The Battle of the MLS

[photopress:Halo.jpg,thumb,alignright]What a strange and wonderful industry you have here…

I was reading Trulia Blogs’s Is the MLS Totally Clueless? and Greg Swann’s Cute little Trulia pleads, “Can’t we share the hate?!?

23 thoughts on “The Battle of the MLS

  1. At the local level, my understanding is that taking a full feed from ARMLS is a matter of filling out a form and having the pipe. I’m not there yet, so I take what I want by downloading from the TEMPO system — super easy if you know how to parse a tab-delimited file.

    My own personal experience is that ARMLS is hugely responsive to me as a broker. They listen to what I say and implement what they can — even though I am an extremely small fry compared to other brokers in town.

    At the philosophical level, unless it is behaving badly, an MLS system should be of FAR greater benefit to a small brokerage than to a larger one. Realty Executives in Phoenix sells a huge number of listings in-house — leaving the ethics of this alone. We sell zero in-house — and we would sell very few in-house even if we were willing to do dual agency. Without the MLS, their work is harder, my work is impossible.

    But: As I said to Galen at our place the other day: I am a desginated broker. I have feed privileges to one of the largest MLS systems in the U.S.

  2. The NWMLS of these parts and the RMLSFL of Florida to date, haven’t been responsive to my clients (both desginated brokers) and to me as a software engineer/web designer trying to help them. Which annoys the crap out of both myself and my clients. It also doesn’t help matters that each MLS does things slightly differently (why this industry hasn’t dumped RETS for raw database server access I’ll never understand). We’re still playing the red tape game in Florida. What’s odd is that the EBRD of California and CAARMLS of Virginia were far far easier to get feeds from. In my limited experience it seems an MLS either operates at DMV employee speed or a NASCAR pit crew speed. If you got the pit crew, congratulations. Be very thankful and don’t take them for granted.

    I realize that some MLS’s give both agents & brokers feed privileges (since they both pay fees, IMHO that is the way it should be), and others are broker only (I don’t like it, but it’s not my war to fight), but the making things harder for the broker (when they are paying your salary) completely boggles my mind. What purpose does it serve?

    This practice hurts the little guy because they need “mercenaries” to help them on the battle field. They can’t afford a full time software engineer army like a big broker can and not everybody has a software engineer in the making living in their house either.

  3. Robbie,

    What issues have you had with the NWMLS? We deal with them all the time and they have been excellent to work with. ARMLS is also very good to work with. What i would like to see happen is companies have to get their software approved before access is given to the MLS’s production servers. Its the mom and pop IDX companies that are causing most of the issues IMMHO.

  4. Allen,

    In fairness to the NWMLS, it’s only been a week since my current client sent in their Form 110 w/ my name on it, so I may be a bit hasty in my comments. Still, I’d prefer to not to use one brokers feed for another broker’s web site, when we go live, and risk possible NWMLS hassle. And let’s just say, my past experience hasn’t been as positive as I would’ve liked.

    As for Mom & Pop IDX, I agree that many IDX companies could stand to hire better software engineers. I’m currently very similar to a Mom & Pop IDX in many respects. (I do have the advantage of being a senior software engineer, so I don’t have engineering issues that a typical Mom & Pop IDX might have). I’m not quite so quick to put the blame solely on them however.

    I think a big reason why things are that way, is because nearly every MLS is different. Because of this, way too much software engineering effort is spent on reinventing the data download instead of writing a great web application. Developing a more efficent data download mechanism requires more time. Time is money. My clients don’t want to spend it and the market hasn’t matured enough so IDX vendors have an incentive to make it better on their end. Even the biggest IDX vendor (I’m guessing it’s Wolfnet w/ 40,000 agents), only has a less than 4% marketshare (assuming, over 1 million agents in the USA). Where’s Microsoft when you need them?

    It’s unfortunate because the IDX industry is served currently served by a thousand small mediocre vendors (which leads to poor vendors and crappy software) instead of six or so large vendors (that have the resources to produce great software).

