mattsretechblog: matt cohen (Default)
2019-03-03 09:16 am
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Media Manipulation: MLS Action Required

Many people may not realize that numerous listing images uploaded to the MLS, used on broker and agent websites and apps, and syndicated for display on other Internet sites, are heavily modified. While this can be a very effective sales tool, some undisclosed manipulations may be deceptive. National MLS policies and other steps should be implemented to address the risk this causes.

At the 2019 Clareity™ MLS Executive Workshop, we invited Peter Schravemade from to present “Ethical Marketing & Photography,” to help frame the beginnings of the national conversation that is needed to create such policies. Such policies would have implications for listing maintenance and compliance, data standards, IDX and VOW rules, agreements with photographers, as well as data license agreements for listing content sent to third parties.

It is not the purpose of this blog to propose restrictions on media manipulation that might be counter-productive to the selling process. Rather, the focus is to consider how MLSs might help subscribers improve their current marketing practices while reducing their risk, as well as reducing consumer dissatisfaction that may result from undisclosed, possibly deceptive, manipulations.

Media Manipulation Can Be Good - Even Necessary

Peter provided an example of an overexposed listing photo, where important details such as the view out of the window could not be determined. The view may be desirable, like an ocean view, or undesirable, like a sewage treatment plant. He described the common process that professional photographers use, taking multiple photos at different exposures to capture all the important details, then compositing them into a single image to maximize the detail presented. This technique, called “bracketing”, is technically media manipulation, but is entirely ethical and done entirely in the service of providing an image that is most like what one would see with one’s own eyes in the room. In fact, not using bracketing to ensure our hypothetical sewage treatment plant is shown, does not properly represent the listing. There are other basic edits, such as straightening a photo accidentally taken at an angle, that are also clearly not unethical and should be of no concern to us and should not require disclosure.

Types of Media Manipulation

There are several practices that are common and useful in the sales process but may be deceptive, depending on the implementation. Such deception may be intentional or unintentional. For example:

  • Image enhancement – The intent of this edit is to return the image to what a buyer might see when visiting the property but which the original photograph may not have captured. For example, a grey sky may be changed to a blue sky to reflect a sunny day. In some areas of the US, and most of the world, it is acceptable to add green grass. Issue: overuse of this type of manipulation - for example, adding grass to an area where it would not or could not normally grow well - can misrepresent the property.

  • Twilight conversion – The intent of this edit is to demonstrate the property at a time of day which evokes a positive emotional response in a buyer. It is quite often already commonplace as a manipulation when the photographer has been unable to photograph the property at sunset as desired. Issue: Photographers may change the color of the sky and add a sunset, but sometimes when they do so they put the sun in the wrong location. When this happens, the viewer may think certain rooms will get southern or other exposure when they will not. The viewer may think they can enjoy sunsets from the pool when sunsets would be blocked by the house. This misrepresents the property.

  • Item removal – The intent of this edit is to remove clutter that will be removed before the sale / or that is not part of the sale process. Issue: An overzealous editor can easily misrepresent the condition of whatever they imagine lies behind and beneath the clutter. Obviously, editing out undesirable things such as power lines, poor views, and property condition issues, is deceptive and unethical.

  • Virtual staging (Item addition) – The intent of this edit is to demonstrate to a purchaser what a space could be by adding photorealistic furniture. When executed well, this is an effective and harmless edit. Issue: If not performed extremely carefully, it is easy to misrepresent the size of the room by adding virtual items that are not in actual proportion to room measurements. Images of light sources that imply a fixture is present where when none is installed would be deceptive. Images of items that would normally convey with the property but are not actually present would be deceptive. If a condition issue is being obscured by the items added, it would also be deceptive.

  • Virtual renovation – The intent of this edit is to demonstrate to a purchaser the potential of a property (by, for example, adding a pool), or removing an objection (like adding a kitchen, or renovating an abandoned property) This manipulation removes everything from a room and leaves it looking like it is already prepared for painting and other finishing. Issue: If not disclosed well, it may be misleading if the viewer believes the image is of the actual condition of the room. After all, not only might getting the room to that state be expensive, but in the process of actual room preparation one might find other conditions that increase the cost of actual renovation.

  • Renders / CGI / Hybrid CGI – The intention of this edit is to demonstrate what a property might look like before it has even been constructed. Issue: The reality of what is constructed is rarely identical to an artist rendering. If the viewer does not understand that they are looking at an artist’s creation and not present reality, it could be deceptive. This should be disclosed.

Ensuring that media manipulation is disclosed is important for a couple of reasons. Obviously, we do not want to mislead brokers, agents, appraisers or consumers. No one wants to waste time visiting a property that is not in the condition indicated by photos and other media. The accuracy of professional property valuations that depend on manipulated images of the property or comparable properties, could suffer. There may be lawsuits by people who purchase a property without validating the veracity of each listing image. Finally, as we consider a future where computers could use artificial intelligence to create data about a property based on the related media, we would not to accidentally rely on a manipulated image and create incorrect data.

Actions Suggested for the MLS Industry

The MLS industry has a strong interest in the accuracy of listing information, including media. The property should be represented accurately by media, and neither professionals nor the purchaser should not be deceived. Ideally, we should implement a national MLS policy regarding media manipulation that is easy to understand and uses correct terminology so that it is understandable both by real estate professionals and media creators.

The following actions should be considered:

Create an implement a national policy regarding media manipulation. Require disclosure. It must be easy to understand.

Educate MLS subscribers on photography “common sense”, explaining where a technique may be deceptive and explaining their responsibility in vetting the manipulation performed against the property being sold to ensure the image is not deceptive. MLS subscribers should also be taught how to spot media manipulation providers that create deceptive images, intentionally or otherwise, and how to report issues to the MLS. It may be desired to share best practices in establishing contracts with such providers, including the obligation of providers to provide those purchasing their services information about what changes were made to each image, and such that risk regarding accidental or intentional deception is not entirely held by the listing agent and others that use the media. If media manipulation might possibly be deceptive as described above, MLS subscribers need to understand their responsibility to disclose the manipulation.

Create a standard disclosure as a part of the media manipulation policy. Peter Schravemade provided the following language as a starting point for discussion:

This image is an artist’s impression of what the property ‘might’ look like. As such the image has been digitally modified. [ABC REALTY] suggests you conduct your own due diligence into the state of the property or request a statement of what has been modified from the brokerage.

Rules regarding the display of such disclosures, in the media themselves as a watermark or displayed prominently in proximity to the media inside the MLS, on IDX/VOWs, and wherever the content is syndicated, should be a part of policy.

Establish RESO data standards for storing and transmitting information about media manipulation. Each type of media manipulation listed above may be an enumeration of the field. Peter suggested an additional enumeration: “A digitally activated fireplace or appliance”.

Once there are policies and data standards related to media manipulation, make changes to the MLS listing maintenance software so this data can be managed.

Consider if and how MLS rules and data license agreements may be amended to protect parties that use the media from risk due to deceptive media manipulation that was missed by the listing agent.

Last Words

Media manipulation has become less expensive and is increasingly commonplace. Each of the types of manipulation described above can be a perfectly legitimate and valuable sales tool - when executed correctly and disclosed. Creating MLS policies and taking the related actions described above should help us maintain professionalism and ethics and reduce risk for those using manipulated images.

mattsretechblog: matt cohen (Default)
2019-02-11 07:37 am
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MLSs Must Continually Articulate Value

To improve and maintain subscriber satisfaction, multiple listing services must continually articulate the value that they provide, both as an organization and through products and services.

In more than half of the MLS strategic planning processes I facilitated over the last year, pre-planning surveys and other research showed most subscribers were unaware of many of the products and services the MLS provides in exchange for their access fees, and less awareness directly correlated to less satisfaction with the value provided for those fees. For some clients, where I performed more detailed research, it was apparent that even when subscribers were aware of a product’s existence, they were not aware of specific features or recent enhancements and their benefits. Raising awareness about the value the MLS provides as an organization and through products and services is difficult, but it can and must be done. Not putting resources into such communications and making sure the effectiveness of those communications is maximized would be penny-wise and pound-foolish.

Value of the MLS

Too many subscribers still think of the MLS as the way to access a database. When it comes to promoting the value of the MLS organization, the “Making the Market Work” campaign released by the Council of MLS back in June of 2017 is still the best resource for MLSs to adopt and promote through all channels. I’m still surprised how many MLSs have not adopted this campaign on an ongoing basis. If you’re an MLS executive, at your next board meeting, try giving your board members a short quiz about the value of MLS – if even they can’t articulate the tenets of confidence, connections, and community to at least some degree, more work is certainly needed.

Value of MLS Products and Services

There’s a saying in the industry: “Realtors Don’t Read” or “RDR” for short. I dislike this saying because I have worked with so many professionals over the years and they DO read … if the message is interesting. All too often the headline, Facebook post, or tweet reads something like “[MLS] Releases [Product Name].” If I was a busy professional I wouldn’t click through on that either.
Professionals are primarily motivated by four types of benefit-oriented messages:

  1. This will help you make more money (“profit”)

  2. This will save you time (“ease”)

  3. This provides insight into your business (“control”)

  4. This will reduce risk or prevent you from falling behind (“fear” or “fear of missing out (FOMO)”)

  • “Read about the new changes to listing input” will not generate nearly as many click-throughs as “New listing input feature saves you 20 minutes per listing”.
  • “Learn more about [product]” is not as effective as “This [MLS] agent closed 18% more transactions this year by using [product].”
  • “Sign up for [product] classes” will not generate as many click-throughs as “[Product], offered as an [MLS] benefit, helps you close transactions 15% faster. Click for a 5 minute video with everything you need to know.”
If when the professional clicks through from calls to action, there is a short web page – possibly with a short video – that continues to sell the benefit of a product and how to get started, you will start to see more product awareness and adoption. And, if they’ve already tried the product but aren’t seeing the benefits, this type of messaging may well get them to look closer at how they are using the product. Either way, they are being reminded of the value provided by the MLS.

Targeting and Improving Opting

Another important MLS communications trend has been to improve targeting and opting.

Still, some MLSs are still not targeting properly and sending every message, even those that would only apply to some subscribers, to every subscriber by email. Or, they present messages that apply to only some subscribers to all subscribers in an MLS post-login popup. If an MLS doesn’t target properly, it’s easy for subscribers to burn out on the quantity of irrelevant messages they receive. Ensuring subscribers are sorted into groups based on role, product and service use, and other factors is key to targeting communications properly. If messages are not targeted, subscribers may decide to opt-out – an MLS communications disaster!

Another problem I still see at some MLSs is that they have a single opt-out – all or nothing. These days, when you try to opt out of most websites, they encourage you to opt out of certain types of communications rather than all types, and MLSs should follow suit. Just the other day, I received a brokerage email about the value of my ex-house and when I clicked to opt-out, it opted me out of communications about that property only. I would have had to navigate the site further to opt out of more than that. Some MLSs say they can’t have a more sophisticated opting system because their marketing system doesn’t provide for it. If that’s the case, it’s time to find a new marketing system.

Continuous Improvement

This article has covered just a few components of how MLSs can improve and maintain subscriber satisfaction by continually articulating the value that they provide, both as an organization and through products and services. Some readers will remember that I literally spent hours at the 2014 Clareity MLS Executive Workshop providing a more comprehensive review of communications best practices – it’s a huge topic! Still, with just a bit of planning, by taking more care to use benefit-oriented language with subscribers to articulate the value of what the MLS provides, and by improving targeting and opting methods, MLSs can dramatically improve subscriber engagement and satisfaction over time.

mattsretechblog: matt cohen (Default)
2018-12-07 08:08 am
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MLS Products & Services: From Principle to Practice

There are many technological "shiny objects" MLSs are presented with for site-licensing or offering a la carte. How should these be evaluated by MLS leadership? Here are some thoughts from a presentation I previously made at the Clareity MLS Executive Workshop. First, I'll examine NAR's approach and suggest some potential updates and then I'll describe some additional principles that should be considered.

The NAR Approach

NAR has created three categories, basically:
  • CORE  = MLS MUST provide
  • BASIC = MLS MAY (include)
  • OPTIONAL = MLS MAY (offer, a la carte)


This includes information, services, and products are essential to the effective functioning of MLS, as defined, and include current listing information and information communicating compensation to potential cooperating brokers.

But how is MLS defined by NAR?
  • a facility for the orderly correlation and dissemination of listing information so participants may better serve their clients and customers and the public,
  • a means by which authorized participants make blanket unilateral offers of compensation to other participants (acting as subagents, buyer agents, or in other agency or non-agency capacities defined by law),
  • a means of enhancing cooperation among participants,
  • a means by which information is accumulated and disseminated to enable authorized, participants to prepare appraisals, analyses, and other valuations of real property for bona fide clients and customers, and
  • a means by which participants engaging in real estate appraisal contribute to common databases.

The phrase "listing information" seems too limited, given all the kinds of information resources MLS subscribers expect these days, the types of information being standardized at RESO, and all the types of data needed for a core MLS system or database to interoperate with all of the various tech tools in use by MLS subscribers. I would suggest that perhaps the definition of MLS could use a little updating by eliminating the word "listing" rather than trying to create some kind of all-inclusive list.


This is determined locally and provided automatically or on a discretionary basis, and includes items such as: sold and comparable information, pending sales information, expired listings and “off market” information, tax records, zoning records/information, title/abstract information, mortgage information, amortization schedules, mapping capabilities, statistical information, public accommodation information, MLS computer training/orientation, and access to affinity programs.

Some brokers and broker groups have declared many things out of scope for MLS:  agent websites, CRM, property marketing tools, showing systems, transaction management systems, and MLS public-facing websites. One large group complained loudly a few years ago about MLSs pushing NAR to add as many items as possible to the list of ‘basic’ MLS functions to force participants to pay for them, whether they want them or intend to use them or not. Since that time it was determined that in-person training could not be mandated - clearly things are in flux.

