Consider your years in the real estate industry. What would you say if you didn’t give a damn whether or not you were ever hired again? What truths would you tell? Ann Bailey, founder and CEO of industry consulting firm Pranix, was in that position last week at the Council of Multiple Listing Services (CMLS) conference in Las Vegas.

  • Industry consultants Ann Bailey and Rob Hahn lay out how MLSs can be more innovative, efficient and competitive.

Consider your years in the real estate industry. What would you say if you didn’t give a damn whether or not you were ever hired again? What truths would you tell?

Ann Bailey, founder and CEO of industry consulting firm Pranix, was in that position last week at the Council of Multiple Listing Services (CMLS) conference in Las Vegas.

Ann Bailey

Ann Bailey

After nearly 45 years in the industry, Bailey will retire at the end of the year — and she has no intention of sticking around. She’ll be off chasing her dream of supporting Ashland Home, a sober-living charity, and Pranix will shut down.

So when Bailey was invited to an “Ann Bailey: Uncensored” session at the CMLS conference, she didn’t hold back.

And fellow industry consultant Rob Hahn — known as The Notorious R.O.B. on his prominent blog — followed her with some blunt truths of his own.

Rob Hahn

Rob Hahn

Hahn, managing partner at 7DS Associates, is not going anywhere, so why volunteer to tell hundreds of MLS executives things they might not want to hear?

“Because they need to hear the truth. The tyranny of politeness [in the industry] gets in the way of finding real ways forward,” he told Inman afterward.

The combination made for thought-provoking commentary about how the real estate industry can change — if it chooses to — and how MLSs could lead the way for their member agents and brokers.

[Tweet “Rob Hahn: MLS execs ‘need to hear the truth’ to move forward”]

Here’s a rundown of what Bailey and Hahn had to say:

1. The industry changes too slowly, if at all. 

When asked what the industry will look like three years from now, Bailey didn’t mince words.

“Unfortunately, I think it will look exactly the same. That is not a compliment,” she said.

New initiatives such as Upstream have popped up because of “pockets of discontent” in the industry, but even Upstream will be “obsolete” before it’s fully functional in 10 to 15 years, she said. (Upstream CEO Alex Lange later disputed this timeline.)

This means change will come from outside the industry, according to Bailey.

2. The MLS industry’s “sacred cow” is what Bailey calls “terminal uniqueness.”

“‘We are unique. We don’t operate like the rest of the world.’ I’ve heard it from every one of you across the country,” she said.

But the tighter you try to hold on to something, the greater the danger that you’re going to lose it, she added.

3. Just like every other vendor, MLSs need to put customers first, Bailey said.

Just because MLSs are “quasi-monopolies” doesn’t mean that they should ignore the needs of their agent and broker subscribers, according to Bailey.

4. There are way too many MLSs, Bailey and Hahn said.

Bailey believes there should only be about 12 MLSs total nationwide, though she thinks whittling down the current number (around 750) to under 100 MLSs would be a “good start.”

But she feared that MLS execs were “too stubborn to get out of [their] own way.”

Courtesy of Rob Hahn

Courtesy of Rob Hahn

5. Zillow is not going away. RPR might — sorta.

When asked where Zillow and National Association of Realtors (NAR) subsidiary Realtors Property Resource (RPR) will be in three years, Bailey’s immediate response was, “Oh, that’s nasty!”

She predicted that Zillow will continue to innovate and agents will continue to buy their products.

As for RPR, she anticipated one of two scenarios:
1. A new CEO at NAR will say it needs to be spun off or that users need to be charged separately for it, or
2. The Upstream implementation will be so successful that it makes total sense to have RPR as a member benefit.

6. MLSs are small businesses — and poor ones to boot, according to Hahn.

They rely on vendors who are also small businesses and negotiate them down so much they don’t have money to spend on innovation, Hahn said.

Zillow spends more than $67 million per quarter on technology, he said — how many MLSs have that kind of budget?

7. What’s the solution? MLSs and Realtor associations must divorce, Hahn said.

MLSs must be inclusive to avoid attention from federal regulators, while associations must be exclusive if they hope to raise the bar of professionalism, he said.

A number of associations are just retail storefronts for the MLS, and most of the so-called “members” of the association are just MLS subscribers, Hahn said.

Courtesy of Rob Hahn

Courtesy of Rob Hahn

If associations and MLSs separated, MLSs would be fewer, larger, more powerful and wealthier — in part because the separation would encourage competition, according to Hahn.

8. MLS governance is broken, Hahn said.

Some MLSs have three dozen board members. By contrast, Apple — a $614 billion company with 66,000 employees — has eight board members.

The decision-making process is too slow when taking nine months to get an initiative off the ground is considered fast, Hahn said.

The solution is to make boards smaller; keep directors out of day-to-day decision-making; appoint some directors from outside the industry; give directors longer tenures; and appoint them based on their qualifications, not elections, Hahn said.

The role of the board should be to defend shareholder value, make major decisions and hold the MLS CEO accountable, he added.

The CEO should have the power to make day-to-day decisions and be held to objective performance metrics, he said. Hahn also urged MLSs to stop creating strategic plans — “that’s the CEO’s job,” he said.

MLSs should also consider forming a representative advisory council with stakeholders such as agents, brokers and vendors for feedback, Hahn said.

9. The industry has developed data standards; why not create model MLS standards? Hahn asked.

CMLS could create mandatory model rules for MLSs and determine parameters for protectionism as opposed to legitimate localism, he said.

10. “You can do better.” Those were Bailey’s parting words.

Before she left, she was inducted into the CMLS Hall of Fame in recognition of her work in the industry.

Hahn ended with, “Show me you’ve still got a lot of fight left in you. Show us all.”

Email Andrea V. Brambila.

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