calREDD + CARETS = Love?

@Victor Hmmm. So if I understand you correctly then the “active” participants of calREDD (https://vendoralley.wpengine.com/2009/03/26/all-130-members-of-madera-assn-of-realtors-choose-calredd/), a whopping 1,800 of them, have joined CARETS?

That is freaking classic! I mean you couldn’t make this shit up if you tried!

This is going to be so fun to watch!

I wonder how long they will last against Mercado.

p.s. – calREDD has not joined CARETS – they will not be able to submit an application to join until they become an MLS – which they are not today(apparently).

When they submit their application, they will need to adopt the CARETS rules – which are different than the calREDD rules. Somebody’s rules will need to change.

I would doubt that CARETS will change their rules to suit the 1800 members of calREDD – especially given that it took them years to get everyone to agree to the standard set by CARETS. So, calREDD will need to consider modifying their rules.

The rules across the state are all quite similar, so it may not be a big deal to work out the differences – but hey – ya never know.

>>Consider the plight of the small sub 500 member Association-owned-MLS with no nearby regional alternative.<<

Victor, if you're ever interested in learning about the level of service provided by small sub 500 member MLSs, let me know.

I agree with Victor that short term the calREDD solution can make sense for the smaller, more isolated MLSs throughout the state. Not only do they give them the opportunity to a pretty cool product (Concentric), assuming it works, they can actually be the MLS in many respects. On the other hand, this “being the MLS” is what is going to keep them from getting broad acceptance in the long term because of the impact on local control in creates and the extra layer of bureaucracy that has to occur with calREDD serving as the middleman between the MLS and the vendors. I also agree with Sam that joining CARETS shows how things have evolved and I don’t see how this is going to do anything other than slow up their own mission. I think calREDD would have better traction getting MLSs on the same platform over time if they gave two options, one a straight vendor option where they simply serve as a procurement channel for attractive pricing on the Concentric system, and two, the option where you actually get MLS services through calREDD. Without that, I think it is going to be hard for any well run regional MLS to see a real advantage in their approach since they lose local control and already have their data issues pretty well addressed via CARETS or other regional initiatives. The first thing that has to happen regardless is the successful deployment of the Concentric MLS system. Reactions to the UI (eye candy) have been very positive so the next few months will be fun to watch to see how it works in the real world.

I think Sam is correct in saying that calREDD joining CARETS is an admission that their plan isn’t working. Now they’ve gone Cuckoo!

No matter how they spin it, Quattro and CARETS have rendered calREDD’s premise moot long ago. The Inman headline should have read. “C.A.R changes strategy- If you can’t beat, join ’em!!”

@WAV, MLS software (great UI or not), does not make a successful MLS provider. Many of the MLS providers in California are some of the best run in the country.

@Mr.Concerned You should change your handle to “Mr. Confused”.

Hang on a minute……… Mike said “The first thing that has to happen regardless is the successful deployment of the Concentric MLS system.”
Assuming that happens, won’t Rapattoni and the others want to roll out their own new & improved widgets to head off defections to calRedd/ Concentric??
If so, my handle is perhaps Mr. Convinced!

@Mr.Concerned Most MLS vendors, at least the good ones, are constantly improving their product. When Concentric launches they become just another MLS vendor, they will have to compete just like everyone else. I doubt any large MLS would want to sign with them due to the fact they haven’t proven themselves. It’s a marathon, not a sprint.

Michael – small MLSs pay a lot more for services than regional MLS due to their small size.

In talking to MLS CEOs in California, calREDD is offering their services at a price that is about 50% more than a regional who hosts their own system, about 30% to 50% less than a large regional that does not host, and about 50% to 75% less than a small mls pays (these are very general factors as prices vary widely from market to market).

This fee benefit to small MLS is exacerbated when you consider that the pricing discounts extend across all services purchased by the small MLS – Tax, Mapping, Data Compliance and other third party applications.

