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The future of the MLS? The Multiple Listing Service (MLS) most real estate practitioners use? Yes, the question is: What is the future of the MLS for auctions? As well, we could ask: What is the future of the MLS?
Maybe another question might be: What is the future of the real estate industry? How about the auction industry? I would offer these are all good questions with no easy answers.
Technology has empowered the public. Does an auctioneer need the MLS to market or determine the market value of a property? Does a real estate practitioner need the MLS at all?
Let me ask another question … since sites such as Expedia and the like appeared, how many of you still make your travel arrangements through a travel agent? How many of you don’t even know what a travel agent is?
The problem with the MLS is — and has always been — the cost/benefit issue. The cost is high: upwards of $1,000 a year for membership in NAR, state associations and local boards/MLS. Joining multiple MLS systems can cost much more. The corresponding benefit has been comparatively diminished.
The National real estate association does lobby in favor of the real estate industry; state real estate associations typically provide quality education, some lobbying and other resources; local boards/associations manage the local MLS and electronic lock-boxes, but are maybe better known as the group who fines agents for MLS violations, sells supplies that can be found elsewhere, and have award-parties for their members.
What has changed since the Internet is the relative benefit of the MLS in most markets — particularly for auctioneers. Here in 2018, a real estate auctioneer can spend monies to put up a sign, place the auction event on his website and do some Facebook marketing and probably serve his client more appropriately.
What putting an auction on the MLS does is show this property to other MLS members, who are also on Facebook and likely see the property otherwise, outside of MLS. A recent real estate auction we conducted in Columbus, Ohio advertised in this aforementioned manner and on MLS had 9 registered bidders — none of which indicated they found the auction via the MLS.
I could be this bold: I think if a real estate auctioneer is solely relying on the MLS to market property — that constitutes malpractice. However, a real estate auction event advertised otherwise but not on MLS doesn’t appear to me to be at all negligent.
So far as our other questions posted in this article, all agents (real estate, auctioneers) need to be aware that the public is so much more empowered to “do it themselves” or press a button on their phone and make it happen that we as agents need to ensure we are providing value to our clients above and beyond what they can reasonably do themselves.
Another issue is commission. A real estate auctioneer just outside our central-Ohio market told me:
I am not a member of the MLS, nor any real estate boards or associations. Because of this I can charge my clients less as I don’t have to pay buyer-broker agents who might bring buyers nor these crazy annual dues to be a ‘member.’ Quite frankly, I can better serve my client without cooperating with other licensees …
Further, commissions in the United States appear to be going down … where fee-for-service brokers who charge only for those services the consumer actually buys are becoming more popular (again.) Such arrangements can save sellers thousands of dollars in commission/costs except in certain states.
At this moment the following states require full-service brokerage: Alabama, Idaho, Illinois, Indiana, Iowa, Kansas, Missouri, Oregon, Texas, Utah, Washington and West Virginia. As well, the states of Delaware, Florida, Nevada, New Mexico, Ohio, Pennsylvania, Tennessee, and Wisconsin allow some limited (but minimum) service by statute.
Lastly, two issues:
- Has the “put my listing on the Internet” landscape changed? It sure has. Consider MyStateMLS for about $300/year pushing listings to Zillow, Trulia, Realtor.com, Homes.com, and ListHub. Where are the younger (and older) home buyers looking for property? Likely on their phone via one of these apps — and necessarily not the old MLS.
- What is the future of real estate buying and selling? Some think (and are working to provide) a “click-to-buy” and “click-to-sell” environment. This will further impact the use of MLS and likely make it irrelevant in some markets. You can read more about this look to the future here: https://www.inman.com/2018/01/22/piecing-together-the-future-a-click-to-buy-real-estate-world/
What does the future hold? Exciting times for sure.
Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, RES Auction Services and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College of Business, Executive Director of The Ohio Auction School, an Instructor at the National Auctioneers Association’s Designation Academy and Texas Auction Academy. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by the The Supreme Court of Ohio for attorney education.