Over ten years ago, I recall being in a presentation at NAR’s mid-year conference and hearing Gregg Larson from Clareity Consulting predict that MLS services would soon be “free”.  I don’t recall all the details, but I believe Gregg was predicting that advertising would replace the per member per month revenue model pervasive in most MLSs at the time.

Ten years later, “free” may finally be here.  First, of course, we have RPR, which is offering software to members for “free” in exchange for a license to the MLS data.  RPR insists that it’s not an MLS but I think the point is still valid.  RPR stands for the basic proposition of “free” software with the right to earn revenue from the MLS listings.

Another example of software for “free” is Listing Book.  Instead of charging MLSs or users a license fee, Listing Book has an advertising supported revenue model and they also have some upsell products.  This really isn’t too different than RPR in that both are using the listing content to generate revenue.

Both of these business models stand in stark contrast to that proposed by traditional MLS or other real estate software vendors, which typically license the software for a monthly fee.  This shift in revenue or business model for real estate software poses some interesting questions:

1. Value.  Assessing the exchange of value in these types of deals is tricky.  We all know there’s no free lunch.  The software isn’t really “free” or gratis but rather free as in beer.  So, what then, is the cost or value of these free software propositions?  In RPR’s case, Rob Hahn, MRIS’s new marketing director, says the cost is too much.and MRIS, the largest MLS in the nation, may agree.  In ListingBook’s case, the “cost” of the advertising depends on the image you want to project.  Some think advertising on their site is not cool and others are okay with it.  (Here’s an interesting discussion at the John Hall blog comparing ListingBook to FBS’s flexmls Portals.)
2. Revolution?  Is the revolution posed by RPR really in the technology or is it more in the business model?  My take is the latter.  They’re converting what were previously revenue producing products (software and tax records) into “free” products in exchange for something they perceive as more valuable: MLS listings.
3. Will Traditional Vendors Change?  These new business models have generated a lot of buzz so far, even if they haven’t yet generated a lot of revenue or profits.  Will traditional real estate software vendors follow this shift and create new pricing models for their products?  From FBS’s perspective, we’ve been wrestling with this issue for some time.  As I expressed in a comment on the John Hall post, our revenue model is different than ListingBook in that we charge for IDX.  Of note, however, we’ve already entered the “free” world a bit in that the portal product itself is “free” with the MLS system.  So, the question looms, how much functionality do we include in the “free” portals?  Should we add some sort of search feature to the portals even for users who do not have IDX?  What features should be “free” (included in the MLS) and what features should be optional?
4. Core MLS versus a la carte.  The latter question goes to a fundamental tension that’s been in the MLS software business for as long I’ve participated: what’s included in the base system and what’s a la carte.  We all know that many features in the MLS system are used by a small fraction of the members and that raises several questions: (1) should everyone pay for a feature that’s only used by a few; (2) should the MLS be choosing these features for all members (leveling the playing field) or let brokers choose for themselves; and (3) is there economy of scale for the MLS buying site wide licenses?  There undoubtedly are even more questions as well.  At a philosophical level, I love the idea of each users choosing what features they want.  At a practical level, I’m not sure any more what is a core feature for the MLS and what isn’t.

What I am sure about is that the shift in business model posed by RPR and ListingBook make it harder than ever for MLSs and brokers to evaluate the value of the transactions being proposed, because “free” is very attractive and can blind you to the real costs. At the same time, as mentioned above, I wonder if the real revolution being wrought here is in the way brokers and agents buy software (“free” from their Association) and whether that’s in their long-term best interest.

P.S.  If you click through on this Realty Times article from 1999 (also linked above), you’ll see that there was a debate or discussion among no other than Dale Ross (then head of MRIS and now head of RPR), Jay Huffman (MLSNI and REBIG) and Gregg Larson on the topic of free MLS.  If anyone has any documents or links or even memories evidencing that discussion, I’d love to see them.  I can’t seem to find anything on the web about it other than the Realty Times intro.

RPR has posted the latest draft of the license agreement they are proposing to MLSs.  The draft attempts to address some of the concerns that have been discussed publicly and privately.  From my review, the draft still does not live up to earlier statements that RPR would not disclose listing-level information.  Instead, 1.w attempts (I think) to address some of the concerns by agreeing not to sell the MLS listings to anyone who is going to use the information to contact property owners or agents (e.g., moving companies, etc.).  But is re-sale of listings to build a contact database the only concern?

What now appears clear  is that RPR wants the ability to sell the MLS listings to others.  By explicitly stating one narrow exception without categorically prohibiting resale of listing-level info, RPR is reserving to itself the right to sell listings to others.  Let me know if I’m missing something in my interpretation or if you see something I don’t.

Brian Larson does an excellent service to the MLS industry presenting on his blog his analysis of the RPR license agreement, which he concludes:

RPR has been making promises about how data will be used (on its blog, in presentations, etc.) without incorporating those promises into the license agreement. MLSs that want to be sure that their data is used as RPR has promised will want to incorporate those promises into the license agreement before signing.

