Category : MLS (Multiple Listing Service)

Copyright Data Licensing MLS (Multiple Listing Service) NAR

NAR's General Counsel responds to Microsoft's Bid for MLS Data – 1998

We have always known that the data has value. As a side note, I wonder if Rich Barton (Zillow) was at Microsoft at the time?MLSNAR_Page_1 MLSNAR_Page_2 MLSNAR_Page_3 MLSNAR_Page_4

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Domain Names Dot REALTOR MLS (Multiple Listing Service) Personal Branding - Domain Names

Who owns Dot MLS?

ICANN Internet Addressing Strategy is moving forward.

Date: 17 December 2014
In Contention to control the DOT MLS TLD: 144
Winner: The Canadian Real Estate Association
Winning Price: $3,359,000

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Data Licensing Major Real Estate Portals MLS (Multiple Listing Service)

Exclusivity of Listing Data on the Web

The NFL allows the Super Bowl to be broadcast exclusively. Consumers have no problem with that and they know where to look to find out when and where to view a Super Bowl.

It is time to consider the concept of exclusivity once again, as it pertains to the www.

I was an exclusivity advocate in 1998, and this is what I had to say about it then:

Take Back Your Future

In 1995 I traveled the country meeting with MLS and association leadership in an attempt to convince them that the future of marketing property was on the Internet. I stressed that the MLSs needed to participate in order to maintain relevance and even control in an environment where it was said that control was being lost and all attempts to control listing information would prove futile.

At that time it seemed logical to me that if REALTORS® placed all their listings on one web site, the critical mass would draw consumers — and the fact that the information was only available on one site would boost the value of that site, much the same as a network contract to air the Super Bowl was a boon to the network.

In 1998 when Microsoft entered the fray, I thought it would be a good idea to step back and take a look at what MS had to offer and also look at the possible consequences of  any decision not to work with the most powerful technology company in the world.

After examining the situation for over a year, I am convinced that the place for REALTORS® listings are on:

  • Local MLS or association site
  • Company and/or franchise site
  • REALTOR.com

I am also convinced, based on observation over the last year, that REALTORS® should not place their listings on:

  • HomeAdvisor
  • HomeSeekers
  • Any other national site

Two prevailing arguments today are:

1) Putting your listings on as many sites as possible will increase your exposure and result in better service for the seller and the buyer (consumer). — advertising a property for sale on multiple sites helps sell the property faster/ better/cheaper

This has not been demonstrated to my satisfaction, yet it is widely touted by web entities trying to get your listing information to create a viable business model for their web site.

To the contrary, concentrating all the listings on one site will make marketing expenses more cost effective. One site makes it easy for the consumer – the same consumer who right now is being overwhelmed with choices, including some with unreliable data.

2) Putting your listings on one site, Realtor.com, will create a more convenient way for consumers to find all the listings in one spot operated by  a company that must conform by written agreement to certain constraints and concerns of NAR and its members.

Cost effective marketing of Site:

If all the marketing of all the REALTOR family of associations and MLSs goes into marketing Realtor.com, more exposure possible

Realtor organizations can promote the services of their members.

It’s time to begin to “take back your future.” Brokers and MLSs need to maintain control over this precious commodity.  With control in hand, they can decide when/how to license it to others with or without restrictions. That is what John L Scott wants, Cendant….argue you can have better control if you are dealing with one major portal….with many aggregators you never really know what all they might be doing with the data (like Homeseekers).

As I was walking around the NAR Trade Show floor in Orlando last week, it became rather obvious that too much of something is not necessarily a good thing. With all those dot.com products and technology gadgets, it was easy to see how REALTORS® can be overwhelmed with choices.

So it is with consumers as they see property listings all over the Net and in various forms of presentation. It makes sense to me that many consumers will gravitate to a central portal where they can consistently find reliable data that is well-policed and current…a place where they can enter their profile and know that they will be alerted as matching properties are entered into the system.

