According to the 2005 MLS Technology Survey, the third annual report of its kind by the Center for Realtor® Technology (CRT), two trends are impacting the future of the MLS industry -- consolidations and expanded data-sharing agreements.
While the trends aren't troubling in themselves (it's natural to want to improve service and costs through consolidation), what should be noted is that there is an increasing lack of support for public MLS websites and an increased concern for information security.
NAR president Tom Stevens observes, "The rapid pace of change within the industry is likely to lead to further MLS consolidations in the near future."
But some are concerned that the power of large MLSs could lead the MLS tail to wag the Realtor® dog. In other words, that brokers will lose their rights to use their listings as they please, under some MLS data-sharing and data-mining rules. Others are concerned about what NAR will do to defend brokers' rights to place their listings where they please in advertising environments with regard to the lawsuit that has been filed by the Department of Justice against NAR over its online listing policies.
One spokesperson for a leading national broker networking association told Realty Times, "Our members are concerned that NAR hasn't done enough to protect brokers' ownership of the listing and our right to choose where listings are advertised."
And that's part of the problem -- what's in brokers' best interest may not be in MLS executives' best interests and vice versa.
Here's the main area where Realtor association and MLS executives differ:
More MLS executives (50 percent) than Realtor® respondents (42 percent) were in favor of MLS public websites to display listings to consumers. Correspondingly, fewer MLS executives were opposed (24 percent) to MLS public websites than Realtor® respondents (37 percent.)
When asked to explain, those in favor of MLS public websites felt "it was a service demanded by the public and offered better exposure to the listing," provides leads to listing agents, helps those with limited web presence, improves consumer appreciation of the real estate industry, and that the MLS public site "represented an alternative to branded MLSs or consumer aggregator sites."
Those opposed "pointed to their own websites as the mechanism to fulfill this demand. They also saw the MLS as being in competition with them," because Realtors work with clients, not the MLS; it reduces the value of the individual broker and agent. These respondents believe it is the "Realtor's responsibility to provide information to clients," that Realtor.com already fills the need for a public consumer site, and that internet data feeds such as IDX make an MLS site "redundant."
Broker Listing Origination
Brokers are increasingly frustrated with data entry and retrieval, and many have sought to solve the problem through internal listing systems to download data. This is particularly useful when the broker belongs to multiple listing services using differing MLS systems, data structures and vendors, as they face increasing costs to set up processes to get their own listing data back for internal use, or enter the same data in multiple locations from the MLS to back office systems, contact databases, accounting systems, etc.
Yet, 16 percent of MLSs say they would not accept data directly from a broker system, while 67 percent weren't sure if their systems would or not. While they said they would consider it if members wanted it, others said the vendor wouldn't allow it and that compatible/ data integrity was a key concern, along with security concerns.
"While over 77 percent of respondents indicated that information security is important, only 46 percent of the MLSs indicated they have a security program in place," said Mark Lesswing, NAR vice president and director of CRT. "MLS executives must understand that information security is more than a cost -- it's also a business facilitator. That is why NAR has programs like ®Secure, to educate and assist the industry to understand and improve its security posture."
Some respondents expressed concern that MLSs will evolve into utilities with data virtually open to any person or business. Some believe granting unfettered access to MLS listings could weaken the current MLS model and even the real estate industry as it exists today.
Past surveys uncovered a strong desire for data integration with MLS listing information, because third-party service providers are able to take MLS listing data information and combine the data with tools such as mapping that deliver more value to consumers than Realtors can online. Realtors want the MLS to empower them, not third-party data aggregators.
"It now appears that the level of data integration is improving, addressing this important need; 78 percent of respondents report they now have the ability to attach documents to MLS listings, and 51 percent integrate tax data. Respondents also stated that many systems now have the ability to map and export data to third parties. Mapping is now becoming almost commonplace in most MLS systems; 56 percent of respondents now have street maps included in their systems and nearly half the Realtors® believe their clients value the maps provided to them."
"Other findings indicated the perception that the key to the long-term success of the industry lies in improvements to MLS service and delivery which will put members in the position of offering services superior to that offered by nonmembers," says the report.
These examples of disconnects between MLSs and the Realtors they serve could be the real reason behind the trend toward consolidation happening in places such as northern California and North Texas. Some Realtors are pushing for state-wide MLSs, although most MLS executives feel that a Metropolitan Statistical Area should be sufficient.
