Brokers who participate in MLSs that withdraw MLS listing feeds from public portals such as Realtor.com will be able to provide direct feeds of their listings, says Allan Dalton, president and CEO of Realtor.com.

"I have total understanding and respect for those brokers who want to go in that direction," says Dalton.

But he also has some reservations.

Broker-owned Northwest Multiple Listing Service serving greater Seattle recently announced that it would no longer be in the "marketing business" for brokers and is discontinuing its feed to Realtor.com, raising questions as to whether a trend is forming that more MLSs will exit the marketing business, leaving data feeds for brokers to pay third-party service providers to handle.

Dalton was a former minor investor in a real estate company that was one of the owners of the broker-owned Garden State MLS. "We serve at the pleasure of the NAR and the brokers so I would never challenge their decisions," says Dalton, "but the demand side is shifting to the supply side, and it will be a great challenge to persuade sellers why their properties are getting less exposure."

He explains, "Garden State sends its listings to Realtor.com so it is not accurate to assume that a broker-owned MLS is an automatic nexis for not wanting listings in Realtor.com. The Northwest is sophisticated and the broker-owners are sophisticated, and in that same area they have the most sophisticated homesellers, and I think it will be a challenge to reconcile this to the consumer."

Dalton says he doesn't believe that MLSs ditching the marketing of listings as a core service will be a trend that grows.

"This is an information age where consumers are more demanding that their properties be given a great amount of exposure, so to not have this for their homesellers is aberrational," says Dalton, "and it points out the significance of the Internet. Companies must forensically evaluate what's in their best interest. I would caution that it's tough to have a benefit for brokers without a corresponding benefit for clients."

He admonishes, "Now that there's IDX, a homeseller doesn't have to go to the listing company to have the listing exposed, in a sense a company's listing is on other brokers' websites, but as an industry, we are hypervigilant on how we compete with other companies. Real estate companies obsess over their competitive advantage when they should be concentrating on making their clients properties competitive. If a company wants to sell a property cutting exposure isn't the way to do it. Pricing is governed by supply and demand, so why would you constrict demand? Why would anyone be looking to restrict demand with supply mounting? It's inexplicable."

Mona Steen, director of industry relations for Realtor.com, says Realtor.com doesn't currently charge to put brokers' direct listing feeds on Realtor.com, despite the additional cost to the company to process individual feeds from brokers, although that could change.

"Even if we contract directly with the brokers, as we do in about a half dozen markets, the MLS, in all cases except one, administers the project so that we can manage it without incremental personnel," says Steen. "If we should ever get to the point where that is not the case, we always have the option to implement a reasonable surcharge on the products we sell in a market that has burdensome incremental costs as a result, so that we can recoup our costs. This seems only fair, as it allows us to distribute those costs over the markets that create the expense, rather than the entire customer base."

The cost will be higher to brokers who will have to hire staff or pay third-party vendors to aggregate their listings to provide a direct feed to Realtor.com and other sites where the broker would like to market his or her company's listings.

"We do it now in several markets, and it works basically the same way," says Steen. "The Realtor.com Industry Relations group works directly with the brokers, who sign a data content provider agreement. We coordinate with the MLS, and the MLS sends the data to us on behalf of those brokers."

Some brokers use third-party vendors to upload the listings to Realtor.com and other sites. "As I understand it, they provide software that allows the broker to enter the listings into their software, and then upload to multiple sources," says Steen.

Some MLSs are going the opposite route of Seattle, says Steen. "During the several months that the statewide MLS in New Hampshire would not provide that service to their brokers, the brokers engaged 3rd parties to provide the data to us," she explains. "After a few months, the MLS decision not to license the data was reversed, and the MLS data feed was reinstated. We are in discussions now with NWMLS about the process for their market."

Steen also says there is no trend developing.

"I think exposure for listings on Realtor.com is a member benefit that is highly regarded and extremely valuable -- as much for the Realtors as for the sellers they represent," says Steen. "And because the Realtors consider it a valuable benefit, I think the MLSs will continue to either license the data or facilitate the licensing and transmission of the data on behalf of their members. History proves that the value of the service is recognized, although in some markets it’s not as obvious until the benefit is restricted or removed, as in New Hampshire."

Published: December 5, 2006

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