The multiple listing service is one of the largest in the U.S. One board member who was part of a team trying to buy the MLS described being blindsided by the private equity deal.
At Inman Connect Las Vegas, July 30-Aug. 1, 2024, the noise and misinformation will be banished, all your big questions will be answered, and new business opportunities will be revealed. Join us.
A surprise deal to sell one of the largest multiple listing services in the U.S. has left members reeling — and raised the specter of legal action.
Shelly Vincent
The deal would see REColorado sold to a firm backed by private equity. Rumors of the deal surfaced Monday night on Greg Robertson’s Vendor Alley blog. Later Monday night, REColorado Vice Chair Shelly Vincent confirmed the existence of a proposed deal in an email to Inman. She said that REColorado’s owners — Denver Metro Association of Realtors (DMAR) and the South Metro Denver Realtor Association (SMDRA) — shared a letter of intent describing the proposed sale last Thursday, June 20.
TAKE THE INMAN INTEL INDEX SURVEY FOR JUNE
Vincent added that the letter was shared 30 days after it was signed, and less than three weeks before the deal is slated to close. She also said that the “terms are very concerning to the future of REColorado, and legal action is being considered.”
Vincent said the letter of intent describing the deal is not public.
In a joint statement to Inman Tuesday afternoon, DMAR and SMDRA said that “after extensive conversations with the respective boards, including research and evaluation” they had agreed to sell the MLS to “to a private entity.” The statement also said, “The proposed buyer has committed to the long-term operation of the MLS service for our professional brokerage community and that the resources of the MLS will be used to enhance the service offerings to all subscribers and that the company will not be resold.”
“This is a decision that our respective associations agree will help provide expanded and improved service opportunities for metro-Denver Realtors and licensees, the members of our Associations and REcolorado subscribers that depend on the MLS to provide the vital market information required to best serve consumers in their home buying and selling process,” the statement also noted.
The statement went on to argue that this is the “right time to sell the MLS, as the industry continues to advocate de-coupling from the real estate associations that have long owned the MLS.”
Nevertheless, one of the reasons the sale of the MLS came as a shock is because Vincent and others were part of a team that was in the process of trying to buy the multiple listing service from DMAR and SMDRA. The plan was to “buy back the shares and become independent, but we were given no opportunity to even compete to do so,” Vincent said.
“As of February, we had already accepted their counter when all communications involving the sale went silent,” she continued. “We had no idea there was another party this involved until we received the [letter of intent].”
In an email Tuesday, Vincent added that “we are currently putting together legal action to attempt to pause” the sale. She also said that “we have been inundated with calls of support, which has been very humbling today.”
REColorado describes itself on its website as the 16th largest multiple listing service in the U.S., serving more than 26,000 real estate professionals across its home state. The MLS also says it facilitates 76 percent of real estate transactions in Colorado.
Read the full statement from DMAR and SMDRA:
After extensive conversations with the respective boards, including research and evaluation, the Denver Metro Association of Realtors (DMAR) and the South Metro Denver Realtor Association (SMDRA), the shareholders of REcolorado, have agreed in principle through a letter of agreement to sell the Denver area Multiple Listing Service (MLS) to a private entity.
This is a decision that our respective associations agree will help provide expanded and improved service opportunities for metro-Denver Realtors and licensees, the members of our Associations and REcolorado subscribers that depend on the MLS to provide the vital market information required to best serve consumers in their home buying and selling process.
Having completed our due diligence as shareholders, we feel confident in the Letter of Intent and that the proposed buyer has committed to the long-term operation of the MLS service for our professional brokerage community and that the resources of the MLS will be used to enhance the service offerings to all subscribers and that the company will not be resold.
We strongly believe that this is the right time to sell the MLS, as the industry continues to advocate de-coupling from the real estate Associations that have long owned the MLS. As has been widely reported in industry reports and media coverage, decoupling MLSs and Realtor Associations could help protect MLS organizations from ongoing antitrust litigation. Separating could also improve MLS management, according to the latest Swanepoel Trends Report, which also recommended that MLSs be structured as for-profit businesses, while Realtor Associations should be nonprofit organizations.
Additional details regarding the buyer and agreement will be announced in the near future however, due to the legal obligations of the LOI and our process, we cannot comment further at this time.
Update: This story was updated after publication with a statement from DMAR and SMDRA.
Email Jim Dalrymple II
Credit: Source link