I’ve spoken with Marty Frame and and even moderated a panel at Inman with him (and Brian Larson and Jim Duncan) and he’s always been clear about the intent of RPR not to re-license to third parties listing level data (only aggregate data) obtained from MLSs.  Given this, why is it that the RPR license agreement doesn’t reflect this stated intent and, as Brian notes, even conflicts with it?

Matt Cohen expresses similar concerns in a recent blog post and also has published results from a recent survey of MLSs Clareity did regarding RPR.  Personally, I just find it weird that the license agreement isn’t more clear on points about which Marty Frame and Dale Ross have been clear in public.  As Brian Boero recently noted on Twitter: “The communications effort around #RPR is at once excellent and catastrophic. A great case study.”  Clearing up issues like this seems to be critical to an effective communications effort.

We’re about to release a new customizable dashboard for flexmls Web, but the upgrade won’t be available to users of IE6.  Why is this?  Because IE6 is eight years old and is so limited in its support for web standards that it’s impractical, if not impossible, to develop web applications that take advantage of the power of modern browsers while also supporting IE6.  Accordingly, we’re left with the choice of either not taking advantage of the capability of modern browsers or developing them and limiting support for IE6.  We choose the latter.  We’re not alone in this choice.  Just yesterday, Google announced that it’s Google Docs and Sites products will no longer support IE6.

We understand that some corporate IT departments still require IE6 for their computers, and so we’re deploying the new customizable dashboard in a way that will maintain the old dashboard for IE6 users.  So, we’re trying hard not to break things for IE6 users and preserve their current experience even though they won’t have access to the new features.  Importantly, however, the fact that IE6 is now so incompatible with modern browsers that we cannot develop new features supporting IE6 is a strong signal that this is the beginning of the end of support for IE6.  As new features are added that cannot support IE6, there will come a time where we can no longer maintain backward compatibility.  The hope is that everyone is able to upgrade to a modern browser by that time.  Keep in mind, for security and many other reasons, even Microsoft strongly urges all IE6 users to upgrade.

One last point is important: We spend a lot of time in our development efforts working on browser compatibility issues.  Supporting old browsers like IE6 make it difficult to support newer browsers like Chrome from Google.  We now officially support recent versions of IE, Firefox and Safari, and we expect to be able to officially declare full support for Chrome soon as well.  Being able to put IE6 and other older browsers behind us will help a great deal in that effort.

Kathleen Shulte from the Northwest Montana Association of REALTORS is retiring this coming summer after a long and illustrious career as NMAR’s Corporate Executive Officer.  Kathleen was awarded the 2009 Terry McDermott Community Leadership Award from NAR and has led NMAR to be one of the premier Associations and MLSs in the country.  Whoever takes over for Kathleen will have some big shoes to fill.  If you’re interested in applying for this executive position, you can find details here (PDF).  NMAR is located in beautiful Northwest Montana, where the mountains and lakes provide all your entertainment needs.  We’ll all miss Kathleen a great deal and we wish her the best in her retirement!

Phil Sexton from John Hall and Associates in the Phoenix area has a great series called flexmls Feature Friday at the John Hall blog.  I always look forward to seeing what flexmls feature Phil highlights on Friday and occasionally I send him an idea or two.

Today, Phil honored one of my ideas with a guest post.  The highlighted feature is the different ways users of flexmls can use the system to help improve the accuracy of the mapped listings.  These features are relevant for all our customers and so I encourage you to check out the post and help move towards our goal of 100% accuracy in mapped listings.

The value of MLS content is one of the big questions facing MLSs today.  The Realtors Property Resource (RPR) from NAR is seeking to license content from MLSs in exchange for software (the RPR web site) and access to public records data.  Is that a good deal for MLSs?  The answer depends on how much the MLS content is worth.

Similarly, CALREDD (an offering from the California Association of REALTORS) offers Associations MLS software in exchange for ownership of the listing data.  Yes, that’s right, joining CALREDD means the local Association no longer owns the MLS compilation.  The CALREDD offer is particularly interesting because it conflicts dramatically with the typical MLS vendor/Association relationship.  Typically, contracts for MLS software are crystal clear that ownership of the MLS data (compilation) remains with the Association or MLS.  In CALREDD’s case, the MLS software vendor (CALREDD) also is an MLS and, as such, claims ownership of the data.

The importance of this change in ownership depends on the value of the data.  If the data is valuable, then the true cost to the local Association of the software provided by CALREDD is far greater than the fees CALREDD charges for the software they provide.  The NAR’s RPR business model — premised on selling analytics from MLS content — suggests that there is indeed some value in the data.  Importantly, early word on the license agreement with RPR is that the license is non-exclusive to RPR.  In other words, the MLS or local Association also can license it to others who may find value in it.   In stark contrast, striking up a deal with CALREDD means that whatever value is in the MLS content is now owned by CALREDD — in exchange for MLS software.

