Last Friday, following the burst of rumors that NAR had purchased Cyberhomes to power its RPR (Real Property Resource) and HouseLogic web sites, the cries of the death of the MLS have risen to a fevered pitch again.
Rob Hahn, founder of 7DS Associates, thinks MLSs need to be very concerned with RPR and that a war is coming between NAR and the MLSs. Brian Boero, from 1000Watt, doesn’t use such stark language, but he, too, thinks RPR will be a “a significant shock to a system that needs it” and asks: “Will MLSs play ball?” He then answers with uncertainty: “As with most things in this space, the outlook is unclear.” As an agent and one of the members of the original NAR PAG that envisioned the RPR, Jim Duncan is excited by the possibilities of RPR and HouseLogic and asks some important questions, namely what will agents be able to do with the information and who will have access to it. The comments to all three of the above posts focus in on the impact the RPR will have on MLSs.
Though I was initially going to wait for an official press release from NAR (I hear it’s coming Monday), the more I thought about it, the more it seemed appropriate to weigh in on some of the speculation about RPR’s impact on MLSs. I’ve already written at length about both the death of the MLS and RPR (RPR or Ready?). In fact, most of the posts on the FBS Blog have been about these same issues in one way or another.
For example, I wrote some time ago that MLS is about more than technology. This crucial point — that MLSs enable competitors to cooperate — is where I think Rob Hahn goes awry in his post. He assumes that the MLS is only about the software. What Rob ignores is that the software merely implements a wide variety of business rules that were carefully crafted by the local MLS or Association in order to create the compromise that makes it possible for the competitors to aggregate their data in the first instance. NAR understands this, though, which is why they’ve been saying that RPR is not intended to replace local MLSs and, to my knowledge, has no listing input or maintenance functions so far. In other words, the data is going to come from the local MLSs and not brokers or agents directly.
NAR and its leadership knows how “local” MLSs really are. The local Boards and Associations and their respective MLSs (some independently owned, others not) are run by brokers and agents competing in the local marker and who have cooperated together just enough to make aggregation of their listings possible. Often, this cooperation results in a complex set of business rules.
This set of business rules is the heart of the MLS today and so talking about the death of the MLS means killing these local business rules in favor of business rules established by RPR. NAR knows this is a tough challenge, and so they’re just not going there, yet. As this issue (death of the local MLS business rules) is debated again in the coming years, I believe there are few core questions:
If you’ve read my earlier posts on these topics, you already know that my answers to these questions are:
All three of these issues are related to each other. FBS serves over 100 different MLSs across the country. We know how important our system is to our customers and that it’s important to have lots of cool features. More importantly, however, we believe responding to each of our MLS customers’ needs is what differentiates us over the long term. We provide value by implementing their business rules, which makes the cooperation central to MLS possible. Responding to these local needs is critical.
At the same time, the lack of standards created by local control of MLSs causes pain for many bigger brokers, franchises and others dealing with multiple MLSs. This is where standards could be of great benefit. Creating standards, however, is very, very difficult, especially at a national level. Of course, one way to create a national standard is to create one MLS. The problem with that result, however, is that you create a monopoly. I’m pretty sure what online real estate needs is more competition, not less. Standards enable competition, monopolies do not.
Accordingly, I applaud NAR buying Cyberhomes and using it to power RPR. As an MLS vendor, FBS loves competition and looks forward to learning more about RPR and how their tools can help our customers. We’d love to see RPR help create a universal property ID. We’d love to leverage data from RPR if it can in any way help improve accuracy of the MLS data. We’re excited about the possibilities of RPR but also strongly believe that those possibilities should not be used to create a monopoly that squelches competition in the MLS software space.
For those of you interested in these issues, join me at the NAR meetings next week in San Diego for the Future of MLS panel. The RPR and related issues should be a hot topic.
As with every “threat” to the future of the MLS they never address the quality assurance aspect. More than just listing entry, the MLS applies critical quality controls that have helped it remain an important part of the real estate transaction.
In some ways the MLS is like a neighborhood HOA. Everyone loves to hate them, but you know what a neighborhood without one looks like.
I was in the initial beta test group and my feelings remain the same: without local oversight and constraints on the originating data, all we would have is garbage in and out. Your comments are concise and to the point;and as you know I am in you camp with regards to questions 1, 2 and 3. Universal property ID? A great idea whose time has not yet come (too bad), but let’s see how these new tools live in the marketplace. They will only survive if they give more value than they cost.
In california calredd is monopolizing everything and making realtors replaceable parts. Soon, they will roll out their monopoly VOW and all ca realtors will have the same back office systems and consumer facing monopoly website. I predict half of the realtors in ca will be gone within 24 months.
[...] Data? Monday, November 9, 2009 7:50 am Author: Michael Wurzer | No Comments I wrote yesterday why NAR’s RPR won’t mean the death of the MLS. Today, I want to ask some more important questions regarding the terms on which MLSs will allow [...]
[...] are a number of speculations that this will be a MLS Killer,but NAR is assuring it’s membership that this is no more than a tool for Realtors®. [...]
[...] are a number of speculations that this will be a MLS Killer,but NAR is assuring it’s membership that this is no more than a tool for Realtors®. [...]
Mike,
I get very excited every time I see that you have commented in your blog again. You have more insight than almost anybody in the MLS world. I can’t wait to hear the juice on what happens in San Diego, as I would love to attend, but, alas, I cannot. I hope you can throw us a few bones while the event is in progress, and look forward to your views on what Hat Tricks are on the way from the NAR. Again, thank you thank you thank you !!!
