Multiple listing services that have been invited to participate in a national property database being constructed by the National Association of Realtors must now weigh similar offers from First American Corp. and Move Inc., which say they, too, would like to license historical listings data.
Unlike NAR subsidiary Realtors Property Resource LLC (RPR), First American is offering to share revenue with MLSs that enter into licensing agreements.
First American says it’s willing to pay MLSs regardless of whether they also decide to feed data to RPR, although the company is offering more generous revenue splits with MLSs that provide historic data to First American on an exclusive basis, according to those who have heard the company’s pitch.
Further complicating the situation, Realtor.com operator Move Inc. is also seeking sold and expired listings data from MLSs for display on its public-facing sites, in exchange for the use of a new search tool that the company says could also facilitate data sharing between MLSs.
Representatives of First American and Move pitched their separate proposals to MLS executives at an industry conference in Arizona last week, according to several who attended.
"I think it makes what was once a one horse race a two- or three-horse race," said David Charron, president and chief executive officer of Rockville, Md.-based Metropolitan Regional Information Systems Inc. (MRIS). "It looks to me like it’s going to warrant a big response from RPR. I can’t see people aligning themselves with RPR exclusively."
If the aggregation of active for-sale listings at third-party sites like Realtor.com, Zillow and Trulia has revolutionized the way consumers shop for homes, the collection and use of sold and expired listings data represents a new frontier.
NAR created its RPR subsidiary in November, purchasing technology and data aggregation services from LPS Real Estate Group in order to build a national property database that will include listings data from MLSs, public property records and other other contextual information.
Only Realtors and members of participating MLSs will have access to the database itself, NAR says, but RPR intends to generate revenue by selling analytical products such as market reports and property valuations to Wall Street investors, lenders and government agencies.
RPR says automated property valuations that incorporate listings data from MLSs will be more accurate than those relying primarily on public property records, which lack the most recent sales. If enough MLSs participate, RPR could generate $60 million to $80 million in annual revenue, company executives said in launching the venture last fall.
While RPR is offering to provide access to the database to participating MLSs, company executives don’t expect the company to become profitable until 2011, and say NAR must first recover roughly $21 million in startup costs before they will discuss a revenue split.
But First American, which also sells analytics products to investors and lenders through subsidiary First American CoreLogic, apparently sees some merit in the concept — and is willing to share revenue with MLSs right away.
Although the company would not comment for this story, Ben Graboske, chief executive officer of First American subsidiary MarketLinx Inc., gave a presentation in Arizona last week in which he said First American was prepared to share revenue with MLSs that provide listings data.
As a provider of property records and software to MLSs, MarketLinx already has ties to many major MLSs, and First American is already collecting listings data from some.
That makes First American a credible rival to RPR — and a threat to RPR’s future, said Brian Boero, a consultant who advises companies in the real estate industry on technology issues.
"LPS and RPR have a long, tough slog ahead of them," Boero said. "For the business model to work, they need to have significant nationwide coverage. LPS can’t go sell the derivative (analytic) products if they only have a dozen markets. They need near, or full national coverage. If First American comes out and says, ‘You don’t have to wait five years, we will cut you in on a slice of the licensing fees from day one,’ they amass coverage much faster than RPR."
At the the Real Estate Connect conference in New York City last month, RPR President Marty Frame said the startup company hoped to sign up half of the nation’s roughly 900 MLSs by the end of the year (see story).
Frame downplayed the impact of First American’s offer to MLSs, saying it validates RPR’s business model, and "draws a clear competitive distinction between who benefits" from the respective offers.
First American’s offer, Frame said, does not appear to offer tools to agents and brokers — it’s a straight revenue-sharing agreement with MLSs in exchange for their data.
RPR, on the other hand, is promising to provide participating MLSs with access to the public property records and other information in the database, and tools for agents and brokers to generate comparative market analyses (CMAs) and property reports for their clients. …CONTINUED
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