When the shareholders of MLSNI, Chicagoland's largest MLS, meet this week, let's hope they are thinking less about what they woulda, coulda, shoulda made money doing, and more about how they coulda and shoulda looked out more for their members.

The big brokers complained bitterly about the closed fiefdom that MLSNI had allegedly become, but all members - every licensee who pays dues to be a member of an association and uses the MLS data deserved to be considered, especially the ones who would be hurt by the fallout.

Remember agents? They're the ones who sweat to bring in the listings that go into the MLS. They are the ones paying fees to two MLSs and sneaking listings onto MLSNI through their colleagues while their brokers duke it out with MLS and association management over who controls MLS data.

It's a shame that it's come to this, that associations and MLS leaders would tell brokers where to get off and that brokers have to sacrifice their own agents in a battle to show the industry who's boss.

As a quick recap, Chicago's MLSNI, one of the nation's largest MLSs, is a for-profit entity owned by 10 shareholder associations. Criticized by big brokers for following the agenda of MLSNI CEO Jay Huffman, who pushed for MLSNI investment into a company called REBIG, led by his wife, Brenda Huffman, MLSNI shareholders have called for a forensic audit of MLSNI, Mr. Huffman and MLSNI holdings.

The audit was called to find out how MLSNI is really run and what happened to approximately $1.4 million MLSNI invested in outside entities like REBIG, but the fracas began over the exodus from MLSNI of over 20 offices owned by three big brokers to a competing MLS in the region.

The big brokers had told association and MLS management what they wanted many times, but no one was listening:

• For MLSNI to be not-for-profit

• For their associations and MLSNI to stop investing in and creating other companies to drive additional revenues

• To get rid of the companies they have already invested in (i.e. REBIG, Multiple Solutions)

• To restructure ownership/control of the entity that governs the day-to-day operation of MLSNI, with more broker or total broker control

• To give brokers voting rights based on contribution to the system

• For MLSNI to give up claims of ownership over broker data, photos, and other broker-inputted MLS information

• To enhance the security of the database

• To shut down MLSNI.com

• Improve technology of MLS system

• Change the bylaws and rules and regulations of the system to include reorganization of the board, and to move decision-making from AEs to brokers.

That's because power is awfully difficult to give up. The brokers didn't want to give it up. The associations didn't want to give it up. The MLSNI board didn't want to give it up. The Huffmans didn't want to give it up. Even the shareholder representatives didn't want to give it up.

So this fight is really all about who ends up with the power.

But apparently the shareholder EOs didn't have as much power as they thought. Despite MLSNI's approximate 42 percent ownership and alleged investment of $1.4 million, REBIG refused to open its financials to MLSNI auditors if the results were going to be published in the auditor's reports, claiming that REBIG's numbers would fall into the hands of the press and its competitors.

Realty Times was unable to find any record of a security agreement on file regarding REBIG, which means if one was never filed, that the money that MLSNI loaned REBIG is unsecured and whoever was in charge of putting the deal together either negligently or deliberately failed to file it. Either is bad for all involved because that means that REBIG has more power than the entity and people who gave it birth.

The result, say sources, was that MLSNI auditor PriceWaterhouseCoopers closed its investigation without REBIG's cooperation, and will deliver its findings at a meeting of shareholders on August 3, 2004.

The shareholder AEs knew enough to call for the audit, but it would be a travesty if they let the auditors report close the books on their inquiry without learning what they set out to learn - how they, MLSNI, and MLSNI management got themselves into this mess.

That puts the brokers back in power. (One wonders how they lost the power in the first place, being the owners of the listings. But when the listings were compiled into the MLS, the MLS became the owner. And that's where the power struggle began.)

Whether the audit ever includes REBIG information or not is almost academic at this juncture - the big brokers have proved their point - that associations and their EOs have no business getting into a game they clearly didn't know how to play and that counters their own members' interests.

The argument goes - just because there is a market for the MLS data, doesn't mean it should be packaged by the MLS over the objections of the people who supply the data when the purpose of the MLS is to serve the cooperation needs of brokers, not to make money for associations at grunts' expense. The grunts, the everyday agents who strive for listings, would have much preferred improved data management technologies than to watch that $1.4 million disappear into a black hole (and much of it back into the Huffman household as an allegedly huge CEO salary for Brenda Huffman) , but the association leaders were more impressed with their shot at the brass ring than in fulfilling their fiduciary duties to the people who put them in office.

But visions of IPOs and stock options dancing in their heads soon turned back to reality as REBIG failed to return a profit.

Scrambling, the MLSNI shareholder associations have come back to the big brokers with concessions as if they were listening all along:

• MLSNI.com, the MLS public Website with listings brokers say diverted leads away from them, www.chicagometrorealestate.com, has been closed down.

• The MLSNI board voted to increase the number of brokers on the MLSNI board from five to 12, giving the brokers a 12 to 10 majority over the association shareholders, each of which hold a single seat on the board.

• A last minute squash from NAR kept the MLSNI board from voting in an all-in or all-out rule requiring brokerage offices owned by the same broker to all be in or all be out of MLSNI.

But the big brokers don't have the last laugh yet.

To stay in power, the association and MLS leaders may work together to sweep this mess under the rug and let REBIG and Multiple Solutions go splat without further investigation. It's hard to fire people who are giving you what you want, isn't it? Or they could fight to get to the bottom of what they have already spent hundreds of thousands of dollars to find out. Which will they choose to do?

And the grunts? It could be the powerless grunts who have the most power after all, if they only knew it, but they'll never organize and put this nonsense to a stop.

Independent contractors are hardly union workers, are they?

Published: July 30, 2004

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Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. For more articles by Blanche, click here.