Adding a buyer's registry to the MLS is a wonderful way to increase the value of Realtor cooperation.
With the Department of Justice looking into the ways that Realtors cooperate on behalf of selling homes for sellers, competitors of organized real estate looking into providing alternative MLSs services, and for-sale-by-owner sites providing buyer's registries, the timing is perfect for MLSs to consider the idea.
According to recent reports, the Justice Department's Antitrust Division, which filed suit against the National Association of Realtors last year over content-sharing policies it recommended to association-run MLS subsidiaries, "continues to examine competition issues in the real estate brokerage service industry."
Recently, the DOJ scored a victory when it induced the West Virginia real estate commission to overturn a rule that prevented real estate professionals from offering consumers rebates, inducements and other discounts. This benefited sites like LendingTree and HomeGain enormously, as their business models are based upon fishing for the online consumer further upstream by offering inducements to get buyers to use their services. The services then refer the buyers to agents who pay hefty referral fees at closing. Other states, Kentucky and South Dakota, have also overturned similar rules.
Having an MLS buyer's registry could help put Realtors further upstream again.
In other news, California attorney David Barry, was reported to be in Santa Fe, New Mexico, recently making a pitch to a venture capital group to help fund a national MLS that he calls "Trust MLS."
An attendee at the angel capital meeting said that Barry intends "to begin his 'national roll-out' by starting in the great state of Maine, with an initiative on the 2006 ballot. He believes he has the best chance of winning there first, and once "breaking open" the MLS system he plans to roll into 22 other states with initiative laws -- mostly in the west -- during the 2008 election cycle. Then he has Florida, Mississippi, Ohio and I think one other New England state slated for legislative or political battles in 2010."
One FSBO site, Sell Your Homes Yourself , offers a buyer's registry for homebuyers looking to be contacted by FSBO sellers.
The takeaway is that there are multiple attacks on the traditional MLS system, and it's time for Realtors to make their MLSs more valuable to buyers.
Answering the call, the Toronto Real Estate board has just introduced a Buyer Registry Service, which operates in a manner that makes sense for the real estate industry. Instead of allowing unrepresented buyers to submit their names directly to the MLS to find homes, the registry lists buyer's representation agreements. That way, other Realtors know the buyer is represented, is serious about buying a home, and can contact the buyer's agent with information about homes coming up for sale or for sale that meet the buyer's criteria.
While TREB is not the first to implement buyer's listings, other MLSs have paved the way with reverse prospecting, a means to link to listings to let the listing agent know that the buyer's agent has a client that might be the right buyer for the listing.
While some may feel that MLSs are to benefit listing agents and their sellers, and there is no advantage in empowering the buyer, there are numerous advantages to having a buyer's registry:
- All practitioners know who is working with whom.
- Buyers will be able to benefit from the resources of all agents, which will help buyer representation.
- Buyers may be more willing to sign representation agreements if they believe that having their information listed will help them find a home, perhaps using resources beyond current listings in the MLS.
- Buyer's listings will help listing agents get more listings from sellers.
- Listed buyers can learn that finding the right house is far more important than a rebate.
- Buyers can still collect rebates where it is legal.
The industry took a hard turn to the left when it changed from seller representation to transactional brokerage. Listing buyers simply evens the playing field for buyers, where they will get the benefit of cooperation while still having representation.