But it seems obvious that showing systems could be considered critical infrastructure for efficient cooperation. The case for inclusion could be made for other items on the brokers' list as well. How do we know who’s right, and what belongs on that CORE and BASIC list and what doesn't? I do NOT think we should be evaluating the distinction between these lists to serve the interests of the "lowest common denominator" of MLSs OR go wild adding items to the list willy-nilly. I DO think we need to apply some additional principles and I'll come back to that.


An MLS may not require a participant to use, participate in, or pay for the following optional information, services, or products: lock box equipment including lock boxes (manual or electronic), combination lock boxes, mechanical keys, and electronic programmers or keycards; advertising or access to advertising (whether print or electronic), including classified advertising, homes-type publications, electronic compilations, including Internet home pages or web sites, etc.

Do Not Pass Go...

Those of you who attended the 2012 Clareity MLS Executive Workshop probably remember the cautionary note about anti-trust tying violations - how easy it is to get into trouble if one creates an illegal tie between one product (e.g. membership / subscription) and another when expanding a product offering. I won't dive into the details here, but I encourage readers to remember the four elements of such a tie:
  1. There must be two separate products;
  2. There must be a tie;
  3. The seller must have enough power in the market for the typing product so that it can impact trade in the market for the tied product; and
  4. A certain amount of sales for the tied product must actually be impacted by the tie.

I'm insistent that we must continue to re-evaluate the definition of MLS precisely because defining the product set that reflects the function of MLS (versus a separate product) is such a core part of the testing.

Another Approach: Principle

What are the principles by which MLS information, services, and products belong in the categories of core, basic, and optional? I not only believe we must more clearly define MLS but also clearly define the principles that are considered when evaluating the categorization of products.

Each bullet point in the definition of MLS services effectively spells out a core principle, which is a test for how appropriate it is for a product or service to be included in the basic MLS package. In short, at least given the current MLS definition:

A. Manage/Disseminate info so participants better serve clients, customers, and public.
B. Means for compensation offer
C. Enhance participant cooperation
D. Participants: appraisals, analysis, valuation for clients
E. Participant appraisals

But let's look at some other elements for consideration:

Principle 1. Network Power. Does the product or service require many or all MLS subscribers to use it to achieve benefits from it? Professional collaboration tools (i.e. transaction management and showing systems) would fall under this principle, unless they interoperate sufficiently that collaboration can occur without everyone using the same system.

Principle 2. Economic feasibility. Does the product or service help participants better serve their clients but is it economically or otherwise infeasible for any one participant to field the product or service on their own? 

Principle 3. Integration. Does the product or service require a level of integration into core systems that would not be feasible from an economic and/or interface perspective if every broker or agent selected their own? Note that ability to integrate continues to evolve.

Principle 4. Economic Interest. Is there an overarching subscriber economic interest?

Note that principles 1-4 help to refine consideration and categorization of items already considered relative to A-E (or an updated MLS definition that drives a different A-E). And, of course, all has to be considered against the potential for creating an illegal tie.

During my presentation at the Clareity MLS Executive Workshop we considered a number of product examples and evaluated them against 1-4 and A-E. That's the approach I'm suggesting MLS leadership take as they are approached with "shiny objects".

Additional MLS Considerations

An MLS is unlikely to go through a process of product evaluation unless the product appeals to subscribers, that is, it fills a subscriber need. But choices must also be made based on whether the product is strategic for the MLS and its subscribers in some manner, how important and urgent it might be for the MLS to field the product at that time and, of course, cost. Also, MLSs typically have limited capacity to roll out new products and continually encourage adoption of those products - again, choices must be made.

Deciding what to do when a product or service is not as well adopted as desired, or if there is dissatisfaction with it, is a topic for another blog, another day.

Next Steps for the Industry

I would suggest that industry leaders collaborate on the following:
  • Consider how we might modernize the definition of MLS (perhaps beyond just fixing reference to “listings”). Think about what we aspirationally want the MLS industry to become - again, a subject for another post.
  • Refine core (and basic) MLS  services as a standard to reflect that new definition. Phase-in over time to allow MLSs to determine strategy for coming up to snuff (on their own or together).
  • Add four additional principles to the section of MLS policy relating to service characterization (core, basic, optional)
  • Remove lists from policy and put them in a “best practices” document explaining how each product/service (and new ones) relate to definition and principles.
  • Run it all by anti-trust attorneys!
mattsretechblog: matt cohen (Default)
2018-11-26 07:54 am
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Strategic MLS Issues for 2019

Some time ago, in preparation for an industry publication, another industry consultant asked me, "What are the most significant issues facing the MLS by 2020, what actions do you propose be taken to address these issues and what are the desired outcomes?" Following are my answers:

Expand what cooperation via MLS means.  If the perception of MLS is just about a place to advertise the homes with some private fields, MLS is very vulnerable. If we make it more explicit that cooperation is about a lot more than that, the MLS can grow stronger.

To accomplish that, we can:
  • Develop standards for compliance and enforcement: data standards and business rules, data distribution, maintaining "fair" online advertising using the compilation (IDX / VOW) and other uses.
  • Develop core standards for MLS data integrity business rules.
  • Consider the kind of government regulation the industry could be facing with regard to wire fraud and get ahead of it - MLS can be a part of that, if organized. Information security practices will be a part of that - much of the steps needed to deal with wire fraud take place during the "cooperation" phase where the MLS is, or could be, involved.
  • Develop and implement standards for brokers and agents ("With teeth") re: responsiveness to showing requests, participation in secure electronic communications and transaction management. Develop these as MLS monitored areas with supported core functions as needed. As elements of cooperation, these would seem to fall within the jurisdiction of MLS. What other areas, technological and otherwise, could be considered "cooperation" and be an MLS function?

There are many challenges ahead for MLS - I think it would be ideal to firm up its value and capabilities in this area.

Consolidation: A unified industry would be more capable of managing risk.

To encourage consolidation, we could:
  • Develop and mandate core standards for MLS, based on CMLS best practices.
  • Drive recognition of strategic issues driving consolidation BEYOND the local service needs and Overlapping Market Disorder (OMD) - for example, managing risks described in the DANGER report, information security, and legal challenges (without depending on subsidy from the national level). Positioning based on OMD alone was unfortunate because that is only one of the drivers for consolidation.
  • Determine the MLS consolidation end-game (per my earlier blog on the subject). When I speak on the subject or consolidation or am helping MLSs achieve it, I create a map based on consumer-oriented data that allows us to productively discuss the end-game. This market-driven endgame map should drive tactics to achieve consolidation, driving them based on consumer needs and the professional access needed to serve the consumer rather than existing industry structures. Add the other broker and core standards factors and we should have a better picture of the end-game we are aiming for.
  • NAR itself could get the right people from each organization sit down together to work consolidation out. Peer to peer asks have had some effectiveness, but progress is slow. Not everyone comes to MLS conferences like the Council of MLS or the Clareity MLS Executive Workshop to understand why consolidation is so important.
  • Some of the states have, in the past, worked against consolidation - this must be discussed at the national level. Shared services at the state level solve some problems, but are stopping others from being solved.

Front End of Choice

Most MLSs are not ready to unbundle for FEoC: providing a core "pipe" of information and allowing for product choice, including products provided through the MLS organization, through brokerages, and purchased by agents themselves. Though I don't think this is an especially important trend to move forward - other others described above are much more urgent - I don't think this trend is going to go away. If the industry is going to support this trend, potentially incompatible licensing processes and the per-user cost bundles MLSs have created will need to be addressed. A few large MLSs (MRIS, CRMLS, Northstar MLS)  developed the technical infrastructure to support this - and it is not easy! Others have focused on providing FEoC for alternate means of MLS data access while providing a single core MLS system.  Once further data standards are created that are needed to support this type of business, there may be increasing competition for this core infrastructure.

Now, brokers are dealing with a similar issue today, with some deploying suites but many more deploying best of breed products, integrated as best they can without data standards. While many brokers are happier when they create this best of breed solution, but it's expensive and difficult because of that lack of data standards. There's more inertia in the MLS space to stick with the single-vendor suite plus a few integrated products approach due to licensing models, but data standards in the MLS space are more advanced than in the broker space and alternate front ends are starting to emerge - so I expect this is going to happen. Again, "How urgent and important is this?" is a question that needs to be asked when considering this initiative - and the answer is not going to be the same for every MLS.

Other Issues

Every MLS has different issues to address in strategic planning. For example, in the last few plans I have facilitated in 2018, "Front End of Choice" didn't come up at all from subscribers or the leadership, while the other two issues did in one form or another - along with other local issues. Some of those local issues are ones I've seen recently in several organizations and could well be covered in another blog post.

mattsretechblog: matt cohen (Default)
2018-03-14 12:00 am
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Report from Clareity’s 17th Annual MLS Executive Workshop

A Short Preamble

Clareity’s annual MLS Executive Workshop took place in Scottsdale, Arizona and, as it has every year, the event was sold out. Responding to our post-event survey, MLS executives made comments like:
  • “Great event this year. Always the best networking.”
  • “Informative and insightful. Can’t wait for next year’s workshop.”
  • “As always – groundbreaking and “explode your brain” wonderful!”
  • “For me, this meeting truly does start the conversation for the year.”
  • “Love the size. Good content, all substance.”
  • “This was the best MLS Workshop ever.”

Here are some takeaways from the Workshop:

Welcome / State of Industry

Gregg Larson shared observations from 2017 and an outlook for 2018 and beyond. This included a broad roundup of consumer technologies, covering the MLS and tech vendor merger and acquisition trend, and focusing on new brokerage models and what they could mean for traditional brokers and the MLS. While many in the industry describe these brokers from a point of fear, Gregg’s focus was more about how these companies seek to meet consumer needs and how we all can adjust to industry change based on those needs. Later in the Workshop, Clareity gave both Redfin and OpenDoor an opportunity to explain how they work well within the MLS community – more on that later in this report. Gregg also thanked the sponsors that let us run a quality show at a low cost for attendees.

Major Brokers Demand Better MLS Security

HomeServices of America is advocating for vendors to adopt more stringent security measures – including MLSs. HomeServices’ CIO, Alon Chaver talked about how they are beginning to work with several MLSs on this and how they intend to expand on that effort with other MLSs. Clareity’s been beating the security drum for over twenty years now, so we welcome HomeServices to the effort.

Alon’s takeaways for MLSs:
Minimize outbound data distribution- provide only the necessary data, data sets and data fields required to perform the contracted services. Require contractual assurances at contract renewal – commitment from vendor(s) to secure the data they receive. That includes not sharing data with third parties unless authorized and vetted for security, minimizing programmatic access via APIs, requiring breach notifications, insurance coverage and indemnity provisions.

If your organization hasn’t yet begun an organizational security program or just wants a fresh set of eyes on your security practices, please contact Clareity’s Matt Cohen to discuss moving forward.

Managing Compliance for the new Mandatory Waiver Policy

Carolina MLS has had a waiver policy in place for a while now. Steve Byrd explained the various conditions where his MLS allows waivers, the scope of waiver use, and their 3-part process for catching “cheaters”:
  1. Using Listing Data Checker software to look for co-listing violations. Since subscribers are not allowed to co-list with non-subscribers, they use the tool to search for keywords such as “co-listed” and related terms as well as listings with an email address, web URL or phone number in the Public, Agent and Company Remarks, or Directions field that might be a sign of co-listing.
  2. Clareity’s SAFEMLS + RISK product works as a constant deterrent. Nonetheless, using the tool Carolina MLS issued 19 notices/warnings to subscribers for password sharing and unauthorized use of the MLS and issued four significant fines for password sharing.
  3. Reports by Agents. When agents ask what to do if the selling agent is not an MLS subscriber or can’t find that agent in the roster, the MLS investigates. Carolina MLS has fined and back-billed six times since 2013.

Leadership Lessons

In a session facilitated by Denee Evans, Two CMLX3 graduates, Colette Stevenson and Stan Martin, shared leadership lessons learned from their CMLX3 experience. There’s no way to sum up such a complex conversation easily, but one of the most interesting parts of the session was when Colette and Stan talked about learning about their strengths and weaknesses as a part of the process and how they improved their management capabilities as a result.

Blockchain: What does it mean for the MLS?

NAR / CRT’s David Conroy explored Blockchains, which provide a verifiable and trustworthy record of events or transactions, and David showed how this new technology could evolve to:

    Improve property records
    Greatly reduce cost of business for all parties
    Reduce risk in real estate transactions
    Help buyers & sellers get to closing table faster

Standards Evolution Supporting New Innovations

CRMLS’s Art Carter presented information about the growth of RESO, casestudies from myTheo,, and other demonstrations of RESO successes, as well as highlight videos from RESO’s DataComp event and how standards evolution is supporting true innovation in the real estate technology space. In the myTheo example, that company reduced product time to market from 6-7 weeks down to 3-4 weeks and reduced staffing resources needed to launch in a new MLS market by 30-40% – all by using a certified RESO feed.

MLS Copyright and the “Spark” of Creativity

Matt Cohen moderated a panel including Mitch Skinner, Claude Szyfer, and Brad Bjelke to discuss the copyright office re-evaluation of whether MLSs can copyright the compilation based on “creativity”. A status update on the copyright office discussions and NAR’s role in them was provided. In an especially fun part of the session, Brad role-played making arguments on behalf of the copyright office while Mitch and Claude argued against him in an adversarial fashion. We discussed what MLSs could do to increase the creativity of the compilation. We also discussed whether use of data standards (common field names and enumerations) could reduce creativity of MLS compilations and cause issues – the answer to which is “yes, at least some” – but that can’t get in the way of data standards adoption and there are lots of other ways these compilations are creative. We need to better demonstrate just how creative they are to the government.

Future of IDX and VOW

Matt Cohen,’s Andy Woolley, and Fantis Group Real Estate & Clientopoly’s Tony Fantis talked about the myriad issues of the current IDX and VOW policies, and presented some visions of how policy could be changed to allow brokers and their vendors to provide more innovative uses of IDX/VOW data. One vision was very large in scope but evolutionary, while the other vision was more revolutionary. The reasons for each approach and the pros and cons of each was discussed. We hope those in the audience on relevant NAR committees – and those that influence those committees – will pick up the ball and run with it.

