Cameron Paine Suggests National MLS Listing Portal

Here’s an article that was written by one of our members, Cameron Paine of CTMLS:

We Need One MLS Website

By Cameron Paine | Published October 31, 2011 here

Forward

The purpose of this white paper is to raise awareness that the MLS industry needs one national MLS public website to be competitive online. While there has been some debate over the years, the evidence supporting the benefits of MLS public websites has become overwhelming for even the most hardened skeptics. Still, there are flaws in both the idea and the execution by MLSs (including mine) that limit the potential of MLS public websites to truly compete – and win – in the search engines of Google, Yahoo, Bing, etc.

However, when considering this issue one question kept coming up: “Why would banks continue to invest millions into Zillow when Zillow has yet to turn a profit?” According to Zillow, by August of 2007 they had $87 million in funding. According to CNN Money, in the IPO earlier this year Zillow sold 3.46 million shares – trading today (October 26, 2011) at $25.59. Here comes the interesting part: Again, according to CNN Money, the underwriters of the IPO were Citigroup, Allen & Co., Pacific Crest Securities, ThinkEquity and First Washington Corp. The answer may be that the bank’s interest isn’t just in the public website – it’s the MLS subscription model. Remember, we’re 800+ MLSs, with no real capacity or leadership to mount a coordinated response to a common threat. Yet, with more than 1 million subscribers nationwide paying a monthly/bi-annual/annual fee of [insert your MLS fee here] we are a big, fat, tempting target.

Don’t think for one second that the wealth potential has been missed by Wall Street; for anyone who thinks a national MLS is too big to work consider the fact that several non-broker/non-MLS national sites already accept direct listing entry. If I were them, I’d cut a deal with the large parent corporations that own many of the top nationwide brands to “reverse the stream” by mandating listing entry directly into the national site then passing data downstream to the MLS. It makes the broker/agent life easier because they have one listing entry regardless of how many MLSs they might belong to. Brokers, in turn, save time and money by having one common data feed for their national brokerage websites. The fact is that national sites already have as much or more information than many MLSs and my guess is that the national site(s) would provide some sort of profit sharing or subscription fee split with participating brokers. Ultimately, the only question remaining for brokers and agents will be, “Why do we pay for an MLS?”

Article

The most obvious flaw in the MLS public website presence online is that with more than 800 MLSs (probably half of which have public websites) we are too diffuse to have any real impact on the national scale. Think 800+ people in a gigantic war canoe all paddling in different directions and you will have some idea of our industry’s online effectiveness. There are a few notable exceptions like the Houston Association’s HAR.com, but they have local success because they were early to market and were funded aggressively. HAR was able to establish dominance before the entry of Zillow, Trulia, Yahoo, etc., into their market and has done a good job of maintaining local dominance. For MLSs not in HAR’s position, it’s an uphill climb against well established, very well-funded competition.

We are the source of the data, the most accurate real estate information on the planet. Why aren’t we winning?

We need to stop paddling in different directions and take concrete steps towards improved cooperation within our industry. Consolidation is part of the answer, but I think cooperation needs to come first. We need to take a hard look at our future and realize that while we’re arguing, the competition has been eating our lunch. Think about the vast amounts of collective money being spent by every MLS that built and now maintains their own individual MLS public websites. There are 800+ MLSs, maybe 400 of which have public websites. Let’s say the public websites average $10,000 a year in expenses, that’s a total of $4 million a year being spent on 400 different MLS public websites. What if we were instead spending $4 million a year to convince the public to visit one MLS public website that we all share?

When you Google “CT homes for sale,” 6 of the top 10 organic search results are non-broker or MLS websites. Assuming that most users never look past the first page of search results, it is clear that non-brokerage/non-MLS companies control fully 60% of the lead traffic in Connecticut. To anticipate the follow-up question, yes, Google searches for specific towns have similar results; I will bet you that your town’s search result is the same.

The Connecticut MLS recently completed a total redesign of our website www.CTreal.com. We’ve done some very cool things and we did them for less than $40,000, which is pretty inexpensive. I am extremely proud of what we have accomplished, but I would trade it in a heartbeat to be more competitive with the non-MLS/non-broker sites currently dominating our market – I hope that every MLS would be eager to do the same. The point is simple: Separately, MLSs don’t have enough resources to compete successfully with the Zillows, Trulias, or Realtor.coms of the world.

How can we possibly compete…?

The way we’re doing things today, we can’t. We can continue to tread water, cheering our few success stories as shining examples of what could have been done – if we had been as smart, as convincing, and as early to the market as Bob Hale. Sadly, it is just a matter of time before even those limited successes will be swamped by the sheer quantity of money available to non-MLS/non-brokerage sites.