As brokers we know that CONTROL is the key…and control over our most

important asset – the listing – is critical to our survival. The more you release the data, the more you lose control.   The IC has aimed its marketing campaign at the agent/broker keeping control of their Web Presence so that they have a section for their own listings and another section for other property listings.  The broker does not want their listings appearing all over the Net subject to manipulation by other brokers and by third party vendors.  Internet exposure is desired, but it needs to be in a controlled setting…if it is not working out, it is much easier to change permissions/contracts with one party than with an almost unknown number of web aggregators.

As mentioned on RealTalk, we need to be careful how much we give away:

So has anyone considered that EVERY TIME we GROAN that someone else is

slipping into the middle – taking a slice of the cheese – that it’s NOT that some brilliant dot-com idea has TAKEN it – it’s more like brokers have GIVEN it away… simply by participating like a bunch of currying, starving listing-appointment pr*stitutes eager to pay anything for any marketing opportunity at any price.

Financial gain for NAR

 

Offered Shares at IPO: 7,000,000 shares

NAR Ownership: 6.8% (476,000 shares)…at $52 per share, that’s $24,752,000

 

Common Stock Outstanding after IPO: 67,037,860 shares

NAR Ownership: 6.8% (4,558,574 shares) at a price yet to be determined. Assuming that price is $25 per share…$113,964,362

 

Here’s a quote from NAR after Orlando (fouind in ORP)  —  To help pay for the $8.6 million in initiatives the board approved, members voted to stop setting aside $4.5 million annually for reserves. The annual set-aside is no longer needed, said Yassky. NAR has $23 million in reserves plus $12 million from the sale of its old Washington, D.C., building and owns 4.5 million shares of HomeStore.com, the operator of REALTOR.COM, which was worth an estimated $235 million in mid-November.

Local Association/MLS

 

Gold Alliance examples:An MLS in from the start – these guys took the greatest risk and should be rewarded accordinglyAn MLS in now

 

Control

  • Promotional opportunities
  • White Paper Format
  • Introduction
  • Overview
  • Background
  • Business Proposition
  • Solutions

Conclusion

 

  • Make the site you have the most control over the most powerful site on the Internet
  • Other vendors misuse data

No doubt about it, realtor.com has to commit the resources to counter the argument that it takes too long to upload listings and photos.  They are really exposed on this point and homeseekers can play on that weakness.

 

I think they now upload daily to 1 million of 1.4 million listings

 

Critical mass

Control

More valuable

 

Sticking together makes everyone’s interests more valuable

 

NAR ownership – NAR owns the hardware and the software and the Domain (Realtor.com)

 

No evidence that having listings on multiple sites results in more, or faster sales

 

Create argument for the power of having all the listings in one spot…like the classified ads

Promotion of REALTOR

 

  1. COM best leverages the Internet to the benefit and protection of REALTORS of any national real estate website.
  2. Selecting REALTOR.COM as the national listing site of choice for REALTOR listings is in the best long term interests of the REALTOR community
  3. COM’s classified business model does not compete with REALTORS
  4. Ensuring a REALTORS’ web presence is linked to REALTOR.COM is a vital part of a REALTORS’ Internet marketing strategy.
  5. NAR owns the REALTOR.COM website; RealSelect operates the website for NAR
  6. COM is the only national website that has lifetime contractual benefits and protections for REALTORS

 

Anti-Trust considerations:

 

Paulson Case

Thompson Case

Current San Diego Case

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Listing Syndication Major Real Estate Portals MLS (Multiple Listing Service) Public Portals REALTOR.COM

The Future Of Listings Online – It May Not What You Have Been Conditioned To Believe

With all of the Hoopla and the surprises at Inman this week between MOVE/REALTOR.COM/Newscorp and Zillow/Trulia, the New York Times, etc, there is another possibility that will be spoken little of, if at all…and that is talk of a Broker MLS portal as part of a consortium with local MLS and Association public portals…for lack of a better term, the Network.

John and I have been considering and socializing various aspects of a network or consortium, with interesting result. There is much flesh to be put on the bones of this outline. Something that would enhance this concept is the sun setting of syndication by MLSs, leaving it the responsibility of brokers.

