The Denver Metro Association of Realtors (DMAR) and South Metro Denver Realtor Association (SMDRA) have fired the board of directors of REcolorado, the multiple listing service (MLS) owned by the groups.
REColorado is used for more than three-quarters of Colorado’s home sales. According to a Denver Gazette report, the mass firing comes ahead of the proposed sale of REColorado to a newly formed limited liability company backed by a private equity firm J. Burke Private Capital. The board members posted a statement on the REColorado website last week that said, “While we support a vision for decoupling the MLS from Realtor association ownership, selling your most valuable tool to a private equity firm is a questionable way to achieve that and may bring added uncertainty.”
The statement was taken down after the firings occurred. The new owner of the MLS issued a statement that declared, “We are dedicated to ensuring that the MLS remains a trusted, broker-focused, true partner that subscribers can rely on.”
A group of real estate brokers started an effort last December to buy back their shares in the MLS, but DMAR and SMDRA abruptly ended these discussions February. The realtor groups signed their letter of intent to sell REcolorado in May but only announced their action in mid-June.
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Theres a “shift” occurring in the residential real estate environment- out with the old, in with the new. But that doesn’t mean it will be better.
So a private equity-backed LLC has bought the Colorado MLS? How has that business model worked for the medical industry? In case you don’t know – NOT WELL. Most MLS’s, if not all, are not profit-driven. With the welfare of Realtors and hence the public in the hands of PE, I dread the consequences for the good folks in Colorado.