What do you think?  If you were an MLS or local Association considering using CALREDD as a vendor, would you add to the price tag anything for the value of the MLS content you’re surrendering to CALREDD?  How valuable is the MLS compilation?

Update: Brian Larson reviews the terms on which NAR’s RPR proposes to license MLS content.  Maybe MLS content isn’t worth very much after all?

Some excerpts from a conversation on Twitter this evening:

A bit later, after more conversation . . .

The issue here is the possibility of RPR participating in the RETS with the aim of using the RETS for the RPR public records API.  RPR’s willingness to consider participating in standards development is good news.

This could be the opportunity to roll some simplified web services APIs into RETS, because I’m not sure it makes sense to use RETS 1.x for the RPR public records API unless the public records are not standardized and lots of metadata is needed.  Where I think RETS could play a very important role with RPR is by offering participating MLSs a repository for exchanging data with their data sharing partners.  I’m learning from my hero Kristen, one step at a time, and I’m very appreciative that RPR is listening.

Last week at the Inman Connect conference in New York, Dale Ross, CEO of NAR’s Realtor Property Resource (RPR), was asked by Brian Boero why RPR wasn’t trying to create a national MLS.  Mr. Ross initially responded with the same thing Marty Frame (RPR’s President) said during the RPR Reverb panel I moderated the day before:  RPR is a small company that doesn’t have the resources to become a national MLS.  However, Mr. Ross added that politics would get in the way and there were a “lot of mouths to feed” in all the MLSs involved today.

I was a bit confused by the “lot of mouths to feed” comment at at the time he said it and, even on reflection, I’m not really sure what it means.  Does it mean they feel they would have to buy out the existing MLSs?  Does it mean they believe they’d have to hire a bunch of people from the existing MLSs?  Or something else?

Overall, the statement leaves me uneasy.  To date, RPR has clearly stated they aren’t trying to become a national MLS, which seems backed up by their apparent willingness to include a non-compete in the MLS data license agreement.  At the same time, statements like those made by Mr. Ross give one pause to consider whether RPR isn’t really a Trojan horse.  Looking back, we all can remember that the initial gateway/archive/library, etc., vision was to be a national MLS.  Only after there was a lot of resistance to the creation of such a monopoly did NAR hone its message into what is now the RPR pitch for cool tools for Realtors and free public records for MLSs in exchange for MLS data.

I think this is important because a single, national MLS would be a monopoly that would hamper innovation in the long run, and so letting in the Trojan horse would be a big mistake.  Importantly, there are legitimate arguments that the pain some brokers experience from overlapping market disorder would be improved by a national MLS but that same problem can be addressed through standards without the long-term negative consequences of enduring a national MLS monopoly.  If there are concerns with MLSs today, they’d only be exacerbated years from now with a national MLS monopoly.

Importantly, RPR could do a lot to foster innovation and addressing broker concerns of overlap by promoting standards and data sharing but they’ve also been pretty clear they don’t intend to do that.  If I was running RPR, my sole mission would be to create a platform that would foster competition for new technology.  Instead, RPR appears intent on being the sole vendor of technology.  So, what do you think?  If there weren’t a “lot of mouths to feed,” would RPR be positioned as a national MLS?  Do you agree with me that monopolies are bad or do you think a national MLS would be a “good” monopoly?

Update: Watching the video of the Q&A at Inman, Mr. Ross makes clear that he does believe there will be a national MLS someday. He says RPR isn’t being built for that but it will happen. I don’t get that. If you’re looking to create a national MLS, why would you build RPR for something else? This shouldn’t be that hard to explain or understand.

Here’s another thought from the Inman Connect conference.  This morning, I first heard several people on stage bemoaning the existence of 800 MLSs.  Next I heard a guy from Meetup say he thought Realtors should get together locally — you know, meetup.  What a crazy idea!  That made me think of a post I wrote quite awhile ago that seems quite relevant today.  Here’s the part I love the most, my version of the history of MLS:

Step back and consider the history and future of the MLS through the eyes of Joe and his progeny:

A long, long time ago, two real estate guys are sitting in a coffee shop:

“Hey, Joe, I hear the Smith place is up for sale.”

“Yep, know anyone who might be interested?”

“Maybe.”

“I’ve been trying to get that place sold for awhile. If you bring me a buyer, I’ll split my commission with you.”

“Deal.”

A week later, back at the coffee shop:

“Joe, this is Mary from our office, she’s got a few listings, too.”

“Great, I brought Ann, who’s been working with lots of buyers lately.”

A month later, still at the coffee shop, but a much bigger table:

Mary says, “I couldn’t sleep last night so I wrote down all of our listings on these recipe cards and organized them in this shoe box. Pretty cool, huh?”
“Awesome, can I copy those?”
“Sure, if I can copy yours.”
“No problem.”

A few years later, no longer at the coffee shop, because there isn’t a table big enough for all the people participating:

“Hey, I ran into Peter at the Print Shop the other day, and he saw my shoe box and said he could print them up in a book for us if we want.”
“That sounds great!”

