Consumer Benefits of a Statewide MLS?
I’ve been asked to speak before the California Association of Realtors (CAR) committee on MLS/Computer and Business Technology this Thursday in Sacramento, CA and I’m just now coming to the conclusion I may be in over my head! 
Despite the slightly off-topic nature (California MLS issues as oppose to Seattle MLS issues), I thought I’d share the story of what I’m working on as it might interest more than a few RCG readers…
Here’s some background:
- A few months ago, John Hickey (president of the Pasadena/Foothill Association of REALTORS) attended one of my seminars and asked if I’d be willing to speak to the CAR MLS committee members in Sacramento in June (It seemed so far away at the time!) about online real estate technology.
- My research to date has been limited to talking with John, talking with a few people around Move about CAR’s MLS plans and reading their Proposal of a Statewide MLS in California.
Just to be clear, I haven’t been asked to give an opinion on the merits of doing away with California’s local MLS organizations in favor of one statewide MLS (although that appears to be the proposal), but rather, my role is to give a short overview presentation (20 to 25 minutes) on how online technologies are being used in the real estate space. (This is tougher than it sounds!).
It’s dangerous to walk into any presentation without a goal in mind, so here is what I’m looking to accomplish. I want the people in attendance (anywhere from 100 to 250 local MLS technology representatives) to walk away with the understanding that the only way to be successful in the online space going forward will be to provide tangible and obvious benefits to consumers. (I’m not going to make this part of my presentation, but I personally think that with the size and scope of the competition in the listing aggregation space, it is a gamble to assume that any one organization will control listing data into the future, especially if the local MLS’ aggregate into larger and larger targets.)
Here’s the outline of my presentation so far:
Understanding Online Real Estate Technology through the Prism of Web2.0
Overview: How do “Web2.0″ technologies apply to online real estate? (7 minutes)
In a simplistic sense, successful web2.0 sites are designed, developed and managed for the consumer as oppose to a product, advertiser or organization. Some Web2.0 characteristics:
- Everyone is a publisher
- Quick examples of writing posts, leaving comments, writing reviews, rating items, social bookmarking, etc.
- Designed for more than just a browsers
- Websites are being built for mobile devises and feed readers that rely heavily on web-services and APIs
- Consumers expect websites that meet their individual needs (personalization)
- Example: Understanding Kayak’s roll in disrupting sites like Expedia and Travelocity
Understanding how communication tools are being used to benefit consumers (5 minutes)
- Blogs
- What is a blog? and Why are agents using them to market themselves?
- Feed Readers
- Example: How Google Reader can be seen as an extension of a personalized online newspaper
Understanding how communities are being used to benefit consumers (5 minutes)
- Consumer-oriented Social Networks in the real estate space are still relatively undeveloped
- While some agents have gone to existing consumer-oriented platforms (like Facebook and MySpace), the majority of agents using social networking tools are blogging.
- ActiveRain is the most popular service in the real estate space by providing a forum for agents to share knowledge about effective online marketing options and reach out to consumers.
- MyBlogLog provides a way to connect blogs and create a sense of community out of bloggers who write on their personal sites.
- Trulia Voices provides a way for consumers to interact with real estate professionals around local topics
- Blogging is particularly appealing to real estate agents because it is mostly a one-way conversations where agents can have control over the conversation. While there have been more than a few attempts, no social networking platform in the real estate space has managed to capture significant consumer participation.
Web2.0 websites work because they deliver on evolving consumer expectations… (5 minutes)
- Consumers are being conditioned to expect more and better data on the internet about the home buying process:
- Market and neighborhood information: Market Snapshot, Altos Research, Trulia and Neighboroo
- Realtor information (reviews and commissions): HomeThinking and Redfin
- Comprehensive database and listing information: Realtor.com, Zillow, and PropertyShark
Summary (3 minutes)
Web2.0 aggregation sites are highly focused on serving the real estate consumer:
- RE consumers expect websites (and Realtors!) to use multi-media tools to build community and trust into the systems.
- RE consumers don’t care about our rules, practices and policies with regard to listings. They expect and will continue to seek out the most complete and accurate database of listings.
- RE consumers trust the information from websites that (1) rank well in search engines and (2) allow for interaction and acknowledge feedback.
