A new report analyzes emerging opportunities for multiple listing services to generate revenue or provide additional services for members by sharing listings data with third parties.
The report, by WAV Group consulting firm, examines overtures made to MLSs in recent months by the National Association of Realtors, First American CoreLogic, IMAPP Inc. and Realtor.com operator Move Inc.
Produced for the Council of Multiple Listing Services (CMLS), the report is aimed at helping MLSs and their governing boards decide whether partnering with those companies makes sense, based on each MLS’s unique local circumstances.
The report, "New Ways to Leverage MLS Data," will also be considered a must-read by some real estate brokers and agents because it provides a glimpse into what the future may hold for MLSs — as well as insight into how third parties want to use the listings data that brokers provide to MLSs.
The report examines four new opportunities for MLSs:
- NAR’s Realtors Property Resource (RPR), a national property database for Realtors;
- An offer by First American CoreLogic to share revenue with MLSs that provide access to listings data;
- Realtor.com operator Move Inc.’s natural language search tool, called "Find";
- IMAPP Inc.’s IDX (Internet Data Exchange) Hybrid, offering listings and property tax record data to non-Realtors.
With the exception of Move, which wants to make more historic listing data available to consumers on Realtor.com, the third-party companies seeking to license MLS listings data aren’t seeking to make it accessible to the general public.
They plan to use the information to generate analytic products like automated property valuations, and provide broader access for Realtors and other real estate professionals.
None of the offers require MLSs to sign an exclusive agreement, so brokers could soon find their MLSs participating in one, several or even all of these initiatives.
RPR opens the door
NAR’s announcement in November that it had formed a subsidiary to partner with MLSs in building a national property database "opened the door for other third parties interested in gaining access to MLS data for resale or repurposing," the WAV Group report said.
Armed with technology and data aggregation services from LPS Real Estate Group, NAR’s Realtors Property Resource LLC subsidiary is out to build a national property database that combines active and historic listings data from MLSs, with public property records and other contextual information.
Access to RPR would be limited to Realtors, but RPR hopes to generate revenue by selling analytics and "derivative products" such as automated property valuations that benefit from access to listings data.
Currently in beta test mode in 12 markets that serve about 200,000 NAR members, RPR could become a powerful tool — depending on how many of the nation’s roughly 900 MLSs decide to participate. RPR executives hope to have half of those MLSs onboard by the end of the year.
RPR is offering MLSs free public record, tax and assessment data on 147 million property parcels — about 92 percent of U.S. properties, with plans to approach 100 percent coverage within two years.
RPR will give Realtors the ability to search for listings in any participating MLS and generate comparative market analyses, facilitating referrals and "reverse prospecting" of vacation homes.
When RPR comes out of beta testing some time in the third quarter, all Realtors will be granted access to the system as a NAR member benefit — whether their MLS participates or not. RPR will also make its public property records available to MLSs whether they license listings data or not.
But if MLSs want to integrate the public property records into their listings data and share listings with other MLSs, they must license their listings to RPR. Each MLS will be able to decide whether other MLSs can view their active listings, the report noted — and so far, RPR is finding most MLSs want to share active listings.
RPR could quickly become a data-sharing platform for MLSs without offers of compensation, allowing brokers subscribing to one MLS to prepare comparative market analyses in other areas, the report said.
"A fundamental value shift has occurred in our industry," the WAV Group report said. The RPR model "has significantly reduced resistance to monetizing MLS data outside of traditional uses."
In the long run, this value shift could set the stage for the creation of a national MLS, the report concluded. RPR and Move’s programs each create foundations for a national property database.
Move is barred under its contract with NAR from offering MLS services. But some MLS officials have voiced concerns that the RPR property database could ultimately be transformed into a national MLS, if it also provided a means of making offers of compensation to cooperating brokers.
NAR and RPR officials have repeatedly said they have no intention of turning the national property database into a full-blown MLS.
RPR has also changed its position on who will be able to access the national property database. RPR had originally said all members of participating MLSs would have access to the database. Now, only Realtors will be granted such access. …CONTINUED
But MLSs who enter into partnerships with RPR receive no written assurance that RPR will not compete with them beyond the terms of their agreements, the WAV Group report notes.
