Newsroom

Listing Syndication for Proft: Turning Data Into Dollars

 By: Jeff Tomlin

Builder/Architect Vol.18, No.8

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lore Live Launched

lore Magazine 

Series of Live Broadcasts Discusses Major Issues in the Real Estate Industry 

lore Magazine, a magazine devoted to profiling fascinating individuals in the residential real estate industry, has launched a new and compelling series of interviews called “lore Live.” lore Magazine, currently distributed to top agents and leading brokers, is thrilled about the launch of their new podcast videos. The new additions to the lore “brand” are five-to-10-minute podcast videos covering key issues such as the future role of the broker in the transaction, the need versus cost of technology, among other relevant topics.

Industry leaders, including Steve Murray of REAL Trends, Larry Kendall of The Group Inc, Brendan King of Point2 Technologies, and Scott Kucirek of Prudential California/Texas/Nevada, and founder of Zip Realty, will participate in the discussions. “We always new that lore would present the residential real estate industry in many different media formats and we are thrilled to have these podcast videos to share with our readers,” says Anne Randolph, publisher of lore.

Available on the lore Magazine web site, loremagazine.com, and through podcast portals such as iTunes, the podcasts also include behind-the-scenes footage and additional perspective on the intriguing people covered in lore Magazine. They can be viewed as a podcast, in MP3 format, or on a computer screen. Subscription is free which assures access to all interviews and videos. Additional podcasts will debut each month, and all interviews in the series will be archived.

lore Magazine is the magazine about the people in the residential real estate industry. lore Magazine content is available both in print and online at loremagazine.com, where “lore Live” is also available. lore was founded in 2004 by Anne Randolph and Steve Murray, Denver real estate consultants who together have provided business and consumer trends research in the residential real estate industry for over 35 years. In three years, lore has come to be considered by its nearly 40,000 readers to be an authoritative voice on the lives of the people who drive the real estate industry.

Debate rises over MLS role in offer of compensation

By Glenn Roberts Jr.
Inman News

Part 3: Future of MLS: Full speed ahead

There is more to a multiple listing service than warehousing data.

MLSs are marketplaces for showcasing information about properties, including pricing and property amenities. They are cooperatives that provide neutral ground for industry competitors to work together, make offers of compensation and share data. They are marketing portals that disseminate property listings information to public-facing Web sites. They are security organizations that verify the quality of property information while guarding private information about for-sale properties and scanning for improper use such as copyright and contract violations.

They are statistical agencies that provide detailed real estate market reports and enable participants to conduct their own data analyses. They are technology providers that roll out a range of tools and services for subscribers. They are governing entities that set and enforce rules.

Some industry participants have advocated for reform in the structure of MLSs, such as a change in the offer of compensation to cooperating agents. Some have questioned whether third-party technology companies and consumer-targeted real estate Web sites may reduce the role or relevance of existing MLSs, and whether there will be one unified MLS for the entire nation or whether the entire MLS system as we know it will go the way of the brontosaurus.

Despite the debate and an increasing push for MLSs to collaborate or consolidate with other MLSs, the core functions of the MLSs have remained largely intact. There are over 800 MLSs operating across the country, most of them governed by or affiliated with local Realtor trade associations.

"The compensation issue has always been a strength of the MLS," said Ed Krafchow, president of Prudential California Realty.

"Really what we are and were is a milk cooperative. All our dairy people take our data and put it in one large bucket and we all cooperate with each other. That's in the interest of the consumers. The agreement that lies there as to compensation is relatively important. We all share in the data and then we all compete with each other to see who can find the buyer for that house," Krafchow said.

An MLS, as defined by the National Association of Realtors, is intended to serve as "a facility for the orderly correlation and dissemination of listing information so participants may better serve their clients and customers and the public," "a means of enhancing cooperation among participants," and as "a means by which authorized participants make blanket unilateral offers of compensation," among other functions.

