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In April 06 I wrote a blog about the idea of a “National MLS” Much has happened since that time. Zillow, for instance, has been held up a potential threat as a “new national MLS”. It seems funny to me that people, real estate professionals in particular, would consider Zillow a threat as a National MLS. It seems to me that Zillow is a consumer facing advertising vehicle where listing information is displayed to consumers and real estate professionals alike. There are lots of neat tools there to help anyone make sense of the data they see. Nice, but is that what an MLS, or National MLS, is?

I submit to real estate professionals that if they consider the value of their MLS to simply be consumer facing advertising, then they are correct, Zillow will be the next National MLS. At this point I would also suggest that these same Realtors get their resumes in order. Side Note: I always refer interchangeably Realtor and Real Estate Professionals – When I say Realtor I really mean anyone licensed to sell real estate (I hope I don’t get a nasty note from Laurie Janek J ). Seriously, the members of the Realtor community that feel their value add is tied to their control of the public display of listings are living on life support. That genie escaped the bottle long ago, and consumer oriented web 2.0 companies like Zillow are going to continue to make the display of listings easy and freely available. This is what consumers want – see my post here.

Further, it is my contention that the more information a consumer has, the more likely he or she will be to use a Realtor. Let me explain by way of analogy: You might go online to diagnose a disease or illness; you will find a lot of information there and may even come to truly believe you know exactly what is wrong with you. Will you prescribe medicine or operate on yourself? I think not. If you think that is too extreme consider this: would you represent yourself in court? You can get ALL the information you need online. Some people do but most, particularly educated Internet users, do not. There will always be some subset of people, however, who try – in real estate we call those FSBOs. So why, as a group, do many Realtors believe their value is simply in hiding homes from consumers and “forcing” them to deal with a member of their profession to “see what is available”?

As you might have discerned by now, I DO NOT BELIEVE the value of realtor is attributable to their access to information. Most Realtors provide real value, whether buying or selling a home. Many of these successful Realtors understand that Zillow and others like them will not destroy their value. Real estate professionals bring tremendous value to the table including: Marketing prowess, negotiation skills, market knowledge, local knowledge, education, legal and contractual obligations and just plain common understanding of the local business environment and pitfalls to avoid. However, these reasons alone might not be enough to ensure that the profession, as we know it, will prosper and flourish. As Saul Klein commented here it certainly is “time for brokers and agents to take back their future”.

So how does an entire industry go about “taking back their future”? In order to take back the future you have to understand the past. The past, in this case being the entire Regional MLS system. The main goal of these regional or legacy MLS’s has been to facilitate the cooperative sharing of information and the cooperative marketing of listings between real estate brokers. Up until this point in history these MLS’s have served the industry well. The MLS’s were never designed or meant as public facing advertising vehicle, but it could be argued that is in fact the largest portion of value that it provides to it’s membership.

I would argue that, in conjunction with advertising, the biggest value of an MLS comes from the idea of organized cooperation amongst real estate professionals. This is an important concept that might not be clear at first. Think about it. Real estate is a complex business involving the sale of complex capital goods. Having local professionals collaborate together in the best interests of consumers, buyers and sellers alike, is very important. The MLS is the system that has allowed these professionals to cooperate. The MLS allows for the sum to be greater then the parts. It is it fact that these cooperating parties are all truly “real estate professionals” that creates the value.

So, I am saying that the power in the MLS is advertising and organized cooperation amongst professionals. The allure of this has attracted the attention of many parties that would attempt to capitalize on this power without contributing to its creation and continuation. These parties include:

  • Part time or pretend real estate professionals
  • Certain types of discount “Brokers” that are little more then a way for FSBO’s to get into the MLS
  • Non-Realtor Internet firms looking to use the data to generate traffic they can monetize; in many cases by capturing leads and sell them to realtors.

In an attempt to protect themselves from the above, some MLS’s have implemented policies that have attracted the attention of the DOJ/FTC. DOJ aside, there are many problems with the structure of the current regional MLS’s.In my opinion much needs to change to help the Industry “take back the future”. Actually, it is more then just my opinion. It is no secret that NAR President Tom Stevens appointed a presidential advisory group, or “PAG,” to study the future of MLS.