I submit this with one reservation – today, like many small MLSs, calREDD is a small MLS (and not likely to be getting the good rates that are available to large regionals). They will need to subsidize their offering during their ramp process to represent this value in order to win customers. It appears that the will of the C.A.R. board of directors is to invest an initial $3 Million toward this effort – and I imagine they will commit more if calREDD is meeting their business goals.

All of these savings come at the cost of relinquishing their current MLS governance and adopting C.A.R.’s. This could be good or bad, depending on the situation. Consider the plight of an Association owned MLS which is out of reserves and barely breaking even.

Here is my hope –

WAV Group and other consultants (Cohen, Larson, Sherry, McQueen, Bailey et al.) offer deep consideration of business and vendor options specific to the circumstances and needs of each individual MLS and Association engagement. My only hope is that MLSs and Associations who do not have experience weighing choices in these matters don’t put an ad hoc committee together and wing it.

>>In talking to MLS CEOs in California, calREDD is offering their services at a price that is about 50% more than a regional who hosts their own system, about 30% to 50% less than a large regional that does not host, and about 50% to 75% less than a small mls pays (these are very general factors as prices vary widely from market to market).

This fee benefit to small MLS is exacerbated when you consider that the pricing discounts extend across all services purchased by the small MLS – Tax, Mapping, Data Compliance and other third party applications.<<

I'd love to see the actual data for this. You know, real, hard data as opposed to off-hand supposition. I have pretty intimate familiarity with the costs of running MLS systems along all the lines you mention, and if we were able to see the data on which you make your claim, I think we'd quickly find the out of pocket costs to the agent are not dramatically, if at all, lower for larger versus smaller MLSs. But we need to make sure you're comparing apples to apples and not apples to oranges.

As I said before, I believe the issue for the smaller MLSs is whether they have overlap with other markets. That's where cost savings may occur, by elimination of duplicate fees, entry, etc. If overlap is not involved, I would like to see real numbers showing out-of-pocket cost differences to the agent.

Victor and Mike, I agree that each MLS needs to consider all their options and the costs associated. What concerns me are blanket statements about small MLSs and the costs without details.

Though there can be economies of scale for larger MLSs on software license acquisitions, I challenge the general proposition that out-of-pocket costs for brokers/agents is less for larger MLSs than smaller ones. I’d love to see the hard data on that. Especially when one considers giving up the responsiveness of local MLSs for the bureaucracy of a one-size-fits-all solution, the cost-benefit analysis goes far deeper than a software license. Hosting and support costs do not get dramatically less as you add more members, and most MLS vendors today are already spreading those costs through unified data centers more than even the largest regional MLSs.

As I mentioned in an earlier comment, the cost savings for any MLS in considering regional solutions depends on the overlap with other MLSs and whether duplicate fees, entry, etc., exist. If there isn’t overlap, there likely isn’t going to be any cost savings either, regardless of the scale.

Also, given that calREDD hasn’t achieved wide adoption, each MLS will have to consider whether they will get the regional partnerships they need. Further, if the MLSs are going to regionalize, they could do so with any vendor and so should consider all potential solutions.

I realize I’m biased in this discussion but I think there’s too much danger from generic statements like those in the comments above leading MLSs to believe they don’t have a choice and it will be cheaper and better without evaluating their options. Competition is what produces efficiency and lowest cost over the long run, not going with a single vendor.

@ Mike Wurzer…to be fair, neither Victor nor I ever said anything about “…leading MLSs to believe they don’t have a choice and it will be cheaper and better without evaluating their options.”

I definitely agree with your comment about competition though there are times when it makes sense for MLSs, once separate, to join on a common platform. When and if that is needed in any given area I would encourage any MLS to look at all options including those mentioned above as well the rest, such as FBS and the other solid vendors.

As I stated in an earlier WAV Group blog post, I think the big MLSs in CA have proven they are getting the job done so I don’t expect them to change course in the near term…no upside for them at all. On the other hand, I would expect if Concentric proves they have a stable solution that they will get a look and evaluation just like any other vendors but that will take time….with the added complication that going with them via calREDD is not a simple client vendor relationship.