Brian N. Larson, a lawyer who has worked with MLSs, has advocated for the elimination of inter-broker compensation in the MLS. In a series of guest commentary articles published by Inman News last year, he argued that "inter-broker compensation makes little if any sense. Getting rid of it would mean the end of MLS as we know it, but it solves a series of problems and may also open the door for more innovative brokerage and listing service models."

Larson proposed a new model for listing services in which brokers representing buyers would obtain their own compensation from the buyers they represent rather than relying on listing brokers to offer compensation for the buyer's side of the transaction. In the current system, the listing broker posts a cooperating commission in the MLS that will be paid out to the broker who brings a buyer into the transaction.

He also has suggested that a new form of listing system might allow principal brokers to "pick and choose which registered recipients receive that brokerage's listings, checking a box for each entity (the broker) wants to receive the data."

Point2, a company that offers marketing tools and services for the real estate industry, operates a platform called the Point2 National Listing Service, for example, that allows participating agents to make decisions about which property listings they want to advertise on other sites and where to send property listings information. Users of the NLS can make "Handshake" agreements to share property listings information with other users or to block other users from receiving listings.

MLS rules passed by the National Association Realtors allowing MLS subscribers to selectively opt out from sharing property listings information with specific brokers were challenged by the U.S. Department of Justice in an antitrust lawsuit brought against the association -- Point2 has sought to steer clear of antitrust complaints by allowing real estate professionals to make independent advertising decisions in a peer-to-peer platform that is not affiliated with the trade association.

Brendan King, chief operating officer for Point2, said the Point2 NLS already allows property managers and builders to advertise compensation offered to cooperating brokers, and there are plans to formally add a means for all NLS participants to announce inter-broker compensation.

Despite these developments, King said that Point2 NLS is "not trying to challenge what the MLS does -- we think we work best in cooperation with regional MLSs. We want to leave the governance and for the most part the offer of compensation to the MLS."

Larson said that perhaps 30 percent of the legal issues that he handles for the real estate industry relate to inter-broker compensation. "It was a beautiful system when NAR invented it 30 or 40 years ago," he said. "Really, it was the right thing to do for that era." But the system does create problems, he said, "It's pretty clear to me that the system we have to some extent suppresses price competition on the buyer-broker side."

Already, there are some agents who enter into agreements with buyers that spell out the amount of that agent's fee and method of payment, regardless of what the listing broker offers as compensation to a cooperating broker.

Saul Klein, president and CEO for Internet Crusade, an Internet publishing company that offers online services for real estate professionals, has also questioned whether the offer of compensation will continue to be a vital role for MLSs. "The offer of compensation -- is that as important in the future? I'm not so sure," he said earlier this month during an MLS panel at the Real Estate Connect SF conference. He also questioned whether real estate professionals would turn away a deal just because a non-MLS member brought a buyer to the table.

Larson said that MLSs play an important market-making role in the real estate industry by maintaining data repositories for other participants to view property listings and by working to ensure the accuracy of real estate data. Similarly, the NASDAQ stock exchange plays a market-making role for those who purchase stocks, he said.

"The future of the MLS depends a lot on whether MLSs continue to be opportunistic about maintaining that role," he said. MLSs should consider taking in for-sale-by-owner listings, he said, to help maintain their market-making role and to assist MLS participants who are working with buyers.

"I don't see anyone stepping to the plate with more current information than what the MLSs have," he said.

But there is potential for third-party companies to make inroads into this core MLS territory by building up an updated and reliable set of property sales information, for example, he said. "I think MLSs could see a run for their money in organizations looking to build that kind of data," he said.

Consolidation and MLS data collaborations have the potential to disrupt the cooperative nature of MLSs, Larson said, as MLS participants in one market may not feel confident in offering full inter-broker compensation to a brokerage company that operates mostly in an entirely different market area.

Cooperation among MLS participants -- and compensation as a component of that cooperation -- are still key functions for MLSs and that may not change in the short-term, said Gregg Larson, CEO and founder of Clareity Consulting, a real estate consulting company.