So how can the industry “take back the future” ? In my opinion it is to capitalize on the power of what makes the MLS, namely: the power in the MLS is advertising and organized cooperation amongst professionals. So let’s look at each component.

ADVERTISING Consumers rely on Real Estate professionals to be professional marketers. As such, the industry cannot afford to be out marketed by 11 year olds on eBay selling baseball cards.

A National MLS needs the following:

  • Rich Homogeneous Data Structure. In order to build something strong you need to have a good foundation. Current MLS’s were never meant to perform a public facing advertising function and were therefore never designed for this task. The data structure needs to be completely redefined to provide a robust marketing and advertising medium.
  • Exposure/Syndication.The listings (marketing assets) need to flow transparently wherever the owner of these assets (real estate professional) chooses. This could be their own site, other professional’s sites, Google base, Yahoo, Craigslist or even Zillow. Real estate professionals need to realize that by actually setting the data free and placing it in these places, under their own terms, they are actually maintaining control. Sometimes to really have something you have to set it free – believe me on this one – I know.
  • No Regional Boundaries. Regional MLS’s have regional boundaries that simply don’t make sense to consumers. There are some areas (the Tri State in
    Michigan for instance) where a consumer on a broker or agent site might have to look in three separate IDX pages for three separate MLS systems to see the available listings.
  • Searching not bound by geography. Regional MLS’s by definition can only show listings in their region. Many consumers are looking for second homes and lifestyles, market conditions and home features may be more important then geographic location.
  • Analytics. Traditional advertising is very inefficient, typically results cannot be measured. An effective National MLS would need to not only provide advertising but would need to provided and track results and calculate concise ROI’s.
  • Predictive Marketing. A National MLS, or any MLS, ought to build a profile of potential consumers based on their online behavior and predicatively and automatically provide that consumer with what they are looking for. For instance if a consumer were looking in a certain neighborhood they ought to be sent that neighborhoods demographics. If they had spent a lot of time looking at all the photos of a certain home, they ought to get information about open homes, price changes or sale status if any of these events transpired. If they were primarily looking at kitchen photos (or any other rooms) they should get sent homes that are similar and have interesting kitchen photos – automatically.
  • Consumer participation – web 2.0. A National MLS will need to be open to empowering consumers to participate, in what for most, is the biggest financial transaction of their lives. Seller logins, seller comments on listings, etc.


This is really the crux of why Zillow will never be a National MLS. Zillow and others like them may be able to achieve the advertising vision above, but will never be able facilitate the organized cooperation amongst true real estate professionals that has been the magic behind the success of the current MLS system. That said, changes are afoot that could destroy the profession if the industry does not “take back the future”. Here is what is needed to ensure the continued “magic” of the MLS.

A National MLS needs the following:

  • Co-operation. There is simply more power in organized real estate. Simply put the power of real estate professionals working together is simply great news for consumers. This is a case where the sum is more then the parts. Together we are stronger.
  • Asset Protection. Real estate agents and brokers are professional marketers that turn the data associated with a home in to a “listing” that is really and truly a marketing asset. The real estate professional uses this asset to market the home and attract new buyers and sellers. Every prudent business persons protects their assets – why should realtors be any different?
  • Data Control. The real estate professional that created the listing (took the photos and provided the marketing descriptions), needs to completely control where and how it is displayed. The real estate professional needs to be able to provide the seller with the assurance that he or she will not lose control of the sellers data. A National MLS needs to provide this.
  • Choice in Marketing Partners. A National MLS should provide a real estate professional complete control over who they share their marketing assets with. A member of a National Listing Service should not be forced to allow non-professionals to market their assets, nor should they be forced to market other listings in the National Listings Service. After all, does anyone tell a retailer what products he must carry market and sell? These marketing choices can effect a Realtor’s reputation and should therefore be individual business decisions.


The last and possibly most important thing a National MLS needs is community. This nebulous term is really at the crux of a National MLS. Participation in the community ought to be free for any licensed real estate professional. The community should be self regulating and policing based on, and tied into, the “social capital” of each member. The community should embrace transparency and openness.

In closing, I do think time is running short for the real estate profession to “take back the future”. That said, I think it can and should be done!