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.