"It's right there at the core of (MLSs) and without that you have some potential for chaos," Larson said. "I think the offer of cooperation and compensation will stay in the MLS for the foreseeable future." He suggested that variable offers of compensation through the MLS could become a favored approach for some MLS participants, so that they could offer varying amounts of compensation based on the level of services that a broker performs on the buyer's side of the transaction.

Rules enforcement is another important role that MLSs play, said Luke Glass, chief financial officer and chief operating officer for Threewide Corp., a vendor that offers MLS tools and services. "When it comes to all of the rules ... I think they do a wonderful job of that. I don't think you can get rid of that." He added, "I think that the MLS form of cooperation and compensation is a good model."

Some industry professionals have questioned whether third-party property-search sites may compete with the role that MLSs play in collecting and displaying a database of for-sale properties.

But Pete Flint, chief executive officer and co-founder of Trulia, a company that markets broker-supplied property listings information on the Internet, said his company is not there to compete with MLSs. "MLSs know best what services they plan to provide to real estate professionals in the future. We see our function as being different and complimentary in that the MLS has provided a valuable back-end business function for brokers and agents. Our function is as a media company to help consumers easily view neighborhood and listings information and also connect with brokers and agents online."

He added, "Our view is that MLSs have always served an important role in the transactional process, such as broker reciprocity."

David Charron, president and CEO for Metropolitan Regional Information Systems MLS, which has about 60,000 subscribers in the Greater Washington, D.C., area, said he expects the role of MLSs to grow in some areas, such as data monitoring and security.

MLSs could potentially play an expanded role in monitoring where participant data is going and who is using it, he said, and there are also opportunities for MLSs to enhance security to ensure that only authorized users have access to MLS data, for example.

MLS public listing sites gain support

By Jessica Swesey
Inman News

Part 2: Future of MLS: Full speed ahead

Consumer-facing multiple listing service Web sites -- once taboo and controversial in some markets -- are gaining interest again as MLSs scramble to define their value and role in future real estate markets.

About 300 MLSs throughout the country currently have consumer-facing Web sites where buyers and sellers can search property listings information. These sites were widely debated a few years ago in markets including Cincinnati and Chicago where brokers said the MLS sites served as competition to their own sites and ordered them shut down.

MLS affiliates tend to support the notion of public-facing Web sites for listings more than their broker and agent members, but support from both groups has increased in the last year, according to surveys conducted by the National Association of Realtors' Center for Realtor Technology.

The most recent survey found that 63 percent of MLS affiliates said they believe the MLS should provide a public Web site to display listings, up from 49 percent the previous year. Slightly fewer -- though still a majority at 52 percent -- of Realtor members also said MLSs should provide a public listings site, up from 34 percent who supported the idea a year ago.

While the increase suggests a renewed interest, many still believe that MLS-operated property search sites directly compete with local broker Web sites. Forty-four percent of brokers and agents in the 2007 survey answered yes to the question, "Do you believe an MLS public site competes with broker or agent Web sites?" while 28 percent said no, and the remaining 28 percent said "other."

A slimmer 33 percent of those affiliated with the MLS said they believe MLS public sites compete with broker and agent sites.

There are examples of how consumer-facing MLS sites have served to push traffic to broker sites, but the survey suggests that there is still uncertainty among members whether their MLS site sends them quality leads or site traffic.

Saul Klein, president and CEO of Internet Crusade, an Internet publishing company that offers services for real estate professionals, said he and his team uncovered a little more than 300 public-facing MLS Web sites throughout the country and about two years ago assembled them on a map at http://publicmls.realtown.com/.

"I think having a public side to the MLS is a good thing because you find all the information on all the broker sites anyway so it is in a number of different places already," Klein said. "I've got to think that it's a traffic driver" to broker sites, he added.

Keith Garner, managing director of the Center for Realtor Technology, recently told Inman News that MLS-operated public sites that display property listings information are receiving a lot of attention in the industry. "We are starting to see MLSs putting sites back up now. The pendulum is swinging a little bit. I think the members are starting to figure out that to make a really good Web site may take more resources than they have at times," he said.