- RE consumers expect that the tools being developed and the websites they visit to focus on providing a tangible and obvious benefit to them.
Now that I’ve put the outline together, I’m going to rearrange existing slides (from my earlier seminars), add some new content and cut away at my outline until I can get it down to 20 minutes. If you have any thoughts on how I can hack this presentation down to better serve my goal, I would love to hear your ideas.
About the Author: Dustin Luther
- Author's website: http://dustinluther.com/
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This post is precisely why I return to this blog time and again. Twenty minutes would not be enough time. In my opinion, there are only maybe, maybe, five per cent of Real Estate agents that embrace technology while maybe an additional twenty per cent use it. Another fifty percent have company provided web presence with a remaining twenty five per cent who could not care less about the internet tools available.
The over all experience of an interactive internet is lost on the majority of people. You’ve done a great job in making the concept clear. Your work here shows how an online community can be set up. My problem would be to try to explain this site or the concept of this site. In either words or pictures how do impart Ardell? How can you express the flying housing bubble monkeys who swoop in from time to time to create trouble?
In a greater sense I ask myself all the time if the consumer really benefits from any of this. In twenty minutes can you really get the point across that this is beneficial?
So no I don’t think you can hack it down. It’s put beautifully and thank you for the message.
David, you should hear Dustin speak!
He’d have an hour presentation all wrapped up in 20 minutes.
I’m just teasing you, Dustin (well…kind of)!
Don’t forget your water breaks.
Great content – I would be surprised if the attendees don’t reach information overload though. Most of these people are only minimally internet-savvy, with only some having viable websites and very few even understanding the concept of blogging. Still, throwing a bunch of stuff at them all at once will hopefully get them to start doing some research on their own so they’ll learn what the internet is all about, instead of being afraid of it because it’s an unknown factor.
Thanks for the compliments David and Rhonda (and I will definitely try to get a few quick water breaks in there!)…
and Linda, I definitely hear your point that I may be throwing too much stuff up against the wall…
My personal opinion is that if I can’t get across a point in five minutes, then I’m probably making things too complicated to begin with… Hence, I’ve tried to break it down to four or five points that can each be conveyed in a few minutes. Nonetheless, I haven’t really figured out who I am going to convey meaning for 8 different websites in five minutes a la the second-to-last section, so that area in particular is ripe for squeezing.
[...] Dustin from Rain City Guide posted recently about being asked to speak before the California Association of REALTORS® (CAR) committee on MLS/Computer and Business Technology, and in doing research for his speech, Dustin reviewed CAR’s business plan for creating a statewide data repository or statewide MLS. As I reviewed the business plan myself, I was very excited to see that the menu of functions for our flexmls™ Web system was the source for the vast majority of the functions listed in the business plan as “all features available on the most desirable MLS service.” This is quite a compliment. [...]
I don’t agree that this group won’t be internet savvy, since they are the Techonology Committee. I just think your viewpoint may be the exact opposite of theirs, since their “constituency” is not the general public, but the mls members.
I think you should have fun and say what YOU want to say. They may not embrace it t this point. But you will be planting the seeds of the future, that we are part of a much bigger issue than simply member concerns.
The most important part of your message has nothing to do with technology. It has everything to do with the consumer. It is a lack of CONSUMER FOCUS that will prevent industry establishments (MLS’s, brokers, Realtor.com, etc.) from losing the game to competitors like Trulia, Google, Zillow, and the like. The industry has to focus on agents, but in terms of building websites and features, too often the agent controls the conversation.
Ardell,
Your take has definitely not escaped me… I definitely plan to have fun and doubt I’ll win a room full of converts. Nonetheless, only time will tell if I have a green thumb!
Annon made an excellent point about the MLS operators’ focus (or lack thereof) focus on the CONSUMER. IMHO, this is the single biggest issue facing MLS operators across the country. Their consumers have traditionally been the real estate broker and agent not the general public. The MLS builds and manages a local/regional compilation of real estate information PLUS enforcing underlying business rules across the entire membership, managing legislative/political issues at the local & state levels, ensuring an environment of cooperation and compensation exists between licensed real estate professionals, and overseeing an arbitration/ethics process which self-regulates the whole process.