Mike,
Nice job, makes a real difference when you apply logic and reason when answering the burning questions. Jeffrey
Mike -
Great post as usual fully of calm wisdom, as opposed to my little hyperbole-laden sturm and drang. Having said that… I still think you may be dismissing RPR as a threat to the MLS too easily.
First, the idea that the MLS is the “complex set of business rules” rather than a technology tool used by realtors in day-to-day life is… I think a bit fanciful. When the server goes down, the agents and brokers aren’t saying, “Well, the MLS isn’t down, because the MLS is a complex set of business rules, and we can make those work over the phone”.
Second, the success of something like Loopnet illustrates just how successful a “quasi-MLS” can be without these various rules and the big one of offer of cooperation and compensation.
Third, the way RPR works goes a long way towards eliminating the “quality control” function of the MLS because the property information is already in the system. All that an agent has to do is put in the price, flip the status to “Listed”, and away we go. Maybe enter some modifications if there’s been a change to the type of furnace or something.
Given the latest post (about questions to MLS’s before they work with RPR), I think you’re more aware of some of these issues.
This topic will be something we get on for weeks ahead. 
-rsh
As a working girl, I am having a hard time getting my head around this. If the site’s functionality is as robust as I have read (still attempting to plow through the webinar), then kudos, and I would love that on a local level. But from my view in the (unenlightened) cheap seats, exactly how does this better serve me?
Without the show instructions and offer of compensation, so what? More importantly, what agent needs a national system? I don’t give a flip what is listed in Topeka, unless of course I am thinking of buying in Topeka, in which case I would call a local agent.
We are seeing the law of unintended consequences in So Cal. Reciprocal agreements allow agents from eight hours away to list homes they will never see in neighborhoods and markets with which they have no familiarity. And they do this in their own MLS, not mine. These same agents can similarly submit offers on these same properties from the comfort of their far-away office. Level of service is degraded, and our perceived collective professionalism is taken a notch down yet again. It’s carpet bagging opportunism, pure and simple, yet where are the ethics and excellence in this system that our trade organizations profess to protect to the death?
Several times a month now I hear from an irritated client who wants to know why I haven’t shown them a certain home located a block from my office, only to find that the home is not listed in my MLS but by an agent seven counties away in his own. Unless I am cross-checking my inventory with a third-party web site each time, this will continue to happen. Yet, a consolidated statewide or national depository is not the answer.
Michael has it right. Local control and standards are the ticket. I can no more represent a client in the Silicon Valley than I can in Belgium. It would not be in the client’s best interest, and it certainly wouldn’t be in the industry’s best interest.
And yesterday I get an email from my local association telling me I now have access to homes for sale in Hawaii. Whoopee! Is anyone paying attention to what the members really need/want?
Somebody is going to make a lot of money off of the RPR — a lot of somebody’s I suspect. I will not be one of them, yet this is somehow being touted as a big benefit to the members. Last time I checked, I’m a member; I don’t see it.
I know I digress, but I had to get that off my chest.
Rob, the RPR won’t have all the data without the MLS data. You’re greatly underestimating the quality control and business rules for maintaining the data. Just flipping a switch to “for sale” is nowhere near reality. That’s one of the reasons I’m looking forward to our meeting in San Diego, so we can get on the same page regarding what an MLS system does and the power already available in MLS systems today.
Kris, as a successful broker, your views are the most important. Let’s hope your leadership is listening.
Rob,
Regarding flipping the switch to “for sale” and depending on public records data, please see the following article: “Realtor Sued For Misrepresentation When Assessor’s Record are Incorrect” http://realtytimes.com/rtpages/20091103_realtorsued.htm .
I understand that this is just anecdotal, but it points to an issue that would need to be addressed. The quality of tax data – even assuming you have negotiated for the best possible source of tax data – is not always very good.
kris hits upon the delta between what the public wants from an info standpoint and what they expect from the agent with regard to service.
Can RPR bridge the gap? I believe that is what they intend to do now that the reciprocal agreements between MLSs have opened the door.
I think Chris Berg nails it. There is far to much activity going on which has no positive affect on the experience for the consumer or agent.
This move by NAR won’t increase transaction volumes, shorten sales cycles or make it easier to differentiate between good agents and bad ones.
Consumers (and agents) want cool tools with accurate data at a local level on a single site.(RPR is not open to consumers) They want experienced professional agents with excellent local knowledge who are allowed to act purely in the customers interest and not sub guided by alternative agenda’s driven by rules and regulations. (which the consumer does not care about) Most importantly the consumer wants the deal to happen as quickly and painlessly (as does the agent) as possible.
It seems that a war would only come if RPR eventually developed its own, separate input system and back-end. Then it really would become a competitive alternative to the local MLS systems.
The question is does NAR have the both the intention and political ability to follow through and create a National MLS even if they wanted to. That seems unlikely.
There are many great benefits to having a national MLS. This system should never replace local MLS systems but instead be a stand alone additional tool for NAR members. NAR would also have a very valuable asset that thousands of companies would kill to have access to this system.
[...] the blogging community offered their viewpoints including Jim Duncan on Agent Genius, Rob Hahn and Michael Wurzer . There is no question this is big news. There is no question that NAR having access to this much [...]
6:06 pm
Mike,
Another great post and point of view.
Information maybe global, but real estate is local. I do think that one day the MLS will be replaced with some other system, but I don’t think this is the killer app, that several others have speculated.
I’m in the MRIS footprint and find them a strong company, but honestly the problems caused by trying to serve multiple states is more significant than the benefit. To see agents come from three hours away and another state is a nightmare. Even though the MLS system is the same, the local customs weight heavily on how that system is used.
My point is that regional markets need regional data sources. I see RPR is just a database of those local sources. Not much more…