The MLS is undefended. Its existence, its value proposition, and its utility are largely unknown to the real estate consumer. MLSs as a whole have little ownership stake in the technical distribution and attribution of real estate information on an industry wide scale.
If the most effective, transparent, liquidity-creating, pro-consumer marketplaces in the world are to be defensible, an MLS Network, governed by MLSs, must be considered.
I discussed the concept of a new MLS Network with a group of MLS leaders at a mid-2021 unofficial meetup. There was a significant level of common concern around current risks for MLSs. At this stage, I believe the concept needs broader visibility. The simpler the idea gets, the more reasonable it becomes.
This MLS Network would not need to be a website or an app. It wouldn’t need media or extensive local data. It wouldn’t necessarily even need a user interface.
It would need ten fields per listing, accessible to the public, to establish itself as a universal and inseverable source of MLS truth. Suspend your disbelief before full consideration.
“The MLS” is Not a Thing
Let’s level set on terminology. We sometimes say “The MLS” to describe the MLS industry, but it’s no more a singular thing than “the cloud”, “the media”, or “the government”. This is the crux of the traditional MLS industry’s vulnerability.
“The MLS”, as a descriptor of collective MLSs, is not a thing. There are hundreds of MLS organizations operating primarily independently. These businesses are some of the world’s most productive marketplace models: rising tides that float all boats.
The conclusions stated here are not criticisms of MLS leaders’ strategies to date. They’re a call to bolster the strength and defensible longevity of these organizations’ objectively beneficial and powerful effects on real estate consumers and communities.
MLSs Have No Network
MLSs are isolated islands. They sometimes partner, share data, merge, and acquire one another. But their need to strengthen their local organization can limit their ability to focus on a critical fact: the effect of their sum is greater than that of their parts. That MLS is a given in the United States and Canada is a highly underappreciated reality.
MLSs collaborate for strengthening thought leadership, policies, tools, and practices of running MLSs via organizations like CMLS, COVE, and The MLS Roundtable. These initiatives create opportunities for MLSs to improve themselves. What they haven’t created is a technical backbone for a national network that embodies the strength of the MLS industry. And that lack leaves MLSs collectively exposed.
Not a National MLS
A single organization running all facets of a national MLS and its consumer facing technology, simple and clean sounding as it is, is not ideal for competition or innovation. Any multi-state broker will tell you that there are still too many MLSs. But simplicity is the goal for technology experiences, not reducing service provider competition in exchange for a monolith.
Consumers with a hint of organized real estate knowledge might understand the concept of MLS. But their experience is mostly a blend of data across multiple MLSs via their consumer interfaces
Facades Benefit MLSs
The most popular interfaces with MLSs today are through national facades: those run by brokers, marketing cooperatives, and advertising portals. They layer a mask over independent MLS organizations’ property information, providing data aggregation and display to make the consumer’s view appear somewhat organized across marketplaces.
Lest this description give the impression that these companies are a negative to the MLS, in fact they have been a benefit to MLSs. The average consumer can’t see the inter-MLS disharmony that requires these outside entities to provide the unified facade that MLSs do not.
Zillow, realtor.com, Homes.com, Homesnap, Remax.com, ColdwellBanker.com, Redfin, Compass et al have helped MLSs despite themselves in transitioning to the seamless experience consumers demand today.
The Brocial Network
We’ve identified the owners of the most popular current consumer real estate facades. Broker/vendor hybrid entities own these facades. I like to call them The Brocial Network:
To reiterate, these companies have been good for the industry. But if you’re an MLS, your SWOT analysis has some flashing red lights here. An MLS doesn’t need to replace the current facades. But if the rules of the game changed in the marketplace in a objectively negative way for MLSs, do they have any capabilities to independently support a new facade?
MLSs do not control the user interface of the consumer, the network to supply the underlying information, nor the rules as to which facades are required to display their listings. MLSs rent their network from third parties. Collectively, they appear to an objective observer as an empire with no walls and no military defenses, waiting to be raided.
What are the Threats if the Rent Changes?
Companies change. Leaders change. For-profit organizations flip 180 degrees on their promises and call them pivots.
In our current scenario, the Brocial Network owns the ground rules, the distribution, and the consumer experience of MLS listing data. To be clear, an MLS can tell a facade that it can’t display its listings. But the MLS can’t force a facade to display its listings. This is key.
