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C’mon, NAR, get with the times already- it’s the friggin 21st century!

The National Association of Realtors Inman News is just a little over a week away from their big three-day Real Estate Connect convention in NYC. One of the panel discussions on the agenda is called “No More Mr. Nice Guy: Revitalizing the MLS.”

The implication is that the proprietary Multiple Listing Service is in trouble, threatened by competition from that series of tubes known as the internets… and they aren’t gonna take it anymore!

You see, the MLS is a database that only Realtors have access to. Mere mortals like you and I aren’t allowed access to it unless we pay an agent a sales commission of 3% to 6% to represent us in a transaction. For the past several decades, Realtors have been the gatekeepers of information in the marketplace, enjoying a monopoly on listings information. Until recently, there hasn’t been any comprehensive database for active listings of real estate with the broad reach of the MLS.

But that’s changing.

Over the past five years or so, websites like Redfin, Zillow, MSN, Yahoo, and others began offering the general public the opportunity to list homes for sale without the need for an agent. This allowed regular folks like you and me the ability to search a huge database of properties without going through the Realtor-as-information-gatekeeper.

Buyers and sellers do a lot of research online anyway, so it makes sense that the consumer would want to browse property listings at their leisure without the ever-present sales pressure of an agent hanging over them. Plus, the cost to use these services is dirt cheap compared to hiring an agent, and so people flocked to them in droves.

Now NAR is beginning to realize that the days of its information monopoly are numbered. But instead of innovating to stay on top, they’re hunkering down and clinging to an obsolete business model. Let me explain…

You’ve probably heard the term Web 2.0 a million times, right? In case you’ve been under a rock and haven’t heard the term, it represents the shift from a social structure with a few giant gatekeepers charging the rest of us to have access to information, to a model where the consumer is in control. Sharing of information between people and removing the powerful gatekeepers is the direction that the Web and the world in general are headed.

Just ask any major television network. YouTube gets more traffic than practically all TV networks. Teenagers with a video camera can create content and build an audience as big as prime-time television. Print newspapers are quickly going broke trying to compete with the Web. The “push marketing” strategy of a few giants in any industry telling consumers what to want is quickly being replaced with “pull marketing” whereby consumers pull brands they like into their sphere of social influence and become advocates for their favorite products or companies. The gatekeeper as the center of the marketing and sales process is an obsolete model, replaced in the 21st century by the consumer as driver of the process.

These new breed of real estate websites understand this, and aim to give consumers the tools they need to make informed buying decisions. By putting the consumer at the center of the buying process, they create options for their customers and advocates for themselves. Conversely, the NAR is still trying to hold fast to the obsolete model of agent as gatekeeper, giving the consumer fewer options and less information with which to make decisions.

In a time gone by when the consumer had no other options, they could get away with this model. How many times have you heard a friend complain that they felt like they spent way too much on an agent’s commission compared to the value they received? On the other hand, many users of these new Web-based listings sites feel as though they received more value than they would have using an agent, for less money.

In short, the world has changed, and the NAR is wrong-headedly trying to ignore that reality. They should be trying to innovate and change with it. Customers expect more value and greater options, and if NAR weren’t stuck in a 20th century business model, they’d get with the program and offer customers what they want- a consumer-focused platform for making smart buying and selling decisions at a reasonable price.

So what should NAR do rather than just cling to the old ways?

How about bundling services? Why isn’t NAR following the lead of newspapers and network TV? These industries have giant gatekeeper companies whose business models are directly impacted by the Internet. What are they doing about the new consumer-centric marketplace? They’re changing their business models to accommodate the consumer.

For example, some daily newspapers are going to just five days a week in print, and putting more emphasis on Web-based content. Network television puts entire TV shows online, allowing viewers to watch what they want, when they want. They’re also partnering with other established companies to offer a broader array of services to their customers. Look at the partnership between NBC/Universal and Microsoft or the music industry and iTunes as examples.

In the case of NAR, instead of just clinging to an outdated business model, what they should do is encourage agents to partner with other real estate service providers and offer bundled packages of services. Have you ever seen an office where a real estate agent, title officer, and mortgage broker all work together? Imagine if you could go to a single office and meet with your entire “team” all at once? The lines of communication would be much more clear and efficient. The agent wouldn’t have to wait to hear back from the other team members for updates on the transaction, because they’d all be together in one physical space. Even if they still operated as separate entities, complimentary services in one place would offer a greater efficiency of operation and expertise that would be greater than the sum of its parts. This would allow the separate players to reduce their own overhead and marketing costs by offering their services as a team, and would allow NAR to start thinking of their agents and the services they offer as more important than their database.

Now let’s take it a step further. Imagine that when you agreed to work with your new real estate team, you also got access to an entire set of market resources, including full access to the MLS, whether you buy or not. The MLS could sell ad space to housing related retailers like Home Depot, Lowe’s, Ikea, and so on to create revenue from the MLS, just like other websites have done for years.

Now imagine getting a virtual “transaction room” where you could go online to a secure website and see a dashboard showing the status of your transaction details like where the appraisal, title report, inspection, financing, and fresh comparable sales are, all in real time? Imagine Microsoft Project, Basecamp, or other project management software for the real estate buyer or seller.

By putting the customer at the center of the transaction, bundling services to create efficiencies, allowing more consumer access to information, and tearing down the gate to allow consumers to make informed decisions, NAR could generate a ton of consumer loyalty and maintain their position as the industry leader. But they need to vastly rethink who and what they want to be in the future if they’re going to position themselves for future growth. NAR needs to understand that they can’t work against a consumer-centric business model and gain consumer loyalty at the same time. If they’re going to thrive, they’re going to have to stop protecting their status as a gatekeeper and start adapting to a new world order.