MLSs are transitioning to a new role, and it’s not lead generation

Mission should be helping brokers get the most out of data

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Two big shifts happened in the past month that will reshape the way brokers and agents use MLS listing data. The first change was the dismantling of IDX website pricing models by Placester. Its partnership with NAR to deliver modern, mobile-friendly, IDX-powered websites for $5 per month minimizes the barrier to entry for agents who’d like to leverage an IDX data platform.

The second change was a big step in modernizing MLSs’ dissemination of listing data in the form of IDX. NAR’s annual conference ended not just with an approval, but with a requirement that MLSs update their IDX feeds frequently and include sold data. This builds on a trend that points to MLSs releasing far more of their content in the future, some of which isn’t accessible to portals.

There has been a lot of hyperbole surrounding IDX in the wake of these changes. IDX is certainly not in its demise. To be frank, it hasn’t even been commoditized. Successful new IDX products are proliferating for a wide range of platforms and devices, even at high-end pricing levels. The real conversation is one that was highlighted by Rob Hahn: We need to look intently as an industry at the MLS’s transitioning mission.

Empowering brokers to generate leads through MLS data has become a primary role of many MLSs. The MLS can, and should, deliver every kind of data it can (responsibly) to its members that can be used to generate new business. That role, however, should be limited to creating support tools for members to use. It should not, as has been suggested by some, allow the MLS itself to become the lead generator.

MLSs are overstepping their roles when they use member resources to take the position of first contact with consumers. Brokers need the MLS to give them wings, not regurgitated worms.

When an MLS takes on the role of the public-facing, dues-spending, lead generating website for its members, it undercuts its members’ ability to differentiate online based on their marketing skills. The MLS website effectively competes with and displaces the online business created by its most innovative members. It pulls clients away from the successful and uses their dues to supplement the business of those who’ve failed to capitalize on the Web.

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It’s an ironic shift of strategy. The MLS originally was formed to create a neutral playing field on which any broker could compete for success through individual capacity for innovation and hard work. The public-facing MLS website actually attempts to flatten out the success rates of its members.

MLSs have a stark contrast in the paths down which they can lead their members, and they sound a bit like Cold War propaganda (forgive me for dabbling in hyperbole). They can democratize their data and tools to make them available to their independent members, allowing them to succeed or fail based on their own abilities to leverage those tools. Alternatively, they can view their members as a feckless herd of subscribers who won’t innovate themselves and need the central controller to generate and distribute work for them according to the traditional pecking order.

Portals consume an inordinate amount of our attention, but that shouldn’t cause MLSs to ignore the successes of their own members. Many brokers are driving prolific online marketing businesses with differentiation and creativity. These are the brokers that we should be looking to learn from, not drag down.

It’s also true that many other brokers have lost much of their online visibility. They’re still listing homes in-person with clients, but they’re increasingly losing the ability to capture buyer leads. They’d like their association to prop up their traditional real estate experience at the expense of newer businesses. This old-guard mindset tends to win a lot of our industry’s strategy debates. That may be why our overall competitiveness online is in its current state.

Supporters of public-facing MLS lead generation websites will point to Houston’s HAR.com as a model of success. It is an outstanding implementation of an MLS portal. Its creators built a highly successful lead generation website. It absolutely works  as a means for transferring buyers directly to listing agents.

Surprisingly, the MLS public-facing website may be the biggest threat to the utility of its IDX. By undermining IDX’s intended purpose of allowing all brokers to market others’ properties directly to their own buyers, the MLS is putting its own competition against advertising portals above its responsibility to encourage independent agency representation and collaborative broker marketing.

The argument for these websites isn’t about listing agents getting proper credit for their listings. That can be done with a simple identification line or link placed as prominently within each IDX listing as the MLS deems appropriate. The public-facing MLS website’s purpose is to finance a lead generation program that funnels buyer leads to listing brokers. It’s an innovative face on a support mechanism for a traditional mindset.

MLSs feel they are under fire, but their core roles have never been more important. They need strong rules to enforce broker cooperation, the most unique and valuable platform of our industry. They need to continue to create guidelines for listing integrity, proper agency interaction and data distribution. They also need to embrace the idea that their data is our data, and it is a unique tool that should be offered to any broker who wishes to use it to generate business.

Agents don’t get into real estate for an “everybody gets a trophy” league. Their associations and MLSs should provide the structure and support to give their members the opportunity to succeed, and then get out of the way and let individuals determine the winners and losers.

Instead of operating from a mindset focused on the fear of advertising portals, we should be concentrating on the expanding abilities of our brokers to use the vast untapped data that MLSs can access. IDX, portals and Web technologies will continue to change, and we need to allow our members to react quickly and flexibly to those changes.

With the advent of ever-greater uses for big data and platforms to display it in many new ways, there’s so much more we can do with our MLS data. Let’s open up the floodgates even further than NAR’s requirements, and help our brokers innovate with the support of their MLS not in competition with it.

Sam DeBord is managing broker of Seattle Homes Group with Coldwell Banker Danforth and a director for Washington Realtors and Seattle King County Realtors. You can find his team at SeattleHome.com and SeattleCondo.com.