And several years later, at a meeting of the Board of REALTORS:

“Joe, have you seen these new computers some of the folks are using?”
“Yeah, those are pretty handy. But man, who’s in charge of that anyway? I hardly know anyone involved in this any more.”

Many years later, on a Usenet news group for real estate, Joe’s son types:

“I’m working on a web site to show all the listings in the MLS system.”
“You’re what? Are you sure you can do that? Will the MLS allow it?”
“Hey, I’m doing it. I don’t care about those idiots at the MLS; they’re all old school, just trying to protect their turf!”

A decade later, Joe’s grandson, Joe III, posts on his Facebook wall:

“Joe III is sick of the stoopid rules of the national MLS and so has created a Real Estate Sharing Group for like-minded people.”

A few weeks later:

“Joe III is holding a meetup at Starbucks for RESG, see you there!”

At Starbucks:

“Hey, Joe, I hear the Smith place is for sale . . . “

I’m at LaGuardia airport ready to head home after the Inman Connect conference in New York this week.  The conference was great and I applaud Madelyn, Brian, Brad and everyone associated with Inman for putting on another great event.  My biggest take-away from the event is that I’m sick and tired of hearing people say the MLS model is broken.  Last time I checked, we live in the United States of America where competition proves value.  On that fact alone, MLSs are proving their value every day.

For anyone out there who says the MLS model is broken because there are too many MLSs, the answer is straight-forward.  Start your own MLS, write your own MLS software, and put down all those stupid MLSs that supposedly just protect their turf and provide lousy support.  As I listened to Joel Singer from CAR talk about calREDD this morning, I thought I was being thrust into the novel 1984 and that black was now white and white was black.  According to Joel, the MLSs and MLS systems today are antiquated, redundant, and his calREDD system is the solution.  Really?  The market is speaking pretty loudly to refute that claim.

In addition to Mr. Singer, Brad Inman and others repeatedly said that it was ridiculous that there are so many MLSs.  BS.  The MLSs are the ones competing and proving value.  There is nothing to stop anyone at any time from starting a competitive MLS anywhere.  You have a better idea how MLSs should work?  Prove it in the market.  You’ve got better technology and think everyone else’s is lousy?  Prove it in the market.  Until then, I call BS.

I also counter ahead of time comments or responses about how the existing MLSs are barriers to entry and that there really isn’t any competition.  That claim is BS, too.  The fundamental value proposition of any MLS is that they’ve gotten brokers to agree to cooperate with each other in terms of offers of compensation and sharing their listings with each other.  To compete with that, you need to organize the brokers and get them to work with you.  If you can’t do that, too bad, you’re a failed competitor or a cry baby, nothing more.

I’ll put our MLS software up against any system any time.  If you think you’re more innovative, bring it.  I’ll also put the community building power of the 110 MLSs we work with up against calREDD, RPR, Zillow, Google or any other MLS wannabes any time.  Think you can build a better community and attract more brokers?  Bring it.  Until then, I call BS.

One of our MLS clients received an email yesterday from a representative for NAR’s RPR.  In addition to this being interesting because it is the first sighting I’ve had of email marketing from RPR, there were a few interesting tidbits in the email:

• An API for the Property Records and Deed Recordings is expected to be ready “by the end of January” and is “at no charge” if the MLS “sign[s] up for the service and agree to a terms of use”.  (On a related note, the email claims “no contract is required” as long as you “agree to a terms of use”.  Uh, okay.)
• The terms of use will be available for review by mid-January.
• They’re expecting beta testing to begin in late February and are targeting an April/May launch for MLSs who have enrolled in the program.
• A new web informational web site on RPR will be launching soon to help answer questions.

I’m moderating a panel at Inman Connect in New York City next week called “RPR Reverb:  Should MLSs Love It or Fear It” and would love to hear questions you have about RPR.  The panel will include Marty Frame (RPR’s President), Brian Larson (attorney and consult to MLSs everywhere and author of MLS Tesseract), and Jim Duncan (broker at Nest Realty and author of RealCentralVA and original NAR PAG member that envisioned what became RPR).  This is going to be a great panel and it will be better with your questions, so fire away!

Two anniversaries for FBS have just passed and I want to acknowledge them publicly, because I think they’re both pretty cool and important:

• Ten years ago in December, our first customer went live using flexmls Web.  In those ten years, many more MLSs have placed their trust in us and I’m proud to say we’ve delivered as the system has changed remarkably with many more features, speed and reliability.  Ten years is a long time in terms of software development but in many ways it still feels like we’re just getting going.  I’m very much looking forward to the next ten years.
• On January 1, we marked our five-year anniversary of being an employee-owned company, which also means that the original twenty-four employee owners at FBS are now vested owners.  When we first became an employee-owned company, we all signed a “Declaration of Independence” to commemorate the event.  Yesterday, we celebrated with a cake including the names of all twenty-four people who signed the initial declaration, and we handed out some special “vested” pins to each person.