One of the most well-known public-facing MLS Web sites in the country is the Houston Association of Realtors' site, HAR.com. The site launched 10 years ago and currently has about 55,000 property listings that are updated every 15 minutes, according to HAR's CEO, Bob Hale.

HAR.com in March of this year received 1 billion hits and 920,000 unique visitors in a single month, Hale said. "Those visitors looked at Realtor listings 11.3 million times that month for a total of 35 million minutes."

Hale said the site works to connect consumers with real estate brokers by including the listing broker's contact information and a link to the broker Web site for each listing. "We're sort of like Google in that we get them in and pass them off to the member," he said.

HAR members don't pay referral or lead-generation fees to the MLS because HAR considers the service as part of membership dues. The HAR.com site delivers a little over 500,000 leads and "millions of clicks" to Houston Realtors and their Web sites every year, Hale said.

HAR.com also includes open house listings, maps of open houses, school and neighborhood information, a find-a-Realtor service, a home-value finder, and listings that can be viewed in seven different languages, among other features.

Hale said the MLS employs seven full-time programmers who interact with a technology task force made up of Realtors who give them input about what site features would be helpful to agents and their clients.

"For the life of me I can't understand why every MLS in the country isn't doing this," Hale said.

In addition to maintaining the public-facing site, the Houston association also markets the site to consumers on billboards throughout the city in English, Spanish and Vietnamese. The association also has television and newspaper ads that promote Realtor value and the HAR.com site, Hale said.

HAR late last year began distributing its members' listings to Google Base, a free classified listings service operated by Google. The association also sends property listings to Realtor.com, Homes.com and the Houston Chronicle for additional exposure, and executives are considering partnerships with additional listings sites, Hale said.

MLSs in other markets are interested in what HAR has done, and some are considering following suit.

The Connecticut Multiple Listing Service, a broker-run statewide MLS with about 13,000 subscribers, is working on a public-facing site and intends to launch later this year, Cameron Paine, CEO of the MLS, recently told Inman News. The public site would aim to compete with national property-search site Realtor.com as a destination for Connecticut property searches, Paine said. The site will be free for MLS subscribers.

As MLSs struggle to find their role in the industry going forward, many may consider public Web sites, and they also may be thinking about how they can serve members' listings syndication needs. Klein, of Internet Crusade, said that one of the difficulties brokers face now is they want to display their listings in a number of places without having to enter data at several different sites in several different formats.

"I think MLSs ought to be looking at (data syndication) as part of the service they offer," he said. Klein is well versed in MLS issues as he spent a lot of time working with MLSs to get listings on the Internet in the '90s.

He noted Point2 Technologies' syndication service, which is not affiliated with MLSs and has gained traction among brokers. The service enables brokers to choose where they want their listings information to display by simply checking a box inside their Point2 accounts.

Point2's chief operating officer, Brendan King, said that brokers ultimately should have choice in where they send their listings for display.

Jay Shares Statistics and Tactics

Jay Thompson Interview - Part 3 

Is 95% of a real estate sales professionals business attributed to online social media significant? From his overall web presence (blog, a website or referral from an online associate,) Jay gets 10-12 contacts or a each day from his online presence.  Of course they may be unqualified at that point, but I can probably identify about 20,000 real estate professionals in Arizona alone who would trade places with him.  How many across the country?

In this segment, Jay shares many of his strategies and tactics around his blogging activity, as well as some of the statistics that regularly lead to closings and listings for he and Francy.

Click here to listen to Part 3

Social Media and Real Estate Case Study

Jay Thompson Interview - Part 2 

In this segment, Jay continues talking about his use of social media tools from the early days of ActiveRain and how he spends his day; from the first cup of coffee throughout the business day. 

He is either blogging, using email, checking his social network tuning his web presence on either his web site at Point2 or his blog at PhoenixRealEstateGuy.com.

We talk about the most remarkable experience he can attribute to his web presence and how he handles the flamer's & griefer's who post argumentative comments.  Lastly, he tells us about clients who finally meet him & Francy after having read the blog first - the response is much more friendly and open; they've already had a conversation by the time they call.

