By Jacob Bourne
Some regulations for real estate brokers utilizing multiple listing services that consolidate data on property listings between brokers has come under pressure to evolve as the internet and companies in other industries have transformed the marketplace.
Greg Hague, founder of Real Estate Mavericks, is a proponent of MLS but thinks the Northwest MLS has an unfair monopoly over the Seattle market. Hague has been involved in real estate since his youth when his father, Harold Hague, created an informal MLS in the 1950s while working with a Cincinnati firm.
“MLS isn’t open to consumers who search online for properties”
“When MLS first got going it was completely optional but real estate agents started doing a bad thing. They were so accustomed to selling their own listings they would hold out certain listings unbeknownst to the seller. The seller would think that their property was in the MLS but they were being left out. It was a bad practice, and it was right for the industry to create regulations,” Hague explained.
According to Hague little changed in the following decades but now companies such as Apple and Tesla have changed the mentality of consumers over the last 10 years with marketing programs that build excitement over products before they’re actually released for sale. Hague witnessed 1,500 people standing in the heat of Scottsdale, Arizona waiting to test drive a Tesla demo vehicle that they’ve never seen and is unavailable for purchase. Though a mass produced product such as a car is very different from a custom-designed home that’s decades old, Hague believes that pre-marketing is even more vital in the real estate market where buyers with specific requirements scoop up properties that suit their needs.
Hague was unaware of the stringent Northwest MLS requirements until six months ago when a couple Seattle-based brokers taking his 22-step home launch course, informed him that they were prohibited from not listing a home in MLS—even with the seller’s full consent—and would have to pay a fine of thousands of dollars if they wanted to retain their MLS membership. They were told the only exception would be for a celebrity who wanted to keep their property off the list for privacy. Since then, Hague has been lobbying to have the rules adjusted so that the MLS can be used more strategically.
Some in the industry bypass the MLS, and pocket list exclusively to reach consumers who use the internet and social media as their primary source for information. Rex, a California-based digital platform for home sale transactions founded in 2015, allows buyers and sellers to interact online and in-person without a traditional agent and charges one percent of the home’s selling price for the whole service.
Lynley Sides, Cofounder and CMO of Rex, claims that their properties sell 37-percent faster than the market average.
“MLS isn’t open to consumers who search online for properties,” Sides said. “We use the internet instead of MLS to market to consumers directly. In our model there’s no buy-side agent fee. Sellers care about their net at the end of the day. This gives the buyer more negotiation leverage when you take the fees out of the equation.”
San Francisco company, PocketList, has a mobile application with both MLS listings and “coming soon” listings. CEO Tom MacLeod cited a study done in Chicago showing that pre-marketing decreases the time a property is on the market by about 14 days. MacLeod, who’s pro-MLS said, “We got into this for the value that’s added and to organize non-MLS-inventory.”