Conversations about the MLS industry, creating software, and employee ownership.

Posting here on the FBS Blog will be light or non-existent over the next two weeks as I’ll be on vacation, hopefully enjoying some boating, fishing and other lake fun at our cabin in central Minnesota.

The Inman Connect conference this last week was informative and invigorating.  I moderated the MLS track and we had some great presenters and discussions.  Before the MLS track began, however, Alfred Lin from Zappos spoke about the Zappos approach to customer service.  One example of how Zappos operates that separates them radically from others is that they pay their support trainees $2,000 to quit.  Yep, you read it right, they pay them to quit.  And not just a token, either.  $2,000 is significant.  They do this because they only want people who are committed to Zappos’ service ethic and they figure someone who will take the $2,000 isn’t committed.

I simply love this.  It’s an incredibly powerful statement.  If you think about it, every support trainee at Zappos is giving up $2,000 to work there.  Conversely, Zappos gladly pays the $2,000 to those who take it, because they’re getting radical commitment from everyone else who stays and they’re saving having to fire the others later for lack of performance.  This is brilliant on so many levels.

I mentioned this Zappos policy on Twitter and Brian Larson asked: “Should brokers do the same?“  My response: Yes.  To be clear, what I really mean is that brokers should be committed to customer service the same as Zappos and that means making sure you have the best people representing you and your customers.  This brings me to one of the MLS panels I moderated: “From listing data to people data: The next challenge in VOWs and MLS consumer web sites.”  One of the panelists was Bill Chee, who shared a pretty remarkable statistic for his brokerage: It is less than one percentage point from being the market leader in Honolulu, with 150 fewer agents than his competitor.

Bill attributes this success to their commitment to customer service and measuring the efforts of every agent and the happiness of every customer consistently and regularly through their CRM system.  For Bill, the “people data” collected in their CRM is so much more valuable than the listing data, because it helps them provide better customer service.   He knows when customers are contacting agents and how quickly they are responding.  He knows what they’re searching for on his VOW and how often they log in and engage with his agents.  From public records, he even knows when former customers are listing or buying with agents from other brokerages.

In the Q and A that followed, I asked Bill if there was any people data he thought he could use from the MLS.  He said he tried at one point but currently didn’t get any people data from his MLS.  In contrast, Matt Lavallee from MLSPIN described how their MLS is tracking all kinds of people data through the VOWs they offer.  The data regarding what customers are searching on, when they’re searching, what listings they like and don’t like, and what listings they’re visiting and buying is all being collected in the MLS system.  That’s some powerful people data.

Here at FBS, we released our customer portal feature a little over a year ago and agents have been using it quite successfully, with over 250,000 consumers having active accounts currently.  These accounts provide agents and brokers great insight into what their customers are looking for, how interested they are, and a way for the agent and customer to communicate with each other on-line.  These accounts also provide listing agents with powerful data regarding the activity on their listings, such as how often the listing is marked as a favorite, possibility or reject, how often showings are requested or questions asked, how many messages are sent about the listing, and much more.  Importantly, this customer portal activity data is combined with the activity data from within the private MLS system and from our IDX sites, to provide a more complete picture of search and viewing activity.

Again, all of this people data is very useful for the brokers and agents to provide better service to their buyers and sellers, and that’s why we think the MLS system has an important role in helping agents and brokers make use of all of this data.  Internally at FBS, we call it MeTAL: Measure, Test, Adjust and Learn.  Bill Chee is proving that MeTAL is critical to providing radical customer service and win more business.  Those are my take-aways from the Inman Connect conference this year.  What did you learn?

Brian Larson posted a detailed conclusion to his IDX series the other day, concluding that he’d recommend the NAR modify the IDX policy to:

• Define what we mean by ‘web search engine,’ identify the benign uses they make of listing data, and incorporate those descriptions into the rules.
• Say that broker IDX sites may allow and even encourage indexing by web search engines.
• If brokers are particularly miffed by the “Nancy Smith” example, MLSs can prohibit display of listing agent in IDX (as long as state law does not require it).
• Educate all brokers about how site indexing works and about technology options to allow them to take advantage of it.
• Allow MLSs to adopt a rule requiring IDX sites to display terms of use prominently on the site (but giving brokers a few months’ grace period to implement them).
• Develop a good model TOU and invite the MLSs to promulgate it to brokers; two key terms would make MLS a third-party beneficiary and would allow ‘web search engine’ use but not any other commercial use of the listing data.

