Controversial REcolorado sale to title-firm president Burks completed

Lucas High

GREENWOOD VILLAGE — Joseph Burks, president of Equity Title of Colorado Inc., has completed his purchase of REcolorado from Denver Metro Association of Realtors and the South Metro Denver Realtor Association, which had jointly owned Colorado’s largest multiple-listing service.

Leaders of the 26,000-member statewide MLS did not disclose the financial terms of the deal but said in a Friday news release that the buyer intends to continue using the REcolorado name and branding. Larry McGee, a broker who was formerly the chairman of REcolorado’s board, will serve as interim CEO until a new leader is hired. 

“We are committed to ensuring that REcolorado not only remains the foundation of Colorado’s real estate community but continues to set the standard for excellence and innovation as a subscriber-focused MLS,” Burks said in the release. “As a market leader, REcolorado has always been at the forefront of delivering top-tier services. Our goal is to collaborate closely with its exceptional team to strengthen the company even further, ensuring it continues to deliver MLS services that bring unparalleled value to its subscribers and their clients, adapting and innovating to meet the evolving needs of today’s real estate professionals.”

Consummation of the deal marks the end of the latest chapter in a controversial saga that riled the Front Range residential real estate community. 

The process that led to Burks’ purchase faced stiff opposition from brokers, which stemmed largely from their belief 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, and resulted in the late June firing of the entire REcolorado board of directors after several board members began speaking publicly about the impending sale.

Rumors, many of which related to the identity of the buyer, swirled all summer in an information vacuum that DMAR and SMDRA claimed was necessary because of a non-disclosure agreement signed by the parties to the REcolorado sale. 

For months, REcolorado leaders let on only that the buyer was an entity called Mazl LLC led by a person called  “J. Burks,” described vaguely as “a leader in the real estate industry for more than 40 years.”

In a June letter to REcolorado members, DMAR CEO Brendan Bailey and DMAR board president Jen Routon revealed that J. Burks was Joseph Burks, “one of the largest shareholders in the early creation of CTM eContracts, a widely used contract software for real estate transactions. He currently serves as the president of Equity Title of Colorado and is an affiliate member of SMDRA.”

The letter continued: “We understand that the initial lack of communication about the pending sale of REcolorado, MAZL and Joseph E. Burks specifically has been perceived as secrecy and has been an ongoing source of frustration this past week, and we apologize again for limited communications. This, again, was due to confidentiality obligations to the potential buyer, which we followed under legal counsel and a signed NDA. However, we acknowledge that this has led to speculation and theories not based in fact, and we commit to releasing information to our member base as soon as we are able.”

Mazl LLC, which has very little online presence and was registered with the Colorado Secretary of State’s office using a Greenwood Village address in January, “is a private company formed specifically to acquire the MLS service. Joseph E. Burks is the sole and only purchaser of REcolorado,” Bailey’s and Routon’s letter said. “He created MAZL, LLC specifically to execute the Letter of Intent (LOI) and complete the business transaction. There are no other investors. The funding for this purchase is coming from a commercial bank, as is typical for a corporate entity making a business transaction.”

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.

“Both boards and leadership teams evaluated several legitimate offers for the sale of the REcolorado shares,” REcolorado leaders told members this summer. “After a lengthy and comprehensive evaluation, including evaluation with our Association counsel and Merger and Acquisition counsel, we determined that this offer best meets the long-term needs and services of our members.”

Brokers also expressed concern about how SMDRA and DMAR would use proceeds from the REcolorado sale.

“We emphatically deny all accusations and rumors suggesting that either the DMAR or SMDRA Board of Directors or leaders have any financial gain to be made from this sale,” the groups’ leaders said in a letter to members. “That is simply untrue and goes against the foundational principles of a member-based organization.”

DMAR and SMDRA said this summer 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 was 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 in statement this summer. “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.”

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 the result of a 2020 data-sharing agreement.