Should MLSs be Supporting Successful Agents?

Xplode’s Matt Fagioli presented a vision of how agents will be successful going forward with technology and what MLSs could be doing to support them. Many tools were discussed, but some MLSs said there was one big takeaway for them: figuring out how to help their agents take advantage of Instagram, since according to a 2017 Forrester report, Instagram has a 2.2 percent per-follower interaction rate vs Facebook at only 0.22 percent.

MLS Consolidation

T3 Sixty’s Kevin McQueen gave the audience some interesting statistics to think about: we’re down to 677 MLS organizations: 88 Regional MLS serving 80% of REALTORS® and 20% served by the remaining 600 or so MLSs. Kevin described how a useful tactic to initiate discussion is to take inventory – looking at duplicate listings, subscribers, and listing agents, and quantifying the waste of the inefficiency – putting a dollar figure on it that makes sense to stakeholders. He suggested that the important thing to do to get the ball rolling on consolidation is to get groups in the room together – sometimes with state association leadership, with 2-3 larger MLSs (not just one “gorilla”), and involving brokers. Kevin suggested we may want to focus on the most severely overlapping markets, especially the nine states containing over 350 MLSs.

The Future of Brokerage and What It Means for MLS

Rob Hahn & Sunny Lake Hahn ended day one with an entertaining look at brokerage. They described a barely profitable traditional brokerage model, the increasing pressures brought by agent teams that “own the kitchen table” where the relationship with consumers is formed, additional pressures brought by 100% commission shops, and even more pressure being brought by technology brokerages. They described a potential future for brokerages being run like a professional services firm, with equity partners and employee associates, and a future where there may be fewer brokerages and agents. Perhaps MLSs will need to establish a different financial model to address shrinking membership, and MLSs may need to continue to evolve policy with relation to teams.  In summary, Rob and Sunny exhorted MLSs to stop fighting, understand the pain brokerages are experiencing, and help “save them.”

A Tragedy of the Commons

Redfin’s Chelsea Goyer presented Redfin’s pro-MLS point of view, countering a “think tank” article that invoked Redfin’s name and painted MLSs negatively. She talked about an article she and Glenn Kelman had written about this called “A Tragedy of the Commons”.  According to Wikipedia, “The tragedy of the commons is a term used in social science to describe a situation in a shared-resource system where individual users acting independently according to their own self-interest behave contrary to the common good of all users by depleting or spoiling that resource through their collective action.” In the view published by Chelsea and Glenn, it’s important for brokers to support the shared-resource system that is MLS. Chelsea also talked about the need for MLSs to consider how membership should be (and feel like) a privilege, how MLSs could be more transparent, how it can be modernized, how important data standards are, and how MLS consolidation should make things better for brokerages. This was a great session!

Zillow’s Listing Ecosystem

From listing input to listing distribution, Zillow’s Errol Samuelson described how they work within existing MLS infrastructures. The Bridge Interactive API provides RESO platinum certification including the data dictionary and additional fields and extended datasets. He demonstrated a management interface with a great design, and reporting capabilities.  Errol also explained how the solution could be used to not only manage data distribution from a single MLS, but also to “bridge” multiple MLSs into a single feed for brokers and their vendors. He also showed a mobile-friendly listing input system that complies with MLS business rules. This solution is live in Atlanta, and coming soon to Rhode Island, Huntsville, Boston, and Oakland / Berkeley.

Personas as a Way of Better Understanding Subscribers

MLSListings’s Dave Wetzel presented a different approach to understanding subscribers better using personas. A persona is a fictional character who embodies certain essential characteristics, such as attitudes, goals, and behaviors, of a particular subset of the users of a product or service. Personas are constructed using sample data collected from actual users. Constructing personas creates internal focus and understanding of your users across your teams and organization. They help internal teams empathize with users, including their behaviors, goals, and expectations. They help the company talk in terms of user needs, and they support better decision making where users are concerned. Dave described the five personas they identified in their MLS and suggested other MLSs do similar research to create their own personas to guide their efforts.

Managing the DANGERs and Other Risks

While managing risk is an important business function, many MLSs feel the risks we face are too big to manage. Matt Cohen helped explore what can MLSs do about the DANGERs (from the NAR D.A.N.G.E.R. Report) and other risks, as discussed in “MLS 2020 Agenda”. Some risks are too much for smaller MLSs to manage – which is one reason MLS consolidation is important. Some risks may even be too large for larger regional MLSs, and may take cooperation to address. The session covered five risks, re-evaluating them for probability, timing, and impact, and providing an initial set of risk mitigations for discussion. For example, mitigations for the information security risk include:
  •     Security Assessment & Remediation
  •     Strong Authentication
  •     Anti-Scraping (MLS resources)
  •     Anti-scraping (IDX requirement)
  •     API Security
This session should inspire good conversations during MLS strategic planning!

Homesnap (Broker Public Portal)

Gregg interviewed Guy Wolcott, the Founder of Homesnap. He asked probing questions about measuring success of the effort, and about how the company plans to achieve greater success in the future.

How to Capture, Communicate and Close in today’s “On Demand” World’s Bob Evans described Realsuite, their new product which includes “Respond”, which quickly delivers responses to client inquiries, “Connect”, which provides a contact management system and includes market data reports, and “Transact”, which organizes documents and tasks and includes form integration and electronic signatures.

Power of the Network and Site Licenses

Matt Cohen moderated a panel including Lone Wolf / Instanet Solutions’ Joe Kazzoun, Showing Time’s Michael Lane, Real Safe Agent’s Lee Goldstein and CSS’s Kevin Hughes. Panelists described the conditions under which products are optimally site licensed, versus “a la carte” licensing or provided as one of several choices. Each described the benefits of site licensing for their product, and the panel discussed the hybrid model of licensing core features but upselling additional capabilities to individual users. Finally, we discussed data standards and how companies may choose to share data – or not share it – with business partners, competitors, and the consumers. While standards make it possible to move data more easily, business, legal and privacy issues all affect whether data will be shared.

Gregg Larson interviewed Kerry Melcher, GM from, the original and leading iBuyer in the country. The way their brokerage works is that sellers request an offer, the brokerage creates an offer to buy the property itself – rather than trying to find a buyer to buy the property immediately. If the seller is interested the brokerage then conducts a home assessment and, if repairs are needed the seller can make the repairs or deduct costs from the offer and the brokerage will make the repairs. Payment then happens in just a few days. OpenDoor then maintains the property and finds a buyer.  As discussed during the session, it’s important to note that the company buys at retail and sells at retail – this is not about buying low and flipping homes. OpenDoor works with buyers too. Buyers can use their app to gain access to the homes they have for sale, and every home comes with a 30-day satisfaction guarantee.

While a lot of people are afraid of the change that iBuyers might bring to the industry, Kerry made it clear that they work cooperatively with other agents all the time and conform to MLS rules. Also, by making the transaction easier for consumers, they believe their approach will result in more transactions and more money for the real estate industry overall.
Final Words

It’s “business as usual” at Clareity. If you want more information on our professional services (strategic planning, MLS regionalization, public speaking, security audits, etc.), please contact Matt Cohen or Gregg Larson. If you want information about Clareity’s security and SSO products, please contact Troy Rech.

Clareity packed a lot of perspectives and content into a ton of sessions over a day and a half – but the Workshop is about more than content – it’s about relationship building. We’ve listened to those attendees with ideas of how to make the event even better – besides the meals together and fun outings on arrival day, the longer breaks have improved the networking possible during the event. Over the past 17 years, MLS executives and their guests have enjoyed our event which, we’ve heard in post-event surveys, is “just the right size” and “full of takeaways.”  We promise to continue to improve the Workshop based on attendee feedback.

Thank you for your support!
mattsretechblog: matt cohen (Default)
2016-06-22 12:00 am
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MLSs Win with Their Business Rules in RETS

RESO Standards Let MLSs Take Control in a New Way

For the past few months I’ve been a bit quieter than usual on the blog because I’ve been working on a number of time-consuming projects including MLS regionalization, MLS selection, strategic planning sessions, and information security audits. But one very interesting project that has been taking some of my time has been an opportunity to work toward a standard for expressing business rules inside RETS. The focus so far has been mostly on listing input business rules, but that focus could expand in the future. This project should be of interest to every MLS, and I strongly encourage MLSs to participate in the ongoing process at RESO.

I first submitted the value proposition for this effort to RESO as part of a business case worksheet back in April of 2010: “MLSs with well documented business rules can more efficiently and smoothly move to a new MLS system, add additional front ends with full functionality or integrate other software that requires use of business rules – without manual work and often inaccurate results. This will result in smoother conversions, more software choice, and enhanced competition and innovation.”  At that point it wasn’t prioritized but in late 2015 I was asked by the RESO Research and Development work group chair, Greg Moore, to lead the charge to come up with a standard for expressing business rules inside RETS.

As part of the process, I gathered knowledge to attack the problem by visiting with a number of MLSs. During that process, sometimes I saw things that made it even more clear how urgent it is to succeed in creating a standard – one that can be understood by MLS staff and not just technical people – and getting it adopted. For example:
  • At several MLSs, when I unpacked what their vendor had ‘coded’ as their listing input business rules into plain English, we found implementation errors. “That’s not how our rule is supposed to work,” became a common refrain during several of my visits.
  • At one MLS, I saw a ‘botched’ calculated ?eld that had been that way for years, simply because no one – not an analyst or an MLS staff person – could review the programmer’s work, looking at it in terms of the business rule that drove the calculation.

Also, because there’s no common way of expressing these rules, it’s hard for MLSs to talk about them, establish best practices, and discuss key differences in how data is validated during regionalization discussions.

Right now, the effort to come up with a standard for expressing business rules inside RETS is a work in progress, but it is moving quickly. So far, the group has agreed to continue down the path of using a well-established business rule language called RuleSpeak and developing a short-hand for the rules expressed in RuleSpeak in what we call REBR (Real Estate Business Rules) Notation. The RuleSpeak structured English notation is perfect for clearly and unambiguously expressing business rules, even complex ones, in non-technical language using business vocabulary. Expressions that MLS non-technical staff can read and validate are the single source of truth when it comes to business rules. Everything else is mediated by someone who is not the business owner, so errors can happen along the way. Following are just a few common RuleSpeak examples. Note that most examples use RETS Data Dictionary names for fields – but I could just as easily have used more user-friendly MLS field labels.
  • An Expired Listing must accept user input up to 15 days after Expiration Date.
  • A Closed Listing must not accept user input. Enforcement: MLS Staff may override this. Data field GarageSpaces must have a value if GarageYN has a value of “Y”. ListingContractDate must be on or before today’s date.
  • YearBuilt must be on or after 1700.
  • ParkingTotal must be greater than or equal to the value of RentedParkingSpaces ListPrice must be greater than or equal to 1, and less than or equal to 50,000,000
  • Status of an Active Listing of Residential Property Type may only change to one of the following:“Active”, “Cancelled”, “Extended”, “Under Agreement”, “Temporarily Withdrawn”. Enforcement: MLS Staff may override.
  •  Listing Status must be set to Expired on the Expiration Date if Current Listing Status is not Expired, Pending, Sold, or Leased.
The REBR Notation mentioned earlier divides all the MLS rules into about a dozen basic syntaxes and, with the documentation we’re working on, it should be easy for MLSs (and their vendors) to articulate the business rules and end up with rules that both people and computers can easily understand – rules that are not specific to one MLS system implementation and that would be documentation of the MLS organization’s intellectual property going forward.

Following is an example of a rule in both RuleSpeak and REBR Notation:

Rule stated in RuleSpeak “Structured English”Same Rule using REBR Notation
An Expired Listing must accept user input up to 15 days after Expiration Date.ALLOW_EDIT LISTING YES

IF ListingStatus is Expired AND TODAY = ONORBEFORE (Expiration Date + 15 DAYS) ENDIF

None of this language is finalized yet: this is just research happening inside a business rules sub-group of the RESO Research & Development (R&D) group – but hopefully readers will see how valuable all of this can be to them and we’ll see more participation in this part of RESO. If you want to get involved in the group, please email Jeremy Crawford  and ask to be added to the business rules group. If you already belong to RESO, whether or not you are in the work group, you can just log into the RESO collaboration system and get involved with the discussions there too.
mattsretechblog: matt cohen (Default)
2016-05-02 12:00 am
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MLS Regionalization: Beyond the Needs of Any One MLS

It’s Not Just About Overlapping Market Disorder

I was talking the other day with my friend Kevin McQueen about MLS consolidation and regionalization. Both of us help MLSs through the process, and we like to talk and share our experiences with each other in order to help our clients better and move the industry forward. One of the challenges we discussed the other day was that, for MLS regionalization to gain momentum, MLS leadership at every MLS in the country – including boards of directors – need to better understand the need for MLS consolidation and regionalization. Many don’t attend industry conferences and are not aware of the larger strategic issues driving it.

When Clareity Consulting discusses the strategic reasons for MLS regionalization, we often focus on the following objectives:

1.       Reduction in cost

2.       Improvement in MLS product / service scope

3.       Associations can focus more on association functions

4.       Reduction / elimination of arbitrary information and system barriers

o   Reduction of need for multiple memberships

o   Reduction of number of data feeds for participants’ information systems / websites

o   Providing more comprehensive and accurate statistics for overlapping market areas

o   Providing wider listing exposure for sellers

5.       Reduction of the number of systems some members need to learn

6.       Improvement of MLS rule and data accuracy compliance, providing uniform rules and enforcement

7.       Providing efficiency for participants who want to be involved with governance / committees

[Update: these days I have even more goals, including driving technology provider interest in our industry.]

Many MLSs evaluating regionalization on their own initially consider only one or two of these objectives – for example, reduction in cost, or elimination of the arbitrary information barriers – and don’t evaluate the decision against all the items listed above. As a result, they might conclude something like, “We’re geographically isolated so we don’t need to consider regionalization.”