I propose the creation of a single national MLS public website that participating MLSs would fund instead of their own individual sites (alternatively, the few MLSs that DO dominate their market area could do both, with the cost for participation in the national MLS site at a reasonably affordable $10,000). The combined resources would go much further and the combined traffic would significantly benefit organic search results. CTreal.com earns around 20,000 visitors per month, so assuming the 400 other MLS public sites average out about the same (some are better, some are worse), we’re talking about 8 million visitors per month. Now that’s a number we should be able to get behind.

There are many details that need to be addressed, specifically: Who controls the site, how much would it cost to participate, how would it accept data, what would it be called, the web address, and many more. I have opinions on some and have a rough outline prepared, but it’s the “big idea” the MLSs need to sort out first, before getting in the weeds. The best organization suited to begin this discussion may be the Council of MLSs – but only if they can overcome the tired, old-guard impulse to try and crush anything that isn’t the status quo. Otherwise, we will find that while we’ve been arguing about whether or not we should start talking, the decision will have been made for us.

 

 

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Comments

5 Responses to “Cameron Paine Suggests National MLS Listing Portal”
  1. Matt Cohen says:

    This is great food for thought.

    I believe this is a valid approach, but I would suggest that a network of local or regional sites could also work – either with a “home page” that linked them together or as subdomains of a single site (i.e. CT.mlscloud.com) . This would work IF the site had integrated data on at least a market-wide level and perhaps if some user interface guidelines and other best practices were adopted by MLSs.

    I also think the point in the forward about “reversing the stream” is problematic – MLSs are not just a database of listings, they are companies that field a wide variety of technologies and provide extensive services. Why would MLSs want to take bad data from a national advertising portal, and do you think professionals would put up with that bad data? Reversing the stream is not just a matter of adding a few fields to the national ad portal.

  2. I appreciate the comments, Matt, and you may be right about are technological solutions that could facilitate what I have proposed. Regarding the reversing the stream of data concept; in my mind it’s only a matter of incentives for the broker. If a major 3rd party site were to offer the top 5 brokerages free enhanced listings for their agents, plus a cut of any leads sold back to agents there could well be enough incentive to convince a broker to make the change. After all, if my top 5 brokers came to me and told me that the MLS would need to accept a feed of their listing data, I have very limited options. Is it likely? I don’t know. Is it possible and technologically possible? Yes.

  3. Ron Stephan says:

    Cameron says “There are many details that need to be addressed, specifically: Who controls the site, how much would it cost to participate, how would it accept data, what would it be called, the web address, and many more.”

    What national website provides almost all REALTOR listings. They have one of the fastest and most comprehensive national “private” databases for REALTOR members in their FIND product. They have a fantastic mobile application. The fact is, as was stated, that somehow/someway a database like this needs to be funded and paid for. So Move Inc./REALTOR.COM has charges for some enhanced services on the REALTOR.COM website. Show me another national website that has the quality, accuracy and timeliness of real estate data and is in the control of the REALTOR organization. This is one MLS that puts its trust in REALTOR.COM and we have never been disappointed. Instead of reinventing the wheel share your concerns, thoughts and suggestions with the REALTOR.COM leadership to help make it and even better product than it already is. Maybe we should allow them to put FSBO listings out there too! If you don’t want them to charge for services to pay for the site, then send them a check to help with expense of paying for a national database.Oh for those interested in Jacksonville properties check out http://www.REALTOR.COM/Jacksonville or broaden your search to http://www.REALTOR.COM/Florida I hear that it snows in Connecticut :) PEACE OUT!

  4. Ron, All good points, and Find is a great product, but it’s a different animal from what I am suggesting. The national MLS website would not accept paid placement, would not confuse the consumer by placing paid advertising from agents not connected with the listing next to the listing agent, and would be controlled by MLSs. The hyperbole about putting FSBOs on is silly, of course, but don’t get distracted from the real point – 3rd party sites are outperforming BOTH brokerage and MLS sites. If you think that’s okay, then doing nothing will be just fine. I think it’s a problem so I’ve offered a reasonable solution.

  5. Ron Stephan says:

    Cameron, I just think it is one more website where brokers will send listings. Also, it’s clear that brokers would not stop sending their lisings to what they believe to be better, different or a new national websites. Again, it is going to cost something….I haven’t heard that any of these “national” websites are making any money to provide a quality product. I do agree however, that we (and our brokeres) need to get a piece of the action that the syndicators and these sites are getting. Otherwise how do we as a group pay for this new national website, just raise the dues? That would be leveling the playing field. What’s wrong with letting those that can afford to pay for enhanced services do that. Most brokers don’t want the MLS to have a public website….they want consumers to come to their own website….and as far as the dollars go if an MLS decides to spend gobs of money on a public website wasn’t it the leadership of that MLS that made the decision to do that? I also agree with everything Russ Bergeron said (in his other post) except for the bit about eliminating the guarantee of compensation. Russ said (i’m paraphrasing) We have already opened up the data to so many wbsites why do we need any rules or restrictions. Let’s support what our brokers want. Cameron your post is certainly food for thought and maybe, just maybe some of the national website vendors (especially one) will take heed.

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