So, as with any onion, there are many layers, the future could resemble:

Broker/MLS National Public Portal Joined in a Consortium with Association/MLS Public Portals, AKA The Network

What’s at Stake

  • The current real estate sales model

The Opportunity

  • Position as the authoritative source of real estate information to the public, becoming a competitor for the public eyeballs at a greatly reduced capital cost…you own the data everyone wants
  • Listhub, Zillow Trulia Data Battle will be expensive for both sides, and create an opening for an Industry entry.
  • Creating the revenue from the data search, display, and other acceptable uses to pay for all of the costs of MLS services to real
  • Synergies of this Consortium.

Stakeholders

  • Consumers
  • Agents
  • Brokers
  • Associations/MLSs
  • Franchisors
  • Vendors
  • Consultants
  • Portals

Projects

  • Broker/MLS National Public Portal
  • Association/MLS Public Portals
  • Contract Alignment – LRM (Listing Rights Management) – Data contracts with specific data rights. This is critical. Exclusivity of data is a driver of value, and attainable.

Strategy – P C M

  • Protect – Contract Alignment
  • Control – LRM
  • Monetize – Industry Public Portals

Major Portal Competition

  • Zillow
  • Trulia
  • REALTOR.com

Portals are “Games”

  • Traffic count indications
  • 60 Million Uniques per month
  • 5 Million Annual Transactions
  • Changing rules of data display will not affect serious buyers, only gamers.
  • Portals at vulnerable and at multiple risk
  • Relationships with MLSs are weak
  • Data Source from Point2 short term contracts
  • Data Source from Listhub tentative – owned by Move
  • Reliant upon MLS (free) data to build commerce

The Network is a Player

  • The Network uses its data resources to propel it forward. All indications is that The Network must move now, to maximize the current landscape
  • Third-party Portals pose a threat to brokers as the portals move upstream, creating relationships with consumers early in the home buying process, and cultivate consumers in a far more effective way than is possible for most practitioners. MLSs are at risk
  • The Network is the alternative
  • Network of Portals with combined traffic better than the Top Three
  • Positioned to help Brokers and MLSs control and monetize their data (API Strategies) – LRM
  • MLS Fees become a thing of the past for real estate professionals

Portals Are Vulnerable

  • Be a competitive alternative to the top 3 in the real estate portal space
  • Compete for the current dollars
  • Find ways to monetize or benefit
  • Position for future opportunities (dollars)
  • MLS Public Portals
  • Providing relevant search results to consumers, not hampered by revenue models of most portals
  • Bringing Realtor® and consumers together online through the most dynamic and prolific Online Real Estate Communities on the Internet
  • Data – Quantity and quality, the best of any portal
  • Offering training and education resources to agents and consumers
  • Sold data eventually – “that was then, this is now.” Sold data provided by forward thinking MLSs. Put the Zestimate to bed once and for all.
  • Develop a public portal solution that is a WIN – WIN – WIN (Consumers/Practitioners/Organized Real Estate)
  • A new online consumer experience
  • Syndication Network – MLSs and Association Public portals
  • Harnessing the power of the data, creating data products and revenue for the benefit of consumers and the industry
  • Bringing REALTORS and Consumers together in a conversation
  • Capitalizing on the community and organizing power of our MLSs and Associations to generate community created, hyper-local content

How? Create a “New Model”

  • Key: “Industry Friendly” with Integrity
  • Old Model – Single giant portals competing
  • New Model – Create a network of MLS/Association portals and use the power of the organizations and brokers to help propel the “New Model” to the top, organize and share in revenue. Gain recognition and brand exposure in the marketplace to assist in the sale of other products

Industry Friendly

  • Other MLS/Association Portals
  • Broker Portals
  • Agent Portals
  • Franchisors
  • Anyone who wants the data, under the provisions to be determined
  • More Power Growing demand for data products….the MLS is data rich and can be used to construct many data products that have not yet been thought of.

MLS/Association Portals Will Come From:

  • Public Portal
  • Ad Networks
  • Ads to local vendors
  • Member Involvement
  • Online Community
  • Education
  • Bringing the consumer and the REALTOR® together

Member Benefit

Sending leads back to members In a REALTOR® Friendly way

Emphasis on:

  • Mobile
  • Millennial
  • Social
  • Gaming
  • Learning
  • Community
  • Content
  • Search
  • Display
  • BI/Big Data

The Revenue Opportunities

People keep talking about “data,” but what is it that they are talking about?