I basically agree with all of this, though I think defining “web search engine” and benign uses is very difficult if not impossible to do when it comes to the web and why I think the terms of use Brian mentions are most important.

Yesterday, Rob Hahn followed up on Brian’s post with “Great Expectations, or On the Purpose of IDX“, in which he makes at least two key points:

• Purpose of IDX.  Rob agrees with Brian that defining the purpose of IDX is critical: “Without this purpose statement, one could reasonably claim that the purpose of IDX is to benefit sellers as much as possible, or that IDX is meant to empower agents to be more competitive, or whatever.”
• The Game is Over for IDX.  Rob makes the case that big brokers no longer benefit from IDX in the world of Google dominance, and speculates that the next model might be for big brokers to pull out of IDX, build great VOWs for themselves, and then encourage their MLS to build a great public web site to drive traffic to their VOWs.

I have a couple of comments in response to these ideas from Rob and the IDX issue in general:

• VOWs.  As I posted a few weeks ago, establishment of VOWs as required by the DOJ/NAR settlement raise questions about MLS IDX policies.  On the one hand, many brokers and MLSs filled the vacuum created by the NAR/DOJ litigation by expanding IDX to include lots of data, including sold information.  In other words, IDX data feeds in these MLSs look a lot like VOW feeds.  On the other hand, some MLSs, like MIBOR, continue to have a restricted view of IDX and want to keep it off the web at least in terms of indexing by search engines.  The distinction between these views seems to be squarely in front of the NAR MLS Policy Committee for investigation and possible decision this fall as a result of the IDX/scraping issue raised by MIBOR this last spring.
• Purpose of IDX.  I’ve stated before that investment in IDX by many industry participants makes changing that policy of concern, and that the NAR should not combine the VOW and IDX policies.  This brings us back to the purpose of IDX.  Though I agree with both Rob and Brian that a stated purpose would be useful in interpreting the policy and for brokers in deciding whether to opt in or out, I also think that any “purpose” of IDX only matters to the extent it is codified in the terms of use.  After all, the end result of IDX is to put listings on the web.  The web is an evolving, changing flow of information and any purpose stated today likely will change tomorrow.  As Rob points out, Google now dominates and defines the web in, perhaps, too many ways, but tomorrow it may be different.  That’s the beauty and creativity of the web and all its participants.  Declaring a purpose for IDX is useful, but, in the end, the result is that IDX allows agents to put others’ listings on their world wide web site, which, by definition, is open to the world.  Controlling that is going to be difficult, at best, and quite probably impossible.
• Re-thinking IDX.  The open nature of the web (IDX) and the closed nature of VOWs raises the question as to whether the current IDX policies of MLSs recognize these differences.  I’m hopeful that Rob’s idea about IDX going away in favor of VOWs is a stretch too far, because, as mentioned above, IDX is a vibrant part of so many franchise, broker and agent strategies today.  At the same time, the industry needs to recognize the reality of VOWs and how they interplay with IDX.
• Syndication.  One example of the evolution of the web is syndication.  Today, many franchises, brokers, agents and MLSs are syndicating listings to sites like Zillow, Trulia, Yahoo!, Google and many others.  One of the more interesting twists on this phenomenon is RealBird’s “IDX” solution based on listings in Google Base.  Tying these altogether, let’s say that Rob’s vision of big brokers pulling out of IDX in favor of VOWs coupled with an MLS consumer portal comes true.  Unless some terms of use somehow prohibit it, RealBird will continue to offer agent and broker “IDX” solutions based on the listings many MLSs are syndicating to Google Base.  This is just one of many reasons (the possibilities of a platform like Google Wave are another) why crafting a terms of use for the open web is so important and difficult, and why the industry, intended or not, is weaving a tangled web.
• Standards. (You didn’t think I’d get through a post without mentioning standards, did you?)  One possibility for tying some of these issues together is to focus on the syndication standard developed over the last year or so.  At a basic level, syndication is very similar to IDX in that both are focused on advertising listings.  If that’s true, wouldn’t focusing IDX policy on the same data fields identified in the syndication standard make sense?  If we could standardize IDX on the syndication data set, that also would solve many of the cost issues associated with processing so many disparate IDX feed formats.  Having a standard format for IDX also would make crafting a more standard terms of use easier.  Getting there will be challenging, of course, particularly given the wide adoption of IDX, but the long-term payoff could be significant for the entire industry.