But even the list of objectives above is incomplete, focusing on local and regional needs rather than the larger threats facing the MLS industry. If one looks at the NAR’s D.A.N.G.E.R. Report, one should consider how the current splintered MLS industry is – or is not – ready to deal with the threats detailed in that report, including, but not limited to:

  • Entry by a New Player
  • Unclear End Result (Loss of Control)
  • Control of a National MLS
  • Decentralized Infrastructure Becomes Obsolete
  • Large Patent Troll Attack
  • Security Breach 

A more consolidated MLS industry would be better able to mitigate these risks.

Back to my conversation with Kevin. He asked, “How do we reach executives and board members at association/MLSs that are resistant or uninformed about the possibilities for regionalization?” Kevin suggested one way was that we could speak on the subject more at conferences. But, so many of the people who need to be reached don’t attend these conferences, and certainly wouldn’t attend a session on regionalization if they’ve already made up their mind on the subject.

We also discussed NAR mandating NAR- or CMLS-developed best practices for MLSs. While the core standards approach NAR took with associations could be useful, it leads to a very slow, incremental approach that may have been appropriate 20 years ago but is too slow to meet today’s challenges. Based on the MLS regionalization end-game described in my recent Inman article, NAR could simply mandate standards for MLS that do meet the condition of the end-game and initiate a fast process to get us there. But is a top-down mandate approach the best one?

Kevin and I both believe that the best approach is a collaborative one, where association and MLS leadership engage in a consensus-driven process for regionalization. Clareity recently outlined this process recently in an Inman News article, republished here: “MLS Regionalization – Breaking Through” Are the threats to the industry and the benefits of MLS regionalization becoming clear enough that initiative momentum will radically increase? Will leaders take an active role in designing the best possible future for their organizations and the industry at large? Or will they continue to focus on their own organization and ignore what is ultimately best for their members and the industry? Or will they wait for one of the worse threats from the D.A.N.G.E.R. Report to occur and make all of this irrelevant?

mattsretechblog: matt cohen (Default)
2016-04-25 12:00 am
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MLS Regionalization: Breaking Through

Consolidation of MLSs Requires Process

In part one of this article ("MLS Regionalization: Setting the Goal") Clareity outlined the criteria for determining the future “end game” for MLS consolidation. In this part, we will describe Clareity’s process for MLS consolidation and regionalization and how we overcome some of the common objections to consolidation during that process.

A good process for MLS consolidation and regionalization has four parts: planning, decisions, formalizing decisions, and actualization:


In the first part, planning, organizational leaders meet with a facilitator who can drive consensus on the hard issues, including goals, ownership and governance, money flow, leadership, staffing, and the product and service offerings. The facilitator provides examples of how decisions in these areas have worked in other organizations and captures the group’s consensus in a document which all participants approve of, so there is no backtracking later. The leaders may consult with their boards of directors during this phase and work to sell the consensus plan. There are other decisions that will need to be made along the way, such as specific technologies, but the above decisions are the one that will set the framework for the long term, while technologies come and go. Some groups want to focus on cost right away, but how can cost be discussed when no decisions have been made yet about the factors that drive it – leadership, staffing, products, and services? And how can one make decisions about those things until a decision-making structure has been put in place? A successful planning process is all about asking the right questions at the right time.


In the decision-making phase, the leadership of all stakeholder organizations meet together to discuss areas still lacking consensus. Having group meetings is an important part of the process because it is an opportunity to address many remaining fears, ensuring all valid issues are on the table. The facilitator can provide perspective and knows how to address common objections. The group must have trust in the process, building trust that they are all working toward a common goal: a better MLS that serves all of the subscribers in the region well. In this phase, the group can make more definitive decisions based on the initial planning, which the facilitator captures.


Next, the facilitator will use the documentation created in the previous step as the basis of a business plan. All of the planning and decisions will be incorporated into this document. A draft budget, a plan for the next steps, and a timeline for regionalization will be developed and included as well.


The final step, actualization, involves creating the company, addressing all of the legal issues, commencing initial and ongoing communications, selecting technology and contracting (or re-negotiating) as needed, and implementing MLS system changes as needed. Having top-notch legal counsel is critical in this phase, and Clareity Consulting likes to collaborate with the best in the business.


There are usually many questions and fears about MLS regionalization that must be addressed along the way. Sometimes agents worry that competitors from the adjoining MLS will sell out of their traditional area and create problems, and they need to be reassured that this has not been a serious issue in regional MLSs that have formed in the past. Other times, MLS executives and staff fear for their jobs, or board members worry about the continuation of their leadership roles –worries that can be addressed by discussing the role of service centers in the new organization and creating a plan for merging leadership. Some will worry about strife between associations in a regional MLS but having strong bylaws and intellectual property agreements can minimize that risk. Revenue traditionally shared with the association can also be a concern that can be addressed in a variety of ways and Clareity’s CEO, Gregg Larson, described one such approach at Clareity’s MLS Executive Workshop. The point is that common concerns about MLS regionalization can be addressed as a part of the process, and such concerns shouldn’t stop the process from happening.


With a sound process and proper facilitation, organizations working together can demystify and accomplish MLS consolidation and regionalization. Once fears are put aside and the MLSs commit to engaging in the process, it is generally possible to address stakeholder issues and concerns, achieving the goal of having a single MLS with strong capabilities that covers an appropriate geographic area.



mattsretechblog: matt cohen (Default)
2016-04-19 12:00 am
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MLS Regionalization: Setting the Goal

Aim Before Your Fire

Why are there still so many MLSs? I’d argue it’s mainly because we don’t have the answer to other questions:  How many MLSs should there be, and where are their borders? Should there be six MLSs? 30? 60? 100? One?  Can anyone be held to account for not meeting a goal that has not been set? Before we consider how to achieve a goal that will enable consolidation, we need to know what that goal – the “win condition” – is.

Clareity Consulting is studying the MLS regionalization “win condition”.  We believe that the industry first needs to understand what the consumer considers to be a natural market area. If someone gets a job in Manhattan, New York City, they may end up living in a house in that borough (2 MLSs), one of the outer boroughs or Long Island (several other MLSs), take the train up to Westchester or Connecticut, or out to New Jersey (even more MLSs). How can an agent serve his or her customer when he or she can’t set up a single prospect search in the MLS system, since the data is spread out over nearly a dozen MLSs? The situation is even worse when MLS geographies overlap, or a property is on the border of more than one MLS. In this situation, agents can’t find all the CMA “comps” they need in one system. If an MLS doesn’t cover the natural market area – including overlapping and adjoining areas – it is doing its subscribers and their clients a tremendous disservice. How can that be justified in today’s world where real estate portals have no boundaries and consumers are free to search everywhere?

There are other criteria that can be looked at in order to evaluate the “win condition”. Can the very smallest MLSs – even if they are isolated geographically – meet reasonable standards of service? NAR hasn’t developed MLS core standards as they have for associations, and it is high time that it did so. CMLS did a great job summarizing MLS Best Practices.  Perhaps they could establish the core standards.  Clareity can easily imagine core standards covering compliance management, data standards, support, technology, data licensing and distribution, and participant data access, as well as security and privacy. Can those smallest MLSs provide that service at a reasonable cost? Another criterion for the win condition is whether an MLS can meet the needs of large brokerages that currently must belong to and aggregate data from multiple MLSs.


Since this article has focused mostly on listing data, one might reasonably ask, “Can’t MLSs just share data? Do they really need to consolidate?” There certainly are cases where that might be sufficient, but MLSs need to evaluate their goals before they consider that answer. Do they want to reduce number of systems some members need to learn and pay for? How about providing consistent MLS rules and data accuracy compliance across the natural market? What about providing a single copyright / IDX notice for websites? Must a broker belong to many MLS boards to affect policy in their market, or can efficiency be provided in a single MLS? Are there economies of scale that are needed to provide the best service at the lowest cost to subscribers? Often data shares are not optimal because they add additional overhead, inject delays in getting the listings into the repository and into partner systems, and/or have problematic source data differences between the local systems. A data share may be a good solution, but careful evaluation is needed to determine if that’s the right approach for the MLS consolidation end-game, or if further consolidation is warranted.  Data shares can also be an excuse to simply maintain the status quo when the right thing to do is consolidate.

We’re not going to see substantially faster progress in MLS consolidation until two things happen:

  1. Brokers get behind consolidation and/or demand it, especially in obviously overlapping markets, and
  2. MLS boards of directors openly discuss the future of MLS in terms of the types of business objectives discussed in this article, setting goals based on these business objectives, and planning for them. 

A process for overcoming barriers to creating a regional MLS will be described in a blog post titled, “MLS Regionalization: Breaking Through"

mattsretechblog: matt cohen (Default)
2015-03-15 12:00 am
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IDX & VOW Compliance Reviews Done Better

One of the core functions of MLS is to help subscribers cooperate and making sure all subscribers follow the MLS rules designed to minimize participant conflict is a key part of this function. One of the places conflicts play out most publicly is in arguments over IDX and VOW displays. Yet, a number of MLSs do not have a compliance program in place, and others are uncertain of their compliance practices. I think that’s why, when Clareity recently surveyed MLSs asking which of our services they planned to use in 2015, one of their most common responses was our IDX and VOW compliance services. Compliance is growing increasingly difficult, especially since MLS rules seem increasingly out of touch with innovations such as social media and installed apps. Following are some tips to help MLSs do a better job with IDX and VOW compliance reviews. Some of these may already be on the radar for my regular readers, but there are some new tips as well.

First of all, hard as it may be to shake off the habit, let’s not call these things “compliance audits” anymore, at least with subscribers. Using the word “audit” brings up bad memories people may have of certain government agencies and an inquisitorial way of doing things. Let’s call them “compliance reviews,” which is a much more neutral way of referring to them.

In keeping with this spirit, it’s important that, as far as possible, reviews be conducted consistently, not just in response to a perceived problem. “Complaint-based” reviews often lead to accusations of unfairness and even persecution. If MLSs consistently review sites and apps within a specific time period after they go live, and at specific times after that, it is harder for complaints such as, “the MLS picks on me because I am a discount broker,” to stick. If an MLS is just implementing a compliance program, I usually suggest that the leadership’s sites be reviewed first. After all, nothing is worse than having an antagonistic subscriber who is able to retort, “The MLS president’s site does it the same way – she’s out of compliance but you’re not doing anything about her!”

It is important for an MLS not just to have rules, but also a formal legal agreement with brokers governing VOWs and IDXs. The agreement is where the “rubber meets the road,” the last word on mutual rights and responsibilities. It’s the best place to clarify any vague parts of an MLS’s VOW/IDX policy and describe auditable criteria. The agreement sets out rules and responsibilities; the times when reviews may take place; how compliance and other costs are accounted for; what it takes to comply; the time during which a compliance problem can be remedied (“cure period”) and what happens then; and the criteria on which a site will be reviewed. The agreement will also have all the standard legal clauses concerning assignment, governing law, notices, and severability, and other required language. Many of the IDX and VOW agreements Clareity sees from MLSs lack much of the specificity required to be successful with a compliance program. This is an area to consult both with your business consultant and your attorney.

Again, VOW and IDX policies can be vague, and give rise to disputes if not specified more clearly.

For example, how should acceptance of the Terms of Service be handled? There is a spectrum of options that range from having a document linked to from inside a signup form all the way to having a text area with the terms where the user is forced to scroll to the bottom and nominally read them before she can check off a box marking her acceptance and move forward. What options are acceptable, and are you enforcing them consistently?

What is “appropriate security protection?” For which security criteria are sites tested? APIs have opened up a huge new area of vulnerability. What criteria apply to them? What issues can be let slide, and what issues must be fixed?

What does it mean to have “anti-scraping” protection and monitoring? Scrapers have grown radically more sophisticated with time, and measures you may be writing into your agreement, and which you may be offered by some IDX vendors, may only protect against the kinds of attacks that were common years ago.

There are also many areas where the IDX and VOW rules need to be updated and ambiguity decreased. What does it mean for the display of IDX data to be a “Participant’s display?” Ambiguity in this area is causing significant conflict in the industry these days. Who is a “Consumer”? I know at least one company that would say that a federal agency and other businesses are their “Consumer” – certainly not what was intended by policy writers.

Technology marches forward, creating increasing conflict with our aging rules. For an installed “app”, does the VOW process of email confirmation make sense, and should an installed app require the VOW username / password each time the app is opened? What’s reasonable? Consumers are becoming used to signing up for sites & apps using their social media login, which flies in the face of many of the VOW rules related to signups and logins. Do we need to engage with both NAR and DOJ to make changes to VOW rules?

The items above are just a few of many areas where MLSs must take care when implementing an IDX and VOW compliance practice. As they say, the devil is in the details! But, throughout the process of IDX and VOW compliance reviews, also keep the big picture in mind: attitude is everything. Be friendly and respectful to all subscribers and their vendors. Be merciful to the very occasional and obviously accidental violators. Remind them that rule compliance reviews are an MLS service to make sure that everyone is playing by the same rules in order to reduce conflict among subscribers. If you follow this guidance, you will be more successful with your compliance program.

mattsretechblog: matt cohen (Default)
2015-03-01 12:00 am
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Targeting MLS Communications

Though many MLSs offer a rich and diverse set of products and services to their subscribers, there is often a gap between what is offered and what subscribers know about. When MLSs spend money on providing value that subscribers don’t know about and take advantage of, those dollars are wasted. To judge communications effectiveness, it’s not enough to ask subscribers what they think. Last year, Clareity surveyed a medium size MLS and 72% of subscribers said that their MLS did “a good or excellent job of communicating.” Yet, 74% of those same agents did not know about the new MLS system, the rollout of which was impending!