  • Information is the currency of the Twenty First Century – Toffler
  • MLS Data – Availability, status, size, on market,
  • Property Data
  • Local Data added by associations and MLSs
  • Community Data
  • Behavioral Data

Components

  • Vision
  • Organizational structure
  • Resources
  • Budget
  • New Hires – a few
  • Responsibility
  • Authority
  • Accountability

MLS Portals

  • Socialize MLS public portal acceptance to MLSs, Associations, Brokers, Agents
  • Strive for as many public portals in the next two years as possible, by all competitors

 

 

 

 

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Major Real Estate Portals MLS (Multiple Listing Service) Organization Of the Real Estate Industry REALTOR.COM

Where Does the Data Come From? Primarily from Members of an Association of REALTORS

“For Sale” Data, is the “Oxygen” of real estate portals such as Zillow, Trulia, and REALTOR.com.

The deepest, richest, most accurate and timely comes from Multiple Listing Services (MLS).

MLSs are typically owned by an association of REALTORS, or a group of Associations of REALTORS. A group of Associations owning an MLS would probably be considered a Regional MLS.

An MLS is either a separate corporate entity of an owner Association(s), or a Committee of an Association.

The data in an MLS data base is acquired through the hard wok of real estate professionals, in most cases, REALTORS, who belong to an Association of REALTORS, and its MLS.

These associations are housed in unique building across North America…there are over 1300 Associations of REALTORS, and about 850 Multiple Listing Services.

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Listing Syndication Major Real Estate Portals MLS (Multiple Listing Service) Public Portals

Real Estate Syndication Consortium

Back in July, I circulated the seeds of a “position paper” I had in mind, internally, to the leadership at Yardi, and I also circulated it to a few “industry giants.”

I knew that Yardi (then owner of Point2 and the number 2 syndication capability in the Industry) had decided not to dedicate any more resources to the Point2 syndication product. This was about to create a huge hole, and for the right party or parties, an even bigger opportunity.

There were strategic as well as tactical benefits for specific entities that might be willing to step up to the “data distribution” plate, as Yardi was stepping away. Listhub already controlled the biggest network and stood to gain much if it could acquire Point2. Zillow and Trulia seemed to be at greater risk if Point2 were to fall into the hands of Listhub…which then fell into the hands of NEWSCORP.

The September acquisition of Point2 syndication by Listhub (which is owned by MOVE) puts MOVE in a very strong position to regain the number one position it held for so many years. I think we may begin to see some of the results of MOVE’s recent acquisition  of Point2 Syndication when the Zillow and Trulia data contracts with Listhub expire…sooner rather than later. 

What is needed is an Industry syndication alternative. This is the time for disruption, for “taking back the future” by the industry. Conversations and meetings are already taking place. A Public Portal effort with a new syndication effort is a multi billion dollar proposition, and is a possibility if the right entities “join hands.”

I have been saying for a number of years that the value of the MLS data, properly packaged and distributed, should be able to pay the cost of the MLS infrastructure, and a whole lot more, and in a way that is not adversarial, or in conflict with the best interests of the brokerage community, the MLS and association communities, and consumers.

Back to July…here is what I was advocating to a small group: 

Real Estate Syndication Consortium

Create an organization of interested parties who will benefit from more uniformed and structured data resources from MLSs nationwide. This can be done by placing in motion a process whereby MLSs will begin to control their data once again, through the Intellectual Property (data contracts) and Leadership and influence offered by this organization.

 Discussion

Billion dollar enterprises are wrestling and positioning for their share; expectations are that huge commerce will be made in the real estate online marketplace, and all that entails…from advertising, media, and “upstream lookyloos” to the transaction platform and closing, and all of the commerce that may spring from that major event — the purchase or sale of a home. Multiples for companies in this space are unusually high.

There is much at stake, and yet much rides on a major choke point, data acquisition and data rights.

