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The Case for a National MLS
A number of agents who are distressed because some major brokerages are choosing to "opt out" of the local MLS due to companies who have VOWs (Virtual Office Websites.) The agents at the traditional brokerages are distressed because they may not have full access to all the properties on the MLS. The companies, on the other hand cry, "This information is ours! We're not going to give it up!"
A slightly different lament comes from brokerage owners:
"I could have invested in a VOW for my office and I decided to wait. I'm President of a small board (about 60 people) and have followed NAR guidelines exactly. Now, the one broker in our area who operates a VOW only has to support two agents, has no office space expenses, and has 25% of the market share. Waiting has cost me an incredible amount of money. When we told him he would have to abide by MLS rules, he agreed he would leave the Board. Then he changed his mind and said "Sue me." We're a small board - we simply don't have the resources."
Like it or not, VOWs are creating a national MLS system. With a little bit of searching, one can find virtually every MLS listing on the web. Realtor.com, in many respects, is the first primitive version of this national animal. Major companies and the local MLS systems are tightly clutching their buggy whips while the people who have accepted VOWS as a fact of life, are speeding past them in their motor powered vehicles. Furthermore, third party vendors including lenders, airlines, and a host of online Realty companies are quickly eroding the "traditional listing pie." Given these circumstances, Realtors need a different strategy to adequately compete.
Instead of diverting our energy into trying to stop what will ultimately be an eventuality, the question is how can we create as much business as possible for ourselves? Here's some ideas.
What the online companies do NOT have is personal connection.
Use your technology (including video email, homeowner's clubs, neighborhood websites) etc. to build a database and to keep my existing sphere of influence from having to go to the web to find the information they need. Even if my clients "go window shopping", make sure your connection is so strong that they will come happily return to their "local store with the great service" when they are ready to purchase.
Here's the Achilles heel for both FSBO sites and for a National MLS.
It takes a lot of time to search all those listings. Most people still connect to the web using 28.8 connections. It takes FOREVER to download pictures and data at this speed. Where you have a huge edge is you can drastically shorten that time for virtually all customers. Granted a few cheap ones will happily trade their time for money. On the other hand, if you can sell your services in terms of creating a more efficient search that will provide the best possible property at the best possible price, you will be much further ahead.
Many VOWs don't provide negotiation advice, don't assist buyers in obtaining the best loan possible, and don't help the client with disclosures and other potentially lawsuit producing situations.
These are the areas where agents shine and poor representation can literally cost tens of thousands of dollars to the consumers. As an agent you need to create a strong dialogue about "how you are different". What benefits do you provide and what benefits does your company provide? You have to be able to show buyers and sellers how what you do is so far beyond looking at pictures on the web that they will be reluctant NOT to work with you. For example, in Los Angeles, it takes over 60 different documents to close a transaction. When someone is looking on the web, they still will need help with these items. Let people know everything you do so they can make a clear cut, informed choice.
Be the Rolls Royce - not the cheap import.
People will pay for top quality and service. Rather than focusing on saving commissions, you need to focus on how you can provide such a great experience for our customers that they will walk away saying, "WOW! That agent did such an incredible job, you should use them when you get ready to buy or sell."
The bottom line is those agents who make the shift now will be in a better position than those who wait and fight the oncoming tide. The question is how much of a head start do you want the competition to have on your business?
To contact Bernice Ross please email her at bernice@realestatecoach.com
