It is not too late.
Not only that, the time is NOW to determine paths to data monetization of MLS Information for the real estate industry, with a few initial, specific objectives.
I have been around Internet listing display and listing data distribution since their inception in 1995. My initial experience with MLS data was as an MLS user and a broker, and an association volunteer in the 1970s, 80s and 90s. This led the way for my work with NAR, RIN, Realtor.com, InternetCrusade, and more recently with ePRO, and Syndication as CEO of Point2. We are now at the threshold of a convergence of Syndication (Data Distribution) and MLS Public Portals. This is significant, with billions of dollars of revenue at stake over time. Shouldn’t some of that revenue be directed to pay for the cost of the data, for the infrastructure that supports the data pipeline?
There is a lot of “noise,” misinformation and disinformation about these two related subjects being promulgated and propagated, with intentions that are, in my opinion, not in the best interest of many of the current industry stakeholders, particularly brokers and agents. There is an insidious, yet direct assault being waged against your business practices. Stay with me on this.
What you see of the real estate landscape on the web today is in large part a result of decisions made at the dawn of the Age of the Web (around 1996). But the real estate portals of today, exemplified by Realtor.com, Zillow, and Trulia are not the only solutions to the data concerns of primary industry stakeholders today, and now is the time to seriously consider and implement alternatives which are in the best interest of your business and practice, before it is too late.
Who are the Primary Industry Stakeholders?
- Data Display Sites (Portals such as Realtor.com, Zillow, Trulia)
- Consumers of real property goods and services
Based on what I’ve learned working on this for the last 18 years, and more recently over the last six years, I believe there is now room for different public portal real estate models to flourish. I also believe that the window of opportunity is not indefinite and is in fact, short…two to three years.
My belief is driven largely by my perception, after speaking in person with tens of thousands of agents and brokers from coast to coast, and many more online. My perception is that there is a growing dissatisfaction of the current choices available for data display in the industry, and a feeling that the large, real estate portal models of today do not seem to be serving the interest of the brokers, agents, associations, MLSs or the consumers they serve.
I firmly believe my perception is an accurate portrayal of the feelings in the industry. We can debate this all day, but this is what my intuition is telling me, based on thousands of conversations. The portals of today can quote me all of the traffic numbers they like, but I do not buy the proposed beneficial impact implied by traffic count. But you do not have to take my word for it. You can check this out for yourself. Take the temperature of your colleagues about the major portal choices available today, what they like and don’t like, at your next office meeting.
What is the problem with many portal displays of MLS listing information today?
- Inaccurate data
- Untimely data
- Diversion of leads away from listing agent
- Sale of leads to agents and brokers generated from listing content
- Consumer frustration, anger and distrust of agents when inaccurate property representations appear on some of the real estate portals
These are but a few of the complaints I have heard.
Here is the good news:
That was then, this is now. Information is the currency of the Twenty First Century (Toffler)
MLS/Association public portals can be influential as we move forward into the next phase of the real estate cycle. MLSs hold the key to the success of the very portals that are the targets of the industry complaints mentioned earlier in this piece. Part of the answer lies with stricter data licensing provisions and enforcement.
The current listing distribution (syndication) position of the industry is ready for the next phase. This phase will continue to restrict the uses of MLS data and Information, understanding that information is the currency of the Twenty-First Century.
The following are examples of Data Licensing Provisions which have been vetted by key players and organizations, including major brokers and successful agents. In order for third party MLS data publishers to utilize MLS data, I believe that, unless granted authority otherwise, third party publishers of MLS data must adhere to the following:
- Publisher is not allowed to sublicense the licensed data nor use or display licensed data in any derivative works.
- Publisher may not capture leads from the display of specific listings and sell them back to the participant broker/agent or divert them to third parties (the ‘three-headed monster’).
- Publisher may not feature any other persons or companies associated with a specific broker’s listing in a more prominent manner as the listing broker in any advertisement or promotion.
- Publisher may only display the licensed data in the context of a consumer display (not, for example, display on an agent’s mobile app).
- Publisher may not retain any licensed data after termination of the syndication agreement or after a participant has opted-out.
- Publisher may not re-syndicate and must retain custody of the licensed data and not operate sites on behalf of third parties, even if framed on a third party site or powered by publisher
- Publisher may not modify the licensed data in any material way
- Publisher must provide a link on each listing display that directs consumers to the URL provided with each listing where consumers can access extended property information
- Publisher must promptly update their site upon any update of licensed data
- Participants must have access to a dashboard where they can change the opt-in and opt-out selections regarding any publisher
If publishers will not agree to these license provisions, they will be denied the data feed from the MLS. Publisher portals are free to ask sellers for the data, or brokers, or agents. Of course data from these sources is not as accurate or timely…but these portals will still have access to the data, so any cries of anti–trust will be muted by the facts. Some MLSs may decide to allow for fewer data restrictions for a fee. Some may also charge the same RETS Feed fees they charge other vendors, such as IDX vendors, imposing the same sorts of restrictions.
MLS Public Portals
MLS Public Portals can be another piece of this puzzle as brokers, agents, associations and MLSs look to further define their value propositions.