Jay and Dave Barnhardt / BusinessBloggingPros.com met yesterday at Pie Zano's (a meeting of Phoenix blogging titans in my opinion, and I got to experience it) yesterday and we discussed how important blogging is becoming as a fundamental part of marketing in the Web2.0 era and beyond.

We decided to work on a meetup for real estate bloggers here in Phoenix (probably next month), as well as a Point2 user group in November and Dave and I are working to put on a series of real estate blogging seminars here in Phoenix - I thought it was time for them to meet (besides, I like hanging out with smart people and these two are the best in there are - and I learn a lot from them)

Click here to listen to Part 2
 

What Does an Agent2.0 Look Like?

Jay Thompson Interview - Part 1 

Jay Thompson / PhoenixRealEstateGuy.com is a blogging icon in the Arizona real estate social media world.

His investment in using blogging and social media as virtually his only form of marketing is very much the model of the agent of the future - what I call the Agent2.0™. I've been following Jay since I stepped into social media and this model came to me, because I see him in many ways as the implementation of what the model calls for - dilligent, transparent, social and tech savvy.

When I asked Jay to join me for a conversation about his work, how he does it and what the effects were he graciously agreed and this is the result.

In this segment Jay talks about how he and Francy got involved in real estate to begin with and how he started using a blog to promote his business. He also talks about how some of the other social media components he uses in a holistic approach to his online presence.

Click here to listen to Part 1 

Craigslist community wins Inman Innovator award

Mortgage Fraud Blog, vFlyer among other category winners

The Conflicts of Advertising and Listings

by Michael Wurzer
Inman Blog

Inman Blog writes today that the Realogy deal with Yahoo! Real Estate doesn’t knock Prudential out of the picture, instead Yahoo! has created (and Realogy apparently agreed t0) a separate “classifieds” section of their search and Prudential still gets the “Homes for Sale” section.  The upshot: you can’t search both Prudential and Realogy listings at the same time, which, of course, is ridiculous from a home buyer’s perspective.

This bizarre result is predictable and shows the difficulty of striking a proper balance of interests allowing competitors to advertise together.  There basically are two revenue models for listing aggregation sites: (1) charge the broker or agent for premium positioning; or (2) give the listing advertising away and sell advertising to others.  I don’t see either of these models building a critical mass of listings necessary to serve the consumer.

The broker pay model fosters competition among the listing providers (brokers and agents) for the premium advertising space, and that competition necessarily will increase demand and then prices and eventually drive out a significant segment of the listing providers who will choose to advertise elsewhere.  The free listings/outside advertising model doesn’t work because listing search is advertising and the advertisers (brokers and agents) don’t want their advertisements diluted by others’ advertising.

Every listing aggregator falls into one or the other of these models, or a combination of the two.  Realtor.com is straddling both models and their troubled history is a classic example of the conflicts inherent in mixing listing search with advertising.  Trulia, the heir apparent to Realtor.com, so far has eschewed outside advertising and is focused on charging brokers and agents.  So far, they’ve done well attracting listings but my guess is that they’ve cut sweetheart deals to get a foothold and eventually we’ll see the need for cash start to drive up prices and eventually the listings will go elsewhere.  Zillow initially ignored (annoyed) the broker/agent market but now is a mix of both the broker charge and outside advertising models.  Yet, they have few listings and I’ve predicted for a long time that they’ll never build critical mass.  Point2 isn’t seriously in this space, as they are more of a syndicator than an aggregator.  Google is an outside advertiser model and hasn’t gained much traction either.  I could go on but the result is the same:  all these aggregators make a lot of waves but their models are doomed as it relates to comprehensive listing search.

Though I’m completely biased, I think the facts show that the only model that can work for the consumer is an MLS portal, devoid of all advertising and premium positioning.  The beauty of this approach is that it not only is consumer-centric but it’s also the least expensive for brokers and agents.  The MLS fosters the cooperation necessary to tame the competition enough to allow listing aggregation, which is necessary to serve the consumer.  I wrote yesterday that I needed x-ray glasses to see through all the hype surrounding these issues.  Do you think I found those glasses?