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One Step Forward, Two Hundred Steps Back

Oct 18, 2007 Michael Wurzer

Stefan Swanepoel writes that the California Association of REALTORS is taking a step forward by seeking to establish a monopoly MLS covering the state of California.  Clareity Consulting has explained in depth why this move by CAR required more thinking, but I thought it wouldn’t hurt to make a few points myself:

  • One MLS is a monopoly.
  • Monopolies thwart competition.
  • MLSs need more competition, not less.
  • The pains of brokers and agents from disparate rules and data sets has nothing to do with the number of MLS systems and everything to do with data and operating standards.
  • CAR’s claim that their monopoly MLS will solve the broker’s pains is like a drug dealer convincing the addict that this day will be easier with just one more hit.
  • The problem is the hangover the next day.
  • And the need for another hit tomorrow to get rid of the hangover.
  • Of course, the dealer is the only winner in that raging battle.

I’d be more stirred up about this if I actually thought the monopoly MLS will succeed, but it won’t.  A lot of money will get spent, some sort of system will be built, but by the time it is up and running, competition will have created something better.  The result?  RIN redux.

Centuries of competition in America and the world have proven that command and control monoply solutions don’t work.  What doesn’t CAR understand about that?  Here’s the funny thing.  I expect CAR was quite certain that David Barry’s “open MLS” for the state of California was a bad idea, yet, bizarrely, they are making that possibility more of a reality every move they make.

The better solution is straight-forward, inexpensive and fast: Focus on data and rule standards nationwide and create competition among systems.  Going about fixing these problems on a regional basis is ignoring the very real work on-going at the national level and that more intense focus on the national effort can create competition at the regional level.  One need look no further than the Internet and web to understand that the model of broad data standards creates freedom, competition and innovation, which is what brokers need now more than ever.