REcolorado faces uncertain future as sale looms

GREENWOOD VILLAGE — A schism has emerged in recent months within Metrolist Inc., Colorado’s largest multiple-listing service that does business as REcolorado, that has cast a shadow of uncertainty on the future of the MLS.

Jointly owned by the Denver Metro Association of Realtors and the South Metro Denver Realtor Association, REcolorado’s management team inked a preliminary agreement this summer to sell the MLS to a somewhat mysterious entity called Mazl LLC, a move opposed by many of REcolorado’s real estate broker members. 

That opposition, which stems largely from a belief by the brokers that REcolorado’s users and clients would be better served if DMAR and SMDRA sold the MLS to its members rather than a third-party buyer, resulted in the late June firing of the entire REcolorado board of directors after several board members began speaking publicly about the impending sale.

“While disappointed, we have come to this decision based on the egregious violation of confidentiality and signed non-disclosure agreement carried out by a representative(s) of the REcolorado board of directors,” the associations said in a joint news release. “Coupled with the response of the REcolorado board of directors over the past several days we have reached this decision which we believe is in the best interests of our collective membership, our long-term ownership and operational goals,” according to the respective association boards”

Mazl LLC, which was just formed in January, according to the Colorado Secretary of State, is led by J. Burks, who is described in a  SMDRA and DMAR news release as “a leader in the real estate industry for more than 40 years.”

Mazl has little web presence, and SMDRA and DMAR said that the entity is “a private company formed specifically for the purpose of acquiring the MLS service.”

In a prepared statement, Burks said, “With this change in ownership, our commitment to providing a broker-centric platform remains steadfast. We assure the subscribers that REcolorado will continue to operate as a multiple-listing service, maintaining its core mission of delivering exceptional data, tools and resources to Realtors and licensees. We are dedicated to ensuring that the MLS remains a trusted, broker-focused, true partner that subscribers can rely on. As this transition to new ownership evolves, we are excited about the opportunities this presents to enhance the MLS service and provide even greater value to subscribers. Our top priority is to uphold the values and integrity that have made REcolorado an indispensable tool for real estate professionals.”

Terms of the deal have not been disclosed.

The situation got even more complicated in late July, when global real estate software firm MRI Software LLC emerged as a potential second bidder for REcolorado after submitting an indication of interest, or IOI, letter for the purchase of the MLS.

“Having integrated and worked with REColorado for many years, we know that REColorado is a valuable asset to the real estate industry in Colorado. The goal of the proposed acquisition is to secure REColorado’s future while supporting and improving its MLS and contract platforms. Although the contents of the IOI are confidential, we feel that it will be very competitive,” MRI Software president John Ensign said in a late July statement. “Our intention is to keep existing integrations, help users maximize their profits and efficiencies, and continue to collaborate with industry leaders in the real estate community so that we develop and upgrade products to meet evolving needs.”

Terms of MRI Software’s offer have not been disclosed, and it’s unclear whether DMAR and SMDRA leaders will consider it. 

REcolorado is a Greenwood Village-headquartered broker-to-broker network that claims to facilitate more than 75% of all real estate transactions in Colorado. The REcolorado system was fully integrated with Information and Real Estate Services LLC, a Loveland-based multiple listing service that operates in Northern Colorado and the Boulder Valley, as result of a 2020 data-sharing agreement.

Its broker members had pushed to buy the MLS from the two Realtor associations that co-own it, but such a deal never materialized. 

Leaders of the MLS “disagree with their approach (regarding a sale to Mazl) and are dedicated to keeping REcolorado a broker-focused business partner,” said a message posted to REcolorado’s website in June, prior to the ouster of the board of directors.

In an emailed statement to BizWest, DMAR and SMDRA said that a sale “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.”

One of the motivations for the sale is legal protection against antitrust allegations, DMAR and SMDRA said.

“We strongly believe that this is the right time to sell the MLS, as the industry continues to advocate decoupling from the Realtor 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,” REcolorado’s owners said. “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.”

REcolorado’s former leadership responded to this argument about decoupling MLSs from Realtor associations in their June website post. 

“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 message said. “In fact, separation between the MLS and associations is why we actively engaged with DMAR and SMDRA earlier this year to acquire 100% ownership of REcolorado.”