    What about Mom & Pop MLS? After all, the MLS has it’s own set of problems. I don’t know much about the other side of the coin, but I do know that not every MLS has the resources the purchase a Rapattoni, Tarasoft, or a MarketLinx product. And they don’t all have the IT skills to do the right thing. Why has it taken so long for RETS to take over?

    What does an MLS package like the above sell for anyway? I suspect it’s probably a 6 figure annual investment for an MLS because the market is small and software engineers aren’t cheap. And why are there 10 companies serving at best 1000 customer market (my guess on the number of US & Canadian MLSs)? Most other software markets (both Microsoft sized and very small verticals) tend to consolidate to a smaller number of profitable vendors. It hasn’t happened in real estate yet.

    The real value I create is developing an IDX web site, branding & design, implementing innovative features. Putting the MLS data back into a SQL server (when I know it’s already in a RDBMS of some brand or another at the MLS) is just crap I need to do in order to put myself into a position where I can create value becuase the industry as a whole has underinvested in technology.

  5. My problem is not with the MLS system itself per-se, but with the anachronistic, paranoid, self-protective regulations that most real estate boards — under the guidance of NAR — impose on their associated MLS. The raison d’être for most of these regulations is the pre-Internet adage “He who controls the data controls the market.” (Ok, I admit it, I just made that one up!)

    The problem is, in the Internet age, data has mysterious ways of escaping its confines, and enriching those who help it to do so.

    Two examples:

    1) Our local MLS prohibits its members’ web sites from displaying data on sold properties, presumably to force the public to have to go through a real estate agent. Oops! Along came Zillow…and now sold data — less accurate and less timely than what’s sitting in our MLS — is readily available from a third party, and they’re the ones monetizing it. (As a side note, Redfin also appears to show at least some sold data; I have no idea how they get away with it.)

    2) Another antiquated policy is the prohibition of displaying a property’s “List Date” and “Days on Market”, once again presumably to force the public to go through us to get this data. Oops! Redfin and a couple of other creative players do a brilliant end-run around this nonsense by instead displaying “Time on Market”, which they define as being “derived from the date the listing was first displayed Redfin’s site [sic], not from data in the MLS listing.” Since the general public understands the 9th grade Algebra theorem “Days on Market (home X) = Time on Market (home X)”, they’ll simply go to Redfin et. al to get that information.

    The data’s going to find its way out there regardless, so why don’t we just set it free, and compete on our skills and service, rather than on having the keys to the castle where our data is stored?

  6. Kevin,

    I completely agree. The MLS system has a lot of good points and I really don’t want to throw the baby out with the bathwater. It’s just the part I deal with on a regular basis (data access mechanisms & policies) is not one of those good points.

    I think the MLS boards need to set their data free, because it’s not their data to control. The data “belongs” to the buyers & sellers in the marketplace since ultimately, the data is there to help buyers find sellers. An agent or a broker’s primary purpose is to facilitate the transaction.

    Keeping the data under lock & key, hinders a transaction from occurring, which harms the seller, the buyer and the industry. Furthermore, as you mentioned, less accurate and less timely data than what’s sitting in the MLS is already in the public domain, and still has a lot of value for the real estate consumer, and Zillow, etc are exploiting that fact.

    I don’t understand that mindset, because the industry makes it’s money by facilitating the transaction and not by controlling the data. Your business model is closer to Fidelity than Comstock.

  7. Hey Robbie,

    I got to disagree with you here. The whole purpose of the MLS is to create a controlled environment with rules and policies so that brokers can freely share there listings with other brokers and have a way to ensure compensation. The buyers and sellers do not contract with the MLS they contract with the broker the MLS has no responsibility to the buyer or the seller only to the member.