MLS as an organization is really caught in the middle of the technology battle. On one hand (typically smaller brokers by numbers), the MLS is being asked to provide more and more true consumer facing tools for the benefit of all MLS participants while the other hand (typically larger brokers) is telling the MLS that it is the broker’s job to provide the consumer facing tools and to stop leveling the playing field. This discussion covers everything from on-line forms to a MLS portal like http://www.har.com
The issue isn’t about the technology or the Internet. In fact, Linda’s post about lack of internet savvy couldn’t be further from the truth. The fear isn’t of the Internet but rather what people are doing with the listing information and how it is being represented.
Dustin, these folks will welcome you with open arms and will listen to your experience with respect. They are not resistant to change nor to adopting new technologies. Just show them how these technologies help their end customers be better real estate agents & brokers and you will have it made.
Hi Dustin,
My advice is as follows:
1) Slow down your pace (rate of delivery) by 50%
2) Make three solid points. Focus only on these three. There is no way that in 20 minutes, you should attempt to give them more than three solid ideas. If you try to do more than that, you will be talking so fast that nobody’s going to be able to keep up with you. They’ll grab a word here and there and be left dazed and energized without knowing exactly why.
3) Connect your points to the main purpose of their meeting, which, I believe is “Consumer Benefits of a Statewide MLS”
4) A core belief I hold, which may or may not be helpful for you, is that if an MLS focuses on providing benefits (v. features) for their end user base, the MLS will survive and thrive. Their current mindset is that the BROKER is their end user base. Staying with this mindset will ensure an untimely MLS death.
5) An connected belief I hold, which may or may not be helpful for you, is that if the MLS folks look for the answers within their core group of people, they will never find the answers to survival and growth. Growth in an organziation comes from when people who don’t know the rules come in and challenge the status quo. I recommend that you bring with you some interviews of random consumers who no nothing about MLS rules and have those consumers dream about the perfect system for buying or selling a home. Well, maybe that would work for the 45 minute version.
I keep thinking of Todd Tarson trying to move mountains with the Board in his area. If you can get a few Todd Tarson’s in the room, you can play to that crowd.
Just find a few eager and receptive faces in the room and pull the energy from them. It will then be their job to convince the others over time, long after you are gone. Give hope to the progressive ones in the mix.
Jillayne,
Thank you so much. Every point you make is much appreciated and I’ll do my best to heed your advice. And I’m positive your last point would provide an interesting and helpful set of interviews… But most importantly, you’re reminded to not loose focus on how important it is to forget the rules.
Troy,
Not sure how I missed your comment. (It’s been a BUSY day at work!)…
Thanks for the feedback. I tend to agree that the people I’ve met are more than receptive to new technologies, they just need to know how it will benefit them.
Dustin,
I agree with most of what Jillayne said, you should think about paring down the presentation to most of the basic concepts. Although I’d like to believe that most agents are web-savvy I think there will be more than a few people who have never heard of a blog, or web 2.0.
That being said, I’m interested to see how the presentation goes, good luck!
*bookmarks page*
Considering what Ardell points out, the trick is to make everyone feel they will benefit in the long, and short, run–consumers and professionals. Good luck with the presentation.
Dustin,
I had the opportunity to see you in Pasadena and was very impressed with your presentation. I think most MLS committes, Realtor organizations and the NAR are very slow to adopt change, and don’t appreciate anyone rocking the boat. Status quo has been just fine for 30 years, why change? Many of the members have been around for ages as eveidenced by a handwritten purchase contract. The old addage “whats in it for me” will surely apply. I believe one day we will move to a national database of listings allowing homeowners to input thier own data and only pay a Buyers Agent.
There is no direct consumer benefit of a statewide MLS. Why would I say such a thing? Remax , Windermere, and Realtor.com already offer a statewide MLS search tools. There is nothing technically preventing somebody from implementing state-wide tools. The primary barrier is financial. There probably are also legal barriers too, but I’m sure Russ or Craig are more familiar with them than I am.
Currently, because there are so many “MLS standards”, it’s very expensive (many would say cost prohibitive) to enable scenarios that allow an integration of an entire states’ MLS data. It’s not impossible, it just requires a LOT of engineering time to support (and time is money). So only the largest of brokers & IDX vendors can afford to create technology that brings these scenarios to life.