MLSs, Associations and the Brokers who govern them have the power to create a Public Portal Model that serves the interests of consumers, brokers, agents, associations and MLSs.
A portal model that:
- Provides relevant search results to consumers, not hampered by revenue models
- Focuses on Data – Quantity and quality, including timeliness
- Brings Realtor® and consumers together online through the most dynamic and prolific Online Real Estate Communities on the Internet
- Drives traffic and leads to broker sites, without the added expense
- Provides ACCURATE Sold information eventually – “that was then, this is now.” Sold data is currently being provided on a public portal by some MLSs. This practice can be a game changer.
- Promotes the value of working with a licensed professional.
- Does not depend upon selling featured agent or featured property ads for revenue
- Offers training and education resources to agents and consumers
- Pays for the cost of the infrastructure (and maybe more eventually) through:
- revenue created from the sale and licensing of certain data – RETS feed fees MLSs are currently charging some vendors, such as IDX vendors, and not others, such as Syndication vendors
- derivative works of unidentifiable data for a multitude of industries
- generic advertising, both national and local.
- consumer behavioral data products based on consumer activity on the site
This model, if adopted by a few MLSs, will mushroom into the choice of consumers and will prove a superior alternative to the portal models of today. Over 400 MLSs currently have some form of public MLS display.
The recent NAR conversations around MLS public portals being either core, basic and optional services, has created the opportunity to once again have an industry discussion around the direct monetization of MLS data through MLS public portals.
Broker’s benefit from tighter control of Listing Data and Information
The collection of the data and information that sits in MLS databases is accomplished by a “volunteer” army of agents and brokers who toil until a transaction closes, with no compensation.
The labor required for the collection of the MLS Listing, used by third party sites to generate commerce, has a cost, currently borne by brokers and agents. Add to that the fact that margins in the brokerage business are smaller than some might imagine, and the idea of eliminating the cost of the MLS infrastructure through the efficient commercialization of the data begins to make sense.
What about the Huge Traffic Counts from Syndication?
Five million home transactions on average each year according to NAR. The three major portals talk about 40 to 50 million unique visitors per month. Obviously, most of the uniques are not homebuyers. Go more granular…to your city or town, zip, type of property, and price range, and the number of substantial leads from those 50 million numbers dwindles rapidly. And aside from leads (whatever constitutes a lead), what about conversions? The conversion rate of these leads would portray an even sadder story of the value gained by agents and brokers from listing portals today.
It’s too late; you can’t put the horse back in the barn. The competition has too much money!
Baloney. This is not about money as we normally think about it. This is about currency, and information is the currency of the Twenty-First Century. And MLSs have much of the information, and all of the power that entails, which they can now bring to bear for the benefit of their Subscribers and Participants…the brokers and agents around the country. The lion coming over the hill is the MLS and the brokers and agents they represent.
The game is still in the early innings. There will be many obstacles and diversions along the way. But have no doubt that the universe of information collected (and even more which can be collected moving forward) has value and will have greater value as we continue to find new ways to use the information. Toffler’s statement, “Information is the currency of the Twenty-First Century speaks directly to MLSs today, and indirectly to the brokers and agents that control them through the maze of governance and businness stucture, which allows for the collection and compilation of current, and future assets.
Broker control over marketing dollar:
Use of MLS data is now fueling consumer confidence and helping to build brand for big companies. Is the advertising these companies offer in return really worth the price you are paying? If it is, end of story. If it is not, it is time to act. The first step is to continue to follow our discussions at TheDataAdvocate.
As brokers were once trapped and forced to advertise in newspapers, because it was “expected” by sellers, it will become that way with portals over the next few years, but there is still time to make sure that does not happen,. A clear vision and focus over the next 3 years has the potential to further fulfil the expectations of all those interested in real property.
Many of the “voices of the industry” will cry that it’s “too little, too late.” I know that this is a very tall order. I brought the concept of listings on the Web to the industry in 1995, and I was instrumental in many aspects of the creation of Realtor.com®. Along with my partner, attorney and author John Reilly, we resuscitated the NAR e-PRO Program in 2001 and grew it into the largest Certification program in the history of NAR. We created an alternative to Listhub, the only large listing syndication company in 2009-2012, and now owned by MOVE, Inc. In each case, the task at hand seemed almost insurmountable. We’re not strangers to challenge and adversity, and we’re looking forward to this challenge.
John and I may not have all the answers, but we’re not ready to tell the industry to give up the fight. The “conventional wisdom” may be telling the industry to throw in the towel, however, that’s bad advice from those who have something to gain should you heed their advice. At Point2, we are not ready to accept the premise that “MLS is dead.” We believe that MLS as an industry is alive, well, and gaining strength and direction with organizations such as CMLS, and COVE Group. The MLS is the consumers’ best friend, and the ally of brokers and agents. John and I fully intend to participate and have an impact on this conversation and the future of listing data on the Internet. The time is right, the forces are aligning and the future is a little clearer with each passing day.
The time to take control of the future of your business, be it brokerage and sales, MLS, or Association Management, is now. Use the strengths you have today to anchor your position in the future.
It is not too late.