    1) It is because of the organization and rules that the data is the quality it is.
    2) The MLS should have no contact with the public that is the members job.
    3) The Data should be more readily accessible to the members ( I don’t think there is a person out there that disagrees with this).
    4) The data that gets put on the internet needs to be monitored and policies do need to be put in place. Systems without rules turn quickly to chaos.

  8. Kevin,

    You said, “…the pre-internet adage, “He who controls the data, controls the market. (OK I admit it I just made that one up!)”

    You may have “made it up”, but it is very close to the actual “old adage”, “He who controls the listings, controls the market.”. Listings = Data.

    To many brokers, listings is their inventory, their product. It is very difficult for brokers, particularly large brokers with lots of inventory, to understand why they should allow XYZ company to use their inventory to advertise themselves. It’s like Costco borrowing Target’s inventory to fill their store and draw customers into Costco.

    Now you may say what does Target care if Costco sells Target’s stuff? Well the Target stuff may draw people into Costco to buy other stuff that isn’t Target’s, and Target then loses the added revenue.

    A broker has two sources of revenue, listings sold and buyer controlled sales. Each home sold has two sides and a fee for each side. A listing can equal three or more sales, if the buyer who calls on the listing buys something else. So losing the eye of the buyer by having their listing on John Doe’s site, is a very tough pill for them to swallow.

    The horse is out of the barn, but the barn owners are still trying to figure out what to do with a barn that doesn’t contain and control the horses.

    Take Redfin’s blog as an example. The houses extracted from the feed and shown as “most hits” can draw potential buyers for that house to Redfin to make an offer. When you single out a house like that, one could argue that you are advertising that specific house. Advertising another broker’s listing is against the rules. That house might draw 10 buyers to purchase property through Redfin. Those ten buyers were drawn to Redfin, via a property being advertised against the rules. Ten buyers used Redfin that might have called the listing broker of that house, if not for the highlighted home on the Redfin blog.

    No easy answers. Just throwing out the true broker model, which is not to sell a given house for one specific seller, but to draw as many buyers and sellers to that Company as possible.

  9. Let me clarify what I mean by “set the data free.” I don’t advocate the anarchic approach of letting anybody do anything they want with any content in any listing. There is immense value in the cooperative nature of an MLS, and furthermore the creative content in a listing — spelling mistakes and all — is and should be a copyrightable asset.

    What I do mean is simply that we need to revisit the anachronistic rules that restrict our ability to compete on displaying real estate facts and our value-added analysis of those facts. We can’t display facts on solds, but Zillow can. That just doesn’t make sense and can’t be helping our cause, especially because the data Zillow has access to isn’t as good as ours. We can’t display the listing date, or the days on market, but third party aggregators can by doing a simple calculation. To shamelessly quote myself, The real genius of Zillow is not its perceived threat of contributing to the downfall of this industry, but rather in doing an end-run around all of us and making money out of the gold mine of data that we’ve been sitting on.

  10. Redfin continues to advertise other brokers listings without that agent’s permission, clearly violating NWMLS rules and regulations.

    For instance, currently on their blog they have singled out a cute Wallingford Craftsman home, with information and both exterior and interior photos that are not public and are subject to copyright restrictions. Wallingford Craftsman home

    Unfortunately, they have done this without the brokers permission. And who is the agent? None other than Ron Waxman, the past recipient of Redfin’s “Hall of Shame” award.

    Probably not a good idea.

  11. Ardell,

    You are just plain WRONG.

    You Said:
    To many brokers, listings is their inventory, their product. It is very difficult for brokers, particularly large brokers with lots of inventory, to understand why they should allow XYZ company to use their inventory to advertise themselves.

    It was Windermere, John L Scott and Coldwell Banker who told the small brokers that they would allow them to use thier inventory so that every brokerage website would have all the listings from the NWMLS. It was the small brokers who couldnt figure out why the big brokers would allow them all their data. They debated this for months until the first IDX agreement in the country was put into place.

  12. Ardell,

    The old adage, “He who controls the listings controls the market” is still very much true, but I don’t think it’s because Listings = Data. Listings are far more valuable than simply the Data about them; ie. Listings > Data.

