Big brokers would like to use multiple listing service data to create automated property valuations to sell to financial institutions, and they want the National Association of Realtors to require MLSs to help them do it.
That’s according to a letter from The Realty Alliance, a network of 60 or so large real estate brokerages that says it represents more than 100,000 Realtors nationwide and counts heavyweights such as HomeServices of America, Long & Foster Real Estate and Crye-Leike Realtors as members.
Home price appreciation image via Shutterstock.
NAR is set to grapple with a policy proposal stemming from that letter at its midyear conference in May in Washington, D.C..
“MLS participants are already entitled to use MLS information to broker and value real property,” NAR spokeswoman Sara Wiskerchen told Inman News. “So the issue isn’t whether participants can develop AVMs for clients or customers, but rather how MLSs deliver the information to participants to do the AVMs.”
NAR operates a money-losing subsidiary, Realtors Property Resource, whose business model depends on selling analytics based on MLS data including automated valuations to third parties such as lenders, government agencies and secondary mortgage market investors.
Although RPR has made strides in signing up new MLSs in the past year, many have opted not to partner with company and therefore do not feed sold listing data to the company’s database, creating coverage gaps that limit the usefulness of its products to potential analytics customers. The Realty Alliance’s program may or may not have similar issues.
NAR declined to provide the text of the policy proposal to be considered next month, saying it does not share policy language externally before it goes to committee.
In a blog post, Brian Larson, an attorney at Larson Skinner PLLC (formerly Larson/Sobotka PLLC), said he plans four other blog posts over the next couple of weeks discussing the issue, including an examination of the proposed policy language when it becomes available.
“Some of our MLS clients believe that they should not provide data feeds for these broker-owned AVMs [automated valuation models],” Larson said. “Others are fine with it, provided the broker signs a license agreement that protects the MLS and other brokers. Still others have said (while aiming a data hose in the general direction of requesting broker), ‘You want data? Here it is!’”
One of the items included in the list was: “Claiming that broker participants somehow do not have the right to produce and sell valuation products, when creating valuations using all MLS data is and has been a core benefit of MLS participation.”
In the letter to NAR, The Realty Alliance CEO Craig Cheatham asked NAR’s MLS Issues and Policies Committee to amend NAR’s MLS policy to make clear that MLSs must provide participant brokers with a source of MLS data — either downloads or data feeds of active, sold and off-market data — that the brokers may use to generate AVMs using software licensed from a third party in order to sell those AVMs to financial institutions in return for a fee independent of a real estate sales commission.
Cheatham makes the case that NAR’s MLS policy already permits brokers to use MLS data to create AVMs and sell AVMs in this way and, therefore, MLSs subject to the policy can’t “effectively deny” brokers the ability to use MLS data this way by refusing to allow brokers and their technology vendors to use the MLS’s virtual office website (VOW) feed to create the AVMs.