The CLAW Saga Gets More Interesting: Art Carter Administers A Beatdown on Annie Ives

The CLAW/TheMLS saga gets more interesting. For background, read this Inman News articleby Andrea Brambila, who does consistently decent reporting on these arcane issues for our industry.

Basically, CLAW decided to delay syndication feeds via ListHub by 48 hours. Chaos ensued. I’m trying to find out some more stuff about it, but the latest turn is… interesting to say the least. 

It appears that Art Carter, the CEO of CRMLS, the largest MLS in the country and a neighboring MLS to CLAW, issued a letter to subscribers of CRMLS a few days ago to respond to a few points that Annie Ives, the CEO of CLAW, sent to her subscribers.

I was sent both letters by someone who belongs to both MLSs, and thought the exchange raises some… interesting points and questions. Suffice to say that the title of this post is not much of a hyperbole. Art does in fact administer the verbal equivalent of a beatdown.

[DISCLOSURE: CRMLS is a past client of mine at 7DS Associates. But I did not receive the emails from Art Carter, or from CRMLS, and had no communication with them about this post. I thought I should disclose the past business relationship, however.]

First, the CLAW Letter

I’ve mentioned parts of the letter in passing, but for this purpose, I think I should repost the whole letter that was sent to the subscribers of CLAW. Here it is:

We have become aware that Zillow is soliciting members of The MLS™/CLAW, encouraging them to join the Greater South Bay Association of REALTORS which is part of a different MLS known as CRMLS.  It is not the role of a third party data site to tell you which Association of REALTORS® to join.  This move appears to be in response to the policy recently implemented by The MLS™/CLAW that puts a 48 hour delay on the data feeds to third party websites, such as Zillow, Trulia, and Realtor.com.

Things to Know 

• The 48 hour third party data feed policy was designed to drive consumer traffic to the most accurate source of real estate information; the websites of the agents and brokers who service the market and to TheMLS.com™ that captures and drives leads to you at no cost.
• CRMLS has given notice that they are pulling out of CARETS, as of June 18th. In a short while, as things now stand, CRMLS will not have access to data from The MLS™/CLAW.
• The 48 hour third party data feed policy only affects data that appears on third party sites, not MLSs, or IDX data feeds.  The policy is intended to apply only to new listings, not changes, and adjustments are underway for that purpose.
• The 48 hour third party data feed does not affect any listing or other information that appears in TheMLS.com™ or any other MLS that participates in CARETS. All agents who are members of The MLS™/CLAW or any other CARETS participating MLS will continue to have immediate access to your new or changed listings.  Brokers are also free to distribute their own listing data in any way they elect.
• Participants of The MLS™/CLAW who do not want the 48 hour delay applied to their listings can contact The MLS™/CLAW and an adjustment will be made for you at no charge.

The bigger picture is that there is an effort underway by some that would force all MLSs to join a statewide MLS.  The leadership of The MLS™/CLAW believes that local control of your MLS is in the best interests of brokers, agents, and the entire real estate community at large.  A single, centralized statewide service would take away local control, reduce choice, and in all likelihood result in increased fees and costs.  Brokers and agents are best served by having choices and the ability to make their own business decisions, including who receives their listing data and any remuneration for that data.

The MLS™/CLAW remains dedicated to providing the best available service and technology to brokers and agents.  We conduct business and implement strategic decisions as determined by the brokers and agents who make those decisions.  We believe that providing choice, unparalleled service, and a more than one-size-fits-all approach, are in the industry’s best interest and the best way to assist you in making your business successful.

The emphasis was in the original. The PDF of the above is here: CLAW_Email (PDF)

The CRMLS Letter

I knew about the email from CLAW a few days ago, especially since it appeared that they were walking back the original decision by allowing brokerages to “opt-out” of the delay. What I didn’t know was that the email resulted in Art Carter, the CEO of CRMLS, posting the following letter to the homepage of CRMLS.

Today, Ms. Annie Ives, the CEO of Combined Los Angeles/Westside Multiple Listing Service (CLAW), sent an email to her membership containing a number of inaccuracies regarding CRMLS. Because a large number of CRMLS members are also members of CLAW, I feel it is necessary to address a number of these inaccurate statements contained in that email.

• Misstatements About a Statewide MLS.  The letter made statements about MLS choice and cost. Since merging with the California Association of REALTOR’s (CAR) statewide MLS initiative, CRMLS, with the support of CAR, has pursued the possibility of a statewide MLS, with the intermediate goal of a statewide database. This goal was approved by a vast majority of the CAR directorship, and CAR maintains a relationship with CRMLS as a Member of the organization. Choice is exactly what CAR and its directorship wanted to deliver out of their efforts. CRMLS has been pushing for and has delivered varying levels of choice, including choice of software front ends that our member Associations can offer to their membership. I would challenge any member of CARETS, much less any other MLS in the state of California to match the level of choice we offer.

