Over a dozen of the largest MLSs in the nation, among them SoCalMLS, Trend and MLSNI, have banded together to form The Real Estate Business Information Group, (REBIG) with the intention to help member MLSs create revenue by being a data broker on behalf of their brokers.

According to insiders, the Group will combine their resources to collectively define and target national and regional markets for their aggregated data.

The Group formed in response to increased demand for MLS listing information by companies which wish to license the data, exchange MLS data for public records or product discounts, or to broker the MLS information for MLSs. The companies include title companies, insurance agencies, and public record vendors which want access to MLS data for purposes such as transaction management, streamlined appraisals, automated valuation modeling (AVM) and predictive modeling.

MLSs have been concerned with exercising appropriate controls over the use of the data, ensuring consumer privacy is protected, and preserving the relationship between real estate brokers and agents and the real estate information consumer.

MLSs also know that being in charge of their own data licensing can produce a much-needed new revenue stream for them as well as for the brokers who own the listing data.

The group will be sending requests for proposals (RFPs) to approximately 30 companies including real estate information service providers, risk management companies, lenders, underwriters, title companies, and others who use broker listing data as part of their services, product lines or strategies. The potential product line partners and REBIG will also sign nondisclosure agreements to protect what promises to be an extremely competitive environment.

Only approved product line partners will be able to negotiate access to the MLS information controlled by REBIG.

REBIG will be a for-profit organization which will return the profits to the brokers. While the group is being put together by the MLSs, the management of the group will be turned over to a management team to be announced.

In an exclusive interview with Blanche Evans, publisher of Agent News, Jay Huffman, chairman and CEO of Multiple Listing Service of Northern Illinois, Inc. (MLSNI), explains the purpose, goals and hurdles of launching the REBIG.

B.E.: Is this the first step toward a national MLS?

J.H.: Absolutely not, we have no interest in doing that.

B.E.: It sounds like an negotiating cooperative…

J.H.: It's a working business group. All the MLSs have been bombarded with increasing frequency with deals about their data. We haven't put a handle on the entire scope of it, but that’s what we are attempting to do with the RFPs. We have had discussions with approximately 30 product line partners who have agreed to participate already.

B.E.: What kinds of deals are you looking at?

J.H.: it would be easier to say what we are not looking at. We want to retain appropriate control over the use of the MLS information; we need to pay attention to privacy concerns; and we are looking at a wide variety and mix of product lines, from AVMs to statistical modeling tools.

B.E.: Are agents an intended customer?

J.H.: We are not interested in broker products or selling listings back to the broker.

From an overview perspective, it will be business-to-business relationships with no business-to-consumer applications. We feel strongly that brokers don’t want us to sell their data to the public. There may be some consumer applications with our partners, but we are not getting between brokers and consumers. This is meant to supplement the brokers' participation in the industry not replace it. We don't want consumer customers.

B.E.: So companies which intend to cut the broker out need not apply. Who is on board already?

J.H.: I have been asked not to disclose that. I have more than a dozen MLSs in the group, and we have a substantial footprint already, and are in discussions with other MLSs.

This idea has been needed by the MLSs for so long, and everyone has seen increased demand for nontraditional uses of the MLS database.

The information industry has increasingly viewed MLS data as the holy grail of the information business, and this is an opportunity for the MLS to administer things for the benefit of the Realtors who use our services.

B.E.: So this is a new business model - brokering data for MLSs. Sounds like companies like Fidelity, First American, HOMS and others will be eating their hearts out.

J.H.: MLSs should broker the data and give back the proceeds because the data comes from the broker. We have adopted a policy to start a revenue-sharing program with the brokers.

Fidelity and HOMS are potential product line partners, but from a broad perspective their fundamental business model isn't to be a data broker for MLSs. No-one has that business model. This business model is the MLSs, and the MLSs have woken up. We will distribute the data as we see fit. This is the MLSs working together to leverage the increased interest in the nontraditional uses of the data.

First American and Fidelity are two of dozens of different companies who have strategized on different uses for the MLS data, but they don't have the business model to broker it. When they became more public about wanting to do brokerage deals for MLSs, we decided that is what the MLSs should be doing for themselves. Why pay a middleman, or not have direct relationships with the companies using the data in products?

B.E.: Whose idea was this?

J.H.: The original idea was Brenda Krueger's - she is a 20-year expert in information services. She was the VP of business development for Transamerica, she was the President of Virtual Information Systems (a data and mapping technology company), she worked for HomeSeekers as VP of business development, and she was VP of data services for Homestore.

B.E.: She's also your wife, isn't she?

J.H.: She goes by Huffman, but everyone has known her for years as Brenda Krueger. She is working for me as a consultant.

MLSNI has formed Multiple Solutions, LLC to do things outside of core MLS competencies to take care of public records and other product lines without interfering with MLSNI's ability to maintain and manage its MLS systems.

She presented the plan to stay in control and maximize our revenues to me and Jim Kinney, MLSNI's president, and we decided that we would start working on it, and part of the plan was to see if other MLSs would join with us. If we developed a national footprint it would be a much better market for us. At MLSNI we have two million off market properties and 64,810 active listings. We feel that is a significant database of information and that it is very valuable.

The problem is we never were able to put together for our own edification the potential or true value for the database. We knew that the more that we add the more valuable it becomes.

I think is it more than coincidental that Brenda and I ended up as a couple. We have been together for about four years, and married last summer. With her expertise in the data business, she was able to educate me about the value of the information, she knew from her experience that other companies were looking into uses for MLS data and the commercial applications possible, and she understands the privacy issues we face. I found from other MLSs that they had the same interest as we did, so we put together the Real Estate Business Information Group.

This goes way beyond Fidelity and First American to many industries. They were obvious choices, but I won't name the other individual companies that we have sent RFPs.

B.E.: When will you go forward with agreements?

J.H.: We are going to have an analysis of proposals by early October, and based on that analysis, our goal is to have several deals in place by the end of this year. That's aggressive but it is attainable.

We are expecting to have more MLSs join us throughout the summer. In D.C., we had a meeting with 25 of the most prominent MLSs in the U.S. Most are still discussing it.

A lot of the MLSs are in different states of preparedness in data sharing and they have a lot of questions. When you talk about data, you have to be aware of individual desires on personal information, so we are going to focus on privacy issues and intellectual property issues.

B.E.: What are your biggest hurdles in putting this new business model into action?

J.H.: Lack of information.

First, a lot of brokers understand the value of the data but a lot don't understand anything about the information industry. They don’t understand that data applications can be improved without interfering with the listings industry, such as statistical modeling, predictive analysis, AVMs. Those are some of the more obvious examples. We aren't talking about mailing labels. When some think we are going to sell data, they think we are going to sell it to moving companies.

Second is having an appropriate mechanism in place to compensate the owners of the listings - the brokers. If there is an MLS in the country who thinks that the broker doesn’t own the listing, they haven't been paying attention, and there are a couple out there like that.

B.E.: What about management? Who is going to manage the REBIG?

J.H.: I'm not going to be managing it - it will be a company owned by the MLSs who own it but it will be managed by a professional staff.

There are more reasons, but those are the major ones. The objections of brokers are from those who don't understand the potential, and that is why it is important that the MLSs do this instead of others.

There is a duality in running an MLS - you are a gatekeeper and protector of the data and you are a facilitator in helping the brokers make money.

Published: May 30, 2002

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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. For more articles by Blanche, click here.