All of the activity pre and post purchase in a lifetime relationship with the consumer in the area of real estate needs is the goal of many portals today, and all of the data that can be derived therefrom.

What all of these companies (save one) lack is reliable long term access to the consistent flow of accurate, dynamic data.

Access to that data is fragmented and of varying degree of accuracy and freshness. What many entities, looking to make commerce in this space all need, the key element, is access to MLS data, which is policed, and made available with varying depth of information, by the different MLSs (Data Providers).

Background:

We have moved from Syndication Evolution to Syndication Revolution in the past 6 months, and it is just beginning. The Industry at the broker, MLS, and agent levels are ready to take control of their data, with new, data agreements developed in a way to insure there is a fair exchange of value for the information.

Brokers, MLSs, have learned much since syndication was brought front and center in the Industry in 2008, with the prevailing thought being “Distribution trumps destination.” Data, its value, and the value of the data created by the data, was being considered by few inside the Industry.

 Current State of the Industry:

There are 3 ways for third parties to obtain this data, at varying expense, and benefit (this was written in July, and now Point2 and Listhub are ONE):

  • Listub – Owned by one of the “Big Three” real estate portals, REALTOR.com – Growing stronger
    • Point2 – Owned by Yardi – weakening and little resource available to make it better
    • Direct Feeds – The choice of major portals, which would benefit in the long run from a more reliable source of data, not controlled by a major competitor

There is great misunderstanding within the industry around data rights and the licensing of those rights, but that is changing and this creates a disruptive opportunity.

In addition, the value proposition provided by those currently using MLS data (Zillow, Trulia et al, received from Point2 at no cost) is being questioned at all levels of the residential real estate sales industry (the Industry).

There is great dissatisfaction with the portals, and with the MLSs by the brokerage community.

The time is now right to use the strengths of the Industry to anchor its position for the future. Those strengths being the data collected by the army of REALTORS who work for free until a transaction closes, and the organization of MLSs across the US and Canada that makes the real estate marketplace in North America the envy of the world. The Industry can now capitalize on the fruits of this labor, for the benefit of:

  • Practitioners at all levels
  • Associations and MLSs
  • Media
  • Consumer

There is an opportunity for major players currently in this space to achieve a number of their individual goals by working together on the Real Estate Data Syndication Consortium project.*

 Purpose of the Organization:

To achieve mutually beneficial goals and objectives around the accumulation, manipulation and dissemination of real estate listing data provided to the public by MLSs, brokers, and franchises, for the benefit of group members, industry stakeholders, and, ultimately, Consumers.

Examples of Benefits:

  • Alternative to Listhub
  • Rewrite syndication model in the residential real estate industry today

Include data rights in a transparent way, and in a fair exchange of value with portals and those desiring the use of the Industry data.

There should be enough money in the data food chain, behavioral and advertising, that the infrastructure in the industry, currently costing the industry over a billion dollars a year (made up, check real number from Clareity…it is a lot).

What entities have an interest and might participate in this “Movement.”

Financial

Expenses – 3 year proposed time to accomplish goals and objectives. With possibilities new opportunities will arise.

Funding could be through a group of investors yet undetermined; the companies mentioned here, and/or others.

Execution

  • Organize and fund as necessary
  • Create the Data Contract Standard – Stake in the Sand
  • Negotiate with Data Recipients
  • Consult with MLS and Brokerage community
  • Charge for the data, and/or data handling and delivery to destination sites
  • Timetable

Results:

Standard data contracts in place and constructed to allow for the continued evolution of the value of the data created by the real estate Industry with the first major goal to be a new funding mechanism for MLS.

Now is the time to take the next step  to change the monetization model of MLS data from lead generation and sales, to the participation in the value created by the information, and by the information created by the information….

Considering the above, the days of dominance of the current portal superpowers may be numbered.

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Listing Syndication Major Real Estate Portals MLS (Multiple Listing Service)

MLS Data has value

Data concerns – 1998. What we knew then is even more relevant today, and sharing that data will allow interlopers to get upstream…and you will pay a toll down stream.

