It doesn't matter that Realtor.com is free advertising to brokers. What matters is that it's popular with consumers.

It's so popular that consumers are going to Realtor.com to look at listings. Meanwhile, local brokers are spending millions annually in building their brands and driving traffic to their company websites. While it's good politics to support Realtor.com, the Realtor-friendly, no-referral-fees, free advertising provided by the mother ship -- the National Association of Realtors, the reality for many brokers is that MLS feeds compete with member websites.

Suddenly, the pink elephant in the room is blaring its trumpet. Northwest Multiple Listing Service, which serves one of the largest housing markets in the country (Seattle) has announced that it will no longer send a listing feed to Realtor.com.

Why? The scuttlebutt is that local brokers in Seattle are wondering why they're paying millions to compete with themselves. Buyers and sellers already know they can see all the listings on Realtor.com. They don't have to pick a team (choose a broker) or remember a brand website (Is it JohnLScott.com or JohnL.Scott.net?) All they have to do is key in Realtor.com and homogenized listings pop up, ready for consumer consumption.

According to a news story about the announcement, Jack Johnson told reporters that the MLS is refocusing on its original mission to provide real estate professionals with sales information. Marketing listings is for brokers, not MLSs.

"It's always been our feeling and the board's feeling that the multiple listing service should not in any way be involved in marketing,” Jack Johnson, president and chief executive of Northwest MLS, told Aubrey Cohen of the Seattle Post-Intelligencer.

Cohen wrote that those opposed to the change say "large real estate companies are behind it because they want to impede the competition on Realtor.com and on Google, which indexes homes displayed on Realtor.com."

In other words, those free listings on Realtor.com could be eclipsed by ads from other brokers.

Seattle was the area of the country that first came up with the concept of Broker Reciprocity -- brokers sharing listings on each other's websites by permission using tit-for-tat technology provided by the local MLS. It's important to note that unlike the Houston Association of Realtors, which takes extreme pride in its well-publicized MLS listing site for the public HAR.com, which it uses to promote the Realtor agenda of using real estate professionals for real estate transactions, Northwest Multiple Listing Service is not an association-run MLS. It's broker-owned.

Explains Russ Bergeron, CEO of Southern California MLS, "When we first put listings on the Internet over 11 years ago, back then brokers didn't have websites. Now they've all developed their sites and they don't want their MLS to take eyeballs away."

That's why SoCal, the second largest MLS in the country, doesn't have a public website, although the MLS does feed listings to Realtor.com.

"Realtor.com has become the Saturday ad in the newspaper," says Bergeron, "that you have to have to please your seller, but you don't necessarily think you're going to sell the listing from Realtor.com. Sellers want to see their listings on Realtor.com. That's how they look at it -- akin to a newspaper ad."

Offering an insight as to why brokers could be ungrateful for free ads, Bergeron points out that there are regional differences between MLSs. MLSs don't share data with each other. That makes it hard for a broker to explain to a consumer why they can see listings on Realtor.com, but the broker may not be able to show them listings that aren't supplied by the broker's MLS.

"Southland Regional is going to be part of SoCalMLS," explains Bergeron, "so we are putting together a common database. Our impetus is that consumers can go to a site like Realtor.com and get all the listings, which makes it difficult for an individual broker to show listings to buyers when they don't have access to the MLS. We have done a lot of sharing in our area over the years, given each other access to each other's system, datasharing, and this way we'll have it all in one place."

So what does this mean? Brokers are clearly looking at MLSs, competition, and how to use the Internet in a different way. In fact, a sea change in attitudes may be underway. Remember last year when the Real Estate Information Network (Virginia) tried to charge consumers for access to listings via E-PASS? Carlos Rodriguez, the real estate network's director of business development, told Realty Times at the time that the goal of E-Pass was "to spur the consumer into contacting the agent regarding wanting information through a particular method, either through e-mail or E-Pass, which is validated against the credit card. How many people have lied about who they are online? So what the credit card does is validate the lead. This is not an e-commerce play -- it's a decision maker. Its a fork in the road where both roads lead to contact information on the prospective buyer and seller for our members."

REIN never intended its IDX feed to be a free arcade for consumers, but it has since ceased to charge for E-PASS, not because the brokers didn't like it, (REIN is broker-owned) but because their agents didn't like it. In related news, REIN just signed a license agreement to return to Realtor.com as soon as the technical process is completed.

"As consolidation occurs, brokers don't want MLSs to compete with them and that makes a lot of sense," says Bergeron. "That's what we've always tried to do."

Published: November 30, 2006

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Blanche Evans is the award-winning senior editor of Realty Times, the Internet's leading independent real estate news service. She is featured daily on the Realty Times Video Network in the "Realty Viewpoint" segment. Blanche has been named one of the "25 Most Influential People In Real Estate" by REALTOR Magazine, and has been twice recognized as a "notable." In 2005, she was named "Top Reporter Covering the NAR" by Delahaye-Bacon's. Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. To contact Blanche, email her at . For more articles by Blanche, click here.