Time to Defrag?
Marlow of the 360Digest reports that the Northwest Multiple Listing Service (Washington) will not be renewing their contract with Realtor.com, thereby pulling all of their listings from the search engine giant effective this Spring. This is potentially big news as I think it could be the beginning of the end of their dominance in the third-party search engine category. Gregg Swan, in a comment on Galen’s Rain City Guide post feels otherwise, as he reminds us that Central Arizona stopped their Realtor.com feed years ago yet this issue has since been resolved.
For the consumer, first let me make the distinction between the MLS systems and IDX. The MLS systems allow brokers to cooperate with one another. It is intended for member use and allows the sharing of listings and the agreement to compensate brokers who participate in the sale of those listings. IDX, or Internet Data Exchange, is a mechanism which allows MLS Participants (Principal Brokers) to give each other permission to display each others’ listings on their web sites. The search features you see on individual broker and agent websites are the result of IDX agreements. MLS participants, however, may opt out of the IDX agreement. The result is that hundreds of (typically smaller) brokers in San Diego will not have their listings represented. Therefore, the consumer is not getting access to each and every property offered for sale.
In today’s web world, there are many established and many more emerging home search sites, and they populate their sites in different ways. Trulia, and I will trust Galen on this, uses web crawlers to sweep listings from individual sites. In addition, much like Craigslist, Backpage and the myriad of other online classifieds, individual agents or brokerages can subscribe and place their listings on these sites. Realtor.com, on the other hand, has relied on free feeds, from the source if you will: The MLS’s.
The question becomes, why should Realtor.com play by different rules? It seems that there is strong sentiment that the fact that the for-profit giant is laden with advertising banners from competing brokers is not in the best interest of the MLS agent members who “own” the listings. I don’t entirely disagree. In order to allow our contact information, along with enhanced photos and property descriptions, to be displayed on Realtor.com, we are now forced to pay thousands of dollars a year. Will pulling the property feed in Washington have an adverse affect on the clients, however, by limiting their exposure? In the case of the Northwest Multiple Listing Service, I am not so sure, as their website is public and offers full access to all listings to anyone who is interested. In San Diego, however, our MLS is not public, so the consequences could be significant.
Having said that, with the veritable candy store of search engines available to the consumer, it may just be time to stop treating the independent search engines differently. Is the answer to withhold MLS feeds or provide them to all? I am admittedly somewhat confused as to the direction we are heading, a confusion apparently shared by Jim Duncan at RealCentralVA. Obviously, there will be many in the broker community who shun full cooperation as they fear it will diminish the value of the agent when/if the MLS is no longer a private matter. However, I see privacy and privelege of information as a dinosaur on its way to extinction. The larger brokerages have already hopped on the cluetrain (as Jim put it) and are feeding their listings directly to the more popular sites, case in point Prudential’s recent parterships with Yahoo! and now Google Base. I, for one, am placing my listings on every online search site I can get my hands on, as I continue to feel that maximum exposure is critical to my clients. For the time being, though, fragmentation is the word.
October 26th, 2006 at 12:02 pm
I agree 100% that “privacy and privelege of information [is] a dinosaur on its way to exinction”. I truely believe that within 4-5 years there will be a fully searchable national website that will simply bypass the MLS systems and allow homeowners to directly list their property for sale at no cost. I just see the MLS, Realtor.com, all newspaper advertising etc getting eaten by a Zillow or Trulia that got eaten by a Google or an Amazon. How the industry reacts to that will be interesting.
October 26th, 2006 at 12:13 pm
It could be, but if your scenario does indeed come to pass, I believe it will be awhile getting there. Naturally, most agents won’t embrace the concept of MLS (and therefore, agent) bypass. I think a more logical scenario would be for the various MLS’s to simply feed the future site you speak of. That way, everyone is happy.
October 26th, 2006 at 4:37 pm
Jeff Brown at Behind The Curtain http://bawldguy.wordpress.com/ SAYS:
“I’ve spoken to Kris and she’s impressive in her grasp not only of San Diego real estate but in her computer geekness. And you don’t want to miss Steve’s posts which at times resemble good old fashioned Bawldguy Rants.”
October 27th, 2006 at 4:37 pm
Privacy and closely-held listing information are all but relics of the past.
I strongly believe we will see the MLS concept (as we now know it) disappear within the next 5 years; to be replaced by something like Google Real Estate or other new emerging technology.
If you don’t believe me, read Google’s Mission Statement.
There is simply too much going on with potential DOJ anti-trust litigation, Zillow, Trulia, Google, etc. for that not to happen.