Just weeks after RPR’s launch, Move and First American were making their own pitches to MLSs for access to active and historic listings data.
Like RPR, Move is offering participating MLSs a sophisticated search tool that they can provide to members, with access to an expanded database that includes nearly 4 million active listings, sold records and more than 90 million public property records.
In return for providing its Find application, Move wants the ability to make MLSs’ active and historic listings data available to other participating MLSs, and also on the company’s consumer-facing site, Realtor.com, for three years.
MLSs who partner with RPR or Move won’t get any cash — a sore point for some. First American CoreLogic and IMAPP Inc., on the other hand, are offering to share revenue with MLSs.
First American CoreLogic is offering MLSs revenue-sharing options, ranging from 7 percent to 40 percent, depending on how many listings they have, whether they provide them to CoreLogic exclusively, and whether they are also using one of CoreLogic’s MLS platforms (MLXchange, Tempo, Innovia, Realist) or purchasing bulk tax data (First American is in the process of spinning off its information solutions group into a separate, publicly traded company, to be known simply as "CoreLogic").
If CoreLogic were receiving 2.5 million listings, and those listings helped it generate $4 million a month, a large MLS supplying 30,000 listings on an exclusive basis could earn $19,200 a month, the WAV Group report said, citing a CoreLogic licensing document.
Even if CoreLogic was receiving only half that many listings — 1.25 million — and generating $2 million a month, the same MLS could expect to receive $17,280 a month because it would be supplying a greater proportion of the listings.
In the same scenario, a medium-sized MLS providing CoreLogic with 5,000 active listings on an exclusive basis could expect to receive $2,880 in revenue per month, and a small MLS with 1,000 listings to contribute could earn $576 a month.
At the other end of the scale, a large MLS contributing listings on a non-exclusive basis and using another company’s MLS platform would earn base royalties of 7 percent, or $3,840 per month. A medium-sized MLS with 5,000 listings would earn $640 a month, and a small MLS with 1,000 listings $128 a month.
IMAPP, on the other hand, is offering straight 30 percent revenue shares with its MLS clients in seven states, through two new offerings.
Through one IMPAPP offering, MLSs can earn a 30 percent share of revenue generated by banner ads from title companies, home warranty companies and other advertisers appearing on pages inside an existing product: the IMAPP Tax Mapping Suite. The system offers MLS members parcel mapping, aerial photos, street mapping, core tax data, updated deeds, and integrated MLS and demographic data.
Ads can be delivered according to user’s search criteria, such as property value, location and type, and "advertisers are willing to pay a premium for this focused approach," the WAV Group report said.
IMAPP projects MLSs with 30,000 or more members could earn $30,000 to $60,000 a month in revenue, while those with fewer than 1,000 members might earn $2,500 to $4,000 a month.
IMAPP is also planning to offer another service that can be offered to non-Realtors, an "IDX hybrid product" that will combine the company’s tax and public data records with IDX feeds from participating MLSs. Insurance agents, surveyors and lenders are all envisioned as potential subscribers to a password-protected site, the WAV Group report said.
With 250 subscribers, IMAPP expects the IDX hybrid product would generate $50,000 a year for a participating MLS, the report said. In a market with 7,500 agents, revenue might be more than $100,000 a year.
Making a decision
Rather than reaching a verdict on each opportunity, the WAV Group details factors each MLS should weigh in considering whether to enter into a partnership.
Will the companies seeking listings data guarantee not to compete with the MLS providing it? Will data be protected from unauthorized use? What happens to data when agreements end?
Each MLS must consider whether its members are asking for the information the companies are providing, and whether the trade-off in providing MLS data in exchange for technology or revenues is worth it, the report said.
In a recent analysis of RPR’s "strategic proposition" on his blog, MLS Tesseract, attorney and consultant Brian Larson took a similar stance.
There’s more to deciding whether to participate in RPR than whether there’s a revenue share or not, Larson said.
MLSs have had opportunities to license listings data for commercial purposes for years, Larson said, but some have been reluctant to do so because it’s been unpopular with listings brokers and there can be unforeseen consequences.
Larson, who has also written in detail about the licensing agreement RPR has offered MLSs, suggested that MLS executives and board members ask themselves what they would be giving up in a partnership, what they would be getting in return, and whether it would further their strategic goals.
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