Chicago Listing Services May Be Near Merger Deal would be to combine all property listings from both groups in a new database, giving real estate agents easy access to both existing services
RISMEDIA, June 22, 2006—(KRT)—After a year and a half of study, Chicago's two real estate listing services may be near an agreement to consolidate, but opponents of the deal say they are gathering strength.
The fate of the proposal was expected to become clearer yesterday, when the board of the Multiple Listing Service of Northern Illinois met at its offices in Lisle to review the latest objections to joining with its smaller rival, MAP MLS.
The idea behind the deal would be to combine all the property listings from both groups in a new database, giving real estate agents easy access to both existing services. This would simplify the laborious and costly data-entry process that members of both groups go through to cross-post listings, and it would make it easier for agents to peruse the largest number of properties for sale.
Members of the brokerage community said MAP's shareholder-owners are looking to get those extra fees off their hands for what some regard as a redundant service.
By most accounts, developing a proposal for the deal has been a tedious--and occasionally fractious--process that has its roots in a feud within MLSNI, one of the nation's largest listing services.
Representatives of some brokerages say their patience is wearing thin and hint they might start a new, independent MLS if no agreement is reached soon.
The merger process in the 45,000-member MLSNI hit delays this spring over internal squabbling and a U.S. Department of Justice subpoena of MLSNI documents in an anti-trust investigation of the National Association of Realtors.
But Loretta Alonzo, a La Grange Park broker and president of the MLSNI board, said the process has been deliberate to address varied interests in the 22-member board. She predicted approval by August or September.
"We're making baby steps," said Alonzo.
Consolidation proponents say the change is not likely to affect consumers directly, though the cost savings per agent might incrementally reduce sales commissions.
Michael O'Neill, a director of the Oak Park Board of Realtors, one of MLSNI's shareholder-owners, said the data-entry problem could be resolved without the merger. His group also says proponents have not provided enough analysis to show that the deal would be in MLSNI's financial interest, he said.
"We believe certain adjustments could be made that could make this work for a lot less money than creating the merger," said O'Neill.
Others said smaller brokerages and Realtor boards would be disadvantaged by the bigger players in a new structure's governance.
"We have so many mom-and-pop operations, and potentially they could be hurt," said Aurora agent Dennis Stone, whose local Realtor group opposes the proposal. He cites a third association that opposes it with "two others, maybe three" on the fence.
The merger plan is rooted in controversy that roiled MLSNI starting in 2004, when three large Chicago-area brokerages pulled their North Shore offices' listings and put them exclusively in MAP. Their complaints were focused on administrative policies.
The move set off a year of MLSNI board turmoil that included an extensive audit of its books and the firing of its chief executive.
The three brokerages--Baird & Warner, Coldwell Banker and Koenig & Strey GMAC--returned all their listings to MLSNI in March 2005, in what one broker described as a "good-faith gesture" based on the preliminary conclusions of a task force studying the creation of a new service.
At the time, task force members said a deal on a new MLS was possible by the end of 2005. The broker-owners of MAP, based in Palatine, approved the consolidation in principle shortly after it was proposed. Bud Fogel, its executive director, declined to comment for this story.
According to reports, the documents went under attorney review earlier this year, and will be voted on by shareholders when all objections are resolved.
But in April the Justice Department subpoenaed more than 1 million MLSNI documents; the subpoena was one of more than a dozen issued to listing services around the country.
"It slowed things down," said Pat Callan, a Wheaton broker. "It raised concerns. Every time you wave that flag it scares people, and it was one more thing we needed to understand."
That gave several MLSNI members time in late spring to voice more objections, which led to the review of the complex bylaws that would govern shareholder votes if MLSNI's structure were to change, Alonzo said.
Proponents of the consolidation regard some of the objections as delaying tactics, said Charles Melidosian, chief information officer for Baird & Warner and a member of the MLSNI board.
He said the original schism within MLSNI could re-emerge.
Copyright © 2006, Chicago Tribune
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