A proposal for 'MLS 5.0'
Industry veteran envisions marriage of MLS, Web 2.0
By Inman News, Friday, August 8, 2008.Bookmarking Sites
Multiple listing services are not dead or irrelevant, real estate technology industry guru Saul Klein says in a paper released this week, though they must evolve to embrace Web 2.0 ideals and expand beyond for-sale listing information to encompass parcel-based information.
It's not an entirely new concept for the real estate industry. Third-party sites such as Zillow and Cyberhomes, among others, already provide a range of information on tens of millions of U.S. homes at free public Web sites.
And leaders of the National Association of Realtors trade group have announced a plan to create a national property database that will compile information for industry professionals about all types of property across the country. As proposed, this database would not replace MLSs, and MLSs could be participants in sharing data with the database and channeling database information to their members. While there had been discussions early on about offering limited public access to this database, more recent discussions have focused on a password-protected database that is not accessible by consumers.
But Klein's concept, which he dubs "MLS 5.0," does introduce a new way of thinking for MLSs.
The paper, "MLS Today and MLS Tomorrow," attempts to answer, "What will be required to build on the current solid foundation of today's MLS?"
Klein, a licensed broker since 1977 who serves as CEO for real estate technology companies InternetCrusade and Point2 Technologies, proposes that a key element to this futuristic MLS is that it includes all parcels of real property and leverages information from a variety of sources over time "to bring consumers and real estate professionals together on the Web to participate in an ongoing conversation with real estate at its center."
He envisions that this next-generation MLS will have a public-facing side for consumers to interact with real estate professionals, and a private side accessible only by real estate professionals.
The MLS should feature online communities for real estate professionals and consumers alike, should have multilingual capabilities, agent-rating and referral systems, agent profiles, and updated neighborhood information that accepts user-generated content, as examples.
The MLS should encourage innovation and allow for a variety of front-end software to access the data. "Openness should allow for more applications and solutions and lower prices for Realtors," the paper states.
Why call it 5.0? Klein explains in the paper that he considers the first generation of the MLS to be the three-ring binders with printed weekly updates and daily errata that were commonplace in the days before the Web. The second generation was the bound MLS book, and computer access to real estate data through simple terminals is defined as the third generation.
The fourth generation, according to the paper, was the Web-based MLS, and the fifth generation incorporates components of Web 2.0.
Klein proposes that MLS 5.0 is "open, collaborative, self-organizing and self-policed," and it serves as a property "wiki" that allows users to enter and update information, a social networking site, and incorporates "single sign-on" technology that allows users to log in once to gain access to multiple systems, among other attributes.
While industry discussions have traditionally centered on keeping real estate professionals at the center of the home-sale transaction, Klein suggests that real estate professionals "must now be at the 'center of the conversation' about real property, and this is essential to the mission of MLS 5.0."
His proposed mission statement for MLS 5.0: "Keep the Realtor in the center of the real estate conversation, realizing that conversation extends from far in advance of a purchase and continues after a purchase of real property. Real estate is a lifetime conversation."
There are many ways to generate exposure for property listings information these days, the paper states. In addition to placing property listings information in MLSs, real estate professionals and individual sellers can post information on sites ranging from Yahoo and Google to Craigslist, Realtor.com, Trulia and Zillow, among others.
The MLS "must reflect the new realities," Klein states.
In addition to for-sale information, the MLS should carry historic sold data, public data, and consumer-generated content from "online communities, groups, blogs and other Web 2.0 technologies and applications," Klein proposes.
While MLS systems have traditionally served as broker-to-broker networks, the MLS can take on more of a role in marketing, the paper states.
"MLS needs to redefine itself from a purely business-to-business network tool to a marketing facilitator for its participants and subscribers. It needs to take advantage of its assets and shift its paradigm from information about what is for sale to information on all property whether for sale or not."
While Klein acknowledges it will take time for MLS systems to get on board with such changes, he notes that rapid and sweeping changes are common in this era of technological innovation.
"How many people knew of Google five years ago and how many know of it today? In a short span of time, unknown Web sites have become household words.
"The world of MLS as we know it is approaching a cliff, and many riding the MLS train do not see the cliff as it gets closer with each passing day."
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Submitted by Jed Lane on August 8, 2008 - 4:45pm.
I've written on this many times. We need to have a new way of doing business that reflects the changes that have come about in the last few years.
I like to remind my associates in the business that 100 years ago NAR was formed as a new way to conduct the real estate business and a little over 100 years ago Mr. Coldwell and Mr. Banker came together in my hometown to do business in a more honest and open way after the 1906 fire burned all the records.
The MLS's have data in them that can benefit the members. I rail against the "data wants to be free" construct. HomeGain is very upfront about it with it's slogan "You're business is our business". I know what they intend it to mean but I read it as they want my money, a piece of my business.
This is happening because we haven't created a public face search to beat all the competition.
The consumer wants the information for free, at least they don't want to have to pay for it or even register for it till they are ready. HomeGain and all the other aggregators have created sites for them to use to get at pieces of the information. Even ActiveRain is getting in the money picture after we, the Realtor community created it's content and in so doing it's place on the search engines they turn around and charge us to buy the neighborhood that we are already the expert in. All of the sites want to charge us for placement, enhancement or the lead. So much for free data.
