MLS information management market leaders FNIS and Interealty are aggressively launching cutting edge MLS-based lead generation products at the MLS and broker levels. How strongly will their solutions impact the growing trend toward local marketing solutions for brokers and agents?

To answer that question, let's look at the big picture. National sites utilize national advertising to get visitors who want to see listings, among other property information. To pay for their costs, including fees charged by MLSs to allow them to publish the listings, most of these sites (with the sole exception of HomeAdvisor.com) charged agents for lead generation packages - Web sites so they could be found alongside their listings.

But the national listings sites had two fatal flaws in their business models - they were too listings-centric and too egocentric. In most cases, agents could only be found on their own listings, on that particular site. Agents had to go to additional costs and trouble to promote their Web sites to other portals and directories because the national sites shortsightedly didn't want to be accountable for "hits." As agents found that they needed multiple Web sites and submission fees to get found, they became frustrated. As many of these service providers went bankrupt, agents turned to local marketing solutions.

But local brokers and agents have to be willing to advertise their ability to provide the same information and aggressive advertising as the national listings sites at the local level. Otherwise they won't be as attractive to Internet consumers.

With Broker Reciprocity, (MLS listings for public display by agreement among participating brokers) that's changed.

Now buyers' agents, agents with few or no listings, agents with listings but not all price ranges, and agents with tons of listings can be found through a new listings-centric business model - shared MLS listings by broker participation. And the ones who are enabling the broker at the local level are not the national listings services but the ones I predicted would be in charge of local marketing solutions all along - the MLS information service providers.

Fidelity National Information Solutions (Nasdaq: FNIS), formed recently by the mergers of Fidelity National Financial, RISCO and VISTAinfo and serving over 240 of the nation's largest MLS organizations, has announced the introduction of several new products from its MLS Systems Division which relate directly to local marketing solutions.

Paragon™ is the new name of the Internet-based system for "comprehensive listings search, multiple property and photo views, integrated customer communication options, contact management, listings maintenance and links to an expansive array of other services."

Paragon Offline™ offers similar capabilities, says FNIS, but allows for data manipulation on the desktop.

Not only does Paragon promise unlimited marketing potential for listings, it supports content-rich data from virtual tours to e-mail listing alerts, to interactive customer contact and management.

But here is where it gets more interesting. FNIS takes MLS information management into new territory with the introduction of ListingView, a new IDX framing subscription service for brokers and agents to put on their personal and company Web sites.

Now this is a revenue model that works. First, unlike the national aggregators, FNIS already has the listing data, and is simply repackaging it for consumer consumption according to National Association of Realtor guidelines. Second, the company is wisely making the framing solution available to agents as well as brokers. This is an important distinction, as some MLSs are going strictly by the book and making Broker Reciprocity solutions available to brokers only. This makes sense because agents far outnumber brokers and need a way to be in control of their own marketing solutions, particularly those agents that earn higher commission splits.

Says FNIS President and COO Eric Swenson. "Our goal is to increase productivity and earnings for the real estate professional by delivering vital business intelligence and technology solutions to speed transactions and reduce cost."

While Interealty was slightly ahead of FNIS in creating a broker reciprocity solution for brokers and agents at the MLS level, the company is taking an aggressive approach to working with the 50,000 brokers it already serves through its MLS information management agreements.

Back in July, Interealty offered a data-download and frameable solution that "works with any existing MLS system and provides users a maintenance-free way to access IDX listings. All information is provided in "real time" to ensure data accuracy and a better consumer experience. The entire infrastructure and all listing content is hosted by Interealty so there is no need for MLSs, brokers or agents to invest in additional hardware and support. Search criteria and display formats can be configured to match individual MLSs' specific IDX guidelines."

Now, Interealty takes lead generation to the next level with the launch of its new division, First Star Innovations, which will develop Internet-based business management and productivity tools for brokers. Creating a second sales force direct to brokers, First Star will sell products and services to 120,000 broker offices nationwide.

"The creation of the First Star Innovations Division enables Interealty to enter a new, but very familiar market, as a result of our three decades of experience working with real estate professionals," said Michael Harris, president and chief executive officer of Interealty in a prepared statement.

Agent News readers will recall that Interealty was the first MLS information service provider to offer listings management integrated with office productivity suites via its strategic partnership with HomeAdvisor's Realty Desktop, a broker-focused software line that incorporates client, agent, transaction, and business management all in one desktop application.

Realty Desktop sales, among other productivity solutions, will move to the First Star division. Explains Harris, "We are adding to what we are doing as we have been selling broker products for a while. First and foremost is Realty Desktop, and we'll be taking over the support services for the product. We're working closely with HomeAdvisor as we have for the past 18 months, integrating Desktop into our MLXchange product."

While other lead generation and productivity competitors have been mired in the expense of keeping up a consumer portal, Interealty and FNIS have neatly sidestepped that bog.

"We're listings agnostic - its more business for us," says Harris. "HomeAdvisor is more a technology partner - we don't have any special advantages with respect to the listings side. While Homestore and HomeSeekers have focused on purchasing listings, driving traffic and selling Web sites, we are partners with the brokers to provide them tools and technology to make them more profitable."

FNIS and Interealty have other advantages, too. Both are spin-offs from larger publicly-held companies. FNIS' parent, Fidelity National Financial, Inc. (FNF,Trade), a provider of title insurance and real estate related products and services, just announced third-quarter net earnings that more than doubled, and a fourth quarter dividend of $.10 a share payable in January. While FNIS remains unchanged since changing its stock ticker symbol from VINF to FNIS after its merger with VISTAinfo a few months ago, it hasn't lost value like others in the real estate space, either.

GEAC, (GAC.TO) Interealty's parent, was just heralded in the Wall Street Journal for its stock value shooting up 141 percent since July 1st. "A year ago it was desperate," says Harris. "A large acquisition in the UK doubled our revenue and we had a $100 million credit line and over the last 12 months, we have paid that back. We have also built up a $50 million cash position and completed a credit facility for $30 million more so this is a cash-rich period. We are the shining star in the company, and they want to invest more in our organic as well as acquisitions revenue growth. We haven't had an acquisition since GTE, and we are looking to do more."

"We are part of a $750 million company that is committing to deliver 15 to 20 percent EBITA margins, and Interealty is one of the flagship divisions," he says.

Published: October 25, 2001

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