Where Real Estate Gets Its Dirt

Upstream predictions

Its anonymous poll time kids!

  1. In the past there have been analyses of how approximately much money Real Estate sales means in commissions per year. Has there ever been an analysis estimating the gross revenues of the MLS industry? If this fails to launch, it will be because the MLS powers see it costing them BIG and will do anything they can to keep the brokers under their thumb.

  2. @Thomas W – You could do an estimation that on average MLS service fees (not association dues) range from $15 – 50/mo but most are under $20/mo of the hundreds I speak with. Let’s assume $25/mo average and 1.5 million subscribers in the U.S. That would equate to $37.5 million/mo or $450 million annually.

    They pay typically from $4-10/user/mo for the MLS software. Let’s say an average of $6/user/mo given the majority of MLSs are smaller (under 1000 members) and they pay higher than large multi-regional MLS. This means after MLS system, they spend money on payroll/operations, facilities, travel and continuing ed, reserves, lockboxes, billing and may have $4-7/user/mo remaining for any other solutions they want to offer.

    I hope that helps. In the whole scheme of things the total addressable market of MLS is rather small and Zillow Group alone brings in more agent/broker revenue annually than all the MLSs in the country and that is just with 50,000 users. MLSs don’t keep brokers under their thumb and most do everything they can to keep costs low and serve their owners (typically the brokers or boards). There is simply very little left over to fairly compensate technology companies for their work and the major hurdle will most likely be technical.

    A failure on Upstream project could mean many things. If you think of all of the rework required to every 800+ MLS system to standardize their field names to be able to accept listings from a central system, it’s a massive undertaking. MLS software was designed to be able to configure different fields and every market has done that so how to get Pandora back in the box is the issue. It’s more of a technical hurdle than political one. Either Upstream will have to map and constantly maintain/update their dynamic business rules engine to match all 800+ local MLS systems’ so they can send data how the MLS system expects it, or the MLS systems will all have to standardize their data models and business rules so one system can publish to them all. That can take years either way unless you do something revolutionary – start over from scratch.

Sponsored By Giant Steps Advisors