Guest perspective: Problems with current structure lend clues

Inman News

The idea of
a national multiple listing service has been floating around for years.
Lately, with the arrival of Google Base and consolidation of some large
MLSs, the talk of a national MLS is heating up again.

It
makes one wonder, what would or should a national MLS look like? That
depends on one’s point of view. One of the most common definitions for
MLS is a group of brokers joined together in a cooperative marketing
organization for the purpose of pooling their respective property
listings. In exchange for a potentially larger audience of home buyers,
the brokers agree to share commissions.

This
seems like a fairly accurate description. So in some ways the MLS is a
marketing organization in which brokers “share” their “marketing
assets” (listings) with other brokers.

Realtors
clearly favor a national or some form of consolidated MLS, at least at
a state level, according to the recent National Association of
Realtors’ 2006 MLS Technology Survey. The survey also highlighted a few
reasons why, including:

- The expanding market areas for brokers across MLS lines;
– The cost and inefficiency of belonging to multiple MLSs;
– The cost and difficulty of data aggregation across multiple MLSs; and
- The need for MLSs to provide improved services in response to new
competitors entering the real estate industry.

Before
I return to musings about what a national MLS should look like, I will
point out some problems with the current structure of the some 960 MLSs
out there.

1. Data Control

Brokers can’t effectively control with whom they share their marketing
assets, which leads to many problems, including:

• Brokers can’t measure how their marketing partners are contributing to
  the cooperative (if at all) — i.e., do the partners bring “marketing
  assets” and/or buyers, or are they simply bringing a fork to the
  potluck, as Dave Liniger puts it?

• Brokers have no control over the integrity and reputation of others who
  are using their listings and therefore, their reputations are connected
  with these people as marketing partners – guilt by association.

• Brokers have limited access to the data (marketing assets) they provide
  to the MLS, and they have to effectively pay to get it back.

• Brokers have restrictions on how they may use their own and others’ marketing assets.
• Brokers cannot reuse marketing assets for other marketing activity such
  as vertical search, partner Web sites, print, etc. This necessitates
  multiple re-entry of the data for things like Google Base, Trulia,
  Oodle, Realestate.com, Yahoo! Classifieds and others.

• Brokers have no control or insight into the level of service provided
  by the marketing partners forced on them — thus lies the difficulty in
  sharing commissions properly based on the amount of work and value the
  partner brings. Equal pay for equal work seems to not apply in the
  current MLS structure.

2. Data Structure

Brokers in many cases have little or no flexibility over the data types and data quality they can provide.

Brokers
and agents are the experts on marketing their listings, yet they have
very little control of the makeup of the data set. They are limited in
qualitative descriptions, photos, sound, virtual tours and neighborhood
information. The limited and rigid structure of the data doesn’t allow
brokers to accommodate the type of marketing information that consumers
expect and sellers are willing to provide.

The
heterogeneous data sets from more than 960 MLSs make for a fractured
broker and consumer experience. The broker has to enter data in many
different forms, and the consumer’s viewing experience is different
with each one.

3. Data Types

MLSs are unable or unwilling to provide for the new types of marketing assets that brokers will need in the future.

• Current
  MLSs do not contain all the homes truly available for sale, only those
  under contract. Many new homes, if not under contract, are not included
  and for-sale-by-owner properties, foreclosures, rentals and vacation
  properties are not handled properly or at all.

What does this mean?

As
a result, brokers are unable to satisfy the current demands of
consumers, let alone the ever-increasing demands of the future
information-empowered consumer.

What a New National MLS Might Look Like

What
might a new national MLS look like and how could it solve the problems
enumerated above? I’ll step out on a limb and describe how I think it
ought to look, with the following characteristics:

• A
  flexible homogenous data structure: This means that it could be a
  bungalow in Toronto and a Rancher in Texas, but it is still one data
  field that is the same everywhere.

• 
  Ability to accommodate homes not necessarily under contract such as new
  homes, FSBOs, foreclosures, rentals and vacation properties.

• 
  Complete broker control — after all they are the ones who really own
  the data: Brokers would have complete control over the “who, what and
  where” of their listings or marketing assets. Brokers could then choose
  to only share marketing assets with those who bring something to the
  table (i.e., other marketing assets or buyers). Brokers would have very
  fine-grained control capabilities and could use their data in any
  manner they desire that is authorized by the providing broker.

• 
  Automatic branded syndication of data: Easy and automatic data flow to
  any media (Google, Yahoo! Realestate.com, newsprint, partner Web sites,
  etc.) that brokers completely control and could opt out of on a case by
  case basis;

• 
  A democratic community-based rating system, much like the eBay sellers
  rating that would give brokers insight into their marketing partners.
  This would show what marketing partners are contributing assets and
  buyers, work ethic and integrity of agents to help decide who their
  marketing partners will be, response time rating, service levels of
  marketing partners to help decide commission splits (based on the
  principle of equal pay for equal work), consumer satisfaction ratings,
  referral satisfaction ratings, and data integrity ratings reflecting
  data timeliness and completeness.

• 
  Ability to allow home sellers to participate – for example, top 10
  things sellers will miss about their homes and neighborhoods.

• Unlimited photos, descriptions, audio, tours, etc. – in short, allow brokers to fully utilize their marketing expertise.

Brendan
King is the chief operating officer of Point2 Technologies Inc., Realty
Solutions, which provides online marketing and eBusiness software for
the real estate and heavy equipment industries.

Copyright 2006 Inman News

See Brendan’s blog for a behind-the-scenes peek at Point2 Agent and regular commentary on the state of the industry.