Many say the value of today’s real estate agents lies not in controlling consumers’ access to data, but in making that data understandable and useful.
But agents’ most important technology tools — multiple listing services — are stuck with retrograde technology and an unwillingness to do one thing that would likely make agents’ lives easier: consolidate.
Two initiatives from the National Association of Realtors may help with one issue, but those initiatives might simultaneously exacerbate the other issue, according to a report released by the California Association of Realtors’ Center for California Real Estate.
“The MLS simply has not evolved with how real estate needs to be practiced today, with severe fragmentation complicating the progress of a modern, industry-owned model for modern times,” the report said.
“The burden is on the agent to know the market better than the consumer, regardless of whether the area they serve requires membership in multiple MLSs and disparate access points for information,” the report added.
Industry leaders shared their thoughts at a panel shortly after NAR’s announcement in May that it would put up to $12 million toward broker-backed project Upstream, which will leverage the trade group’s prospective Advanced Multi-list Platform (AMP). Those thoughts were included in the report.
AMP will be a back-end database for MLSs that will be populated with property data from NAR subsidiary Realtors Property Resource (RPR) and will be based on the latest industry data standards. As such, it would be able to connect to any standards-based “front end” chosen by brokers.
Front ends are the agent-facing part of the MLS, where agents enter and edit their listings and perform comparative market analyses and other functions.
The idea is for Upstream to use AMP to create a nationwide broker data entry system that will function as a middleman between real estate firms and the recipients of their data, MLSs and vendors. This would change the flow of data, and Upstream would be the new starting point.
Currently, MLSs use the same vendor for both front ends and back ends, which the CCRE report noted has “thwarted innovation.” By decoupling the two, AMP could spur competition among vendors, the report said.
“I think the challenge we have is that most technology is delivered and designed to satisfy the least common denominator,” said David Charron, president and CEO of large Mid-Altantic MLS MRIS, in the report.
CAR CEO Joel Singer noted that, although MLS data is far better in quality, third-party portals have much better overall user-friendliness.
“There’s not enough scale in the multiple listing business to create the types of user interfaces that portals have. That’s a big deal,” Singer said.
“The most successful combination would be an incredibly knowledgeable, experienced Realtor with the best possible platform available. But that just hasn’t happened at the moment,” he added.
AMP will help MLSs add value to their agent and broker customers with multiple front ends that will make it easier to access data in multiple ways, said RPR CEO Dale Ross.
But some industry leaders worry that AMP, in catering to small- and medium-size MLSs, will discourage MLS consolidation, limiting tech innovation and leaving agents to deal with multiple MLS systems, data sets, fees and rules.
“We’ve got too many MLSs. We’ve got too many markets. But then we’re going to provide a solution [AMP] that’s going to provide longevity to these markets,” Charron said.
“That’s going to do any number of things, not the least of which is fund RPR in perpetuity because of the contracts that they have. So I think it’s going to delay a day of reckoning for the smaller markets in terms of greater market consolidation.”
Ross argued that brokers would push for consolidation and AMP could help because smaller MLSs will be on the same platform.
Ann Bailey, founder and president of real estate consulting firm Pranix Inc., hoped AMP would spur large MLSs to step up and merge.
“If AMP is intended long term in the back of someone’s mind to lead to a national MLS, I am one who firmly believes that there should far fewer MLSs,” Bailey said.
She proposed that 12 MLSs, based on the GDP of the nation’s 12 largest regions, may be ideal, though to get there they would have to overcome “pure politics, protectionism and parochialism” in the industry.
Upstream will gradually push the industry toward fewer and fewer MLSs, Bailey said. She posited that if big MLSs mandate that their brokers enter the data into their MLS systems using Upstream, there would be a gradual “winnowing” process, according to CAR.
“We should do away with [these extraneous MLSs] completely. We all know it’s not working exactly the way that it should. But you can’t go from A to Z without doing B, C, D and E first, regardless of how slow you think it is,” she said.
Too little, too late?
Singer questioned whether AMP and Upstream will be “too little, too late” by the time they are actually deployed. The two initiatives are operating on a five-year timeline with the goal to have Upstream up and running in 2 1/2 years, Ross said.
“Once that’s done, then the parties will get together, and the brokers will figure out what the model is going forward as far as costs,” he said.
“And the brokers have agreed to pay for that cost, plus a 10 percent premium from research and development, and that’s how the project’s going to move forward.”
In five years, Upstream aims to have 50 percent coverage of all listings, Ross added — a figure that Charron deemed “too conservative” along with the five-year timeline.
Still, Ross stressed that the industry should not “let the perfect be the enemy of the good,” the report said.
“Let’s try to figure out a model and do something. Is it underfunded? We don’t know yet. Is it the wrong technology? Maybe. But at least you put your foot in the water,” Ross said.
“May not be the perfect vehicle. May not be the most cost-effective vehicle. But it’s a step in the right direction.”