Why do we now think MLSs should offer their data to Real Estate portals at no cost to the portal?What if MLSs backed off, and let those brokers who desire, to send the data directly to portals?Data Memo - 1998

https://www.facebook.com/saul.klein.98

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Data Licensing Listing Syndication MLS (Multiple Listing Service)

Is Zillow pursuing "Direct MLS Feeds" with great enthusiasm? If not, it is my opinion that it certainly should be…

Someone commented to me on a popular social media platform that Zillow seems in a rush to acquire listing content. It makes sense to me that Zillow would be in an ongoing rush to acquire clean fresh listing content. In fact, when I was in the data aggregation and syndication business a few years back, it was not unusual for Spencer  Rascoff, when I met with him at Industry events, to encourage my efforts to acquire more MLS contracts and more listings, and to do it faster.

While REALTOR.com has some 800 plus direct MLS data feeds, Zillow, has few direct feeds, and depends pretty heavily on the data provided by Listhub.

This reliance on Listhub by Zillow increased when Listhub acquired the data contracts from the number two aggregator and provider of MLS listing data, Point2, in early September this year.

When does Zillow’s current contract with its major competitor, Move/REALTOR.com/NEWCORP/Rupert Murdoch…the company which provides a large portion of the oxygen Zillow needs to be healthy (listing content), expire?

And then…what will Rupert and his Team do, to take back the Number One spot, which is the publically stated intention? Will this be hardball or softball?

I thought I had read somewhere that Zillow’s data contract with Listhub expires early next year, and about a year later, Trulia’s content contract expires.

If that is true, and I were managing Zillow’s data acquisition strategy, I would be looking hard for alternative sources of listing content too, and fast. Nothing worse for real estate portals than big “black holes.”

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Data Licensing MLS (Multiple Listing Service) Uncategorized

Moving Toward Data Standardization

As reported by Inman News, Metropolitan Regional Information Systems Inc. (MRIS) has become the first multiple listing service to be certified by the Real Estate Standards Organization (RESO), a nonprofit that aims to foster software innovation and improve efficiency in real estate transactions through data standardization.

According to National Association of Realtors policy, MLSs must implement the latest versions of RESO’s data standards within one year of their ratification by the RESO board. Now that the certification process has begun, the board is set to choose a ratification date and start that clock ticking, according to RESO Chair Rebecca Jensen.

Currently, the vast majority of MLSs use varying versions of RESO’s Real Estate Transaction Standard (RETS) to transmit data in a standardized format to third parties. But MLSs may only be certified for complying with the latest versions of RETS — versions 1.7.2 and 1.8 — which don’t just allow MLSs to transmit data, but also to receive it — a capability brokers have long pushed for called RETS Update Transaction. Update makes the platform more accessible to others, easier to share data, and easier to integrate systems, whether it’s broker back-office systems or whether it’s third-party application developers.

For now, RESO has only launched a certification process for RETS 1.7.2 and RETS 1.8. The nonprofit hopes to have the other components of its data standards — the RESO Data Dictionary and Web API — ready for certification by the end of the year.

Clareity’s Matt Cohen does a super job in working with the RESO (RETS) Committee. Thanks Matt.
Here’s Matt’s Update of the Spring 2014 Meeting.

For more information on RESO, go to www.reso.org
Article on benefits of RETS

 

 

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Data Licensing MLS (Multiple Listing Service) Uncategorized

Using MLS data to generate an AVM

The question of whether there is any real value to using the MLS data to generate an AVM was recently discussed in the RealTalk forum. Here are some excerpts:

Steve Erwin asked –

“Is there any REAL value to using the MLS data to generate an AVM?”

First off for those who may not know, let’s understand what is an AVM (Automated Valuation Model). It is an estimate of a property’s value using a proprietary formula based only on PUBLIC RECORDS. AVM’s have been around for over 15 years and there are different types.

1. Hedonic – treats the property as a bundle of characteristics (# of bedrooms, # of baths, etc.) the sum of which determines the estimated market value.

2. Indexed – predicts valuation based on sales trends in a geographic area. Specific property aspects are not considered except to select a number of similar properties.

