MLS and Association consolidation has delivered a path to solve many problems for Realtors® and brokers operating in markets where there is overlapping market disorder. With the exception of the San Francisco Bay Area, most large NFL cities have removed the need for Realtors® and brokers to subscribe to multiple MLSs, pay duplicate fees for MLS services, and manage listings in multiple systems. There are plenty of markets that should continue to purse consolidation discussions, but by and large, the MLS industry is on the right track and that is cause for celebration.
However, real estate forms continue to be cloistered by the same antiquated policies that listings faced a decade ago. It’s time to rethink forms licensing to Realtors® and brokers, and for the betterment of serving consumers through the transaction process. We call for a standard license agreement and data standard that allows all transaction management systems to integrate Association, MLS and Broker forms with “live” data that can be, with the broker or agent’s opt-in permission, securely shared across software applications.
Where Forms Come From
When WAV Group works with brokerage firms to integrate their transaction workflow across multiple markets of Associations and MLSs, the first question we address is “Who is the forms provider?” It’s a difficult question to answer because “it depends.” Forms come from multiple sources in each marketplace.
The State Association of REALTORS®
The best news for Realtors® is that, for the most part, real estate transaction forms are available through a branch of the National Association of REALTORS®. Typically, there are forms that are crafted by State Associations of REALTORS® that cover the buyer and seller representation agreements and contracts for most transactions. To some degree, there are also a number of common disclosure documents that are applicable statewide. The State Association normally includes the forms license costs in member dues, contributing an enormous value for membership in the REALTOR® Association. These forms are copyright protected by the State Association. The value of the forms needed for a single transaction more than justify Association membership.
The Local Association of REALTORS®
Before the digital age, Realtors® would drive to the local Association of REALTORS® to pick up their forms packet for a transaction. The local Association was in the printing business. It is important to understand that this was a key source of revenue to the local Association (along with lock boxes and listing books). Another key resource commonly delivered by the local Association are local area disclosures. It is a rampant and commonplace practice of Counties, Towns, Cities, and villages to require certain disclosures on real estate transactions and the local Association delivers value to the members by providing these local area disclosure forms for member use. These local area disclosures are copyright protected by the local Association.
Some brokerages like to inject their company branding on the State and Local forms. It makes them look nice. But more importantly, brokerages have their own disclosures and ancillary documents that are included in transactions. This is where the pain and cost begin to escalate for brokerage companies. It is commonplace for the local Association (perhaps on behalf of the State Association) to charge additional fees for the inclusion of these broker forms.
There are markets whereby the MLS has taken over the role of the Association in providing forms to real estate practitioners. You see this happen sometimes when the MLS was selected as the best company to bring paper forms into the digital era, or when there was disagreement about the providence of forms residing with the Association, the MLS, or the Broker. Variety is a beloved spice of our industry.
The Problems That Brokers Face
The Problem of Forms Licensing
Copyright laws prohibit the redistribution of forms. Brokers cannot download the forms and put them into a document repository for anyone in their firm to access. Yes, this is done every day in violation of the copyright holders rights, and is usually also a breach of the MLS and/or Association rules and regulations. It is very rare to see an MLS or Association take action against a member firm or Realtor® for forms abuses. But, that does not make it right.
When Associations and MLSs have taken actions, those actions were against technology providers trying to deliver transaction management solutions for brokers and agents. (see California Association of REALTORS® v. DotLoop).
In this case, the technology provider allowed users to upload and share forms when the State held the copyright. It made it easier for agents to access the forms. What it also did was open the door to agents – or possibly even consumers – who were not members of the Association to gain access to the forms. This created a circumstance whereby the Association was compelled to protect their intellectual property rights by pursuing an action against the technology provider. In reality, they probably should have targeted their action against the user of the technology solution that violated their rights. Of course, it is not good practice for a Realtor® Association to take an action against a member, or enter into inter-board arbitration. The solution is a forms licensing standard.
The Problem with Transaction Management Product Overlap
Transaction management is the providence of brokers. In many markets today, MLSs provide amazing solutions as subscriber benefits. It’s great when there is a market wide standard – but only for those firms and agents who operate exclusively in that market. Moreover, regardless of the offering by the MLS – sometimes brokers choose alternative solutions that have discrete features meet their business requirements – like integration with their mortgage company, Fannie Mae, etc. Still others are required to use particular solutions to report transactions to their franchise.
Let’s Create Forms Licensing Standard
One of the greatest innovations in global real estate is the Multiple Listing Service. The MLS system here is America is a blessing that so many other nations have difficulty pulling together. It is a simple construct of allowing professionals to collaborate and offer compensation when that collaboration results in a mutually beneficial transaction. The principle of cooperation gave rise to solutions like IDX. A convenient structure for real estate agents and brokers to share and use copyrighted listings to other participants of the MLS. It operates on a standard data license agreement that is curated by the National Association of REALTORS® as a template.
One data license agreement that covers all NAR Affiliated markets would create a tidy method of collaboration among Realtors® and brokers. Professionals could choose the system of their choice without the hassle and legal expense of structuring agreements with the many forms copyright holders.
Let’s Create a RESO Standard for Transaction Management Solutions
The Real Estate Standards Organization has done an amazing job at allowing property record data to plug and play across the plethora and diversity of real estate technology solutions. Suspending the technological complications, suffice it to say that there is absolutely no barrier to creating a standard (restFUL web API) that allows data from Transaction Management Solutions and Form Management solutions to “talk” to each other or even to pass to common software like accounting, CRM or mortgage/title. Technology has evolved to keep documents and tasks synchronized across multiple technology platforms. Our industry needs the will and the participation of leaders to make it happen.
A Final Mention:
The National Association of REALTORS® provides zipForm® Plus electronic forms, zipTMS® transaction management and zipVault® document storage as a member benefit. That is the technology application, not the forms of the intellectual property (IP) holder. Like everyone else, zipLogix™ must go market to market and properly license the forms for the NAR member benefit. For many areas of the United States, this is working out just fine. However, some other areas have invested millions of member dollars in existing solution development (think Forms Simplicity of the Florida Association of REALTORS®. In other areas, Instanet Forms has been the standard for more than a decade and customers love the product and the service. In addition to zipLogix™ other innovators like DocuSign, DotLoop, Reesio, and many others have marvelous solutions and our future is bright with emerging ideas and applications. Carving out a standard license agreement and standard method for communication among all of these players is an enormous opportunity to make real estate better for all.
It almost goes without saying that there needs to be a fantastic layer of encryption and security as these systems “talk” to each other. Certainly, today’s reliance of emailing forms is not the path forward.
If you are as passionate about this topic as we are, please reach out to Victor Lund. We need a number of pioneering people to collaborate on starting this dialog.