Commercial PropertyWho Else Is To Blame For The MLSNI Audit And Broker Pull-out?
Whether MLSNI"s books are all in order or not, the finger of blame could point to association leaders for not holding MLSNI more accountable and for letting the MLS roam far afield of its purpose - to simply serve association members with tools they can use to cooperatively sell real estate.
Instead, MLSNI answers to shareholders, and it is the shareholders who may have forgotten who they are there to serve, say some.
Many brokers and agents feel that if MLSNI generated millions that wasn"t returned to shareholders to benefit their members through lower MLS fees and increased services, and if that money was used instead for third-party development, where others get rich instead of members, then association leadership failed to look out for members and should be held accountable.
For example, one of the largest MLSs in the country charges under $25 for Web-based MLS service, say sources. While not interviewed for this article, Russ Bergeron told Realty Times years ago that any MLS that charges more than that is overcharging. About 37,000 Chicagoland brokers and agents pay $35 for MLSNI MLS access. A ten-dollar difference per month translates to $370,000, or $4,440,000 annually. Without going into whether or not MLSNI provides more services than other MLSs, that"s a lot of money.
In other words, even if no illegal activity is found, there could be a breach of fiduciary responsibility because of negligence, ignorance, or worse - personal monetary involvement in the outcome of MLSNI and its investments. Conflict of interest, negligence, or fraud, the reasons don"t matter too much to the brokers and agents who are also being punished by the conflict between profit-driven MLS leaders, brokers who want to protect their data, and association leaders who want it both ways.
Business has boomed in Chicago over the last seven years, and many brokers just assumed that association leaders were looking out for brokers and agents best interests. But with the rift between large brokers who want to be in control of the data, and MLSNI putting so much money and emphasis on reselling broker data, many have joined a competing broker-owned MLS and are pulling their memberships from the association-owned MLSNI.
"Yesterday, Koenig and Strey pulled out of MLSNI," says Jim Roth, president of Prudential Preferred Properties, an 11-office company of about 400 agents. Roth who recently sold properties as well as manages the company, adds, "Agents feel that no one is looking out for their interests."
Roth says he blames himself, for not keeping his eye on the ball. He has also been a member of MAP for the last year to provide his agents with MLS access in case the larger brokers defected. Now they have.
"What it has done is incurred more cost," he laments, "and time because it has duplicated the input portion of the transaction of a listing to put it into two databases. Association fees and dues have doubled. I perceive this as a cost of doing business."
The division, reasons Roth, is that the MLS is set up to be run by the association which is comprised of agents and brokers. From a day-to-day standpoint, MLSNI services have been fine, he says.
"It hasn"t been on the forefront of our minds of what has been done with the rewards of all our dues and what that has brought to MLSNI," says Roth. "The governing of the people in control - who was watching them? We all believed they were dong the right thing for us, and they need to be held accountable."
Now with the loss of Koenig and Strey, along with 10 large Coldwell Banker Residential Brokerage offices, Roth is faced with choices. He says he is meeting this week with his agents to see what they want to do - stay in both MLSNI and MAP or stick with MAP because without the listings of the large brokers, his agents will have difficulty showing a number of homes through MLSNI alone.
"There is no reason not to provide my agents with the most accurate information," says Roth, "and right now we have to belong to both MLSs. I am concerned about the future and this has to be carefully thought out. A knee-jerk reaction could spell a downturn for the Realtor industry."
That"s why he"s miffed that the conflict has gotten so out of hand. "We are a service provider for our clients, and our clients are the Realtors who work for us," explains Roth. "There are some allegations about impropriety and we"ll see what that uncovers but the right thing would have been to fix the problems, not create a whole new system. The MLS is a valuable tool and for us to participate in two isn"t a problem, but not belonging to both would be a disservice. One of our larger competitors doesn"t belong to MLSNI so now we have to belong to both MLSNI and MAP. Nobody is thinking about the agents," he says.
But the conflict has taught Roth a valuable lesson - stay involved. "I will take more of a leadership role," he vows, "if we stay in MLSNI, unless my agents direct me otherwise."
If the agents vote to migrate to MAP, then Roth says he will seek a board position. "They are formulating a board," he says, "and we would participate. As the fourth or fifth largest brokerage in Chicagoland, I would need to be as intimately involved as possible."
Roth says that no matter which MLS his company chooses to use, he plans to make sure that MLS leadership stays focused on the agents.