FAQ for REALTORS® and Brokers: Dissolving the MLS Operated by Sandicor, Inc.
Legal action has been filed to dissolve Sandicor, the regional Multiple Listing Service (MLS) for San Diego County. Why would REALTORS® want to dissolve their own MLS? If Sandicor closes, what will be its replacement? Why is this action a good move for the local real estate industry? Below are FAQs. We welcome your feedback. Send your comments to firstname.lastname@example.org or email@example.com.
Q. Who owns Sandicor, Inc., San Diego’s regional MLS?
A. San Diego’s regional MLS entity, called Sandicor, Inc., is owned by three Associations of REALTORS® who do business in San Diego County. They include the Greater San Diego Association of REALTORS® (GSDAR), the North San Diego County Association of REALTORS® (NSDCAR) and the Pacific Southwest Association of REALTORS® (PSAR). NSDCAR and PSAR have recently filed legal action calling for the dissolving of Sandicor, Inc.
Q. Why dissolve Sandicor?
A. We work in a very rapidly changing industry with regard to listing syndication and the reality of big business investing in real estate listing portals (Zillow, Trulia, Realtor.com, etc.). However, for decades, our industry has suffered from a highly fragmented and inefficient MLS landscape where brokers have to join and pay for multiple MLSs, with incompatible systems and varying rules in order to conduct business over different yet nearby and contiguous geographic MLS areas.
To clarify matters, several years ago, the California Association of REALTORS® (C.A.R.) adopted six guiding MLS principles, including: (1) MLS data needs to be fully standardized with local options for data field variation; (2) California REALTORS® should have universal access to all MLS data; (3) use of MLS data and its distribution to third parties should be controlled by the brokers who provide the data; (4) MLS entities should exist for the benefit of participants and subscribers; (5) MLS rules should be uniform and enforced consistently; and (6) the MLS board of directors should include broker owners with appropriate regional representation.
Unfortunately, the three Sandicor shareholders have different visions of the role of Sandicor for their members. Despite repeated attempts to resolve differences among the three Sandicor shareholders, the efforts have failed.
In fact, earlier this year, SDAR sued Sandicor (an entity it itself owns) along with the two other Sandicor shareholders, NSDCAR and PSAR, claiming antitrust violations among other allegations. A federal judge dismissed SDAR’s earlier claims as “insufficient.” Despite dismissal of those earlier claims, SDAR has continued to waste members’ dues and MLS fees by pursuing the lawsuit and potentially jeopardizing their own association’s success.
Q. What are the benefits of dissolving Sandicor?
A. NSDCAR and PSAR believe it is important to innovate and improve the MLS. Dissolving Sandicor will allow NSDCAR and PSAR to pursue a better technology platform offering more listing information for our members through a statewide MLS system.
A consolidated MLS makes sense in Southern California because it reduces time, expense and frustration. One MLS gives brokers and their agents a competitive edge because it allows real estate professionals to see all the proprietary listing data in a given market.
Q. What will happen to the Sandicor MLS if Sandicor is dissolved?
A. The courts will decide a fair way to break up the Sandicor MLS. Sandicor would cease to exist, then PSAR and NSDCAR would provide access to the CRMLS system. Subscribers will be able to choose either Paragon or Matrix. REALTORS® will no longer need extra fees to belong to multiple MLS systems.
Q. How long will this dissolution take?
A. We expect the process to take six months to a year.
Q. How is this legal action related to the wishes of local REALTORS® and brokers to switch from a local to a statewide MLS?
A. As a Sandicor shareholder, SDAR has blocked Sandicor brokers from meeting to discuss a merger with the Statewide MLS, called “CRMLS,” stating they would never agree to a merger. As a result, Sandicor’s hands have been tied, which has meant serious repercussions. SDAR has put our region’s own MLS at risk by delaying MLS system updates, thereby putting services to our members and consumer in jeopardy, as well as ignoring the wishes of REALTORS® and brokers who want to join the statewide MLS.
To follow our members’ desires, PSAR and NSDCAR have no other recourse than to file for a legal dissolution of Sandicor and join the CRMLS. Joining the CRMLS would avoid the need to have two listing data resources in San Diego. This is possible only with the court’s directive and SDAR's cooperation.
Q. Who is paying for these additional legal expenses?
A. The cost of this lawsuit is being paid for by every REALTOR® who works in San Diego County and who subscribes to the MLS operated by Sandicor.
NSDCAR and PSAR have no choice but to pursue this latest legal action. In reality, NSDCAR and PSAR are upholding the requests of brokers to control their own data. To do that would be in conflict not only with the desires of local brokers, but it’s inconsistent with best practices and recommended guidelines of both the California Association of REALTORS® and the National Association of REALTORS’® regarding the use of an MLS.
Instead of lawyers’ fees, NSDCAR and PSAR believe our resources and efforts should be focused on our industry’s future and, more importantly, our members’ success. That is why NSDCAR and PSAR have been educating and asking REALTORS® what they need and want for their business. Over the past year, the response has been overwhelmingly in favor of participating in the statewide MLS for efficiencies of scale and to have access to the data that consumers are obtaining on their own from third party providers.
Q. Where can I find out more information about the lawsuits?
A. PSAR and NSDCAR are separate Associations governed by separate board of directors. Each Association has posted information about the lawsuit on their web pages. www.psar.org/lawsuit and www.nsdcar.org/lawsuit.
