A few things have been written about MOVE’s latest announcement on the creation of the “Real Estate Network” (REN). MOVE’s says REN will “extend the syndication of property listings to highly trafficked websites operate by real estate franchisors and brokerage networks.”
I have to say I think this is a brilliant strategy on MOVE’s part. Here’s why:
1. Zillow and Trulia have already proven quantity (and quality for that matter) of listing data isn’t necessary to operate a highly trafficked real estate portal.
2. This further hedges MOVE’s position. MOVE currently depends upon its agreement with the National Association of REALTORS (NAR) for listings and does not run a national IDX network.
The big question is “who cares?” So I’m going to focus on a few tipping points that would cause a Franchisor or brokerage network to implement a REN feed on their respective websites.
1. SEO benefits
I think this is the weakest case. Most Franchisors running sophisticated IDX networks from vendors like Homes Media Solutions (formerly eNeighborhoods) and RED (formerly LPS Real Estate Group) have already figured out how to maximize SEO benefits using a platform designed to be a launching site for a “network of broker idx sites”.
2. Cost
This is a big factor. As I’ve stated Zillow and Trulia have already proven quantity of listings doesn’t matter. Aggregating MLS data from multiple sources managing all those different display rules and paying those MLS fees have a huge cost associated with it. What if RE/MAX is paying their IDX vendor $70,000 per month and MOVE is offering REN for $7,000 per month. Is it possible that a company like RE/MAX might opt to save the money? Maybe.
3. The MLS Two Step
This is also a potential decision point. Lets say that a particular MLS provider, for the purposes of this example the Houston Associaiton of REALTORS (HAR) has made is very difficult to display listings from their MLS. The Franchisor always has to jump thru a few extra more hoops when dealing with HAR. Will some Franchisors be willing to forego not having all Houston listings as long was they don’t have to talk to Sam Scott anymore? Maybe : )
4. Filling the gaps
The REN might be a great way for new and exisiting Franchisors to supplement coverage in areas where they don’t have a Franchisee yet. According to the rules they would still need a license in the state, but thats relatively easy. This makes Realty Executives participation as a charter member of REN a little clearer.
5. Exposure.
Search traffic to real estate portals is still heavily brand related. Long tail searches are a relative minor piece to the equation. It was announced recently that Century 21 is running a Super Bowl ad on February 5th. Depending on when REN would be implemented how ironic would it be when Realty Executives announced to their agents that all their listings would be advertised during the Super Bowl. Pass the chips!
In a way MOVE, with the announcement of REN, has changed the conversation away from IDX (something they are very weak in) to Syndication (something they are very strong in).
“If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle”
― Sun Tzu, The Art of War, Special Edition
Smart MOVE.
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Brilliant assessment of the (brilliant) move by MOVE Greg!
Strikes me as an elegant way to avoid legal liability for reversing the Franchisor IDX policy while further undermining the ability of local MLSs to control and facilitate broker reciprocity at the local level.
If Franchisors, brokers networks, publishers (and any other non-real estate entities for that matter?) can effectively enter data reciprocity agreements through REN, display data from various sources, and advertise freely, how would all the small local independent brokers be able directly compete for business online?
Does this ultimately serve the large numbers of the local real estate practitioners who serve consumers in their local communities? Those who pay dues to NAR for representing their interests?
— Alon
Alon is mistaken when he says that the Real Estate Network will undermine “the ability of local MLSs to control and facilitate broker reciprocity at the local level.” And he should not be worried that it will somehow impact his IDX business, iHomeFinder.
The Real Estate Network (REN) is all about providing brokers and MLSs with control while providing an opportunity for exposure to millions of consumers each month. Both the source MLS and the listing broker have the ability to choose whether they wish to opt-in and participate in REN. Recipient websites can be chosen on a one-by-one basis (it is not an “all or nothing” proposition). And the recipient sites have all agreed to abide by a set of rules (see: http://www.listhub.net/networkrules.html ) which govern and protect how the brokers’ data will be used.
Thanks for pointing out my mistake Errol,
I also appreciate your concern over REN’s possible impact on iHomeFinder’s IDX business.
However, we could easily replace MLS IDX data with REN Opt-In data and greatly reduce our data costs (by ~90%) so if REN gets market traction, it could be very good for our IDX business…and probably your IDX business too :-).
So if you would indulge me, I would like to go back to the question of MLS and broker control.
Since MLSs spend enormous resources regulating data quality, access and uses, I am sure MLS executives would be interested in learning:
1. How does REN plan to replace the MLS data compliance function?
2. What is REN’s organizational competence in regulating data quality, data access, and data uses?
3. How would REN actually pay for all these very significant costs?
As an intellectual property attorney, I greatly value the work MLSs do in curating the listing copyrights they steward, and protecting the intellectual property rights of their brokers.
But, while every MLS Participant and every MLS data Recipient are bound by legal contracts to every MLS, MLSs still have to spend huge amounts of money to enforce these contracts if they want to truly deliver “”broker (and MLS) control”.
So, along with MLS executives I have been talking to, I too wonder:
5. How would REN back up its promise of “providing brokers and MLSs with control”?
6. What are REN’s incentives to diligently enforce their agreements with their Recipient Sites, who happen to be REN’s customers?
Appreciate the candid dialogue!
— Alon