The real problem is that, as the MLS offering grows, it would be overwhelming for subscribers if the MLS sent individual messages about each change to the service – each with its own benefit-oriented subject line designed to increase “opens” and click-throughs. Also, the more general multi-subject newsletters grow longer, and it’s hard to get subscribers to read through the whole thing to find something of interest to them. The answer to this problem is to target communications better, so that subscribers get individual messages most likely to be of greatest interest to them, see similarly targeted MLS system announcements, and receive personalized multi-subject newsletters, so that the most interesting and applicable subjects are at the top. Similar concepts apply to the MLS website and other communications channels. Not every MLS has such sophisticated tools; not every MLS has even considered looking for existing tools, creating them, or having a software partner create them. But the need is there, and that’s why I’m shining a light.

This idea isn’t new. In fact, most MLS executives use Facebook, and many of them use Facebook friend lists to restrict which friends see which status updates and photos – business or personal. Perhaps you go further, and have one group for your family, one group for friends, a subgroup of your friends called “close friends” with whom you feel comfortable sharing personal details, a group for business acquaintances, and a group of friends and acquaintances in your local area. When you group your friends lists in such a way, if you’re going out tonight, you might want to post asking the people in your area if any would like to meet up, but not your Facebook friends in other states or countries. You can apply the same concept to your other communications channels.

overlapping groups (friends, family, client...)

What are some of the lists you might want to create in order to target your messages more precisely?

  • Sell-side agents
  • Buy-side agents
  • Non-productive (neither buy nor sell side)
  • Appraisers
  • Affiliate members
  • Those that use the MLS system or parts of the MLS system
  • Those that use or license certain products
  • Subscribers that have (or not) taken specific classes
  • High ratio of CMAs to listings
  • Political advocacy (useful for association functions)

Mining your MLS software, your AMS software, and your SSO software can give you more than enough data to create these lists. Think of all you could do if you could customize the display of your internal website to target messages to specific segments of your membership. Take your education pages. Has a person taken a class in the past? Don’t show it to her; show her classes she might want to take next. Or take your political action pages. Has a person donated? If not, can he be encouraged to donate? If he has donated, can he be encouraged to donate more? Has a person used a product? If so, could you display information on upcoming seminars to help him with it? If not, you might not want to display that information.

All this sounds good, but you have to identify sources of the data and either create or have a vendor build tools that will enable you to mine the data and turn the data into maintainable email lists, dynamic web pages, or other customized material. At the 2015 Clareity MLS Workshop, we discussed steps that MLSs are taking today to build these tools, to work with their vendors, and to make targeted subscriber communication a reality. MLSs are using commercial tools such as Salesforce, creating their own custom tools, and working with technology providers to create the tools they need.

The benefits of targeted communications are clear. The number of messages each participant has to read goes down, and the percentage of messages participants find interesting and useful goes way up. Open rates and page views go up. Participants are more engaged, and find communications more welcome. I encourage MLSs not to settle for the status quo, where too many communications go unread. As we discovered performing research for the Workshop, and as we heard from Workshop participants, this technology is attainable and usable; it is just a matter of setting your goals high and asking for what you want.

mattsretechblog: matt cohen (Default)
2014-08-24 12:00 am
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Solving the RETS Credential Re-Use Conundrum

How Many Times Must a Tech Provider Download the Same Listings?

I received a call recently from an MLS administrator who wanted to talk about a RETS issue that had been bothering him. His MLS charges a small fee to subscribers for a RETS feed; the fee covers the costs related to the feed, including compliance audits. He was noticing that many of the RETS credentials that subscribers were paying for weren’t being used and thought this was a bit of a mystery. Should he disable the unused RETS credentials and stop charging the subscribers? That course of action would make sense if his subscribers truly no longer needed the data. But there was a more likely culprit behind most of his mystery.

Quite often a subscriber’s RETS feed isn’t just associated with the subscriber, but with a third-party vendor providing IDX, VOW, CMA, statistics, and/or broker back-office systems to multiple MLS subscribers. Let’s say the vendor has downloaded the IDX data on behalf of one broker. If the vendor has 19 more customers associated with that MLS, does it really make sense for the vendor to download and store the data 19 more times, using the additional 19 RETS credentials? That seems like a real waste of server, bandwidth, and storage resources. On the other hand, suppose the vendor re-uses the credentials. Further suppose that the MLS administrator turns off unused credentials, the subscriber whose credentials have been used by the vendor to download data goes inactive, and his or her credentials are disabled by the MLS. The flow of data to the other 19 websites will be cut off. That’s not good!

Besides the potential for data disruption, there are other reasons why an MLS administrator may not like re-use of credentials:

1.    Credential re-use takes authorization control out of the hands of the MLS. If the vendor doesn’t know that a subscriber whose credentials they aren’t using has gone inactive, the vendor may accidentally service him or her using data obtained using another subscriber’s credentials.
2.    Similarly, re-use may defeat opt-outs for individual uses.
3.    The problem is actually even more complex if the vendor has multiple products. The vendor may download a superset of all data they need for a broker back-office use. Then, by re-using a subset of the data for an IDX site, the vendor may accidentally use fields and listings in certain statuses that would not normally be available to the IDX feed, inadvertently using the data inappropriately.
4.    Credential re-use partially defeats the use of data seeding, i.e., trying to figure out where exactly there’s a data leak.

Having unpacked some of the issues, there seem to actually be two questions regarding RETS credential re-use that need to be considered:

1.     Is it okay to re-use data feed credentials for multiple parties with the same use?
2.     Is it okay to re-use data feed credentials for one or more parties with different uses?

So, re-stating the conundrum simply: it’s terribly inefficient for all parties when vendors download and store multiple copies of data, one for each customer and credential, but there are valid reasons why MLSs have looked negatively at the practice of credential re-use. How do we solve this for everyone?

There are several possible ways to address the authorization control and opt-out issues including, but surely not limited to, the following:

The vendor can log in using all MLS-provided credentials at least once per day to figure out what subscribers no longer have rights to use data based on RETS login failure. They won’t download data with each login, just for one of them. But this way, the MLS will have a record that the vendor has checked whether a login / use is still active on the RETS server and should have taken steps to eliminate data use for that subscriber.

The vendor can be given a RETS login by the MLS that gives the vendor access to the roster, limited to a subscriber identifier and status (active, inactive). The vendor can use this to check if they need to stop re-using credentials on behalf of a specific customer.

RETS standard and server functions can be designed to return validation codes for all authorized specific MLS users and uses based on a single login credential, and return data based on that information. This will directly reflect the kind of master agreements and addendums that many MLSs have with these vendors already. If no MLS users are active and related to a vendor credential, the vendor credential will not provide data access.

The inappropriate data use issue is a bit trickier. It is an issue that can be mitigated today to some degree via very clear license agreements, vendors being careful to use the data subsets as specified by those agreements, and by MLSs auditing the end-uses of the data (i.e., the IDX websites and VOWs) – something they should be doing anyway. Additional mitigations may require some RETS standard and server-side function enhancements. For example, additional usage opting information can be passed to vendors where relevant. Also, a server-side function could be created to efficiently determine whether several credentials provide different data for a query – without downloading and comparing the data to the data on the client side. Knowing that different credential use would provide different data may make it easier for a vendor to know whether re-use is appropriate or not.

I don’t think there’s a way to fully resolve issue the data seeding issue while allowing credential re-use but tracking an issue down to who received the feed is still possible. Vendors just need to cooperate with any seeding investigation to help figure out what specific usage is involved. Data seeding is only of use in a very limited subset of illegitimate use detections anyway.

There are more conversations to have on this subject, looking at additional business and legal issues as well as technical reflections of those issues, but this is a starting point. Let’s figure this out, so that RETS service can be efficiently provided to stakeholders while addressing legitimate issues that arise with that efficiency. What’s next? Let’s discuss these and other ideas for solving the issue here on this blog, on Facebook, and perhaps at the upcoming RESO meeting and see if some consensus can be reached among both vendors and MLSs. If changes to RETS are desired, this can be dealt with in RESO workgroups and implemented by vendors as need be.

I know many vendors that simply must engage in credential re-use so they don’t overwhelm MLS RETS servers and so they don’t needlessly increase their costs to service multiple customers – but they don’t like being in violation of some of their license agreements with regard to credential use. I’ve even had clients fine such vendors – and while this is in accord with the letter of some current license agreements, it’s really not fair. These are not “bad vendors.” By not defining our standards, process and legal agreements to reflect the technical reality of data aggregation and use, we’ve created this ugly issue together. But together, we can solve it, and we should do so as quickly as possible.

mattsretechblog: matt cohen (Default)
2014-03-17 12:00 am
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Off-MLS Transactions – Method for Local Evaluation

Members Need to Understand Potential Consumer Harm

Two years ago, at Clareity’s MLS Executive Workshop, MLSListings (the 16,000 member regional MLS serving the greater San Jose area) presented its study of Off-MLS Transactions, evaluating how common the practice was in their market and demonstrating the economic harm caused to consumers. At the 2014 MLS Executive Workshop, CoreLogic presented a wider study, although it still covered only 5% of the country, and the subsequent Inman News article raised awareness further. But everyone knows that “real estate is local,” so now MLSs around the country are beginning to consider replicating the original MLSListings study in their market. Understanding the scope of the practice and the harm that may be caused to consumers is necessary if an MLS is to discuss the trend with membership at the local market level. Such studies may also inform further discussions at the national level.

This article describes MLSListings’ method of performing that evaluation at the local MLS level:

The Process: 

1.       Pull all sales for SFR, Townhome and Condo from tax records within settlement date range.

·         Exclude all records with blank price field

·         Manual scrub for non-applicable transaction records

·         Format County APNs to match MLS data record APN (varies by County)

2.       Pull MLS data for same time period

3.       Match APNs, eliminate duplicate records. Output is properties sold off-MLS.

4.       Median prices for MLS and off MLS are compared by geographic data 

Additional considerations:

Manual review of county records data can further improve quality of comparison. Known examples include: 

·         Individual cases in which each unit in a multi-unit property is recorded with the price of the entire property (e.g. 200+ condos in San Jose for $118 million each). These were manually removed upon discovery following reasonable review.

·         Individual cases in which transactions are recorded as full grant deeds, yet upon further inspection, sale price is well below the reasonable lower limit of a comparable property, buyer/seller are similar entities, etc. Manual scrub for such cases yielded approximately 3 percent of transactions falling within these conditions, deemed within an acceptable range of deviation. 

Accepted conditions/assumptions: 

·         County record data represents all sales within a time period and a given geographic area County classifications of SFR, Condo and Townhome correspond to same classifications within MLS system

·         County record data ‘settlement date’ is the best available match to MLS ‘COE date’

·         APN number is the best available match to compare identical records in county data and MLS system data

Where final sale price is withheld in the MLS record, last list price is substituted as the best available match
mattsretechblog: matt cohen (Default)
2014-03-13 12:00 am
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Subscriber Experience: Core to MLS Success

Following is a small snippet of one of the sessions from Clareity’s 2014 MLS Executive Workshop:

As an MLS, how do you create subscribers who are passionately attached to you – loyal fans and advocates – subscribers who are emotionally engaged in wanting you to succeed in all that you do? Can you imagine people buying merchandise with your MLS logo just to wear around because they’re proud of their affiliation? Apple has done it – there have been Apple T-shirts since the company began in the 1970s – and hotel chains like the Ritz Carlton command similar loyalty. Loyalty is something MLS traditionally takes for granted because in most markets there isn’t more than one choice.  But with all the challenges our industry faces, we need to improve the relationship between MLSs and subscribers. Following are some of the principles that can help you turn subscribers into fans.

All the most successful companies – Zappos, Amazon, Starbucks, etc. – tap into psychological principles that exist in everyone – innate human desires – and don’t rest until they’ve met those desires. The mission statement of the Ritz Carlton chain says, “The Ritz-Carlton experience enlivens the senses, instills well-being, and fulfills even the unexpressed wishes and needs of our guests.” It is these unexpressed wishes and needs that need to be identified and satisfied if you want to be most successful at improving the MLS-subscriber relationship.

One human need is for things to function as we expect them to, and to do so with ease. We want software to work predictably and reliably. If we call a help desk, we want the person on the other end of the phone to be helpful and friendly, and to solve our problem quickly. When we are frustrated – when something doesn’t work the way we want it to, when it’s difficult to use, or when someone says “NO” to us – it is much more difficult for us to “love” the product, company, or person involved. We can all think of many organizations and companies that we do not love because they have made our lives more difficult instead of easier. It’s possible to reframe many MLS negatives into positives:

•    Turn compliance officers into “clean data” stewards
•    Turn the data licensing into “data provisioning” for members
•    Support integration efforts that make things easier for subscribers
•    Use subscriber feedback to improve process (saying “Yes” instead of killing the idea with a committee)

An organization that can anticipate how we want things to work and make them go that way 95%of the time, creating a great subscriber experience, can inspire great loyalty.

Another human need is for meaningful connection. We want to feel that we are liked, respected, and, most importantly, understood. It is crucial for MLSs to put systems in place to personalize the experience – to recognize subscribers by name, to allow subscribers to select their service preferences, and remember past interactions so you can serve them better. Allowing subscribers to control the interaction better – to start or stop a dialog and decide which communications to receive and in what format is also very important. Remember – people want to work with people –not machines or voice prompts.  Using automation to deliver service to them faster is good; using it so you don’t have to answer as many calls is bad. It’s all about service.

For example, when Clareity’s Amy Geddes ordered the shoes from Zappos, she tweeted @zappos to please ship them with some extra energy to help her through the NAR convention.  This shipment came with a can of Red Bull and a note to have a great show! Someone at Zappos was empowered to spend a few extra minutes and dollars to make Amy’s experience amazing and forge a connection with her – a meaningful connection that inspires loyalty.

