After a heated disagreement over the potential sale of Colorado’s largest real estate listing platform REcolorado led to the firing of the company’s entire board, another company may try to stop the deal.
MRI Software, an Ohio-based real estate software application company, said it was interested in buying Colorado’s dominant Multiple Listing Service (MLS), according to a letter from the company’s president John Ensign that was obtained by The Denver Gazette.
A spokesperson for the company confirmed the letter’s authenticity.
The company submitted an Indication of Interest to REcolorado’s parent companies, the Denver Metro Association of Realtors (DMAR) and the South Metro Denver Realtor Association (SMDRA), the letter said. MRI Software did not disclose what it was offering for the MLS.
“Although the contents of the IOl are confidential, we feel that it will be very competitive,” Ensign wrote.
DMAR officials responded with the following statement to The Denver Gazette:
"We can confirm that we have received an unsolicited initial interest. However, details regarding the next steps and specifics of the offer are currently protected under our Letter of Intent (LOI) and Non-Disclosure Agreement (NDA). As such, we are unable to disclose further information at this time," according to the statement. "We appreciate your understanding and will provide updates as soon as we are able to do so within the constraints of our agreements.”
The Ohio company — which also owns Colorado-based CTM Contract — learned that REcolorado was for sale after it became public that a private investor was in agreement to buy the MLS.
REcolorado is where most homes for sale in the state are listed and syndicated to platforms such as Zillow and RedFin. Access to its market trends data is one of the perks Realtors who are part of the association get in their membership with DMAR or SMDRA.
At the beginning of July, DMAR and SMDRA announced they signed a letter of intent with “J. Burke” and fired the entire board of REcolorado, claiming members broke confidentiality agreements after speaking out against the deal.
“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,” according to a statement posted on REcolorado’s website on June 26 that was later deleted.
The associations faced backlash from their members, who were concerned about the intentions of the buyer, the secrecy surrounding the sale and punishment of the board. The MLS is one of the most important tools real estate agents use to buy and sell homes and local realtors are concerned over what a private entity could want with all the platform’s data.
MRI Software, which has apps integrated into REcolorado, said it wanted to buy the MLS because it’s a “valuable asset” and to protect the company’s future, according to the letter.
It also acquired another Denver-based company, eGent. MRI Software bought the transaction management software provider in January with support from REcolorado’s former chairman.
The company said it aims to keep its current applications and help Realtors maximize profits. It also added that it will continue to develop products on the software.
“The goal of the proposed acquisition is to secure REColorado's future while supporting and improving its MLS and contract platforms,” according to the letter.
Editor's note: This story has been updated to clarify that the Denver Metro Association of Realtors offers real estate data from the MLS as a benefit and members still have to separately sign up for REcolorado.
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