    I think the equation goes something like this:

    Listings = More Data + More Marketing + More Exposure + More Relationships = More Business

    The data is just one part of the equation.

    For better or for worse (I think for better) the cooperative nature of the MLS, which formerly meant that Jane Buyer could go to any brokerage _office_ and look in the listing book for listings from _all_ brokers, now means that Jane Buyer can do the same by going to any brokerage’s _web site_.

    This naturally leads to brokers and agents competing against eachother for new clients by offering a better search experience. (As a side note, I’m not necessarily convinced that a better search experience leads to more clients, but that’s a different topic alltogether.) The result? We have to up our game, and consumers get better service.

    The alternative to allowing competing brokers to display eachother’s listings would be, I think, disastrous for our industry. Here’s how I think it would play out:

    Act 1 — can only display BrokerA’s listings. can only display BrokerB’s listings, etc. The only place a consumer could go to get information on _all_ listings would be the public web site run by the local MLS (where such exists) or Shudder. For reasons outlined by Robbie above, such web sites tend to be pretty uncompelling.

    Act 2 — Trulia and other aggregators get into the game, and with their deeper pockets and greater tech skills, they come up with far more compelling web sites. Consumers flock there, and now once again outsiders have more “stickiness” with the public than we do.

    Act 3 — Instead of competing to understand consumers better, the industry borrows a page from the RIAA and starts suing people left, right, and center. Problem is, while creative content like songs (and property descriptions and pictures) can probably be copyrighted, facts (like bedrooms, bathrooms, and square footage) can’t be. We end up with a mess.

    So while I understand the concern of the big brokers about their listings being viewable on competing brokers’ web sites, I think the public, and the industry itself, is much better served by that than the alternative.

    Furthermore, while BrokerA may not like the fact that BrokerB landed a client who saw BrokerA’s listing on BrokerB’s web site and called BrokerB…it’s a two way street. Tomorrow the reverse might happen.

    The concerns raised by your Costco/Target analogy makes sense on one level. However, those two players are fiercely competitive period; our business, on the other hand, is characterized by simultaneous fierce competition and close cooperation, which Ray Noorda called “coopetition.”

  13. Allen,

    See Marlow’s comment. Having a search feature and “advertising a specific home”, is quite a different thing. Stay in the present, Allen. Going back to when…is never a good way to approach a topic when we are talking about innovation and technology.

  14. Kevin,

    Change “viewable” to “Featured Home” pulled from the feed and highlighted on the website of another broker. Isn’t that more like putting another broker’s listing in a Homes and Land Ad or in your window display at your office’s site?

    “Viewable” as in “comes up in the search results” is a no brainer. But one home showing big as life, on another Broker’s site, is advertising that specific home which is currently against the rules. Marlow’s specific is an excellent example of what I am talking about.

    Here in NWMLS they recently made this rule even more stringent, by requiring WRITTEN permission to advertise another Broker’s listing. So the rules are getting tougher in response to these sites, and not more lenient…so far.

  15. Can someone tell me the difference between IDX and VOW, which is important to the DOJ suit?

    As an aside to those who have been trying to figure out how the DOJ suit started and its relevance to this topic, let’s say everyone “opted OUT” of Redfin because they are breaking a rule, or opted out of the “Search the Northwest MLS” on Seattle Times, which also breaks a rule. Is this simply reprimanding a company who is breaking a rule? Is it forcing out the alternative business models who say “Damn the Rule!” because it discourages Innovation and new business models?

    I’m siding with the latter at present, because new rules pop up to block these companies, so breaking a rule that stifles competition may be in order…like refusing to sit in the back of a bus. Rule broken, yes…rule needed to be broken, yes.

  16. Ardell,

    I think we’re completely in agreement. Without your permission, I could no more highlight your listing on the front page of my blog than I could put in our local newspaper with my mug shot beside it. I incorrectly interpreted your remarks in #8 above to mean that you were skeptical about even allowing search results on my web site to show a competing broker’s listing.