How do you inspire love as an organization when you’re just an ordinary organization, with your own troubles, inefficiencies, and personalities? How do you make any kind of commitment to this level of customer service that isn’t mere lip service, when there are core functions of the organization that have to be kept going, and you can’t divert a lot of time, money, or personnel to keeping every member happy?  You can listen to your members and find out their expressed wants through surveys, topics on social media, and in-person meetings. From these, you may be able to deduce their unexpressed needs. If you can meet their wants and needs – and do so while forming that meaningful connection – you’ll be well on your way to creating a great subscriber experience – and loyal subscribers.

mattsretechblog: matt cohen (Default)
2014-02-19 12:00 am
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National MLS, Whatever That Is

If We Don’t Define Our Terms, We Will Talk Past Each Other

“Should there be a National MLS?” is a question that is often repeated in the real estate industry—and it never should be asked again in that manner. As my funny Facebook friend Nobu Hata said the other day, whenever that question is asked, a puppy dies. The problem is that the question is vague and can mean three different things, and if we don’t decide which one we are talking about, our conversations will not be productive. Following are three ways to interpret the question:

1.       Should there be one national MLS system (software)?

2.       Should there be one national MLS database?

3.       Should there be one national MLS organization?

Although the first two questions may seem less central than the third, questions about the risks and benefits of a national organization depend, at least in part, on understanding issues relating to possible consolidation of the core software and database.  For that reason, I will address the more detailed questions before examining the more general question. 

1. Should there be one national MLS system (software)?

There could be one or many local MLS organizations and one or many databases, but one national MLS software package. 

Having one national MLS software package is usually compared only with the status quo: having one (or occasionally, two) MLS software packages for the local market. But let us also compare it against a range of possible options, including one where individual subscriber’s select their own MLS software inside each MLS organization, as well as hybrid approaches. 

Having a single local system provides the local MLS organization the buying power needed to make extensive local software customization affordable, splitting the costs over many users over time. Also, while an MLS organization can advocate with a single MLS system vendor for local needs and changes, it may be less feasible to advocate with many MLS system vendors. If the individual users contracted directly with MLS system vendors, it would be more difficult for the MLS to advocate with many MLS system vendors if there weren’t a direct financial and licensing connection as exists between the local MLS organization and the MLS vendor. How would changes in the many systems (and accompanying training) be communicated to subscribers? In addition, as multiple systems change (at once, or over time) somehow the underlying local database changes would need to be managed. That could get expensive for the local MLS organization, especially if many MLS software vendors were constantly innovating. Providing support for mission-critical software—especially as it changes—is a complex process, and while it’s difficult enough to support one MLS software package at the local level, supporting software from multiple vendors could be untenable. Such concerns argue that limiting the core MLS software packages to only one or two is the better approach. 

But individual subscriber choice also presents its own advantages. Anyone who has ever helped select (or support) MLS software can tell you that it is difficult for a single MLS software interface to satisfy everyone in one local market. Some users prefer a very simple MLS system, others a more functionally robust system. Some users prefer the CMA of this system, others like the client collaboration tools in that system. Also, since people don’t need local support for popular business applications like Microsoft Word, why would they need it for the MLS software? Finally, since technology may make local customization easier in the future, the “buying power” argument may lose ground to the individual choice option. 

However, recently MLSs have begun fielding a single core MLS system but providing an “app store” where individuals can differentiate around that core by purchasing the apps and tools they want—like property reports, CRM, CMA, mobile apps and marketing software—and this new practice may reduce the attractiveness of fielding multiple core MLS systems. This approach could help enable a single national “core” MLS system and a standard national interface to suffice for many users while simultaneously making additional innovative add-ons and interfaces available for agents or brokerages to purchase.  The suppliers of these add-ons could compete for users at the national, state, and local market levels. 

Historically, in comparing the advantages of a national system with those of a single local or individually-purchased system, the biggest question has been whether a national system could be customized to handle all of the local requirements and business rules of all the local MLSs. Any vendor that has tried to service 100 or 200 or more MLS organizations can already tell you how difficult it is to balance those customers’ needs and priorities and serving the needs of over 850 would be far more difficult. With a national system, local customers waiting for a vendor to service the local requirements might experience a lot of frustration. 

Finally, would a national MLS system best serve subscribers? Would competition among multiple MLS software companies spur innovation and lower cost, and how would these concerns balance against a national system’s potential efficiency? Currently, the competitive, innovative MLS software market serves local MLS organizations and their subscribers well. Could a system be put in place that would encourage competition for the national MLS system contract? It is unclear that a company would want to spend three to six million dollars to create a competitive MLS system just for the chance to win the business from an incumbent national system, or, if a new system won the business, whether the industry would want to risk a whole-country cutover to an unproven system. But without this competition, would subscribers be well served?

To summarize, it is difficult to argue the benefits of a single system, and easy to raise concerns that are hard to address. The current model of one system per MLS organization works.  But looking forward, if concerns could be addressed, it might be feasible to move toward a more consolidated “core” MLS system, mitigating some of the concerns about competition and innovation by allowing for individual subscriber-purchase of well-integrated ancillary software and user choice of “front-end” software that seamlessly works with the “core”. 

2. Should there be one national MLS database?

It is possible to have multiple MLS systems that have a single national database or “back end” in common, including listing content and even other core types of data found in today’s MLS systems, such as contacts, saved searches, financial worksheet data, and associated documents and other media. 

Technically, a national database would consist of more than one physical set of database servers, in multiple locations, and might involve either of two processes: 1) the MLS system’s “front-end” interface uses the national database directly via an API or direct data access, or 2) the MLS system uses a replicated copy of the data or only part of the larger data set as needed by that front-end. 

The main benefit of a national database would be that those requiring datasets that cross MLS boundaries could more easily get that data from one place (with local MLS organizational approval for specific local data, of course). Because the hardest aspects of data aggregation are obtaining and managing that permission as well as adequately addressing the related legal agreements and compliance, a unified database technology would not provide that much benefit over what we have now – even less once the RETS data dictionary is adopted. In addition, national aggregators already are addressing the technical aspects of aggregation and distribution.   Syndication companies like ListHub and Point2, and national efforts such as Corelogic’s Data Co-op, RED’s reDataVault, and RPR have each invested several million dollars to aggregate, cleanse, and enhance the local data on a national level, and they can each distribute the data based upon whatever directions and rules the content owners provide. 

A national MLS database would certainly provide the benefit of making it easier to generate better real-time nationwide statistics. Would such statistics be much better than those today, based on data that are sent to NAR to generate national statistics that lag the market? Certainly, more accurate national real-time statistics and analytics would have immense value to investors, government organizations, and the lending industry, and this value would represent a substantial revenue stream to the source. This advantage of creating a national database is undeniable.

 But, a national MLS database would provide limited benefit to the average real estate practitioner, licensed at the state level and doing business locally.  Although aggregating data in larger regional MLSs and having larger multi-MLS data aggregations would benefit large, multi-office regional brokerages, regional aggregation is a much easier endeavor than attempting to compile a national database. How much effort should the industry expend to create a national MLS database that does not provide much benefit to local practitioners, but mostly to national players?

Also, perhaps most importantly, there are three additional risks posed by a national database. First, it constitutes a greater information security risk: it’s a very big target. Also, if all systems depend on that database to be up and running, it also introduces a single point of failure. Finally, a national database might also constitute an easier legal target for those seeking access to the mother lode of listing data. 

To summarize, although creating a national database would offer limited benefits, especially for the local participants who make up the bulk of the stakeholders, a national database would raise a number of concerns. It is unclear that the need for national real-time statistics and analytics, and the desires of those who might legitimately want nationwide listings data for other purposes, would outweigh those concerns. Creating a national database only starts to make sense, as a matter of efficiency, if there is a national MLS organization. 

3. Should there be one national MLS organization?

Most people advocating for national MLS are thinking about the advantages of a single system and database and having a national MLS organization is seen only as an end to those objectives, since it’s seemingly impossible to get many MLS organizations to agree to a single system and database. 

The central argument against the formation of a national MLS organization is that it essentially creates a national monopoly, and monopolies rarely provide the best products and services at the lowest possible cost over the long term.  Also, governance issues would likely make it more difficult for a national MLS organization to service local market needs. Consider the challenges MLSs currently face getting things done at the NAR Multiple Listing Issues and Policies Committee, a group that has only a very limited non-operational scope. Furthermore, like a national database, a national MLS organization also would create a single legal target for those seeking MLS access or recompense for patent or other infringements. 

Many local MLS organizations are currently hubs of software and service innovation, both internally and working with small software vendors. They provide an opportunity to experiment and fine-tune offerings on a small stage, out of the national spotlight. Would one large MLS become an impediment to that environment – even putting up financial roadblocks to smaller vendors getting access to subscribers, as some of the larger industry organizations already do? 

On the other hand, a national MLS organization could provide significant benefits.  First, there always seem to be well-funded efforts on the verge of disrupting the industry, and a single MLS organization would be better positioned, in terms of both governance and funding, to take on those challenges. In addition, the arguments against the formation of a national MLS could be addressed. In terms of product competition, for example, the organization could field multiple MLS system options or choices of front-ends, which would generate daily competition among technology providers, which would fight for market share among the subscribers and compete on price and quality. Further, although many large decisions would be made at the national level, there could still be local MLS service centers which would be expected to meet regularly measured standards of service, and potentially compete for subscribers on service and price as well. Although the governance and legal issues may be more difficult to address, those challenges and risks might be managed to some degree, as could the potential risks of a single national MLS organization. 

Finally, some might argue that, if the present industry doesn’t create a national MLS (organization, system, and database) then another group might. If a well-funded company wanting first access to MLS data offered service to MLS subscribers nationwide for a large discount over what subscribers currently pay, could that company successfully host a national MLS?  Assuming the value was there, many practitioners would move to the lowest priced system, with little or no regard to who the MLS provider is, and obviously this could be very disruptive to the current structure of MLS.  If structured properly, and care is taken to address the issues raised above, a national MLS organization should be able to deliver more cost-effective MLS service than the current model and reduce the risk of this type of potential disruption. 

There’s Middle Ground: MLS Regionalization

Having more than 850 Multiple Listing Service organizations, as we currently do, certainly has inherent problems. Many of the smaller MLS organizations don’t have the resources to provide a strong service or software package to subscribers, to defend against legal challenges, to implement a secure infrastructure, to plan for disaster recovery, or even to hire professional IT staff or management. Having more than one MLS in a property market area causes great inefficiency: practitioners must belong to multiple MLSs, which increases subscriber cost and data aggregation cost and effort. In addition, people need to learn multiple MLS software packages and manage multiple sets of login credentials—but still can’t perform a unified MLS prospecting search to provide search results to their clients. 

The answer to these problems is not necessarily to create a national MLS organization, system, or database. A middle ground would be for the smaller MLSs to merge into regional MLSs, ranging in size from multi-state MLSs (for example, a New England MLS, Mid-Atlantic MLS, or Dakota MLS) down to some states which might have two or three (such as Northern California and Southern California). Many of the concerns surrounding a “national” MLS system, database, and organization would still hold to some degree if one substitutes the terms “state-wide” or “regional” for “national,” and many regional systems may still not have quite the buying power or governance advantage of a national model. Nonetheless, a new modern network of fewer MLSs could provide either a viable middle ground between the current model and a national model, or a logical building block toward a national model. 

Finally, we might consider a hybrid model: that is, simultaneously with MLS regionalization, to evaluate the formation of a National Association of MLSs. Just as Realtor® associations cooperate to have a large voice via the National Association of Realtors, perhaps MLS operators can evaluate that same model to improve their success. 


Some put forth “National MLS” as an answer to perceived threats to our industry, while others see “National MLS” as the threat itself. There is no doubt that this debate will continue to be divisive. However, going forward, the industry should be able to have productive conversations about whether we want a national MLS system, database, and/or organization. Each option has its own disadvantages.   These issues have been raised not with the intention to shut down discussion or hamper progress toward the goal, but rather, as a starting point toward a continuing discussion of each national goal’s value and risks, and how those risks might be mitigated if the goal is deemed worth the effort. Some might point to possible threats on the horizon and say, “Now is the time to figure this out and act toward a national MLS”; and it seems wise that this conversation should move forward with deliberate speed. But, as an industry friend of mine once said, “We’re an industry driven too often by our fears and not enough by our dreams.” Let us consider, with an open mind, the MLS future that would be best for practitioners and their clients, using that as our inspiration in evaluating the potential for consolidating MLS interfaces, databases, and organizations.

mattsretechblog: matt cohen (Default)
2013-11-03 12:00 am
Entry tags:

Principles of MLS Service

What Should the Scope of MLS Services Be?

At the 2013 Council of MLS conference, The Realty Alliance (TRA), a group of large brokerages,
put MLSs on notice that a number of MLS practices were angering some participant firms. In TRA’s brokers’ eyes, MLSs were providing products and services out of the MLSs’ scope – for example, agent websites, CRM, property marketing tools, showing systems, transaction management systems, and MLS public-facing websites — and requiring brokers to pay for these items as a part of their MLS dues. TRA complained about MLSs “pushing NAR to add as many items as possible to the list of ‘basic’ MLS functions to force participants to pay for them, whether they want them or intend to use them or not.” For those not up to speed on how NAR categorizes MLS services, here is a summary [1]:

Core: Core MLS information, services, and products are essential to the effective functioning of MLS, as defined, and include current listing information and information communicating compensation to potential cooperating brokers

Basic: In addition to core services, an MLS may also provide additional information and services in a basic package of MLS information, services, and products, as determined locally and provided automatically or on a discretionary basis, such as: sold and comparable information, pending sales information, expired listings and “off market” information, tax records, zoning records/information, title/abstract information, mortgage information, amortization schedules, mapping capabilities, statistical information, public accommodation information, MLS computer training/orientation, and access to affinity programs.

Optional: An MLS may not require a participant to use, participate in, or pay for the following optional information, services, or products: lock box equipment including lock boxes (manual or electronic), combination lock boxes, mechanical keys, and electronic programmers or keycards; advertising or access to advertising (whether print or electronic), including classified advertising, homes-type publications, electronic compilations, including Internet home pages or Web sites, etc.

Although it seems clear above that MLSs cannot require a participant to pay for optional items, NAR policy goes on to state that “None of the foregoing precludes an association or MLS from utilizing association or MLS reserves, dues, or fees or special assessments … to acquire assets … necessary to make optional information, services, or products available.” Is anyone else confused yet?

