REcolorado was surprised to learn this week that its primary shareholders — the Denver Metro Association of Realtors (DMAR) and the South Metro Denver Realtor Association (SMDRA) — have agreed to sell the company to a private equity firm.
REcolorado — which is the 16th-largest MLS in the country with 25,000 members — said it had reached a deal to buy the shares of the company from the associations earlier this year before DMAR and SMDRA broke off communication.
The relationship between the two parties has reportedly grown increasingly frosty over the years, and now REcolorado leadership is left wondering what happened. DMAR and SMDRA declined to answer questions submitted by HousingWire, but in a statement, they said the sale was in the best interest of association members and MLS subscribers following antitrust litigation tied to the National Association of Realtors (NAR) and many major brokerages.
“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 reads.
“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 decoupling 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.”