These small acts are about right for us in terms of celebration.  We’ve increased the value of FBS by more than a factor of ten in the last five years by doing more than celebrating, and that’s why, even after ten years of success, it feels like we’re just getting started.

Engadget posted a list of Ten Gadgets That Defined A Decade, which, in turn, has inspired me to post this list of Top Ten Changes in Technology That Defined MLS This Decade:

1.  Conversion to Web Browser MLS Systems.  For the majority of real estate agents at the turn of the century, connecting to the MLS still often meant using some Windows communication software (PC Access, Lightning, etc.) to access a legacy UNIX-based system like Compass, Stellar or FBS’s RE/list.  Today, nearly every MLS system is accessed through a web browser.  Evangelizing web browser MLS systems in the late 90s and early part of this decade were Marketlinx with Tempo, FBS with flexmls Web, and Rapattoni.  Others came along in short order (though, sadly, many are still locked to a particular browser like Internet Explorer), but the rapid shift to browser based MLS systems had already begun and that also resulted in a sea change for the dominant MLS software vendors.

2.  Broadband.  In the early part of the last decade, people still knew what a 56k modem was and boasted about anything faster.  Today, the only modems people care about are cable modems and we whine if video doesn’t stream instantly.  Without this shift to nearly ubiquitous broadband, almost all the other advances in MLS systems would have been impossible.

3.  Mapping.  Envisioned for MLS during the 90s, mapping only became ubiquitous in this last decade, starting with systems like MapQuest, GeoJet and ESRI, most of which were soon replaced with more powerful offerings from Google and Microsoft.  Today, parcel maps, aerial and bird’s eye imagery are standard fare, providing an entirely new and borderless interface to the MLS data.

4.  Smart Phones.  Along with the shift to web browser MLS systems, the ability to access MLS data on your phone became standard in the last decade as smart phones (which I define as a phone with a web browser) became ubiquitous.  Side note: Folklore often has real estate agents pegged as technology laggards, but I’ve rarely seen a group of professionals more gadget obsessed than real estate agents, who always have the latest and greatest phones.  Now they’re accessing the MLS, getting email and text messages, opening lock boxes, taking photos (though they shouldn’t, at least not of their listed properties), and checking their social networks from their phones.

5.  Email.  I debated about whether to put email in the list or not, because email really is a technology that took off in the 90s.  In the end, though, I’m listing it because the ability to email content from the MLS system really didn’t take off until the MLS system migrated to web browsers, which did happen this decade.  Before web browser MLS systems were dominant, you had to create a document (PDF, Word, etc.) to email content from the MLS.  I can vividly recall early pitches about flexmls Web focusing on the live, dynamic nature of the email links to the MLS content.  Now, most MLS systems boast the ablity to email highly interactive links to the MLS system that allow agents to engage their customers at a very high level and so I think email belongs on this list for the last decade.

6. IDX and VOWs.  (Though this is more of a change in policy than technology, the result impacted the technology available to brokers and agents.)  The ability for brokers and agents to display listings from the MLS on their own web sites became possible this decade with the creation of broker reciprocity (today, IDX).  Of course, the decade also was plagued by the litigation between the NAR and DOJ over VOWs (virtual office web sites), which were created to get around the limitations on the data available through IDX because of opt-outs and MLS rules.  Today, the VOW rules required by the NAR/DOJ settlement means that pretty much the entire MLS is available to consumers willing to identify themselves, and this change is only now working its way into the fabric of the MLS.

7.  Zillow.  Despite the initial fanfare, Zillow has had little impact on the MLS industry to date.  However, there also is little doubt that their innovation of making zestimates publicly accessible for nearly every property in the country will have a big impact in the decade to come.  Most notably, Zillow scares the pants off NAR, which has launched RPR in an attempt to create a better database.  Because we all know it’s all about the data, right?

8.  TZGY and Other Third Party Aggregators.  Trulia, Zillow, Google and Yahoo! all became popular aggregators of real estate listing content.  In fact, Zillow is now nipping on the heals of realtor.com.  Mostly, the popularity of third party aggregators isn’t of much concern to the MLS, but the proliferation of so many different destinations has impacted the MLS this decade by requiring it figure out how to deliver data to all these destinations.  Some standards work has been done in this regard and yet entirely new businesses such as ThreeWide and Point2 have formed to help solve the syndication problem.  One of the big issues going into the new decade will continue to be improving the data quality on these third party aggregation sites.

9.  Blogs and Social Networking.  Hey, you’re reading this blog, so I guess blogging must make the list.  Jokes aside, blogging may not have had a big impact on the MLS this last decade but it made a big enough impact on brokers and agents (and, in some cases, making brokers out of agents) that it’s worth mentioning here in the overall context of the social networking phenomenon, which has impacted the MLS.  From ActiveRain to popular group blogs like Bloodhound and AgentGenius, blogging has become an important force in real estate.  Beyond SEO, indexing of listings, and the ability to communicate your message, however, I think one of the most important impacts of blogging is in fostering the do-it-yourself or independence ethos advocated by brokers like Greg Swann.  Blogging has become so easy and so powerful that more and more agents and brokers are using weblogs like WordPress to power their entire web presence.  This puts them in control, instead of some technologist, and that’s an important change for the long term.