Scenarios to consider:
- BrokerMax facade ends the display of IDX or any listings outside its proprietary sourcing model
- Braggregator facade segments and obscures much of the MLS’s data set based on listing types
- Brooperative facade institutes a prohibitive pricing model that inhibits the MLS from participating
It’s not hyperbole to say that an MLS’s data set could be effectively canceled from public view in these cases. Boutique and individual broker websites aside, the overwhelming majority of real estate traffic is on a small handful of real estate websites and apps. The systems that connect them efficiently on a national scale are few. The facades own the network.
While the scenarios presented may seem unlikely, their potential impact is meteoric.
Access: A Hill to Die On
All public MLS listings must be easily accessible to all consumers. This belief must be shared to move to the next stage.
As long as consumers can easily access all listings intended to be viewed by the public, then varying practices of facades are not of concern. But ensuring that a protective foundation exists to fuel that accessibility is a requirement.
Today’s MLS Network is undefended, fragmentable, and it’s rented. So its mere existence is not guaranteed.
Today’s MLS Network is for display advertising, lead generation, and referral fees. Its focus is on facade owners.
Tomorrow’s MLS Network could, at its foundation, also offer connectivity, transparency, and defensibility. This would be the MLS Network governed by the MLS community.
Tomorrow’s MLS Network
An MLS governed network could provide a global reference data set for many competitive consumer-facing facades. Its incentives would be aligned with the brokerage participant membership, and therefore aligned with creating better broker-consumer relationships.
A true MLS Network would simply be a thumbnail registry of listings. It would contain the evidence that an industry wide group of coop-etitive organizations are the sources of the definitive real estate listing data across the industry.
Thumbnail Registry of Listing Truth
Each listing in the MLS Network would have accurate IDs for the listing source (MLS) and listing number. The listing would have about 10 fields: address, price, status, Universal Property Identifier, property type, property subtype, and a URL leading back to the source MLS, the listing broker, or the MLS’s designated consumer facade.
Because deeper listing data on the registry would be incomplete, it would create cross-MLS awareness but also incentivize interaction with the facades authorized by the MLS to display the full data set. With no lead gen, misdirection, or filtering out of listings based on business models in the MLS Network, the downside for MLS participation seems scant.
The secret sauce is in the simplicity. True real estate consumers need every single local nuanced data point. They’ll consume the services of businesses that provide the complete listings.
But the evidence of listing identity, uniqueness, and location are all encompassed in the thumbnail. And consumers can trust that they have complete visibility of the full market inventory if their chosen facade uses the MLS Network as its source of truth. Then, it’s up to the technology providers to bring the full experience with the full data set to consumers.
How would technology companies leverage this information? Some may want to simply provide a Wikipedia-style window into the industry’s “truth” of listing information and merely replicate the backbone of data. Others might use it to power their back-end fact-checking of the MLS data feeds they receive. Some companies might create broad market statistical analyses that every stakeholder in the industry could benefit from.
The MLSs themselves would still hold the keys to the most important, critical elements that drive local markets. But on an industry wide scale, the power and pro-consumer benefits of transparency and insights from the MLS would be made unquestionably clear.
In the current regulatory environment, concerns about competitors coordinating around centralized initiatives need to be addressed. But in the MLS Network scenario, there’s actually a more transparent set of information being provided to the consuming world at no cost to them. Low costs and consumer transparency are generally viewed very favorably.
How would it be governed? This is of course speculation, but simplicity again seems to rule. MLSs would be participants in a low-cost cooperative, funded by member dues with optional participation. A strict and simple data license would describe the rules for submission, access to, and removal from the system.
A Call to Arms
I’ve often accused other real estate editorialists of being too alarmist. “The Death of the MLS,” is my favorite never-ending conference conspiracy content parade.
But I believe the current speed of industry power shifting warrants sober analysis and strategy around existential threats to an organization’s connection with consumers. MLSs’ connection to consumers, even if indirect, is a conduit that must not be left unguarded.
Building a backbone, a defensible network, to ensure the MLS source of truth is always fully accessible to the consuming public is not a crazy idea. In fact, it’s probably crazy that it’s not being worked on already.
But ideas are a dime a dozen. Does the industry have the will to build it?
Sam DeBord is CEO of Real Estate Standards Organization (RESO). He has served as the National Association of Realtors President’s Liaison for MLS and Data Management, President of Seattle King County REALTORS, and Managing Broker for Coldwell Banker Danforth.