What really set TRA in motion to articulate its members’ issues was back in May 2013, when NAR, over their objections, added the “establishment, maintenance or promotion of public-facing websites” to “basic” services. While I, myself, believe that such websites are in the best interests of MLS subscribers and consumers, no rigorous arguments to that effect were made before the rules were changed, so I understand why TRA brokerages were angry about the inclusion of public facing websites. I feel that what has been missing from the conversation regarding MLS public-facing displays as well as well as what else should be included in the litany of “basic services” is the answer to the following question: “What are the principles by which MLS information, services, and products belong in the categories of core, basic, and optional?”

At the heart of answering that question is the definition on what an MLS is. According to NAR, an MLS is [2]:

a.       a facility for the orderly correlation and dissemination of listing information so participants

may better serve their clients and customers and the public,

b.    a means by which authorized participants make blanket unilateral offers of compensation to other participants (acting as subagents, buyer agents, or in other  agency or non-agency capacities defined by law),

c.     a means of enhancing cooperation among participants,

d.    a means by which information is accumulated and disseminated to enable authorized,    participants to prepare appraisals, analyses, and other valuations of real property for bona fide     clients and customers, and

e.    a means by which participants engaging in real estate appraisal contribute to common databases.

It’s important to go back to this definition because of how it relates to antitrust tying concerns.  In its most simple terms, tying is the practice of requiring the purchase of one product that a buyer does not want in order for the buyer to be able to purchase a product the buyer does want. The core of one of the four tests for illegal tying is that “there must be two separate products.” How does one determine whether the products are separate? We have to look at how the product is defined, and in this case, the product we’re looking at is “MLS services”. Each bullet point in the definition of MLS services effectively spells out a core principle, which is a test for how appropriate it is for a product or service to be included in the basic MLS package.  Without being aware of such principles, it must seem to broker’s as though MLSs are acting without rhyme or reason. If items fall under this definition, they are clearly core or basic, and if they don’t, they should probably not be site-licensed by the MLS or included in base fees.

One part of the definition of MLS, “Enhancing cooperation among participants,” seems excitingly malleable, and one could ask why requiring use of a common lock box system – something that enhances cooperation tremendously — doesn’t universally fall under that definition as something that could be considered a “basic” product rather than as an unrelated “optional” product. [3]

I would like to suggest that there are some additional principles that should be considered, and possibly addressed in the NAR policies and definitions.  These principles should supplement the principles mentioned above, while keeping in mind their potential antitrust implications:

1.  Does the product or service require many or all MLS subscribers to use it to achieve benefits from it? Professional collaboration tools (i.e. transaction management and showing systems) would fall under this principle. Yes, I am aware that TRA does not like MLSs fielding these products in some markets – that’s why we need a principle-based discussion regarding both viewpoints.

2.  Does the product or service help participants better serve their clients but is it economically or otherwise infeasible for any one participant to field the product or service on their own?  This principle could go beyond “listing information”; frankly, I would like to see the word “listing” struck from the first part of the NAR definition, because it is very out-of-date to think that Realtors® are not expected by their clients to provide a wide array of data and services.

3.  Does the product or service require a level of integration into core systems that would not be feasible from an economic and/or interface perspective if every broker or agent selected their own?

4.  Is there an overarching subscriber economic interest?

These additional principles don’t necessarily stand on their own; the product or service would need to help fulfill part of the definition of MLS as well.

I understand that MLSs want clear guidance from NAR, and the lists of core, basic and optional elements have served that role, but perhaps these examples would be better located in some sort of policy implementation guide rather than in the policy itself. I believe it would be better for the MLS policy to focus more on the principles that would allow one to determine the categories into which future products and services would fit. If we do this, it will be far clearer what constitutes an MLS product versus a separate product and brokers will be able to have a better-structured and more productive conversation with MLSs at the local level on which products and services should be offered by the MLS.



[3] It’s understood that in some markets (not those in the First, Second, and Eighth Circuits) lock boxes can be treated in much the same way as a “basic” product is – if the MLS does not derive economic benefit from it. But this assumes lock boxes fail the other tests and must rely on this “economic benefit” argument.



mattsretechblog: matt cohen (Default)
2013-10-07 12:00 am
Entry tags:

Eliminating MLS and Broker Conflict

Author: Gregg Larson

This summer I was invited to speak about REDPLAN at several national franchise broker-owner meetings and The Realty Alliance CTO gathering in September. I was surprised to learn of the high level of frustration between the larger brokers and their MLSs. Some brokers said the MLS was their #1 source of angst this year, even ahead of the usual suspects like banks, NAR, and ZTR. The intensity of the brokers’ anger is what shocked me – combined with the fact that I wasn’t hearing about this from Clareity’s MLS customers and clients.

When I was invited to sit on the panel about eliminating MLS and broker conflict at CMLS last week, I accepted knowing this would be a feisty session. I met with Craig Cheatham, CEO and Jon Coile, board officer and head of the Fair Display Committee, during Inman in July right after their board of directors meeting. The Alliance had just finished compiling, in collaboration with MLS executives, a set of “Fair Display Guidelines” for MLS public-facing web sites. These guidelines were created at least in part based on the huge frustration with NAR and the MLS Policy process around “MLS core services” during the mid-year meetings in May in DC. It’s clear to me now that this frustration has been percolating all summer and led up to the panel at CMLS. 

My congratulations to Greg Manship and CMLS for getting this topic on the agenda because it provided the chance to get the “dead elephant in the room” out in the daylight and discuss it. Craig Cheatham provided a list of MLS practices that create or increase conflict with The Realty Alliance members. Members usually have more than 1000 agents in their firms, so one could say these are the collective concerns of large brokers. While this is true, some of these items reflect the concerns of any size broker and based upon my meetings this summer, several of the national franchisors as well. 

The week prior to CMLS, Craig Cheatham asked his members to submit their concerns with the MLSs they deal with locally. Keep in mind, some of these firms belong to multiple MLSs, which can be a source of aggravation in itself with different data, rules, and rules enforcement. One member reported belonging to 47 MLSs. Can you imagine how that can contribute to that company’s pain and expense? Craig distilled 48 pages of comments he received to compile the list below. The brokers mentioned many items below more than once. Craig read off a bunch of items during the CMLS panel, but here is the complete list from The Realty Alliance:

MLS practices that are likely to create/increase conflict between MLSs and participant firms (this list is not an accusation that the CMLS audience does all of these, but is meant to give real specificity to general complaints that have been heard for years): 

1.       Tying MLS participation with products/services that should be optional and go beyond the founding MLS principles (data, cooperation/compensation) … unfair, and likely illegal.

2.       Creating and promoting public-facing listings advertising websites that compete with broker websites.

3.       Forcing brokers to participating in and/or pay for the creation, maintenance and promotion of MLS public-facing websites.

4.       Operating a public-facing listings website not in compliance with the “Fair Display” guideline

5.       Subsidizing associations by over-charging for MLS services and passing extra revenue to associations.

6.       Offering continuing education that covers topics not specific to MLS functionality.

7.       Hosting agent-rating programs for the public to view and rank

8.       Amassing excessive reserves.

9.       Withholding feeds of any kind to which the participant firms are entitled.

10.   Making the default position for products/services offered by the MLS be “opt out” instead of “opt in.”

11.   Having a governance structure that is not authentic and equitable (based on market activity).

12.   Withholding sold and/or pending data and/or any other set of legitimate data from VOW feeds.

13.   Pushing NAR to add as many items as possible to the list of “basic” MLS functions to force participants to pay for them, whether they want them or intend to use them or not.

14.   Inconsistent data standards across MLSs in a day and age where all should be up to date.

15.   Not curating authentic involvement in buy-in and governance, using both formal and informal means.

16.   Assuming that an agent on an MLS board truly satisfies representation of that agent’s broker.

17.   Advertising competitors (including competitors of participants’ affiliates), especially around listings.

18.   Blocking sold data from “pocket listings” from being used for comps, forcing data of less quality/amount to be used instead.

19.   Making unsubstantiated claims to ownership/copyright of data.

20.   Not protecting MLS data from piracy.

21.   Not consolidating the total number of MLSs.

22.   In effect courting the loyalty of agents and cutting in on the relationship between broker and agent.

23.   Forcing brokers to opt out of IDX if the broker wants to opt out of syndication.

24.   Picking and choosing which NAR MLS policies to follow or not to follow.

25.   Selling MLS-wide initiatives with the promises of revenue shares brokers never see (either in reduced fees or in payments).

26.   Utilizing lawyers who work to help MLSs figure out how to not do anything more for participants than they absolutely have to.

27.   Resisting programs broker participants want to utilize for the reason that the MLS doesn’t think it appropriate for the broker to earn revenue (somehow the broker is to operate like a non-profit and the MLS is to operate like a for-profit).

28.   Failing to “over” communicate, knowing this is essential and falls to the MLS when it comes to MLS plans and programs.

29.   Using old technology, while spending time and effort on non-core products/services.

30.   Not accepting data uploaded from a broker or its designated source, and instead insisting on data entry through the MLS’s system.

31.   Pretending that the MLS does not or cannot provide the capability to accept data from a broker’s system instead of MLS entry.

32.   Not solving the issue of allowing “firms” that are not legitimate industry participants to be MLS participants and exploit MLS data.

33.   Allowing consultants to steer them to being overly entrepreneurial.

34.   Claiming that broker participants somehow do not have the right to produce and sell valuation products, when creating valuations using all MLS data is and has been a core benefit of MLS participation.

35.   Refusing services/feeds to a broker for a project because a vendor is being paid to assist that broker participant with that product.

36.   Denying a broker a service/feed to provide a product because the MLS feels the broker just doesn’t work hard enough in the process to earn income from the product/service the broker is trying to offer.

37.   Providing agent-level websites to all agents.

38.   Providing CRMs to all agents.

39.   Providing property marketing tools and prospecting tools to all agents.

40.   Sending data directly from the MLS to third-party listing sites that compete with firm sites.

41.   Contracting with showing/appointment systems for the entire MLS if brokers object.

42.   Contracting with transaction management systems for the entire MLS if brokers object.

43.   Extrapolating the requests/opinions of a few of a broker’s agents to decide that the broker’s perspective is invalid or that the broker isn’t “in control” of his/her agents.

44.   Viewing its customer as the agents or the consumer public.

45.   Denying a broker participant a feed/service because the MLS itself has an exclusive agreement with a vendor, when the MLS’s obligation to provide its participants feeds/services has nothing to do with what the MLS as an entity has agreed not to do itself with other vendors.

46.   Being overly aggressive with fining participants.


General attitudes that indicate the MLS may have lost its way:

  • Bias against participant requests while having openness to outside (vendors, public) requests.
  • Feeling that, as technically a for-profit, no one should tell our MLS what we can or cannot do.
  • Operating in such a way that “more than just an MLS” would be an accurate tag line/slogan.
  • Thinking of the MLS as a service to consumers instead of a business-to-business enterprise.
  • Having a bias against participants that make up a significant percentage of market activity  and skewing benefits toward those with a smaller percentage of market activity.
  • Smugness and/or false confidence that “we’ve heard all these complaints before, but nothing  ever comes of it."
  • Using weariness of the “same ol’” conversation as an excuse not to address the gap that exists.
  • Pretending that the issues don’t apply for non-Realtor MLSs.
  • Living in denial that, despite the convergence of low technology costs and cleaner data, a broker-owned/run initiative simply isn’t feasible.
  • Thinking it is the MLS’s proper role to compete with third-party listing websites.
  • Assuming vendors should be lining up to pitch their products to MLSs, not to brokers.
  • Resisting constructive criticism.
  • Feeling “this is my MLS” and “I know better” than my brokers (for whom I am supposed to work).
  • Ignoring the obvious conflicts of interest of MLS executives serving on NAR’s MLS Issues and Policies Committee when motions are made that pit MLS entrepreneurial dreams against the fiduciary duty of MLSs to their broker participants.

General Comments from The Realty Alliance:

Is there any other industry in which business pay significant dollars to an entity that then turns around and uses that money to provide services to that business’s competition – especially services that business may already have bought for itself?

No threat intended … the role played (on the panel at CMLS) was that of a weatherman, warning that conditions in the very near future were very favorable for a storm.

Brokers appreciate the hard work that MLS executives do, and to some extent, understand the challenges.

Both sides have work to do, and brokers realize fixing the gap is a two-way street.

Brokers perceive they are under attack by industry associations, MLSs and vendors, feeling as if these entities want to take from them all they do for agents and customers and leave the brokers with nothing left to do but pay the bill and assume the liability. 

The 10-day goal for communication was a strong suggestion because The Realty Alliance only meets twice a year (fall meeting is Oct.14), and feelings are strong enough on the broker side that MLSs could benefit from checking in in advance of that group’s important time of discussion and decision-making. Why wait when MLSs now know such a gathering is coming up so soon?

However, any project of significant size takes a lot of time and gets implemented in several pieces and phases, so the sky will not fall if MLSs do not sit down with their largest constituents in advance of October 14. But what if nothing comes of the current industry movement? Is that reason not to try to bridge the current gap? 

The ideas being tossed around for possible implementation are broad-based, not restricted to The Realty Alliance, but have been incubated by a number of global networks and brands representing firms of all sizes and business models, of which The Realty Alliance is just one segment.

Clareity’s Conclusion

1.      We encourage MLS executives to pick up the phone this week and touch base, CEO to CEO, (or as high up as you can get) with your largest members, whether they are members of The Realty Alliance or not. Try again to open communications and bridge the gap. Don’t use the excuse that they don’t return your calls – try them. Go visit them. Invite them to your office. Don’t hide behind email only. Get belly to belly as high up in the firm as you can. And listen. And don’t use the excuse that the MLS represents all brokers, not just the big ones. That’s very true, but if you were running any other business and your largest customer, comprising 10, 20 or even 30% of your annual revenue, was extremely frustrated and told you they were thinking of leaving, wouldn’t you as a business owner take the time to hear them out and see what you might do to stop them from walking out the door forever?