3. Blended – combines both sales trends and property details: uses statistics that show the accuracy of predictions for both hedonic and indexed models over time and gives each value a weight according to the provider’s proprietary formula.

The problem is that these usually assume average condition of the property without allowing for upgrades or the value of those upgrades vs. comparable properties. Each AVM can come up with a completely different value. For example – $134,000 for Trulia, $141,000 for Chase Home Value, $138,470 for AOL Real Estate, and $136,519 for Zillow. Will the real value please stand up?

Realtor Property Resource (www.narrpr.com) that can be used by any REALTOR as part of your NAR dues, that produces an RVM (Realtor Valuation Model) which is a nationwide parcel centric database with over 146 million property records. It is using the Blended approach of not only using the public records but is also adding in MLS data of current and off-market information into a proprietary algorithim that produces the most reliable valuation product available. This system is owned by NAR… which is us.

So perhaps you are misunderstanding. No one is talking about a valuation model that uses only MLS data… and is not also blending in the public records too. This blend that other AVM systems have not been able to have access to – our active, pending and sold MLS data – gives an even more complete picture as to the value of the property in question. This MLS data is coming into the RPR system virtually in “real time”.

Please feel free to contact me if you have more questions as I have been teaching RPR classes for the past 2 years for NAR. I have probably given over 125 “live” classes in that time.

Regards,

Win

********************** Win Singleton, CRB, SRS, SFR, e-PRO Associate Broker Long & Foster Real Estate, Inc. (703) 536-7631 wins@winsingleton.com http://www.winsingleton.com http://www.facebook.com/fallschurchhomesearch Licensed in Virginia **********************

===================================

From Mark Jay:

“Steve Ervin asks:

Is there any REAL value to using the MLS data to generate an AVM?

More and more listings are being sold OUTSIDE of the MLS systems. .we have been informed that slightly over 43% of transactions closed in 2013 didn’t pass through a Multiple Listing Service.”

I would think that a data source (the MLS) that is missing that much data would be a pretty unreliable foundation for any Automated Valuation Model system.

Mark Jay comments:

Okay, if 43% of transactions are outside of MLS that means that 57% are marketed and reported INSIDE MLS.

Let’s say that there are 10,000 sales within a geographic area serviced by an MLS. That would be 5,700 sales reported in MLS. That’s a pretty large sample set upon which to perform a statistical analysis upon, don’t you think? Sure, it would be nice to have ALL the population data (all the ‘arms-length’ transactions) within an area but if you don’t, taking-statistically speaking-a huge sample size is essentially, just as good.

Now, it might be that the 4,300 non-MLS sales differ in some way from the 5,700 MLS sales, but it’s likely that difference, if significant, would be systematic and therefore able to be accounted for as another variable, wouldn’t it?

What makes the MLS data amenable to use in statistical modeling is that property data is the ease of tabulation through the RETS standards for MLS data required some time ago now by the NAR promulgated MLS Model Standards. The most important RETS data can be used to predict sales prices and that’s the objective of AVM models. An entity can simply do the work of analyzing the non-MLS sales (a statistically significant sample size) and develop an adjustment factor. Having a sample size as large as 57% of the population universe should be no impediment to having an accurate sales price prediction engine (AVM)

I’ll go on a little farther..

The idea behind AVM is for “larger” MLS participants to be able to develop an income stream ancillary to providing traditional Real Estate Brokerage Services by satisfying the demand lenders (and other users of this sort of information) have for obtaining more objective and reliable information on property values as mortgage loan security (collateral) than appraisers can comparatively provide. MLS entities themselves could provide AVM services but that would be clearly outside of the Core Mission and I doubt the membership would allow it, because of that and other reasons. Large, market dominating, Real Estate Brokerage Services providers (Big multi-office Brokers with 20 to 30% market share) want to add a revenue stream and can do that with just the “slightest” permission from NAR and NAR model MLS entities. In fact. a large broker with a 20 to 25% share wouldn’t even need to use the entire MLS data base to generate an AVM that a large lender could use in lieu of an appraisal, it could be argued, from a statistical point of view. The largest and the second largest broker in my market could generate a statistically robust AVM just from their internal sales. (and remember, this large broker COULD-if they had them-add back in “pocket listings” All that’s need is a large enough population sample size. Remember, too, all the lender really wants is something MORE reliable and less costly than an appraisal. The AVM data source doesn’t have to be “perfect”, as in containing ALL the sales data, it just has to be better IN RESULTS than than the predictive ability of the appraisal process in terms of risk management and cost.