Social networking also has impacted Realtor Associations and MLSs, which are using blogs and social networks like Facebook to communicate more with their members.   Brokers, agents and consumers also are using social networks to share and discuss listing information.  MLSs are adjusting by making MLS content more easily shareable and adding more discussion tools in their customer portals.  More generally, however, blogs and social networking likely will have an even greater impact on the MLS in the decade to come as they come to grips with user-generated content and the blurring of the lines among the private MLS, VOWs, customer portals and IDX.

10.  RETS.  Though I don’t have hard numbers on this, I’m pretty confident that, during the last decade, the real estate transaction standard (RETS) became the predominant method for delivering listing data from the MLS.  Much remains to be done in terms of data standards but the impact of RETS in the MLS industry in the last decade cannot be underestimated, if for no other reason than fulfillment of Matt Cohen’s prediction of it being an unfunded mandate.

Those are my top 10, what are yours?

Honorable Mentions (or Corrections) (or I can’t just list 10)

Digital Cameras.  After thinking about this a bit more, I think I should have added digital cameras somewhere up on the list.  Photos are the most frequently accessed content on our MLS systems, and it’s now common to have 20, 30 or more photos per listing.  That simply wasn’t practical before the proliferation of digital cameras and definitely changed the MLS over the last decade.

Virtual Tours.  Am I missing perspective on virtual tours or should they have been in the list?  I’m still not really seeing how they change the MLS industry too much, other than creating a small dustup over whether they could have branding in them or not.

Videos.  Though video on the web took off this last decade with YouTube, property videos are rarely attached to property listings even today.  I’m not sure if this is a testament to the efficacy of pictures, the complexity of video, or some other combination of factors, but I still haven’t seen video make a big impact in the MLS.

Just a quick note to say how thankful I am for all the readers of the FBS Blog and for our customers and partners.  All of us at FBS are privileged to have you in our lives and we’re thankful for the opportunities you provide.  I’m also super thankful for all my co-owners at FBS.  We have so much for which to be thankful, especially each other.

Peace and happiness,

Michael

I attended a presentation from Dale Ross and Marty Frame to a variety of MLS and public records software vendors last Sunday at the NAR Convention in San Diego.  Here are a few points I took away from the Q&A session:

• No Focus on Data Standards for MLSs.  In response to my question as to whether RPR would be promoting a data standard for MLSs, Marty said something like they didn’t want to be a RETS enforcer.  I’m not completely sure what that means but if Marty intended for RPR to help with data standards, he likely would have said so.  Instead he said it wasn’t part of their plan and they’re primarily focused on about 120 data fields or so.
• No Help For MLSs With Overlapping Market Disorder or Those Who Want to Data Share.  In response to my question as to whether RPR would be helping MLSs resolve overlapping market disorder in their area by serving as a data exchange/repository, Marty said no, that wasn’t in the plan either.  Of course, users can come to the RPR interface and see data from participating MLSs but there isn’t a plan for an API (RETS or otherwise) to allow MLSs to retrieve aggregate data even if the MLSs in the area agree to such an exchange.
• No Authoritative Record.  In response to my question as to whether RPR will be establishing an authoritative record from the various sources of data (public records, MLS, loans, etc.), Marty said no.  RPR will present the various sources of data side by side but they won’t try to reconcile them.  I think this fact makes their claim of being a “property-centric” system a bit off target.  My understanding of property-centric systems is that they do, in fact, establish an authoritative record from the many sources — they combine the best data to provide a long-term repository of property information, instead of just displaying disparate data side-by-side.  The scenario I posed was as follows:
  • Agent Smith creates a new listing on January 1 and auto-pops the listing from the RPR tax record, and then corrects the square footage, which is off by a significant amount.
  • Agent Smith’s listing expires March 30.
  • Agent Jones lists the same property on April 1 and again auto-populates the listing from the tax record.  Agent Jones will again have to correct the square footage coming from the RPR public records because there isn’t a base or authoritative record available from RPR.
• Application Programming Interfaces (APIs) — (Note: An API is a way two systems (such as RPR and the MLS or a broker back-office system) can talk to each other.)
  • Marty said there will be an API for the public records and MLSs will be able to pull the public records into their own system.  MLS systems also will be able to link to the PDF market and listing reports (though they won’t be available in HTML, just PDF).
  • RPR hopes MLSs will help RPR with authentication by using single sign-on (SSO) standards, though they’ll adapt to whatever the MLS will provide.
  • There will not be an API for any of the third-party licensed data (including listings), just the public records.  If you want to see the other data, you must login to RPR.
  • API documentation should become available in the next 30 days or so.