I’m heading off to San Francisco tomorrow for the Inman Connect conference, where the issue of VOWs will be front and center for the panel called “From Listing Data to People Data: The Next Challenge in VOWs and MLS Consumer Sites.” Join me there for the continuing discussion or leave a comment below.

Following Brian Larson’s recent posts on the IDX scraping issue, he and I spoke on the phone for a bit (well, Brian and I never talk on the phone for just a bit) and during that discussion I suggested:

• Terms of Use.  MLSs providing IDX feeds should require a terms of use document be placed on the site hosting the IDX data, just as is required for VOWs.  At a minimum, those terms of use should prohibit any misappropriation of the data and give the MLS the third-party beneficiary right to pursue claims against any party misappropriating data from the IDX site.
• Revisit IDX Data Fields. It’s hard to put the genie back in the bottle, so to speak, but the availability of VOW data feeds now squarely raises the question of whether the IDX data set should be reconsidered.  More specifically, with VOW feeds now being available in all MLSs, is there reason to consider changing the IDX data set to only those fields considered an “advertisement” so that the issues of indexing and scraping are less of a concern?  As I’ve suggested on Brian’s blog (MLS Tesseract), the purpose of IDX is to put listings on the open web and the way people find stuff on the open web is through search engines, which means indexing.  Instead of preventing indexing, perhaps a solution is to limit the amount of data in an IDX feed so that the terms of use can be crafted in a way that provides proper protection given the reality of the open web?  The reality is that IDX policies have been expanded to include more and more data over the last several years because the VOW litigation was on-going.  Now that the VOW litigation is settled, however, and there’s a way to provide the data consumers demand, perhaps the expansion of IDX data feeds should be re-considered to better fit the terms of use that can be enforced practically?
• VOWs.  I know, I know, consumers hate to register.  Get over it.  VOWs (requiring users to register and identify themselves) are critical to crafting a proper terms of use balanced between the open web and consumer access to data.  The difference is clear — IDX is open to the world, VOWs are open to consumers willing to identify themselves.  The data you can provide through a VOW is pretty much the entire MLS and that means consumers can get what they want, they just need to show they are a real person and agree not to steal the data.  Is that too much to ask?  What other terms should there be?

For those who’ve been reading the FBS Blog for some time, you’ll know I’m a big proponent of the web and working with MLSs and their members to make the most of it.  Crafting a balance between the data available in IDX and VOWs and the terms of use for each is important for MLSs to fully embrace the web and help members engage with consumers on the web.

There’s a lot of buzz the last few days over Google’s recent updates to its real estate search.  Here’s a quick run-down of some of the posts that have come through my feed reader:

Google Lat-Long Blog: Improving real estate search on Google Maps

Agent Genius: Real Estate Search – Google to Punk Your Local MLS? Is It Possible?

Real Central VA: Google Assumes It Is A Foregone Conclusion

Property Owl: All Eyes on Google

GigaOm: Why Google is a Fair-Weather Friend

FoREM: Google Gets Serious About Real Estate Search

Bloodhound Blog: Web 2.0 Still Hasn’t Mastered The Real Estate Mantra: Location, Location, Location

Read/Write Web: Google Updates Its Real Estate Search, Should The Competition Be Frightened?

Screenwerk: Google “Real Estate” Not New

VAR Buzz: Google Enters The Real Estate Biz

Undoubtedly there are others I’ve missed as well.  What’s all the fuss about?  As Greg Sterling points out, that Google is displaying real estate listings on maps isn’t new.  Nor is it new that Google is accepting real estate listing into Google Base.  This is where I think posts such as Benn Rosales’ over at Agent Genius are a bit off the mark in suggesting that this could be the end for local MLSs.  Google hasn’t created anything very new or exciting with their latest improvements and sites like HAR.com, HomesDataBase, Yahoo! Real Estate, Zillow, Trulia and many others are already more well-developed with greater listing coverage than Google.  Moreover, Google is getting many of its listings from local MLSs.