This is unfortunate because Trulia, Zillow, etc. probably already have nationwide standard for listing data, and hence they can appear to innovate faster because their engineering teams don’t have the burden integrating disparate data sources. They don’t have this burden because you are giving them listing data in their data format, meanwhile you have to acquire the data in the MLS format du jour! How rich the irony…
I’d argue the primary beneficiaries are brokers and IDX vendors, while consumers and agents are secondary beneficiaries. With standards in place, brokers and IDX vendors can spend more time creating innovative features that consumers and agents want instead of wasting time converting the data into a standardized format.
I also think Troy Rech’s comment regarding “MLS as an organization is really caught in the middle of the technology battle” is very true. The whole NWMLS/Realtor.com fiasco is a perfect example. The current system essentially allows big brokers to have a monopoly on certain kinds of innovation, because they are the only ones who can afford the engineering time. However, in the end, since big brokers aren’t any more fond of spending money than small brokers are, (they just have bigger checkbooks) I suspect that their mixed emotions will be eased by the sizable financial savings they’ll gain with standards.
To quote Microsoft’s CEO, Steve Ballmer, it’s all about “Developers, Developers, Developers”. If you make life easier for software engineers, then they can spend more time implementing the “value add” features of their applications and spend less time on “infrastructure”.
I’d also suggest they add Flex MLS to their feed reader.
Robbie,
The link shows a $52 million dollar savings on a combined basis to consolidate into one state-wide mls. Pretty sure that was the number. Read it yesterday.
The problem has always been, that the more consolidation there is, the more the largest brokers control all of the policies. A little fish gets even smaller in a much bigger pond.
Ardell,
How many MLSes does Washington have anyway? It’s my impression that NWMLS is gaining share at the expense of all others in the state (at least until you reach large metro areas outside Puget Sound like Vancouver, WA or Spokane, WA).
Do you think agents are better served by MLS consolidation or not? I believe in the past, you’ve said it doesn’t matter to you because an agent can only be an expert on a small area anyway. Having the entire state’s data isn’t really helpful. After all, your area of expertise only extends to Seattle & the Eastside. Is it fair to say that Everett and Tacoma listing data is as useful to you as San Diego and Miami listings would be?
Ardell, you can’t assume someone is internet savvy just because they’re on a technology committee. Being on the technology committee requires an interest in technology, but not necessarily an education or awareness of the ever-changing current technology. Some are more savvy than others to be sure, but many don’t go much past email and a basic website. And some will join just so they can get an education from the committee itself. I know some of the people that have been on the CAR technology committee in the past, and although they have an interest in technology and are more advanced than your average realtor, I’d not call them leading-edge type people.
I’m sure they’re aware of the potential “threats” from Zillow, Trulia and the like and want to find ways to compete against these models, but likely more in a broader sense rather than in a technical sense.
Looking at the committee members from the CAR site, here’s what I found:
Jeff Barnett (Chair) – only found him on the Alain Pinel site at http://www.apr.com/DesktopDefault.aspx?pageid=1070&pagealias=AgentDetail&AgentID=1056.
Karen Halliday (Vice Chair) – did not find a website for her. only found an inactive Active Rain blog at http://activerain.com/khalladay (only 4 posts since March ‘07).
John Hickey (Vice Chair) – served on various MLS committees. has a linkedin profile at http://www.linkedin.com/in/johnhickey, websites at http://www.johnhickey.com (basic Advanced Access site with little customization and still has the dreaded states pages for realtor links) and http://www.lacrescentahomes.com (another Advanced Access site with slightly more customization. IDX is both the Dilbeck system and the Rappatoni system, and neither has true lead generating abilities.)
Elizabeth Miller-Bougdanos (coordinator) – only found her on http://rentalcashflow.com, which is not her site.
Tim Johnson (coordinator) – hard to identify without his location, since this name is fairly common.
None of these people show much use of technology, or at least not from what I found in a quick Google search. This is kinda scary, considering that these people hold a piece of our destiny in their hands!
Robbie,
I’m going to start calling you “DATA BOY”, LOL The issue is Statewide offer of compensation, not merely data.
If there were one statewide mls, online services would expand dramatically. No one would have to be an expert. The mls on a statewide basis, would facilitate online services much better than the current mls model.