If we take ownership of our data and create the web experience presentation so that the public sees no reason to go anywhere else they will be on a Realtor site when they raise their hand to have a professional interpret the data or represesnt them in a transaction. No more need for a third party like HomeGain to insert themselves in between us and the client. It will also change the listing paradigm since both listing and selling agent will be reresented on the property record.
Historical sales data, opinions, blogs Q&A everything that is being done by third party business models can be done by us and for the benefit of us. While the conuming public still thinks the data is free to them and no one will callt them until they want to be called.
It could even lower the transaction cost. If I don't have to pay someone 27% referral fee because they raised their hand while on a third party site or $10,000 a year to be one of 5 top placement positions in my city.
Jed Lane GRI
Broker, Sales Manager
Star Real Estate Brokerage
http://www.FogCityGuide.com
415.425.9810
Submitted by Russ Bergeron on August 9, 2008 - 12:30pm.
Maybe because he now heads up a comapny that uses MLS/broker Content for its raw materials, Saul has forgotten what the heart of the MLS really is - the cooperation and guarantee of compensation amongst brokers. Without these two concepts the MLS is just advertising. How listing data is delivered is not the defintion of an MLS.
Saul has provided a lot of good technological and marketing ideas - many of which MLSs in Southern California are already implementing. We appreciate his effort and will take back several pointers upon which to focus at our next planning session.
However, not all of these ideas necessarily fall under the MLS umbrella. Many of his suggestions run contrary to what brokers expect of their MLS - specifically levelling the playing field so that to the public every broker and every agent looks the same.
Saul, thanks for the effort and your years of dedication to the industry.
Russ Bergeron
CEO, SoCalMLS
Submitted by Stanley Nichols on August 9, 2008 - 9:36pm.
Hey Saul
Would you like to help develop a new MLS aggregate site including 100 traffic catchers? >> BuyersHomeFinder.com
Stan
Submitted by mark langowski on August 10, 2008 - 10:51am.
Great Article.
We feel the same way about 5.0. We here over at http://www.beatyouthere.com have already embraced many of his ideas. We have multiple types of properties that are searchable on our site. (Agent, fsbo, reo, etc.)
We also have agent rating systems and open commenting available on each property in our database. You can create a profile, add friends to your network and soon be able to do even more, once we unveil our newest features.
Thanks for checking us our.
http://www.beatyouthere.com
mark@beatyouthere.com
Submitted by Gamil Sawiris on August 14, 2008 - 2:49pm.
The national property is a great database resource for agents and brokers. I think the basic concept behind MLS 5.0 is to bring all the disparate MLS listing systems under a general NAR umbrella.
Submitted by Duke Lane on August 15, 2008 - 11:38am.
Forgive my naivete, but isn't Realtor.com - the official consumer site of NAR - supposed to fill the essential need of there being a single, national site for property searches? All MLSes are entitled to send their listings there at no charge, so in terms of meeting consumers' needs, it seems there is already something in place without creating a new monster.
As to Realtors' ability to post listings on a national basis; to what end that is not already fulfilled by Realtor.com? What, in other words, is there NOT already on Realtor.com that would benefit a Realtor in Connecticut when viewing a listing in California? As Russ Bergeron noted, the primary purpose of an MLS is not advertising, but cooperation and a guarantee of compensation between brokers. Does the Connecticut broker need to know immediately that the buyer's agent is guaranteed, say, 3% that the referring broker (who cannot sell a home in California anyway) will share in as a referral fee? That's meaningless if the buyer doesn't end up buying the particular home the referring broker saw the BAC on.
I'm in complete agreement with the concept of a statewide MLS - or at least, I should say, a statewide online data repository - wherein all of those licensed to be able to participate in the transaction have access to the data of all the properties they might help to sell. An El Paso, Texas, broker or agent can participate in the sale of a home in Longview, Texas, 750 miles away, but a Rhode Island broker can't list or sell a house even 100 miles away: why would they need to have access to compensation or seller information?
Personally, I've never quite understood the necessity of there being 900+ MLSes in only 50 states except as a holdover from pre-technology days (who'd have wanted to drive the listing books from Omaha to Scottsbluff, 500 miles away?) or why Connecticut - with 5500 square miles and 3.5 million people - needs five MLSes while Texas - with 268,000 square miles and 23 million people - can get by with about the same number of MLSes, at least two of which (HAR and NTREIS) each cover areas more than a dozen times the size of the Nutmeg State!
In either case, the ability of Realtors within the same state to have access to full listing data of homes within ALL of the state in which they're licensed - be they in Delware, Rhode Island or Connecticut, or California, Texas or Alaska - has a clear value.
Major brokerages such as Coldwell Banker have solved their own "national MLS" issue by "invisibly" redirecting viewers to local brokerages' IDX websites, allowing users - consumers and Realtors - to seamlessly move around the country to see homes for sale in each region on what appears to be one website. Still, there is no need for a Coldwell Banker Residential agent in LA to either input listings or read full data for a CBR listing in Dallas or anywhere else.
Perhaps the solution is to reconsider how Realtor.com should operate, or whether the contract with Move.com should be held "in perpetuity," potentially allowing NAR to create a separate site that does the things that aren't profitable for Move (now that it's making one!) and Realtor.com. If it's necessary to see additional data, couldn't a separate login - for example, using a state license number and NAR ID in combination - give that access to bona fide agents?
A "national MLS" - or "MLS 5.0" if you prefer - seems to be nothing more than a solution in search of a problem. Until there actually IS a problem that everyone agrees on, the entire project should be shelved. All in my humble opinion, of course!