(Also of important note here: I do not yet see any connection between Google’s indexing of IDX listings and their maps.google.com/realestate site.  Instead, all the listings appear to be coming from Google Base, which is populated from local MLSs, brokers, agents, and consumers and doesn’t involve IDX at all.)

So what is new?  Well, Google clearly is continuing to be interested in the real estate space as they’ve invested additional development resources into the product.  They also are trying to find a home for real estate by using the URL maps.google.com/realestate.  In fact, if you type the term “real estate” into Google’s search, they’ve created a little promo for their new site.  I also think this development from Google is a sign that they believe they have a robust enough representation of listings to make it worthwhile, and my guess is that they achieved this by working with MLSs and syndication firms like ThreeWide or RealEstateBook or others.  If I haven’t made the point already, my guess is that the majority of listings are coming from MLSs (but I’d love to see some real numbers on the data sources).

A couple of things I find interesting about Google’s implementation:

• World-Wide Mapping of Listings:  If you zoom way out, you can see the beginnings of world-wide coverage.
• Plotting All Listings:  Instead of just plotting a hundred or so, Google is plotting all the listings nearly all the time (except when zoomed way out).  This is the same approach we took with our mapping, because it gives users a better perspective on all the results.
• Potential: Of course, when Google sneezes, the world catches a cold these days.  Accordingly, paying attention to what they’re doing is smart.  The most interesting question is when will Google integrate the listings into organic search results.  In other words, when will they join more firmly the Base listings with indexed listings and how will they resolve the conflicts?  My guess is that they’ll prefer the listings from the higher quality sources, which, in my view, are the local MLSs.

Over at GigaOm, they’re running a poll asking, “Where Does Broadband Access Rank When Choosing a Home?”  When I took the poll, the leading answer was “It’s up there with a quality school district and a good location. 56% (29 votes)”.  The post specifically discusses the desirability of fiber to the home.  How many MLS systems are tracking fiber to the home as a feature?

I wrote this two years ago on Father’s Day.  I see some progress on data standards but it has nothing to do with RESO or RETS.  That Father’s Day has become my marking point for RESO progress is a little weird, but it is what it is.  Will RESO be any further on data standards next Fathers’ Day?  Warren Koeller’s chuckle is turning into a roar.

I’ve been traveling this week with Steve Schlangen (Captain) and Dave Rifkin visiting customers.  Here we’re just flying over Lake Tahoe.

Here we’re flying over Lake Shasta after having a great visit with our customers at the Shasta Association of REALTORS. (Thanks, Tomas and everyone, for your great hospitality!)

Captain Steve even gave Dave a short flying lesson.

Shortly after, we arrived (safely) in Newport, Oregon, for a visit with our customers at Lincoln County. (Thanks, Sue, for arranging our meetings at such a great place.  It was great to catch up with you on such a beautiful day!)

Captain Steve dropped Dave and I off and continued on to visit our customers in Tillamook and Astoria, Oregon, and now he’s back with us in Lincoln for our return flight tomorrow home to Fargo.  I hope to see you all again soon!

Further to my post yesterday, It bears repeating: The MLS is more than technology, this post from Fred Wilson on Open Platforms and Innovation states simply the reason MLSs and Associations need to think in terms of building a platform for innovation:

That’s the thing that gets me so excited to get up and get going every day. Technology has reached a point where anyone can get involved with innovation. Patents and degrees matter a lot less. Imagining something and then coding it up is what its all about these days.

We are engaged in what Eric von Hippel calls “end user innovation” and it is a fundamental shift in the way society innovates. The Twitter founders are a perfect example. They built a simple tool to share short messages and it has become something entirely different.

Inman News recently issued a call for essays on on a “new look for MLS”, asking:

• What changes do you believe are necessary and imminent for MLSs, and what types of changes do you believe will require the toughest battles?

• Will VOWs (Virtual Office Web sites) catch on? Will they ever replace IDX (Internet Data Exchange) as the dominant model for sharing property information with consumers?

• What MLS rules and policies, if any, need tweaking? Are any new rules needed?

• How will the debate over MLS-operated public-facing property-search sites be settled?

• Should MLSs send property listings information on their participants’ behalf to third-party Web sites?

• Is the regionalization and nationalization of MLS data a given? What is the perfect number of MLSs required to serve real estate professionals?

• Are we inevitably heading toward a single, national MLS? Would that be a good thing or a bad thing for agents, brokers and consumers?