Ms. Ives further made a statement that pursuing a statewide MLS would result in increased fees and costs. This is absolutely false and absurd.  CRMLS’ goal is to provide data access to every real estate professional in the state of California and for that professional to only pay one MLS subscription fee.  Making an argument that boundaries are more important than data access ignores the needs of the real estate brokerage community and advancement of technology.  Living in the past to protect politics and ego rather than doing what’s best for the agent should not be tolerated by our state’s real estate professionals.

• Misrepresentation Regarding Zillow.  CLAW made a decision to delay the syndication of all its brokers’ listings to third party listing portals, such as Zillow, Trulia and REALTOR.com, by 48 hours. In the email sent by CLAW, the CEO states that Zillow is contacting CLAW members and encouraging them to leave CLAW to join a CRMLS association. To my knowledge, Zillow is not contacting members of CLAW and making this statement.  Rather, Zillow is responding to a myriad of complaints from CLAW brokers who are seeking help to locate channels who will help them syndicate their listings without CLAW’s interference.

In the past, the Board of Directors for CRMLS discussed the option of delaying listings leaving the CRMLS system for syndication. After discussing this with our brokerage community, we learned that most of the franchise brokerages would not be affected by the delay because they have developed expensive mechanisms for direct syndication to third party portals without MLS involvement. However, the small to medium sized brokerages informed us that they would be harmed and would face added expense if they tried to develop those same syndication methods in order to ensure that their listing data would be kept up to date, if they so choose.

The CRMLS Board of Directors wisely decided, in keeping with a long standing CRMLS policy, that syndication choices are best left to the individual brokerage community, not dictated by the MLS. If CLAW members choose to vacate the CLAW system, it won’t be because Zillow forced them to, it will be because they are exercising the choice Ms. Ives so strongly touts in her letter.

• CARETS Decision.  CLAW made the announcement for CRMLS that we have given notice to leave CARETS by June 18, 2014. That portion of their announcement is correct, but what Ms. Ives failed to mention was that we have offered datashare agreements to each of the existing members of CARETS, that, if agreed to, will offer little or no interruption or change to the data being offered to our membership.  CRMLS has further offered to host RETS servers for the existing CARETS members at NO COST to them in order to maintain the brokerage and third party product providers’ abilities to receive ONE feed of MLS data. Furthermore we offered to handle the initial mapping of data from our systems into their systems at no cost.

Why are we doing this? CRMLS’ decision to head down this path is a simple one. CARETS is very expensive and CRMLS can provide the same level of service to our membership for significantly less. In acting in our fiduciary role of providing the most access to data at the lowest possible cost, we have been talking with CARETS about CRMLS taking on the primary technical role for over 18 months, with no movement. The Board is tired of delay tactics and is ready to move on the data agreements and they would HIGHLY recommend that you contact the other members of CARETS and encourage them to participate with CRMLS in this effort to save YOU the member the unnecessary cost of paying for CARETS. CLAW has indicated that they will not participate with CRMLS in discussions with some shared brokerages. If you don’t have access to CLAW’s data on June 19, it will not be because CRMLS is unwilling. CRMLS believes it is time to put the political maneuvering aside and act in our members’ best interests, not in the interests of a small group of people who benefit directly from their employment at the MLS level.

CRMLS remains committed to the premise that the multiple listing service is the Brokerage community’s most important tool and an incredible gift to buyers and sellers. Our Board, entirely made up of working REALTORS, representing both agents and brokers, large brokerages and small, is actively involved in the management of YOUR service. The internet has been an incredibly valuable tool to deliver real estate information to the consuming public, and in many ways the consumer has access to a greater breadth of information than the average agent has access to in their own MLS. However, there is no substitute for the depth of information available in your MLS. Since the advent of the large third party portals, more consumers are working with real estate agents than ever before. However, it is time to work on providing you the broker and agent paying for this service the same breadth of information without having to pay for the inefficiencies of a system like CARETS, or to have to face imaginary boundaries to that breadth of information that politics and money too often place on the data. As with all that we do, we look forward to your feedback. We know we will receive it!

Art Carter
CEO CRMLS

The PDF of the email is here: CRMLS_Letter (PDF)

Interesting Points & Questions

I don’t think it was much of a hyperbole to suggest that Art Carter administered a beatdown here. Language like, “absolutely false and absurd” and “Living in the past to protect politics and ego rather than doing what’s best for the agent” is strong stuff. I get the feeling Art won’t be getting invited to Annie Ives’ house for Thanksgiving this year.

Art Carter also smacks down the outrage Annie Ives expresses with the bolded “It is not the role of a third party data site to tell you what Association to join” saying that wasn’t what happened. Rather, Art says it was the brokers of CLAW who were asking Zillow how they could get their listings back up on Zillow without CLAW’s interference. I assume he’s in a better position to know than I am, since there are brokers who belong to both CRMLS and CLAW, and he probably got his share of customer service requests.

On more substantive issues though… Art raises three points that lead to real questions.

One, Art Carter takes Annie Ives to task for suggesting that a statewide MLS would increase fees and costs, calling it “absolutely false and absurd”. He then says that Annie Ives (and by extension, CLAW) is “living in the past to protect politics and ego”. What does that mean?