  17. My understanding is that one of the key VOW (Virtual Office Website) policies that perked the ears of the DOJ was its “selective opt out” policy, which allowed brokers to select on a per-competitor basis who was and who was not allowed to display said broker’s listings on their web site. For instance, Coldwell Banker could state that Prudential, C21, Remax, and Alain Pinel Realtors (my broker) could offer up Coldwell Banker listings on their respective web search sites, but that Redfin, Zip, and LocalDiscountBrokerageB could not.

    At least to me, this would pretty clearly hamper the ability of Redfin, Zip, and LocalDiscountBrokerageB to compete in any realistic manner.

    The current NAR policy, effected I believe within hours of the DOJ initiating action, I believe, is a “blanket opt-out” provision. ie. Coldwell Banker can either allow or disallow _all_ its competitors to show its listings, not on a one-by-one basis. So CB has to decide if the danger of giving access to their listings to the Redfins of the world (ie empowering a new business model) outweighs the benefits of having its listings displayed in more places in general. Thus far, I believe most big brokerages have decided in favor of the latter.

    The “selective opt-out” policy is, I put to you, another example (see my posts #5 and #9 above) of our antiquated thinking that our industry should protect its way of doing things by putting the data under lock and key, rather than competing on the basis of skills and service. Instead of finding Redfin an ominous threat and trying to shut them down by restricting their access to the data (read “selective opt-out” ), why don’t we simply welcome the competition, up our game, compete on skills and service, and let the market decide who wins? In that world, we probably end up with a portion of the market going the “discount” route, and another, probably significantly larger portion, continuing to use the high-value-added skills of a full-service broker.

  18. Allen,

    Don’t get me started on MLS data quality. The data is filled with rookie mistakes like bogus zip codes, incorrect neighborhood assignments and numerous errors of omission. I suppose I should give them some credit for using a RDBMS instead of an Excel spreadsheet or index cards, but I expect better of a professional organization.

    I think we can agree that the MLS is supposed to serve it’s members. It’s members are supposed the serve the public. Ergo, the MLS serves the public by proxy. We may not elect the MLS boards, but we are affected by what they decide to do. When policies are enacted that prevent members from serving the public fully, one has to question what the motivation behind it is.


    I think folks need to realize the internet is naturally choatic. If the listing is part of an IDX feed, then the intent of the listing agent is that it was meant to be shared as far and as wide as possible. If you want total control of the listing, then don’t put it in the MLS, and don’t allow the MLS to share it via IDX. On the net, control and exposure don’t mix. Do we really want the MLS, to become the RIAA?

    Once it’s IDX-able, the car is leaving the garage (it’s still in the city though). Unless MLSes want to force IDX vendors and brokers to create DRM like retrictions on display listings, they are better off accepting that it’s practically futile to control a listings display & distribution once it enters the IDX feed. And if the listing is put up on Craigslist, Google, or Trulia, it’s “Dude Where’s my Car?”

    At the end of the day, if it’s your listing and you put it in the MLS IDX for all to see, and another broker uses your listing to gain business (regardless if they follow MLS policy or not), your still going to get the seller’s commission if they use your listing to find a buyer.

    The primary purpose of a listing is to sell it as quickly as possible at a price that the seller will accept and a buyer is willing to offer, not to advertise yourself. Like a car dealer, you don’t get paid for unsold inventory. The listing creates the most value for your business when you take it off the market. This is probably the thinking behind big brokers allowing small brokers access to their inventory via the MLS. All listings must go off the lot, before the 2007 models come into the showroom!

    I can understand why Broker A is upset when Broker B uses their listing to gain business. Broker A lost out on a free marketing opportunity. Then again, all is fair in love, war, and business. Perhaps, maybe without Broker B’s action, Broker A never would’ve sold that listing?

    The “selective opt-out

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