2.      Hit the reset button and reexamine the role of your MLS (or Association) for 2014. A common theme heard throughout The Realty Alliance list was related to the mission of the MLS and its enterprising attitude. Clareity and half a dozen other consultants, along with numerous vendors, are guilty of introducing seductive new technology and services that the MLS can license for all its members. MLSs and Associations, in their well-meaning attempts to deliver value to their members and maintain relevance themselves, may have gone over the line by expanding their menu too widely. As I mentioned during the session, consider applications and services that benefit from the power of the network. These are services that everyone benefits from and which add efficiency to the MLS marketplace. Things like RETS, data standards, common forms, lock box, showing scheduling (where not conflicting with existing showing systems) fit in this “network” category. Products like CRM, mobile apps, flyers, productivity tools for agents and so on might be better left to the agent to select from the free market. Some brokers offer these types of tools but they’re fine with their agents picking whatever tools they want, as long as they’re not subsidized by the MLS.

3.      Don’t take Craig’s warning of a perfect storm brewing lightly. And don’t joke about the 10-day deadline that was not scripted by Craig, but rather in response to my comment that over the next month every MLS executive in the room should plan to meet with all of their large brokers. I mentioned during the panel that several “nuclear options” that have never been available before might be possible by 2014. The Realty Alliance and some other large brokers and franchises have invested money in R&D on a project that could dramatically affect MLS and several vendors that were in the room know the details of this project but are under NDA so they are not talking about it. And no, technology is not a hurdle. Clareity has not been involved in this research but has some insights to its viability. My advice is don’t take it lightly. When your largest customer is spending money to find a way to leave you, it’s time to sit down and talk.


The brokers realize that every item on The Realty Alliance’s List can’t be fixed overnight, but some of them, including opening communications, can be started today.

mattsretechblog: matt cohen (Default)
2013-06-25 12:00 am
Entry tags:

The MLS Mission in an Evolving Context

Beyond Cooperation and Compensation

Following is a reminder – an excerpt from my speech at the Council of Multiple Listing Services 2008 Convention, for which I would like to provide new context.

The long-term relevance of MLS organizations has been questioned at numerous conferences and on Internet sites over the past few years, but I believe these organizations are uniquely qualified and positioned to deliver technology and support needed by the industry. If we determine strategically what the MLSs need to provide to help the real estate professional service the modern consumer and participate in the real estate transaction of the future, and if we work vigilantly toward that end, the relevance of MLS organizations – and the value of real estate professionals – will no longer be questioned.

If the MLS organization is not re-chartered, re-missioned, and re-branded more generically as a provider of information systems for organized real estate, we will continue to see pushback against the MLS organization offering systems that don’t solely address cooperation and compensation.…  If our industry doesn’t reposition its MLS organizations or find some other means of improving the toolset and processes of the real estate professional in an organized, consistent manner, our industry will continue to lose its value perception with the consumer.

I don’t believe our industry can afford to fail in redefining and creating an exciting future for itself. I don’t believe we can sit back and let outsiders take control of the real estate conversation and create the future of our industry. The effort wouldn’t be easy, but that’s the leadership challenge I put before you.

Fast forward to 2013

New companies have flourished, raised billions of dollars, and have started to acquire or partner with companies that comprise the technology ecosystem, which I sometimes refer to as the “Agent OS” or “Broker OS.” MLSs are still saying, “They don’t have listing maintenance or data integrity like we do.” Soon, however, those companies may possess everything but that, leaving MLSs to do just listing maintenance, the hardest part of the job and the one that is  least appreciated financially or otherwise by subscribers. And it won’t be hard for technology companies to go the last mile, and take over listing maintenance, too. Perhaps they will provide all the technology in the end, leaving REALTOR® associations to police data integrity at no cost, as a matter of ethics. That’s one way for MLSs to disappear: to allow others to continue to erode their value.

These same new companies are taking over the real estate conversation. They are the sponsors of “Hangouts at the White House” with the HUD Secretary, their economists are quoted (where it matters) far more than NAR’s or the local organizations’, consumers flock to their sites for a wide range of information, and these companies are radically outspending traditional real estate in the media. And they aren’t doing this for the common good. They are doing it to solidify their position and interests, so they can make more money for investors. That, I remind you, is the primary goal of a public company.

Most MLSs have not re-missioned and re-branded, as I urged back in 2008, and the broker pushback against “MLS public websites” at 2013 NAR midyear meetings was not met with strong, rigorously reasoned response the way it should have been. Let’s be very clear about this: MLSs have been the brokers’ TRUE technology partner for decades and MLS shareholders are NOT getting rich off the backs of their subscribers. Meanwhile, the “publishers’” offerings grow more numerous, and reach deeper and deeper into the professionals’ pockets.  These companies continue to push deeper into what were once sacred broker-affiliated territories like mortgage and title in order to do so. How can they not? Their owners and investors demand a high multiplier return on their investments, and so the “publishers” go where they money is. Meanwhile, some brokers have been working to hamstring their true technology partners, against their own economic interests!

The “publishers” may talk about the great value they provide, but let’s be realistic: if they disappeared today, the consumers would still have a place to go for listings, and it’s a zero-sum game: money goes into their pockets and comes out of the professionals’. They aren’t really increasing the amount of money in real estate, even as their corporate valuations swell into the billions. One would think that, as the largest brokerages have moved from being privately held to being publicly owned on Wall Street, they would take a more rigorous look at their environment. Perhaps sending their lifeblood, listings, and money to those who work against their financial interests is not something they should be doing. Perhaps they will re-examine the MLS and appreciate its potential and what it currently provides. Perhaps that nostalgia will only come to brokers when it is too late. But perhaps MLS leaders can more actively  re-mission and re-brand. They can take the message to the brokers and franchises and help them see reason.

Meanwhile, some in the MLS industry are gearing up for battle. They know that organized real estate is going to have to get more organized moving forward. They know that outsiders may be coming in with a package of technologies and services that compete with their own. And they know that the outsiders may come in at a price point far, far below what MLSs charge now – far below what the technology even costs to create and manage – in order to get “first access” to the data. MLSs are regionalizing, looking to provide a solid breadth of service at an economy of scale. MLSs are putting in place Clareity Security’s SSO Portal which, assuming the MLS has put together a robust offering, helps address the perception that the MLS just provides the traditional MLS system. MLSs are implementing the “Clareity Store,” an infrastructure that allows MLSs to narrow their core offerings and control costs while maintaining themselves as the hub for real estate technology. The store provides a great user experience for those professionals purchasing and using other technologies “à la carte.” This has been an important MLS industry strategic initiative put forward by my sister company, Clareity Security: preparing the infrastructure for “MLS core plus MLS store,” which enables MLSs to make the necessary shift in cost structure to prepare for the competitive environment, and at the same time eliminates the “leveling the playing field” argument that many large brokers still complain about.

The context around the MLS continues to evolve, but I’ll stick with what I said in my 2008 speech. There is still tension in many markets surrounding the evolution of the MLS organization to provide more than a system of cooperation and compensation. But I think our industry is up to the challenge. It’s time for us to invent the future we want and take bold steps forward to build that future. Ad astra per aspera – “through adversity, to the stars.”

mattsretechblog: matt cohen (Default)
2012-04-18 12:00 am
Entry tags:

VOW and IDX Rules: Security Compliance in the Trenches

As a consultant often called on by MLSs for help with VOW and IDX compliance audits as someone who is always pushing for improved information security in the real estate industry, I love that information security is featured prominently in the VOW rules, section 19.5: “A Participant’s VOW must employ reasonable efforts to monitor for, and prevent, misappropriation, ‘scraping’, and other unauthorized use of MLS listing information. A participant’s VOW shall utilize appropriate security protection, such as firewalls, as long as this requirement does not impose security obligations greater than those employed concurrently by the MLS.” The last part of that rule is also reflected in optional IDX rule section 18.3.14. Auditing these rules has allowed me to help many brokers improve their VOW and IDX security and reduce the risk of an information security incident.

I’ve already written about guidelines for anti-scraping and monitoring and, although anti-scraping is a constantly evolving challenge, that article provides at least a baseline for evaluating VOW rule compliance.

But, what else should MLSs be looking for when evaluating VOW and IDX security?

First, as specifically mentioned in the rule, appropriate firewall protection must be established. When I audit a VOW, I look to make sure that there are only a few specific network ports open on the server – 80 and 443 as needed for the web server to function, and ports needed to provide a secure method of server administration, such port 22 – or 989 and 990. If ports like 21 and 3389 are open and actually used to administer the website, it should be a big compliance red flag because they are common security incident causes – and issues I see the majority of the time when auditing a VOW or IDX site.

Second, you want to verify that all the web server software is up to date and properly configured. That means checking the web server (IIS, Apache, etc.) version, the operating system version (when possible) and the platform (.NET, JSP, ColdFusion, WordPress, etc.) version, making sure that those are the most current versions or that newer versions don’t have fixes for significant security vulnerabilities. You might think that keeping systems patched would be second nature for a technology provider, but in my experience, it seems not to be the case.

Third, you want to evaluate any externally obvious security misconfigurations of the server and platform. Every server and platform has its own security configuration guidelines and it’s reasonable to expect that obviously poor configurations should not be visible to an external evaluator.

Fourth, and probably the most complicated part of evaluating VOW security, you want to evaluate application security – at least the OWASP Top 10 Vulnerabilities: Injection, Cross-Site Scripting (XSS), Broken Authentication and Session Management, Insecure Direct Object References, Cross-Site Request Forgery, Security Misconfiguration, Insecure Cryptographic Storage, Failure to Restrict URL Access, Insufficient Transport Layer Protection, and Unvalidated Redirects and Forwards. I usually evaluate Information Leakage and Improper Error Handling as well. Some of these items can’t be easily validated externally (i.e. Insecure Cryptographic Storage) though I’m always glad to hear that a web developer has encrypted the passwords and so cannot technically be compliant for VOW rule 19.3b. (“The Participant must at all times maintain a record of the name, email address, user name, and current password of each registrant.”). I’ve seen every one of these OWASP vulnerabilities while auditing VOWs and many times there are half a dozen issues on a single VOW.

If you’re a staff person at an MLS and a lot of the preceding read like gobbledy-gook to you or you don’t know how to audit security, you may want someone like me auditing VOWs and IDX sites for you, or at least auditing the security and anti-scraping related portions. It has been a blessing for the industry that the VOW and IDX rules give MLSs the opportunity to ensure that at least some reasonable security best practices are in place for VOW sites. I’ve had brokers tell me they were actually grateful someone was keeping an eye on their technology provider in this area, since they lacked the capacity to do so themselves and just figured that all appropriate measures had been taken.

Please keep in mind that website security is the smallest portion of overall brokerage security. Taking appropriate steps in terms of policies and contracts, physical security, account management and password controls, internal networking and computing, mobile device security, and internal web applications are all important. The NAR sponsored security workshops and security articles and blogs that I write, and which many MLSs and Associations reprint, are helping me reach some brokers and agents – but it’s a very difficult task to try to improve information security in this industry and I hope that I can count on my readers to act as security allies and spread the word.
mattsretechblog: matt cohen (Default)
2012-03-07 12:00 am
Entry tags:

Expanding Agent-Client Collaboration in the MLS

Buyers and Sellers Deserve Better

Agent-Client collaboration inside the MLS has mostly been stalled since 1998, when MLS systems first started providing an area for clients to view agent-saved searches and suggested listings and provide listing ratings back to the agent. Since that time, some systems have added minor enhancements, such as built-in messaging and for the agent to be able to share a document with the client. But mostly, it’s been the same story: Buyers interacting with agents around listings. For the past few years I’ve been advocating with MLS vendors to both expand both buy-side collaboration and add something for the people writing the checks that drive everything – the sellers. During Clareity’s 11th Annual MLS Executive Workshop I took this idea right to the workshop participants, and now I’m bringing it to the blog. This won’t be as detailed as the workshop presentation and will be much less detailed than when I’m talking with vendors – but hopefully I’ll get the main point across and drive readers to ask for these types of features.

When it comes to collaborating with buyers, sure, agents need to interact online as they do today around listings. But they also need a more robust search and search result content – otherwise it drives the client back to the advertising portals. I’m talking about neighborhood info, school info, public records info, and Walkscore. I’m talking about enhancements like lifestyle search. Relevant market trends and statistics for the client search areas (DOM, Inventory, List/Sell Prices, etc.) would also be compelling content. Messaging is also important and having proper alerting options, including email, text-message, and phone is key to help ensure agents provide timely response to questions. I’m all for the collaboration portal offering a way for agents to provide documents to their clients, but I think that these documents need to be more collaborative – for example, financial worksheets need to be interactive and provide alerts in both agent and client directions when a new version is created by “cloning” an old version for editing. Open houses visit planning, note-taking, and feedback should either be built in or deeply integrated. There’s so much more – this is just a starting point of how agents and buyers could be collaborating. And don’t forget that this needs to be mobile-device-friendly.

What do I look for when it comes to agent collaboration with sellers? Obviously, there is messaging, open house activity and feedback, seller-oriented market statistics and updates (i.e. new similar listings and price reductions), interactive and collaborative financial worksheets, and an agent activity log – the flip side of the buy-side functionality. There could be a reverse prospecting tool with “what if” capability – allowing the agent and seller to explore what happens if improvements were made or price was changed. There can be an interactive marketing plan and materials, including where the listing is on advertising portals and metrics for advertising effectiveness inside and outside the MLS. One thing I definitely would love to see is the provision of CMAs, AVMs, and associated financial worksheets that allow for easy change and new versions over time as the market and comps change over the life of the listing. Again, everything the seller needs to know and all of the service the agent provides the seller needs to be accessible from ONE mobile-friendly client collaboration portal.

As Bill Chee once said to me, “The consumer is the lion coming over the hill.” By making MLS systems truly collaborative, MLSs can both help improve agent service to their clients and improve MLS system core value. I know, to those that thought that features like built-in CMA and prospecting would be the death-knell for broker competition, this seems like yet another “level the playing field” move. But please, look back and note that the world didn’t end more than a decade ago when those features were added to MLS – it won’t end now either.