Consolidation is a Powerful Word
By DIONNA HALL
CEO, Realtors of the Palm Beaches and Greater Fort Lauderdale
Consolidation is a powerful word. Some fear it, some champion it and most of us are just plain tired of hearing about it. But for the betterment of making us stronger and unified, it’s where our industry is going.
All of us fear being a part of the problem. What is the problem? The list of 46 items thrown down by brokers at CMLS in 2013 and now the report, MLS 2020 Agenda.
Holding our 'unique flag' is not justification to prolonging and preserving the issues on that list and to ignore the problems that our brokers face. For over a decade we subscribed to the mantra that we were unique; and we were, just like all you are unique. But when you realize that everyone thinks they are unique, it becomes clear that we are not unique, we are just different and different is not a reason to hold off consolidating. Honestly, uniqueness is not a reason either.
Today, I sit next to the people that were on the other side of the merger negotiation table. A merger that has been labeled the largest merger of two mega boards in NAR history. It produced the Realtors® of the Palm Beaches and Greater Fort Lauderdale, the 3rd largest Association (and one of the largest MLS’s) in the country, with 32,000 members/MLS subscribers, carrying more than 40,000 On-Market listings. The merger created a much larger territory for brokers to expand and grow without the need for them to join multiple MLSs. It came together in 3 months from negotiation table to signing on the dotted line. If you are contemplating consolidating, this article may be for you.
South Florida is a densely populated, contiguous and overlapping market that houses 3 of the largest Associations in the nation and several smaller Associations. Each Association owns its own MLS. It is a competitive market that functions much like a for profit company environment. To make matters even more interesting, many of us datashare.
Prior to our merger, which became effective in August of this year, I was the CEO of the Realtors® Association of the Palm Beaches (RAPB), the 6th largest Association in the country, which had a jurisdictional boundary abutting another mega association, Greater Fort Lauderdale Realtors® (GFLR). The two groups had been engaged in on and off merger conversations for over a decade, but for a variety of reasons (the industry standard deal breakers), talks never resulted in a merger. Earlier this year, with newly seated leadership, both Presidents knew that there was another opportunity to consummate a merger……the question was, Did we want the headache? We were all happy where we were; we had engaged leadership, productive company cultures and a large geographic footprint.
At the beginning of the year RAPB President, John Slivon and I discussed the possibility of a merger. We decided that being comfortable was likely short term (at best temporary); we knew the industry was changing. We wanted to address our brokers and agents pain points and felt that merging was a step toward accomplishing that goal. Fortunately, GFLR President Ron Lennen was of the same mindset. Both Presidents approached conversations with tremendous focus and intensity, a commitment of 'If we are going to do this, we don't stop till we are done’…and that is what we did.
We studied the previous deal breaking issues. In no particular order, the short list yielded:
Prematurely going public about merger conversations
Too many decision makers at the table
Too much time passing between conversations/lingering decisions
Consultants that didn't understand personalities at the table
Arrogance that one side was more powerful, smarter or wealthier (who was going to win and who was going to lose)
Focusing on the problems, not the solutions
Getting too far in the weeds (trying to make decisions on every issue)
A merger task force with 3 members from each association was created. All issues were on the table for discussion and we began by tackling the biggest issues first. Preconceived solutions to those previous deal breakers were presented and accepted. The leadership at that table were selfless and understood that both associations/MLSs brought positive and negative attributes to the table. We needed to remain flexible with a goal of embracing the positive and overcoming the negative, regardless of which side it came from.
The result is what we call a Reimagined Association and MLS. We harnessed the power of our $21 billion listing inventory and cut the red tape to provide better access for our subscribers. Brokers can expand their business the way they choose and we assist them in enhancing their business models.
We have created economies of scale that provides an opportunity for us to invest in new, user-friendly technologies and increase services to members and consumers. The merged association/MLS is synchronizing technologies to create seamless service for brokers and consumers. Members may choose between two premier MLS platforms: FlexMLS or Matrix, for the MLS system of choice. Data will be the same in both systems.
A great deal of thought was put into the governance structure of the merged entity. We recognized that with such a large association it would be easy to lose the local connection that drives the real estate industry. Regional Boards were created to keep that local perspective front and center in our decision-making process. Our new territory, spanning over 100 miles of coast line, is split into 5 Regional Boards that are headed by Regional Vice Presidents who maintain a seat on the Corporate Board of Directors. Each Regional Board elects their own Vice Chair so they can identify and promote upcoming leaders in their Regional area.
To this day we remain flexible. We know our model will be tweaked and some decisions will need to be reworked, but on our part, there is the willingness to be a part of the solution for issues such as the ones listed in the MLS 2020 Agenda. Our goal is to assist our brokers and agents in their race to provide relevancy to consumers. Our ability to assist them in that marathon, will prove our own relevance at the same time.