The sad reality for appraisers vis a vis one through four family valuation is that the way they do what they do has and for many years has been at the point of “technical exhaustion”. Appraisers can be easily “bought” in a way that a mathematical model can never be and the cost, because of the labor component, is just TOO high. What has happened to Mortgage Loan Underwriters will soon happen to appraisers. In mortgage loan underwriting, the originator enters a number of variables into a computer program and the program approves the loan. The information entered is verified for accuracy by what is called a “validator” and the loan is closed. As long as the income, assets, and the property value entered into the underwriting engine (a computer program) is verified or validated by a person with a skill set up to the task of comparing numbers on a form, then a highly trained and deeply experienced underwriter is not necessary except in the increasing rare case of a loan that has to be “manually” underwritten. In the future a “validator” will simply order an AVM product, look at that number to make sure it supports the number in the Automated Underwriting Engine and the loan will close. The AVM number will be ordered online at a cost of a few dollars-say $20 or $50 or so. competition will bring that number down-and received in a matter of a minute or so and the loan will close. There will be no need for an appraiser to “go out”, look at the property, take pictures-front, back, street scene, etc.-and then submit a report 10 days to 2 weeks later.

The short version is that AVM WILL happen and a full record of every sale in a market area isn’t needed, even the internal data base of a large broker should work. AVM WILL work because the lenders want it. The only little thing that is needed is permission to use the MLS data base-even if it’s to only “fuel” a proprietary AVM with the Broker’s own sales data…

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Mark Jay comments:

The hardest part of selling is generating REAL qualified prospects for your good or service.

Steve Ervin replies:

Mark…I completely agree with your comment and the rest of what you wrote here. the basic problem can be understood by the data in NAR’s annual survey of home buyers and sellers. The FIRST thing to look at is that NAR says that on average people start looking on the internet 18 to 24 months BEFORE doing a transaction. The study goes on to say that home buyers START working with a Realtor on average only 12 weeks before doing a transaction. But here is the important fact appended to that…the home buyers say that they started SEARCHING for a home to buy ONLY 3 weeks earlier. In other words almost ALL of the time prospects spend on the internet they simply are NOT prospects.

I totally agree with you that most lead companies selling leads to Realtors have absolutely no interest in the QUALITY of leads they generate. for years I have been working on a solution to this. And I think I have come up with on that will work. Instead of finding ways of tricking consumers into filling in forms so that information can be sold as a crap lead…I am building a system that is designed to HELP Realtors generate leads from their listings. The system is described here …but just the technology to generate more leads does not solve the problem. The leads still needed to be screened to determine if they were actually of any value. So I have been putting together a service to follow up on all the leads generated…..and instead of delivering RAW contact data, I plan to deliver profiles of each prospect identifying why they made an inquiry and where they are in the buying process.

I am planning to offer these services to Realtors free of charge…including providing the rider signs, etc. There will not be any “freemium” offers where the base level is free…but enhancements (Realtor.com enhanced listings for example) are available at an additional charge. The entire marketing system and follow up service will be provided at NO charge. What I am asking for in return is that I can sell these leads to a lender or some other NON-REALTOR service providers that provide products and services to home buyers. Unlike Zillow, Realtor.com, etc. the leads generated by a Realtor’s listings will never be shared or sold to another Realtor. And of course we will not put any restrictions on the Realtor providing those leads to their preferred mortgage supplier or other service providers they feel can help their client.

I would really line to talk with any agents and brokers out there who can give me feed back and advice on what works for them and what does not…before I do the official launch of the system in the next couple months.

Steve Ervin www.24SevenPropertyInfo.com 727-320-5436 Direct

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