There were questions from other vendors as well about the APIs and the business model, but the above were the highlights for me.  I walked away from the meeting thinking they were missing a lot of the potential for how a system like RPR could help MLSs and their broker and agent members.  Helping MLSs improve data quality, data standards, and data sharing are all key benefits not being addressed by RPR. Hopefully this will change over the coming months as MLSs negotiate licenses with RPR and require that these issues be part of the deal.

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Related and recent posts RPR by others:

Brian Larson — Report of RPRs Birth Is An Exaggeration

Rob Hahn — No More Drama and Hype: Known Facts on RPR

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P.S.  Can I please request that all NAR conventions from here on out be in San Diego?  What a perfect location, with a great convention center, great hotels nearby, awesome restaurants, entertainment, and, of course, the views and weather!

I’m pleased as punch to announce that FBS is integrating DocuSign into our flexmls Forms product.  Here’s the press release from DocuSign.  We expect the new features to be available to our Forms users by the end of the year, if not earlier.

If you’re not familiar with DocuSign, it is a web-based system for getting electronic signatures on your contracts.  But, it’s not just about electronic signatures.  DocuSign has some very powerful workflow functions built into it that just make it easier to get deals signed.

I first started looking into DocuSign when I saw agents I follow on Twitter say great things about it. (that link is more recent, but I couldn’t find the older ones that piqued my interest).  Once I started working with Dave Thorpe at DocuSign, one of the first steps in moving ahead was signing an NDA.  Of course, Dave sent me the contract using DocuSign and the agreement was reviewed, signed and archived in matter of minutes.  I was convinced from that moment that this would be a great addition to our flexmls Forms offering.

Right now, we’re busy mapping out the signature and initial locations on all our forms so they’ll be ready to go at launch.  Sending the documents out will happen right through the flexmls Forms system just as you’re able to email them now.  The difference will be that your customer will now get to review and sign the contracts using DocuSign and we’ll be able to monitor and update the status of the transaction right through your flexmls Forms folders.  This way, you’ll always know who has signed and who is left to sign the documents to finalize them.

We hope our Forms customers are excited about this as we are.  Let us know if you have any questions.

I wrote yesterday why NAR’s RPR won’t mean the death of the MLS.  Today, I want to ask some more important questions regarding the terms on which MLSs will allow NAR’s RPR to use (license) their MLS data.  I suspect NAR will be presenting a lot of MLSs with some sort of terms of use over the next few weeks and months, promising their members “free” access to the RPR in exchange for their MLS data.  There is some basic information on a fact sheet NAR posted about RPR (thanks, Kevin McQueen!) but the fact sheet doesn’t provide many details.

If I were negotiating this terms of use, I’d want to know answers to at least the following questions:

• Will the MLS data be re-licensed (re-packaged) by RPR and, if so, on what terms? This is the same basic question asked by Brian Larson asked in his recent post about the possible business model for RPR.  There is some early speculation that RPR’s deal with LPS for the parcel database includes giving LPS the exclusive right to re-license the MLS data.  Clearly, much more detailed information about re-licensing of the MLS data is needed.
• If the primary business model for RPR is re-licensing of the data, what does the MLS get in return? Is there a revenue opportunity for the MLS here?
• What sort of access to the RPR database does the MLS get? More specifically, will there be an API (application programming interface) for the MLS to integrate RPR data into the MLS system?  In other words, will the data flow be a two-way street or is RPR expecting it to only flow one way?  As I mentioned in my post yesterday, an easy to use method for the MLS system to retrieve the universal property ID is critical in listing maintenance.  But also important is the ability for the MLS system to bring back data from the RPR during listing maintenance, into listing detail reports, CMA creation, and other places.  NAR claims the RPR isn’t trying to replace the MLS, and one proof of this will be whether RPR includes APIs that will open up the data to the MLS system.  Two clarifying points here: (1) I’m not talking about opening the system to the public, but rather to the MLS system already being used and paid for by the agents and brokers; and (2) agents don’t need yet another system to log into to do their work, what they need is all the data to be available to them wherever they login (MLS system, RPR, etc.).  If RPR silos the data and makes it accessible only through their web interface, that’s a sure sign that NARs real intent is to replace the local MLS.  Accordingly, having a strong API should be a key term required for access to the MLS data.  In other words, it’s not a one-way street, the data should flow both directions.
• What are the real costs of the RPR? The magic word “free” is being bandied about a lot regarding RPR, but clearly it’s going to cost a lot of money and that money has to come from somewhere.  It’s important for the MLS to understand the costs of creating the RPR as a member benefit, because those costs will drive the business down the road.
• What will MLS members be able to do with the MLS information once it’s in RPR? In this regard, the fact sheet put out by NAR currently states: “There will be no public access to the RPR™, and the database and its data cannot be shared through consumer websites or listing presentations.”  That seems like an odd restriction and contrary to the statement earlier in the fact sheet that RPR “will be exclusive to members of NAR, who can share its information with their clients.”  Again, clearly more information is needed here.  This point also is why being able to bring the data back into the MLS system is important, because that is a system where the agents and brokers have clearly defined rules about what they can do with the data and the local brokers and agents make the rules.
• What happens if the deal sours down the road? Can the MLS get its data back?  Will RPR have commingled or transformed it to a point that it is no longer retrievable?