I’m going to respond to all these questions in one fell swoop by using MLS regionalization as an example.  There are two distinct approaches to the regionalization challenge that have been advocated: (1) a standards based approach (sort of like CARETS and WIREX); and (2) a proprietary approach like calREDD.  (Side note: A big question for me right now is where NAR’s Real Property Resource intends to go, standards or proprietary?)

A good analogy to explain the differences between these two approaches is the web itself.  Let’s pretend the web didn’t exist but you wanted to create it.  Two distinct approaches would be: (1) start by creating an open platform on which others can create; or (2) build one system and try to get everyone else to buy/use it. The web’s ridiculous success is because it’s built on open standards and not a proprietary solution.

This basic distinction — between the open web and proprietary solutions — goes to the heart of what I believe is the purpose of MLSs and REALTOR Associations (local, state and national), namely: creating a cooperative platform on which competitors can compete.  I wrote some time ago that MLS is more than technology. This isn’t new or radical, it’s what MLSs and Associations have been doing since inception.

What is new and radical, however, is that the web is creating new opportunities for competing and cooperating and that presents many opportunities for MLSs and Associations to help their members.  Here are just some of the opportunities:

Listing Data Standards — This is the beginning of nearly everything; data standards are the base of the platform.  Without standardized data, the web as a platform for MLS is very messy, as we’re seeing right now.  Data sharing among MLSs, between brokers, with franchises, search engines, and others is all hampered by data disparities.  More positively, standardizing data opens many opportunities that are not possible or practical today, such as reliable cross-MLS statistical analysis.  One of the most important pieces of data to be standardized is a universal property ID, which I’m hopeful will be a core focus for NAR’s Real Property Resource.  A universal property ID could form a basis for linking listing data together, which is what the web is all about.

Who is a member of the MLS? Or it’s time to develop some terms of use.  I’ve mentioned this before but, today, I think consumers are, for all practical purposes, members of the MLS.  Ridiculous, you say?  Not really.  If access to the listing data is the definition of membership, then consumers are “members” in many respects.  One of the primary features of every MLS system today is the ability to email information to consumers.  Many MLS systems also offer customer portals through which agents can share listing data and interact with their customers.  Also, many agents today are really consumers who have gone through the steps to become a member.  They aren’t producing or active in the MLS but they have access.  As MLSs and Associations consider changes to the IDX, VOW and related policies, thinking of the conumer as a member of the MLS and then working to define the terms of use for that membership may lead to a new way of thinking about how agents and consumers can interact on the web.

Identity.  The web used to be all about anonymity but today it is about identity.  MLSs and Associations could be helping their members by developing standards for identifying and authorizing members across systems and the web, and sharing that information with other sites.  This is a hot topic for the web as a whole today, not just real estate, as sites like Google, Facebook, Twitter, and others require us to maintain information about ourselves multiple times with multiple usernames and passwords.  Couldn’t the MLS help members by participating in these standards efforts on the web?  This is just another example of how real estate is participating in the web evolution, and so needs to think in web terms.

Syndication.  Some good work has been started on standardizing the data format for syndication, but an equally (or more) important issue for consumers is keeping that data up to date on all the various sites.  This is a classic case where technology filled the gap from a lack of standards and created a mess.  Sites like Trulia, Zillow, Yahoo!, Google, etc., are receiving the same listings from many sources, having to de-duplicate them, and keep them up to date somehow.  The MLS remains the most accurate source of listing data and so should provide a standard for how data should be sent (transported) to other aggregators and then kept up to date. This doesn’t need to be hard and could follow some basic standards like Atom or RSS, but the discussion needs to be started to get there.  This same discussion leads back to the terms of use mentioned above — if the data is offered in an open format, who can do what with it and under what terms?

IDX and VOWs.  The recent dustup over whether Google’s indexing of an IDX site is misappropriation of the IDX data is a good example of how MLSs and Associations need to re-envision their operations in terms of the web as a whole.  By focusing on high-level standards, issues like this may be avoided or minimized in the future.

The above are just some of the key issues facing MLSs and Associations today.  The web is reinventing everything, including the way we collaborate, cooperate and make decisions.  The NAR and local Assocaitions could reinvent themselves for member benefit by putting these issues front and center on a web site somewhere and publicly debating and deciding on them.