SAN FRANCISCO — Cameron Paine, CEO for Connecticut Multiple Listing Service Inc., a broker-controlled statewide multiple listing service that launched in February 2007, said smaller MLSs are in danger of becoming irrelevant.
And what many MLSs don’t seem to understand — and vendors do understand — is that "it’s all about the data," Paine said. It would be easy for a "very light, snap-on MLS model" to bring together the top brokers in a given market and form a low-cost MLS that could quickly grab market share.
"It’s just a matter of time. If you’re in a fractured market, it will happen. The larger or statewide (MLSs) have enough of a buffer that they are now providing for the data needs of their brokers, especially their largest brokers," he said, which provides them with some immunity from potential MLS competitors.
Paine, speaking during a "Change or Die: Does the MLS Risk Becoming Irrelevant?" panel at the Real Estate Connect conference last week, also joined in a discussion about the value of public-facing MLS Web sites and data-sharing versus MLS consolidation.
The session was part of a series of panels focusing on the future of MLSs — a hot topic as the California Association of Realtors is pursuing a statewide MLS data-sharing initiative that could lead to a statewide consolidated MLS, and separate collaborative efforts are forging ties between MLSs up and down the state.
Also, the National Association of Realtors trade group is pursuing a comprehensive nationwide property database that MLSs and their participants could tap into. There are about 70 MLSs in California and 900 nationwide — most of them are affiliated with local Realtor associations.
Other topics during the sessions included the potential impacts to MLSs of a pending U.S. Department of Justice settlement of an antitrust lawsuit against NAR, and MLSs’ adoption of Web 2.0 technologies.
"Data sharing is a step, and it’s a good one," Paine said, "but data sharing does not remove the underlying problems" of multiple MLS organizations, staffs and related costs. Brokers have cited multiple sets of membership costs, rules, data fields and enforcement mechanisms as incentive to consolidate MLSs or forge cooperative ventures among separate MLSs.
Paine noted that Connecticut, despite the efforts to consolidate all MLSs in the state, is still home to a county with five competing MLSs, and charged that a market with several local MLSs is not the most cost-effective system for real estate professionals.
David Charron, president and CEO for Washington, D.C.-area Metropolitan Regional Information Systems Inc. (MRIS), the nation’s largest MLS with about 60,000 members, said that the MLS is investing in its public-facing MLS site in an effort to provide more traffic to its member brokers’ sites.
The ineffectiveness of existing media was a driver for MRIS in revamping its search site, Charron said. "The MLS is the one entity you can manage and control much easier than a third party," he said, adding that "brokers and agents are going to syndicate listings over hell’s half-acre."
But creating powerful public-facing MLS search sites can be costly, said Steve Schultz, senior director of product and business development for Yahoo Real Estate. "Do you employ designers, product managers, servers and operations people? There’s a lot of cost associated with (public sites), mostly around people and marketing."
Third-party sites can have common goals with brokers, said Sean Black, vice president of sales for Trulia, a real estate search and marketing site. "At the end of the day we all service one person: the seller or buyer of a home. We all have a part to play."
Paine said that public MLS Web sites can benefit both the small and large brokers in a given market by leveling the playing field for all market participants, and he recommends that the sites "should not be a profit model for the MLS" and should be free of advertising.
Bob Hale, president and CEO for the Houston Association of Realtors and a panelist during a "Public-Facing MLS Web Sites" session, has long championed the benefits of public-facing MLS Web sites.
While there is still resistance by some MLSs in building up their public-facing MLS sites — as some brokers worry that such sites could draw traffic away from their own sites — Hale said that the stats for public MLS sites tend to speak for themselves. "I think the main thing to do is quit having opinions. Look at the facts," he said.
HAR’s public search site, at HAR.com, is "not a destination — we’re a pass-through," he said, noting that the brokers in HAR’s market support the Web site. "We generate about 600,000 leads a year (for members) that they don’t pay a penny for. We send every single agent and every single broker a monthly report on how many leads they got, how many click-throughs to their Web site, and how many times their listing was viewed.
HAR has also actively distributed its participants’ property listings data to a range of third-party sites.
Ben Phillips, vice president of new products and research and managing director for Realogy Franchise Group, the largest real estate franchise company in the nation, said that the value of third-party sites quickly became evident during a presentation by Google officials. "We were seeing 70 percent of traffic to these national (brokerage) sites already coming from Google — they’re already there — so why shouldn’t I put my listings there?"
He added, "I think that it’s a benefit to the industry and to those customers that there are sites like Trulia" for consumers to evaluate properties and brokers, and Realogy has completed several data distribution agreements with major property-search sites in the past year.
Charron said that Hale "led the charge in this many years ago (for public MLS sites), and so many of us now are literally throwing ‘Hail Marys’ " to catch up.
As MLS public Web sites develop, there is the potential for the "consumer side and professional side of the site to meld and merge," and that could have "interesting implications" for MLSs, he said.
Saul Klein, president and CEO for Internet Crusade, an online marketing and support company, and CEO for Point2, which offers online real estate marketing tools, said he believes that MLSs will ultimately integrate Web 2.0 technologies.
"The MLS should be a ‘property wiki,’ " he said, with information on properties culled from a variety of sources."Over time (the information) can get better and better and better. Some MLSs are starting to get the idea," he said, and that is "a parcel-based idea as opposed to a transaction-based idea."
Real estate professionals, he said, must create a compelling argument for the services they offer, as their role is not simply to be an information provider "because that information is everywhere." Rather, real estate professionals can put information into the context of a consumer’s life, he said so that they become "more valuable as that trusted, authoritative source and adviser."
Beverly Faull, general manager and senior vice president for Fidelity National Information Services, said that brokers have increasingly gained control over data aggregated by MLSs. "Twenty years ago the MLSs were very protective of the data and were inflexible in the ways brokers could manage the data. Over time we’ve seen that change — the brokers, they own that data. They should be allowed to do with that listing as they choose."
Brokers are taking the reins in making their own decisions about advertising property listings, she noted.
As for the impact of a pending settlement in a federal lawsuit against NAR over the trade group’s previously passed restrictions on the sharing and distribution of online property information, Klein said, "I don’t think that the proposed settlement, even when finalized, will have any major or even minor impact" on MLSs.
And Paine said, "There are MLSs who are already providing most of the information that the DOJ is (proposing) we need to provide." Connecticut MLS already provides recent sold data to the public, he said. "We have it on our public-facing Web site. I think MLSs that have gone out of their way to protect that kind of data — they’re going to have to figure out a way to get it into the marketplace."
He added that there don’t appear to be any negative impacts for MLSs that share this type of data with the public. "We haven’t seen any negative effects on the agents or the brokers in our marketplace. It makes us think it’s OK to get that data out there."
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