The Ventura County Regional Data Share (VCRDS), a regional multiple listing service (MLS), is breaking their data-sharing agreement with the California Regional Multiple Listing Service (CRMLS).This acrimonious split may be a sign of things to come for all regional MLS partnerships.

The January 2015 deal allowed for the CRMLS and the VCRDS to import listing data into each other’s MLS systems.

The deal was supposed to benefit the 4,500 brokers and agents served by the VCRDS — by allowing them access to CRMLS’s largest-in-the-nation MLS system while adding listings unique to the VCRDS to CRMLS’s database in an attempt to map all listings throughout Southern California for centralized control by the AORs.

The data-sharing agreement officially ends September 4, 2016 — will this pave the way for private listing portals like Zillow and Redfin?

In theory, the deal was a technological and cost-effective way of improving the business information for thousands of real estate sales agents and brokers in Southern California.

In reality, the small realtor-owned regional MLS understandably considered the demands of the mammoth CRMLS too much to handle.

The CRMLS is required by The National Association of Realtors (NAR) to comply with the Real Estate Standards Organization’s (RESO) platinum Data Dictionary standard. All part of the greater plan to control MLS data. This NAR mandate necessitated a change to the VCRDS’s data storing and mapping system — technological upgrades too onerous for a smaller MLS to handle.

The reason for the split? According to the VCRDS, it was all about money.

At an estimated total cost of $25,000, this equates to an additional $5.50 per member to cover the upgrade. Chump change compared to the income from publishing agent’s listings.

So why did the regional data-sharing service feel membership in the CRMLS and compliance with NAR dictates wasn’t worth it?

Regional data control and the statewide CRMLS

Some regional associations believe data-sharing agreements devalue and even “threaten to destroy” their sacrosanct databases on local listing information. Whether it is conforming regional MLS software to a statewide system or the diminished value they can command for their perceived proprietary information — to the VCRDS, a loss of control over marketed properties represents a loss of revenue.

However, as a member of California Real Estate Technology Services, Inc. (CARETS), a nonprofit data-sharing competitor to the CRMLS comprised of five regional MLSs, the VCRDS makes their proprietary information available on private listing portals such as Redfin via a common Internet Data Exchange (IDX) feed.

MLS data-sharing system

CARETS boasts “no conversions” required to enjoy the benefits of their data-sharing service. By leaving the CRMLS data-sharing agreement in favor of the CARETS partnership, the VCRDS recovers exclusive control over their MLS and the technology it uses. For the directors of the VCRDS, it is easy to see the appeal (and the dollar signs). Coincidentally, the CRMLS cited technology and cost when withdrawing from CARETS in 2014.

The CRMLS has the most to lose when regional MLSs withdraw from their data-sharing agreements. The VCRDS is essentially forcing the wide pool of CRMLS brokers and agents to pay their fees or access their information through private portals.

But how does this benefit Ventura buyers and sellers who are the clients of MLS members? Answer: not at all.

The more data access homebuyers and sellers have the better. The VCRDS is not pulling out of their agreement for the benefit of their clients who might want to sell to a larger pool of out-of-county buyers — they’re reneging since they believe it will make them more money. Now, VCRDS brokers and agents who want access to CRMLS listings will need to pay separate dues for the privilege.

Related article:

MLS access – no board membership required

However, the VCRDS can’t hide its head in the sand forever. The VCRDS will be required by NAR to comply with the RESO’s platinum Data Dictionary by 2020 regardless of their current obstinance, if they stay NAR connected.

Competition among data-sharers will only make room for private listing portals like Zillow and Redfin to grow ever bigger and further consolidate their present hold on market share. If CRMLS and CARETS (and the VCRDS as its proxy) fail to work together, MLSs will give way to these online listing aggregators who are transparent, all-inclusive and shown to be very capable of providing extensive property information on listings to buyers, sellers and their agents.

These companies make their money from advertising and will continue to compile a massive and accurate database in competition with the CRMLS and CARETS. Statewide MLSs and their regional counterparts in a desire for control over listing data have lost the battle for access.  It is now with the web giants to fight over the scraps.

In the age of smartphones and ubiquitous internet access, data-sharing and its inevitable consolidation is the future for the MLS formats that flourish today. Building a wall around data is not possible in the modern web world. As technology adapts and improves — and society becomes more and more connected — people simply demand parallel treatment from agents in their homebuying and selling experience.

Self-determination is an admirable quality, but when it defies flourishing future business practice and comes at the expense of buyers and sellers who depend on their agents to fulfill their fiduciary duty, it has gone too far.