The competition to license listings data from multiple listing services is heating up, with data aggregator CoreLogic announcing agreements today with eight MLSs with a combined total of 82,000 members.
All but two of the new members of CoreLogic’s Partner InfoNet revenue-sharing program will provide listings to CoreLogic on an exclusive basis.
That means there could be holes in markets like Atlanta and Las Vegas for sold listings in the database being constructed by a subsidiary of the National Association of Realtors, Realtors Property Resource LLC (RPR).
Both CoreLogic and RPR expect to generate revenue with sold listings by plugging data into software applications designed to help lenders, loan servicers, investors and government agencies track market trends and assess risk.
CoreLogic offers several products that can be used to analyze housing market conditions, value properties, and detect fraud. RPR says sold listings data will allow it to offer lenders and others "Realtor valuation model" (RVM) automated property valuations that it maintains will be more accurate than models relying solely on public tax records.
It can take weeks or months for recent sales to show up in databases that depend on public records culled from county tax assessors’ offices. RPR has estimated that its analytics products, based in part on sold listing data, could generate $60 million to $80 million in annual revenue.
RPR, which launched in November, will provide MLSs that license their listings data with free access to its parcel-based property database, which includes public tax records licensed from another CoreLogic competitor, Lender Processing Services.
Although RPR is not offering to share revenue with MLSs, it’s already signed up a total of 84 MLSs and Realtor associations, plus one brokerage, with a combined membership of more than 259,000.
CoreLogic says it has licensing agreements with other, undisclosed MLSs, in addition to the eight announced today, that a spokesman said it is not identifying for business reasons.
The six MLSs CoreLogic has identified as having entered into agreements to provide listings data on an exclusive basis are:
- Atlanta’s First Multiple Listing Service (FMLS);
- North Texas Real Estate Information Systems (NTREIS);
- Greater Las Vegas Association of Realtors (GLVAR);
- Northern Ohio Regional MLS (NORMLS);
- Ohio’s Centralized Real Estate Information Services (CRIS);
- Downeast MLS (DMLS).
MLSs agreeing to provide listings to CoreLogic on a non-exclusive bases are Colorado’s Information and Real Estate Services LLC (IRES) and Associated Multi-List Services of Oklahoma (AMLSOK).
AMLSOK, which has nearly 500 subscribers, has also agreed to license listings to RPR.
IRES is in a "wait and see mode," said IRES CEO Lauren Emery, keeping an eye on changes RPR has made to its licensing agreement and how well this month’s planned rollout of the RPR platform goes.
Ben Graboske, CEO of CoreLogic MarketLinx, said CoreLogic is currently in negotiations to license listings from more than 50 MLSs, and he said the negotiations are "going well."
According to a report by consulting firm the WAV Group, CoreLogic is offering MLSs revenue-sharing splits ranging from 7 percent to 40 percent. MLSs that provide large numbers of listings on an exclusive basis receive more generous terms, with the highest splits paid to MLSs that also use one of CoreLogic’s MLS platforms (MLXchange, Tempo, Innovia, Realist) or purchase tax records in bulk.
If CoreLogic is able to license 2.5 million listings that generate $4 million a month in revenue, a large MLS supplying 30,000 listings on an exclusive basis might earn $19,200 a month, the WAV Group report said.
Graboske would not comment on the percentage splits or revenue estimates reported by WAV Group, but confirmed that the splits depend on the number of listings an MLS can supply, whether listings are provided on an exclusive basis, and whether the MLS is also a CoreLogic customer.
"We’re trying to create a new market here, so we’re not sure what to expect in terms of revenue," Graboske said. "At the outset, there will be a strong value on protecting the MLS data, and making sure that if value is created, the MLSs derive benefit."
RPR announced its launch in November 2009. When CoreLogic announced, at an MLS conference in February, its intention to offer revenue sharing through the Partner InfoNet program, it was clear RPR would have to vie for sold listings data.
RPR can count on a comprehensive set of property tax records from partner LPS. But its business model — to generate revenue by providing "Realtor valuation model" property valuations — depends on having access to sold listings data in many markets. The company hasn’t ruled out going directly to brokers for listings in markets where MLSs turn it down.
RPR President Marty Frame said it is his understanding that at least some of CoreLogic’s exclusive agreements have 60- or 90-day out clauses.
"So it may not be necessary for the brokers to send their own listings in those markets, although they certainly could if they believed the MLS agreement with CoreLogic was restricting the choices available to them," Frame said.
A spokesman for CoreLogic said it’s standard for the company’s contracts to run for three years, but declined to comment on whether any MLSs that have joined the Partner InfoNet program have negotiated other terms.
CoreLogic’s Partner InfoNet program, which formally launched on June 14, was initiated at the request of MLSs, Graboske said.
The fact that CoreLogic is not seeking the right to put listings data on consumer-facing public websites or use it for other marketing purposes makes the program attractive to MLSs, Graboske said (RPR says access to its database will be limited to Realtors).
"I would say that we have had little to no pushback on the terms that we sought in terms of the license grant," Graboske said. CoreLogic’s intended use of the sold listings data is seen as being aligned with the interests of MLSs’ members, he said.
"The risk management uses we seek would facilitate quality underwriting decisions, fraud detection, fraud prevention, short-sale underwriting decisions, and REO (real-estate owned property) action decisions," Graboske said. "If you think about the lending process, it’s about information arbitrage. Lenders want as much quality information as possible."
The interests of lenders and real estate agents aren’t always perfectly aligned, however. One service CoreLogic provides involves monitoring properties involved in short sales for evidence of fraudulent flips and "unethical behavior" by real estate agents.
In short sales, real estate agents sometimes are representing a lender, and other times a seller, CoreLogic noted in a recent study of short sale fraud, "putting them in a tempting position to manipulate transactions for profit."
Graboske confirmed that the listings data CoreLogic licenses from MLSs will be utilized by applications like CoreLogic’s LoanSafe Fraud Manager, which uses predictive models to flag potential monkey business.
While ethical agents would seemingly have nothing to fear from such efforts, LoanSafe marketing materials warn that alert-based, data-validation fraud review processes typically have false positive rates of 25 to 1 — raising the possibility that even honest agents will have transactions flagged for review.
CoreLogic says analytic models like LoanSafe Fraud Manager that use scoring systems to rank the likelihood of fraud typically have false positives of less than 5 to 1 within a subset of risky applications selected for review.
Graboske, while acknowledging that "a handful of transactions" might be affected by such reviews, said "the overwhelming effect of more information in the hands of lenders (will be to) help the vast majority of deals move forward faster."
There’s also a potential avenue for MLS sold listings data to get into the hands of consumers through CoreLogic’s parcel-based property and mortgage database, RealQuest. CoreLogic last month began marketing RealQuest Express reports on a subscription basis through Yahoo Real Estate.
Another option for MLSs willing to license sold listings data to third-parties is an offer from Realtor.com operator Move Inc., which has talked of providing consumers with more access to sold listings and off-market property data.
Move is offering to give MLSs that feed it sold listings data access to a natural language search tool, "Find," in exchange. At least one MLS — IRES — has taken Move up on its offer, with Emery praising the Find tool’s capabilities at the Real Estate Connect conference San Francisco last month.
But there may be limits to what Move can do with the data under the terms of its agreement with NAR to operate Realtor.com.
The 1996 Realtor.com operating agreement, last amended in 1999, is the subject of ongoing negotations between NAR and Move that have recently involved a mediator.