Realtors lost the battle when they gave their MLS data to Realtor.com, implemented IDX, etc.
To believe that we can keep our information private is utter folly in this new age of free-flowing information.
The consumer is going to demand that listing information be freely available whether Realtors like it or not.
Those who fail to realize that are going to be relegated to the sidelines as others capitalize on the new opportunities arising from that information.
October 28th, 2006 at 9:46 am
[…] It’s a six-month-a-versary at The San Diego Home Blog. It turns out all the great RE.net raconteurs are in San Diego. Kris Berg has some thoughts on MLS fragmentation, as well. […]
October 29th, 2006 at 9:31 pm
[…] Kris takes a clear, even-handed view of this topic in her post entitled, “Time to Defrag?“ I know everyone has an opinion of this volatile issue. I recommend you read this post to broaden your horizons. It may not change your mind on anything, but it will make you think. Filed under: NAR, Real Estate | By: Allan | […]
October 30th, 2006 at 12:00 am
Great post on a complicated subject, always appreciate your insight.
I believe that Realtor.com does indeed pay for its feeds from the ~900 MLS’s around the country. Those fees add up to a hefty chunk of change and are, I believe, part of the reason why Realtor.com has had financial trouble in the past.
Realtor.com does not feel obliged to play by the rules. As the “official site of the National Association of Realtors,” I find it ironic that they break some of the data display rules — however archaic they might be — recommended by NAR and implemented by many of the local MLS’s. Classic example is that Realtor.com now displays sold listings (probably because of pressure from Zillow) despite pretty clear rules in many MLS’s, including ours here in Silicon Valley, prohibiting that very thing.
Ultimately we should all continue doing what we do best. Realtors are not in the business of search; Google is not in the business of representing clients in buying and selling homes. Realtors will continue owning the relationship with the client, and Google et. al will help consumers find homes, Realtors find clients, and clients find Realtors.
October 30th, 2006 at 7:23 am
Thanks for chiming in, Kevin. All I know is that I have to pay close to $1500 a year for the privelege of having my contact info displayed next to my listings on Realtor.com. I may own the relationship with the client, but I have to pay dearly to further Realtor.com’s role as a search facilitator. I guess that makes me an enabler.
October 30th, 2006 at 7:20 pm
It seems like http://www.hooray.com is on to something. It serves both local, state and national. Apparently the For Sale By Owner Listing are uploaded directly with the Broker Agent Listings. It will be interesting to see how Utah and Idaho utilize this service over the next year. So far it looks good. I have noticed new brokerages signing on. Look out Regional MLS and Realtor.com!
November 2nd, 2006 at 10:34 pm
What would you say to your buddy if he called you in the middle of the night with an ingenious business plan. Create a website that people can go to to see what’s for sale on eBay!! Wow, think of the traffic he could draw because lots of people want to see what’s for sale on eBay! But wait a minute, why wouldn’t they just go to eBay to see what’s for sale on eBay? Oh, that’s right, they would just go to eBay. Well, the real estate industry has created such a hodge-podge of antiquated, old-boys-club, protectionistic, dinosaur mentality MLS systems that are “closed shops” (ie closed to the public), but what about the Internet? What about the IDX policies? What about Realtor.com (the official website of the NAR, right?)? So, I guess the public does have access to the listings?
The point is that if the NAR were run by a modern-thinking management team and Board of Directors (instead of one of the most top-heavy, beaurocratic, union-mentality conglomerate of self-interested competitors) there would be one common MLS system used throughout the country (and the world). There would be one website that people everywhere would go to for Realtor listings (maybe they could wrestle the domain name Realtor.com back from HomeStore?).
Geez, if they did that their business model could enjoy the bounties of “network externalities” (not sure what that means? look it up). Those network externalities are the reason that the MLS’s were so successful for the past 40 years, and now that world has shrunk (ie mass communication and instant information), the NAR better adjust or prepare to abandon ship…
November 3rd, 2006 at 8:15 am
Good comments. Their fear of course is that “full access” will somehow fuel the disintermediation we all talk about as coming. (Hate the “d” word, by the way, but it works here). We had two calls for showings on our listings yesterday and both were from self-proclaimed listing agent shoppers (”I can get a better deal by going directly to the listing agent). The buyer’s agent is not dead, but he may be in trouble. There is enough information out there without the full participation of the various MLS’s to cause the change in our industry that we are seeing. I agree that it is time for NAR and the various Boards of Realtors to shift their thinking.