I understand a press release will be coming later today, but my guess is that the press release will be more hype than details.  The real facts will come in the proposed license agreements NAR tries to get MLSs to sign.  I think a system like RPR has a ton of opportunity for MLSs to make their members more efficient, but the key to leveraging the RPR opportunity will be in the license agreement for the MLS data.  RPR won’t amount to much without the MLS data and so that value should be recognized by the brokers and agents in the MLSs providing the data.

Update: Here’s NAR’s press release for November 9.  Not much different from the fact sheet except that CAR is going to partner with RPR with their ZipForms and Relay transaction management systems.  I’ll probably post more about that later.

Last Friday, following the burst of rumors that NAR had purchased Cyberhomes to power its RPR (Real Property Resource) and  HouseLogic web sites, the cries of the death of the MLS have risen to a fevered pitch again.

Rob Hahn, founder of 7DS Associates, thinks MLSs need to be very concerned with RPR and that a war is coming between NAR and the MLSs.  Brian Boero, from 1000Watt, doesn’t use such stark language, but he, too, thinks RPR will be a “a significant shock to a system that needs it” and asks: “Will MLSs play ball?”  He then answers with uncertainty: “As with most things in this space, the outlook is unclear.”  As an agent and one of the members of the original NAR PAG that envisioned the RPR, Jim Duncan is excited by the possibilities of RPR and HouseLogic and asks some important questions, namely what will agents be able to do with the information and who will have access to it.  The comments to all three of the above posts focus in on the impact the RPR will have on MLSs.

Though I was initially going to wait for an official press release from NAR (I hear it’s coming Monday), the more I thought about it, the more it seemed appropriate to weigh in on some of the speculation about RPR’s impact on MLSs.  I’ve already written at length about both the death of the MLS and RPR (RPR or Ready?).  In fact, most of the posts on the FBS Blog have been about these same issues in one way or another.

For example, I wrote some time ago that MLS is about more than technology.  This crucial point — that MLSs enable competitors to cooperate — is where I think Rob Hahn goes awry in his post.  He assumes that the MLS is only about the software.  What Rob ignores is that the software merely implements a wide variety of business rules that were carefully crafted by the local MLS or Association in order to create the compromise that makes it possible for the competitors to aggregate their data in the first instance.  NAR understands this, though, which is why they’ve been saying that RPR is not intended to replace local MLSs and, to my knowledge, has no listing input or maintenance functions so far.  In other words, the data is going to come from the local MLSs and not brokers or agents directly.

NAR and its leadership knows how “local” MLSs really are.  The local Boards and Associations and their respective MLSs (some independently owned, others not) are run by brokers and agents competing in the local marker and who have cooperated together just enough to make aggregation of their listings possible.  Often, this cooperation results in a complex set of business rules.

This set of business rules is the heart of the MLS today and so talking about the death of the MLS means killing these local business rules in favor of business rules established by RPR.  NAR knows this is a tough challenge, and so they’re just not going there, yet.  As this issue (death of the local MLS business rules) is debated again in the coming years, I believe there are few core questions:

• Is cooperation at the local level (agents and brokers deciding how they want to work together) necessary to aggregate the listing data or is aggregating listings now a given (a commodity, if you will) such that it can more easily be established at a national level?
• Is a single national MLS a good thing?
• Are there alternatives?

If you’ve read my earlier posts on these topics, you already know that my answers to these questions are:

• Yes – local control is needed;
• No – monopolies are not good; and
• Yes – standards are the alternative.

All three of these issues are related to each other.  FBS serves over 100 different MLSs across the country.  We know how important our system is to our customers and that it’s important to have lots of cool features.  More importantly, however, we believe responding to each of our MLS customers’ needs is what differentiates us over the long term.  We provide value by implementing their business rules, which makes the cooperation central to MLS possible.  Responding to these local needs is critical.

At the same time, the lack of standards created by local control of MLSs causes pain for many bigger brokers, franchises and others dealing with multiple MLSs.  This is where standards could be of great benefit.  Creating standards, however, is very, very difficult, especially at a national level.  Of course, one way to create a national standard is to create one MLS.  The problem with that result, however, is that you create a monopoly.  I’m pretty sure what online real estate needs is more competition, not less.  Standards enable competition, monopolies do not.

Accordingly, I applaud NAR buying Cyberhomes and using it to power RPR.  As an MLS vendor, FBS loves competition and looks forward to learning more about RPR and how their tools can help our customers.  We’d love to see RPR help create a universal property ID.  We’d love to leverage data from RPR if it can in any way help improve accuracy of the MLS data.  We’re excited about the possibilities of RPR but also strongly believe that those possibilities should not be used to create a monopoly that squelches competition in the MLS software space.

For those of you interested in these issues, join me at the NAR meetings next week in San Diego for the Future of MLS panel.  The RPR and related issues should be a hot topic.