If in fact, a statewide MLS would save money and increase access to the brokers and agents in California, then objecting to it… does what? Art calls it protecting “politics and ego” but what does that actually mean? (More below)

Two, this is a key paragraph from Art’s letter:

In the past, the Board of Directors for CRMLS discussed the option of delaying listings leaving the CRMLS system for syndication. After discussing this with our brokerage community, we learned that most of the franchise brokerages would not be affected by the delay because they have developed expensive mechanisms for direct syndication to third party portals without MLS involvement. However, the small to medium sized brokerages informed us that they would be harmed and would face added expense if they tried to develop those same syndication methods in order to ensure that their listing data would be kept up to date, if they so choose. (Emphasis added)

I’ve suggested that what CLAW did has anti-trust implications under the logic of RealComp v. FTC. Seems to me, the discussions and the decisions of the CRMLS Board supports that idea. When CRMLS considered the idea, big brokers and franchise brokers shrugged because they have direct feeds already in place. It was the small brokerages who told CRMLS that they’d have problems.

Okay… well, the Board of Directors of CLAW appears to have 11 volunteers. It turns out, five are with Coldwell Banker (which in that part of the country is all Realogy’s in-house brokerage, the NRT), two are from Keller Williams, one from Berkshire Hathaway HomeServices (formerly Prudential California), and four are independents. We don’t know how the vote went in the Board for the decision to delay, but when 7 of the 11 volunteer board members work for/with companies that have direct feeds already in place with Zillow and Trulia, one wonders what went down.

In fact, I’d like to find out what went down. Why speculate? I’ve called one board member but haven’t heard back. I hereby invite any of the board members to tell us whether the fact that many of the franchise companies had direct feeds in place was or was not a factor in their decision. Did they consider the different impact on small brokerages vs. large brokerages from their decision? Was there any dissent from any of the Directors?

Three, Art Carter concedes that while CRMLS is pulling out of CARETS, that it offered to share data with any other MLS at no charge. He says that CLAW has refused to partner/cooperate/collaborate with CRMLS, and that if after June 18th, a broker doesn’t have access to CLAW data, it’s not because of CRMLS. Then he ends with this bombshell of a sentence: “CRMLS believes it is time to put the political maneuvering aside and act in our members’ best interests, not in the interests of a small group of people who benefit directly from their employment at the MLS level.”

Am I crazy or is Art Carter essentially claiming that the reason why CLAW won’t participate is because of Annie Ives is all about protecting her paycheck? Because if he isn’t claiming that, it sure sounds like he’s suggesting it. That’s a pretty serious charge. It’s essentially accusing the professional staff at CLAW of corruption.

In fact, it’s the kind of charge that could lead to civil liability if proven. The core allegations of two recent Association/MLS-centered lawsuits (one at Greater Las Vegas Association and one at Chicago Association) were that the executives in charge were essentially enriching themselves at the expense of the membership. Neither of those lawsuits resulted in any liability or findings of wrongdoing (as far as I know) but the whole situation remains murky. (And of course, real estate industry doesn’t have investigative reporters….)

Both of those situations in Las Vegas and Chicago were rank and file members bringing a lawsuit. As far as I know, this is the first time that the sitting CEO of a major MLS has suggested that his counterpart at a rival MLS is enriching herself and her paid staff at the expense of the members.

In fact, this third piece goes with the first issue, about the statewide MLS, as it paints a picture of a MLS that really wants to protect its turf in order to protect the salaries of its employees. That is no longer a “member-driven” organization making genuine decisions for the sake of the people it serves; that is a corrupt bureaucracy existing for the sake of its bureaucrats to keep drawing a paycheck. As a former NJ resident, I have an unfortunate familiarity with corrupt bureaucracies that don’t give a damn about the citizens they’re supposed to serve. Is that what’s going on here?

I don’t know if that’s what Art Carter intended, but that sure is how the letter reads to me.

[EDIT: Shortly after posting, I was contacted by Art Carter and he clarified the statement: "The statement's intent was to include myself in that comment. I'm not accusing Annie of corruption or anything unethical like that. It's about me, Annie, or any other head of an MLS or an Association holding the interests of our brokers and agents over our own. It should always be about the member. Please clarify the post."]

Conclusion

Clearly, if we conclude nothing else from this exchange, it’s that there may be some bad blood between CLAW and CRMLS. There may be some bad blood between the two CEO’s involved here. I don’t know.

What we have left are more questions than we started with, and what appeared to be just a “MLS vs. Zillow” has taken a turn for the more mysterious. I’m still investigating a few things, and hope to have that for you all soon-ish. Or later-ish.

Your thoughts, comments, etc. are always welcome, but in this case, if you have any insight into some of the questions above, I think the Notorious community would welcome it. if you’d prefer to protect your identity.

via:http://www.notorious-rob.com/2014/02/27/the-claw-saga-gets-more-interesting-art-carter-administers-a-beatdown-on-annie-ives/