Where Real Estate Gets Its Dirt

Big brokers seek to shut down MLS public facing websites.

There’s a lot of brouhaha over amendments to the MLS Policy Statement 7.57 outlined in the report and recommendations of the MLS Technology and Emerging Issues Advisory Board (say that five times fast). Overall the issues revolve around what types of services should an MLS provider, should well, provide. And should they “profit” from those services. As you can imagine this has caught everyones attention.

Recently Cathy Holefelder, president of CMLS (Council of MLS) drafted a letter with recommendations to the committee from the CMLS board of directors. You can find the letter and other information at the CMLS website. I think these recommendations, as you can imagine, are well thought out.

But another entity has jumped in to the frey with their own letter to the committee. Bob Moline, President and Chief Operating Officer of HomeServices of America. Here’s the money shot…

“We have no doubt, based on proposals and communications of others of which you are, no doubt, aware, that some want to use the fees and dues collected by MLSs and Associations to actively market public-facing sites. Such expenditures–and the public facing websites themselves–would put MLSs and Associations in competition with many of their broker-members, specifically their larger broker-members.

Therefore, we strongly suggest that the proposed new language on advertsing specifically exclude the use of MLS of Association dues or fees to market public-facing website.

[emphasis mine]

If you can’t promote a site, then what’s the point?

To me this letter is pretty transparent. HomeServices represents some of the largest brokers of the country. HomeServices doesn’t have any responsibility to “enable Participants and Subscribers to better their clients, customers and the public” (as it states in the Handbook on Multiple Listing Policy).

Balancing the needs of brokers of all sizes is one of the biggest challenges MLS providers face on a day to day basis. HomeServices heavy handed approach shows a lack of understanding of the clear benefits MLS public facing websites, and other services provided by MLS providers. These services give all members, not just the biggest, the chance to succeed.

The drama in DC is just beginning….

  1. “HomeServices heavy handed approach shows a lack of understanding of the clear benefits MLS public facing websites”

    – I disagree. A public facing MLS site might be a benefit to smaller brokers, but they’re competition for larger ones.

  2. Todd – this would be true if the big brokers were actually getting any of the Internet real estate traffic. Everyone knows where the traffic goes – Z/T/R/H – 100 million per month. MLSs equal broker competition but Z/T/R/H are necessary evils?

  3. “If you can’t promote a site, then what’s the point?”

    The point is whose money promotes the site. If a public-facing site is a benefit to individual brokers, the MLS can create it and those members can use it or promote it themselves.

    All members should not be required to pay dues for an advertising campaign for a site which may be a direct competitor, no matter the size of the brokerage.

  4. This is a great topic of conversation Greg and Todd, and I really respect both of your views but I am going with Greg this time. If real estate brokers band together in a market, they can move the needle on consumer behavior, bringing consumers into their pipeline, without having to pay for leads (or as much anyway).

    Brokers can stage platforms individually and try and compete as a standalone business against Zillow and others and Homeservices has the weight to maybe take a shot, and a few other really large brokers nationally. But for the almost 400,000 real estate brokerages in the US, they’d do better by forming a strong “buy local ” brand and taking that out into the marketplace (har.com, et al).

    Most MLS platforms can route leads straight to Homeservices (or any member broker) in keeping with the brokers own business model so they can run their own processes. In this way, the MLS only adds to the brokers lead channel.

    As an industry we must understand that we’re in this together, or as a friend said, “our guys are pointed in the same direction”, at Zillow, not at each other.

  5. @sam fair point, but the accounting isn’t that easy. Sometimes the ads a public facing site generates pays a huge chunk of the cost.

  6. This amendment started over how lock boxes could be “billed” by an MLS/Association and has morphed into the great idea of redefining MLS services which hasn’t been done in 50 years.

  7. Good point, agreed, Greg, it can get muddled. We get into this a lot with non-dues revenue generation through vendors as well.

    To Matt’s point, the “banding together” might serve an SEO goal for brokers who are primarily listing brokers.

    Buyer-focused brokers, on the other hand, would just have another new, large competitor online for buyer eyeballs. Most would assume that leads from an MLS public-facing site would go directly to the listing broker. Or, would the MLS charge buyers’ agents to get the leads and cut out the ZTR middleman? I imagine listing agents would squawk.

  8. The issue is rather stark for any broker who operates a successful website where they do business. That number doesn’t amount to many in most markets and I’d be willing to bet that it’s “none” in many. The difference, however, is that those successful broker sites own the traffic numbers where they operate.
    It is flat out wrong to say that the only response to the success of ZTR in terms of capturing consumer traffic is for the MLS to get in the game on behalf of its brokers and agents.
    It is worse than wrong to ask a broker to pay to promote a website that reduces his/her reach even if that competing website returns leads to the originator of the listing. Why? Because the successful broker sites are pulling leads for their businesses that come from other brokers’ listings.
    I asked one of these “successful brokers” once what it would take for his company to get behind a broker-friendly, neutral MLS public-facing website in our market.
    He said, “Show me first how it will be accretive.”

  9. Pingback: NAR Executive Committee seeks to send public MLS issue back to Advisory Board. #narmidyear | Realty Nex.us

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