Remember an mls is not DATA, it’s much more. The offer of compensation is to mls members. If you open that up to any agent in the state, then online property would become like an online catalogue, and “agents” could just man the phones and take orders.
It would make sense to have a central office type company that services both buyers and sellers for a flat fee. Instead of the buyer agent contacting the seller, as in the current limited service model, the online agent would simply set up an appointment for the buyer to meet the seller at the house just to view it. The agent would be the facilitator and talk by email or phone to both, and facilitate the contract and send out an “all in one” appraiser/home inspector. Draw up the inspection negotiation and facilitate escrow. All online.
Not a bad business model, when you think about it. If the mls were ONE for the entire state, that would standardize all forms and business practices.
I’m not sure why CA is even considering it, given they don’t like it when an Agent in San Diego tries to write up a property in Sacramento. We are licensed for the entire state, but mls offerings are only between members. So the way it is now, the mls in Sacramento can refuse payment to a non-member in San Diego. Opening membership in the mls to include everyone in the entire state, there would be no reason one office couldn’t sell online all over the state.
The cost savings per agent do not warrant such a massive change in the way the business is currently done. But the consumer would likely be much better off as the end result. So would the Banks. This model would defiitely facilitate banks getting into real estate.
We could have all kinds of 3D films for every aspect of the house, including the home inspection with close up photos of any defects or repaired defects. The whole thing could be done online, with the buyer seeing the property once, after it is in escrow. Even the staging could be done online with pretend furniture.
This is getting interesting. Someone in California has been positioning this for about ten years. There has been a push toward legislation that would make buyer agent agreements as sacrosanct as the listing agreement. It would put attorneys on an even playing field with agents regarding property transactions. It would also give banks a huge opportunity for people to just go to their local branch to do the contracts and escrow.
Next step would be a National MLS, and huge companies that would operate as brokers, similar to the stock market.
Hmmm, could be the precursor to banks getting into real estate, now that I think about it.
Michael, Joe and Linda,
The spam filter was working overdrive today (over 1000 spam messages caught)… Problem is, they caught all three of your great comments! I so wish that wouldn’t happen!
Dustin,
Here in Clark County (Vancouver), Washington, RMLS has been the entrenched MLS, with the NWMLS trying to make in-roads in the past few years.
In some ways the competition from NWMLS has provided a necessary incentive for RMLS to improve and remember who the customer is.
However, in my opinion there does not seem to be a clear long-term, sole-MLS solution for Clark County. That is leaving many of us agents with two MLS boards to post listings to, two sets of rules to follow, etc.; increasing our over-head costs; and decreasing our availability to clients to some extent.
I have heard that some areas outside of Washington periodically put the MLS function out to competitive bid. The winner is then the sole franchised MLS provider until their term expires and a new round of competitive bidding is opened.
I personally like the idea of competition incenting service providers to be the best at what they do. I also prefer to have one MLS system to work with in my area.
I hope this input helps with your presentation.
Dustin,
Why don’t you bring up the problem of SoCal MLS not using HTML Markup standards where only Internet Explorer users can get on. Anyone using a mac with safari or windows using Mozilla still have to switch to IE or IE under parallels to get on the MLS
That would be a great thing for them to do
Loren
Dustin,
Great presentation yesterday! I was one of those in attendance and you have definately opened the floodgates for me. I am pretty tech savvy, having worked for an ISP before my career in Real Estate, but until now I haven’t effectively used my tech skills in my business. I will be doing a bunch of research and updating myself asap
Andy,
I’m so glad you enjoyed the presentation… I definitely enjoyed giving the presentation and got some really good feedback.
For those that are curious, I ended up cutting the presentation back considerably… My plan was to go through the second to last section (”Web2.0 websites work because they deliver on evolving consumer expectations…”) and then do a bit on blogging… But even that turned out to be a bit long and I had to cut my blogging section in half!
To everyone who gave feedback… Thanks! It was all very helpful and made for a great day in Sacramento!
[...] Dustin wonders what the Consumer Benefits of a Statewide MLS would be. [...]
[...] Presentation: Using Blogs to Build an Online Brand August 20, 2007 A while back I posted an outline I had for a presentation I was giving to group at CAR (California Association of Realtors). I got some awesome feedback from the RCG community that definitely helped improve the presentation (Thank you!!!). [...]