on sites such as Zillow, Trulia, AOL.com, yahoo and Homes.com. for listing agents and brokers for free.

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D. Slavitz February 12, 2014 at 11:41 am

I love the idea, as the current model is clumsy and inefficient, not to mention costly. One point I would like to mention is that MLS information should be accessed only by MLS members(Realtors and Brokers) and restricted where third party operators are concerned. Perhaps a restriction of address and status would be enough. We need changes in the industry in many areas but this is a good first step.

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