Q. What is the CRMLS?
A. Currently, our real estate profession is fortunate to have the California Regional MLS (“CRMLS”). CRMLS (www.crmls.org) is the inheritor of the vision for a Statewide MLS. At about 80,000 members, it has become the largest MLS in the country and offers choice and variety in the way it works with Associations as well as technology front ends for users. It has made great strides in moving towards a statewide data share with other MLSs. And it is still firmly behind the initiative to create a statewide MLS. In so doing, it has the support of C.A.R. behind it.
Going forward, ideally wide-scale MLS consolidation through mergers and or at a minimum wide-scale data sharing between MLSs can be a significant benefit to REALTORS®. PSAR and NSDCAR believe that merging Sandicor into CRMLS which is a singular statewide MLS with multiple front ends of choice is best in terms of serving the needs of California’s REALTORS®. The technology and expertise exists to do it, and the cost savings alone would seem to be reason enough.
Q. What are the benefits of a statewide MLS?
A. We live in the information age. Consumers don’t have borders, why should real estate agents be limited in their choices? When we cooperate, then we all do better business and no one loses. Standardized data and a single point of access is the best way we can truly serve the consumer. It’s critical for the health and vitality of our industry.
CRMLS’ data sharing technology ensures a seamless technology experience for all who will view and use the shared data. CRMLS’ development of these data sharing tools aligns with the purpose of an MLS, which is to foster and facilitate cooperation.
Given the high political hurdles in achieving this goal, it’s mission critical to begin with MLSs sharing data with each other. Data sharing also would allow MLSs to preserve their leadership, rules and infrastructure, while facilitating the businesses of brokers and agents everywhere. It would help the California real estate industry move forward and stay competitive.
Q. How do you know that the members want to go to a statewide MLS?
A. For the past two years, both NSDCAR and PSAR have been interviewing brokers and agents. In addition, the two associations have hosted numerous meetings for both brokers and for agents. The results have been overwhelming and the brokerage community is getting frustrated by the lack of attention to their wishes. The most recent forum was hosted in September. See a write up and video about it here, www.psar.org/announcements/statewidemls.
Another free forum, with great information will be hosted on Nov. 14 at 10 a.m. at the Mission Valley Resort. Find more information here, www.psar.org/mls or through NSDCAR's page Eventbrite.
Q. How valuable is the MLS data?
A. The value of the data that Sandicor compiles for its subscribers is unknown. However, what is known is that if the MLSs in California consolidate the data, then it will be even more valuable. Sandicor’s broker data is less valuable alone because it is incomplete. When you combine Sandicor data with the rest of the data from the San Diego listings in CRMLS and with the rest of the data in Southern California, then Sandicor’s data would become even more valuable.
Q. If MLS data has value, then why should the associations or the MLS give it away?
A. The data doesn’t belong to the associations and it doesn’t belong to the MLS. The data belongs to the brokers. NAR, C.A.R., PSAR and NSDCAR have always supported giving brokers the ability to choose to use their data they way they like it. CRMLS would not give it away and brokers would be required to “opt-in” if they choose syndicated feeds like REALTOR.com or Zillow. This runs contrary to SDAR's choice to automatically opt their brokers into syndication feeds and platforms like SDAR's “Just Knock.”
Q. Will the members of PSAR, NSDCAR and SDAR be able to see each other’s listings?
A. If SDAR chooses to create their own MLS, then NSDCAR and PSAR along with CRMLS would be willing to share listing data with SDAR and their MLS subscribers. This would be the only fair resolution as it allows all members to not only maintain the same access to San Diego MLS listings, but they would have the additional California-wide listings offered by CRMLS.
Q. Will a change from Sandicor to CRMLS force the user to change interfaces like what happened when Sandicor switched from Tempo to Paragon?
A. CRMLS will give our agents a choice to use either Paragon or Matrix, whichever platform they prefer. There may be additional fields for data entry but all the much more robust that makes the data. With what will be close to 100,000 subscribers, we expect a more robust system with plenty new resources for professionals to use. CRMLS also has plans to add a number of other “front ends” so agents can have additional choices in the future.
Q. Will this disrupt my business?
A. Regarding the legal component of the dissolution, NSDCAR and PSAR will argue in favor of a data share in order to not fragment the San Diego listing data. Once the legal component of the dissolution is resolved, then the actual merge with CRMLS is expected to be seamless, as it has occurred in many previous CRMLS mergers.
Q. Where can I find more information about CRMLS
A. Visit http://go.crmls.org/about/
Q. What other Associations belong to CRMLS already?
A. Here is a list: http://go.crmls.org/associations/
Q. Who would provide services for my MLS if we use only CRMLS in the future?
A. Just like today, your local Association would provide lockbox, billing and support for the MLS. In the same way that Sandicor provides training and support today, CRMLS would provide these services in the future.
Q. How will consumers benefit from all of this?
A. The MLS is the gold standard when it comes to property data. The best data in portals like Realtor.com, Zillow and Trulia actually comes from the MLSs. One single data-feed from one single MLS would reduce the number of duplicate listing and situations where no listing appears at all. Because of the duplication, there are times when listings remain on the MLS after being sold. This also creates confusion for the consumer. Currently listings in San Diego are being input into Sandicor and CRMLS. This is not beneficial for the consumer.