After 18 months of negotiations involving shareholders, boards, and management, things came to a head on Monday when we terminated merger talks with IRES, and you deserve to know why. What follows in this blog post are facts. Plain and simple. Here’s what we hope you take away: REcolorado wants a merger. In fact, we MUST make a merger happen because national portals and data websites like Zillow are having a profound impact on our industry, and every day there are new companies with new technology trying to take the broker out of the center of the real estate transaction.
Fact: You want a merger. We want a merger. IRES Board of Managers is holding that up.
IRES Board of Managers made last-minute conditional demands, even after their own shareholders, the REcolorado shareholders, and the REcolorado Board of Directors approved the tenets of a merger that were jointly developed by the shareholders. Those conditional demands included:
- the addition of a withdrawal provision that would give IRES the ability to walk away from the merged company after one year. Could you imagine selling a home with a clause that rendered the agreement null and void if the new homeowner chose? Even taking the payments made and returning them? This provision is the equivalent of a rent-to-own or lease option, which we all know doesn’t work.
- that REcolorado and IRES continue to operate separately. This meant our subscribers would continue to use two systems, operate under two sets of rules, use two customer portals, and pay two bills for at least a year.
If the IRES Board of Managers agrees to remove these provisions, REcolorado will gladly re-enter negotiations. As it stands right now, this is not the true merger you requested. You shouldn’t have to worry about IRES backing out of the deal a year or more into it. You also shouldn’t have to pay two MLS fees and use two systems for another year after the deal closes.
Food for Thought: Over the last 18 months, we’ve completed three MLS conversions. Two for REALTORS® of Central Colorado and one for Steamboat Springs Board of REALTORS®. We’ve also been negotiating with IRES for the last 18 months. By that logic, in the time we’ve taken to negotiate this merger, we could have, by now, completed it three times.
On the One-Yard Line
Fact: IRES shareholders, REcolorado shareholders, and the REcolorado Board of Directors approved moving forward with a merger. Merger documents included ample protections for all the shareholders involved, in accordance with Colorado law.
The presentation of last-minute provisions by IRES was unexpected and would have given IRES the right to tear apart the merger after a year. It was a move that broke negotiations just as we were ready to cross the finish line.
A Willing Party?
Fact: IRES Board of Managers has not demonstrated it is a willing party in favor of a true merger.
A May 22, 2018 blog post from IRES contained the following text:
We continue to feel strongly some agreement for merged data access is in the best interest of our industry and consumers.
“Merged data access” is synonymous with data sharing. REcolorado is committed to a true merger because brokers across the front range have overwhelmingly requested it. So, instead of continuing to spin our wheels with the “us versus them” mentality, let’s focus on common ground: our desire to protect the industry we love. One MLS can help us do that.
Ultimately, our sights are set much higher than a merger between REcolorado and IRES. We see a united MLS for the Front Range and beyond. REcolorado is ready, willing and able to lead that effort for Colorado. Coming together will give us consistent and convenient listing information, as well as the tools and resources you need to serve your clients. We—MLSs, brokers, appraisers, REALTOR® associations—must be on the same page and we must unite to remain relevant. Visit the website MLS of the Future to learn how you can get involved.