REcolorado CEO: MLSs can accomplish more through collaboration 

After spending nearly four decades in the real estate industry, one might think Gene Millman has seen it all. But a recent trend of cooperation and collaboration has the REcolorado CEO excited about the possibilities that lie ahead.

"When we collaborate and form new initiatives together, we can accomplish more than we can by simply working by ourselves," Millman told Real Estate News. "We, as an industry, have a bad habit of forming silos around our different operations. Cooperative ventures really give us a good opportunity to rethink that approach."

Cooperative ventures can buffer MLSs during market shifts

Pursuing collaborative initiatives can strengthen an MLS by adding new revenue sources from data sales, Millman said. This can be especially powerful during slow times like the one the U.S. real estate market is currently facing, he added.

Traditionally, MLS services make money by charging subscription fees to their users who are primarily real estate agents and brokers. A few MLSs also dabble in advertising sales, but the overwhelming majority are not ad-supported.

However, those subscriber fees can wax and wane alongside home sales activity, Millman said. This makes smaller and regional MLS services more vulnerable during market downturns.

Forming cooperative ventures, Millman said, can help MLSs avoid this pitfall by solidifying their market position and improving their data collection technology.

"All technology is based off of data," Millman said. "If you don't have the data to plug into the technology, then your tech simply doesn't work."

He added that REcolorado's partnership with Bright MLS and California Regional MLS to launch Nestfully, a search portal intended to benefit both agents and consumers, is an example of a cooperative venture that can strengthen the position of MLSs. REcolorado is also an investor in REdistribute, which sells housing market data to institutional users.

"I think a lot of us are starting to look at how to take control over our own data because we're starting to understand the value of it," Millman said.

Data security is paramount

One challenge presented by cooperative ventures is making sure all the data collected is safe and secure, Millman said.

"At the end of the day, MLSs are just repositories of data and we're trusted with it," Millman said. "Our customers give us their purchase data because they expect us to be good stewards of it, and we want to make sure that we're doing the best for them to protect that data in a way that doesn't compete with their businesses."

Going forward, data protection should be a top-of-mind issue for MLSs pursuing cooperative ventures, Millman said. Otherwise, the businesses risk losing customers to other ventures who do prioritize data security.

Data sharing leads to deeper understanding of local markets

Collaborative ventures can also enable MLSs to provide better data for their agents and brokers, Millman said. This will become increasingly important in the future as real estate technology continues to push the industry toward real-time data, like what's available for the stock market.

"We'd love to have market data available kind of like how we get information on our televisions, on-demand," Millman said. "But there are a lot of moving parts to make that happen."

The shift toward real-time data is something REcolorado has been hearing about from subscribers for the past several years, Millman said. Agents and brokers have been pushing for these changes because they've seen the real estate market become more transient since the beginning of the pandemic in March 2020, he added.

"A lot of the data sharing that's going on in these ventures can help MLS service providers deeply understand what's going on in their market," Millman said.

For example, Millman said REcolorado received shared data from FMLS in Atlanta, Georgia, that showed a lot of homebuyers were looking at Colorado. This kind of data can help agents and brokers figure out their buyer pools for specific properties and help them tailor their advertising to reach more buyers.

While some MLSs may be hesitant to do business differently, a collaborative approach can be beneficial to everyone involved.

"Getting ahead of the curve can be uncomfortable at times," Millman said. "But I think we have to start being comfortable in uncomfortable situations. That's the only way we're going to grow."