Open Source MLS

Sep 18, 2007  |  Michael Wurzer

Yesterday, a software developer from ActiveRain proposed on the Future of MLS Wiki that the open source software development model could be an effective model for the MLS. Here are my comments on his proposal:

At first blush, your choice of the term Open Source MLS might appear contrary to the traditional MLS model, but the details of your proposal are really not much different than what exists today. First, real estate agents have voluntarily cooperated with each and self-funded the creation of MLS systems in order to share data with each other and the public. Second, as you suggest, the seller is and always has been in control of how and where the sale of their property is advertised. Often, sellers exercise this control by hiring a broker, but other times they don’t. In either case, the seller remains in control and can direct the broker whether to put the listing in the MLS or not, and where to advertise the listing or not. So, the information is free already to the extent the question is control over where advertising occurs.

If what you’re suggesting is that sellers should be able to put their information into the MLS system without hiring a broker, I agree that such a model would help aggregate the data more comprehensively (joining both for sale by owner and broker listings together) but it only works to the extent the brokers continue to get paid in some fashion or the system will cease to exist. In other words, the question you raise isn’t whether the information is free (it is already) but whether the MLS system is free, which, by definition, it cannot be, because things like hardware, software, bandwidth, and people to manage it are not free. For the system to exist, those paying for it must make money for something, whether it is for advertising or services or whatever. So, how that is different than what exists already, I’m not sure.

I do think you’ve hit on some excellent points regarding “access control rights” and agree that “starting a page that outlines the MLS Data and it’s permission issues” is a great idea. The web is changing the environment in which the seller makes the decision about whether and what broker to hire and is changing how listings are advertised and shared. Defining what that environment should look like is exactly what this wiki is about.

What do you think? What information in the MLS should be kept private and what should be made public? What role should a seller have in the MLS? Is there a role for them in the MLS before they hire an agent? Comment here or, better yet, at the Future of MLS Wiki.

7 Responses to “Open Source MLS”

  1. Tony Arko says:

    IMO, the multiple listing services should become statistics and data gatherers for real estate professionals. The raw data and information regarding real estate transactions such as sales prices, seller concessions, days on market, dates, list prices, price reductions, etc should be the focus of the MLS. Anything having to do with marketing and exposure of a property and all the information, pictures, videos, etc should be public information. In fact, multiple listing services are so poor at this aspect of a listing, they should be prohibited from providing this service and should have to farm it out to a company that understands how to properly market a home.

  2. D. Lambert says:

    The current state of the MLS is all about control. Agents want to retain as much ownership of the MLS as they can, even while it inevitably slips from their grasp.

    When I bought my first house, there was no way a “mere mortal” could access the MLS. Your realtor would print out listings, or if you were really lucky, leave a book with you for a while. Now, there are multiple sites where a consumer can search the MLS in a controlled fashion, but we’re really not even to the point where consumers have open read-only access to the MLS, let alone update access.

    To be fair, I believe realtors perform an effective spam-filtering role when adding or updating listings. I can only imagine the deterioration that might occur without any sort of mediation in place.

    In terms of the financial needs of hosting the MLS, I understand the argument, but don’t agree that the current model is the only solution. You can’t tell me that Google wouldn’t jump at the chance to host an open MLS, selling web ads on page views, RSS feeds, and so on. It’s a no-brainer.

    I’m happy to see these discussions taking place, and I’m convinced that the MLS will inevitably open up at some point. The web abhors information hiding, and it’s just a matter of time until we see an open MLS.

  3. In terms of the financial needs of hosting the MLS, I understand the argument, but don’t agree that the current model is the only solution. You can’t tell me that Google wouldn’t jump at the chance to host an open MLS, selling web ads on page views, RSS feeds, and so on. It’s a no-brainer.

    Advertising is one way to make services appear free, but that doesn’t make them free. This is particularly true in the case of an MLS, which already is a group of competitors cooperating with each other on a limited basis. Once you throw advertising from competitors and third parties into the mix, the conflicts will intensify and I believe that system would have a hard time holding critical mass. I’ve been writing this same thing for months now, but I think it can’t be repeated enough that those who confuse the technology of the MLS with the human element are making a big mistake. The human element — getting competitors to cooperate to aggregate data — is by far and away the most important element.

    I think one of the biggest questions is the one Tony raises, namely whether the MLS has a role at all in providing public search capabilities. On the one hand, many consumers clamor for this “opening” of the MLS, because they want a comprehensive and independent source of information. On the other hand, providing such search tools poses potential conflicts with the efforts of the broker members to promote their own web sites. The question is whether there is a middle ground like that served by HAR.com, which provides a popular public search that drives traffic to broker sites.

  4. D. Lambert says:

    Yeah, you’re right. It’ll never happen.

    Or will it?

    http://www.geekestateblog.com/googles-real-estate-strategy/

    The way they’re approaching this, nobody will care who “owns” an MLS, and that’s close enough for me.

  5. […] day or so ago, I suggested, again, that advertising supported web sites will have a hard time building a successful listing portal, which I’ll define as having a critical mass of listings for sale in the relevant […]

  6. Brian Wilson says:

    This question always get clouded by two separate issues being incorrectly grouped together.

    Question 1. Do the MLS’s do a sufficient job in marketing their brokers’ listings to the public or making them more easily accessible to be marketed to the public?

    Question 2. Should the current MLS’s be forced to allow anyone with a computer and an address to be able to add a home or access the inventory?

    Here are my two humble opinions on the two separate questions:

    ANSWER 1. No, they do not. However, this is by design because most brokers do not want their local MLS to manage their marketing program. I don’t understand this problem. With current internet technology any broker can upload a listing to a number of syndication sites in about 10-15 minutes and it will appear on a cornucopia of websites across the internet. We do not need the local MLS to do this for us.

    ANSWER 2. This should be allowed only if you do not want MLS’s to exist anymore because this is what will happen when these become “open.” The value of the MLS to real estate brokers is the built-in compensation system and the accountability system that maintains very accurate and timely data. “Opening” the MLS to people who really cannot be held accountable to the system and who will not be truly obligated to the contractual nature of the system will render it equivalent to a ubiquitous listing site like Trulia.

    Brian Wilson, http://www.zolve.com

  7. With current internet technology any broker can upload a listing to a number of syndication sites in about 10-15 minutes and it will appear on a cornucopia of websites across the internet.

    Is that cornucopia of websites really effective when none of them have complete inventory? IDX sites have somewhat complete inventory, but, most often, they are MLS by MLS, which the consumer doesn’t care about. Realtor.com has a pretty complete inventory but is that site making brokers happy? I agree that MLSs should stay out of the way of the broker’s marketing program, but I wonder if there isn’t a difference between providing a search portal and advertising. That may sound like I’m splitting hairs but I think decisions regarding the two (a single listing advertisment and a portal aggregating all listings) are very different from each other.

    “Opening” the MLS to people who really cannot be held accountable to the system and who will not be truly obligated to the contractual nature of the system will render it equivalent to a ubiquitous listing site like Trulia.

    Why couldn’t a homeowner be held accountable for accurate data through terms of use? Many homeowners may have more motivation to be accurate about the data they enter than agents.

    Regarding offers of compensation, again, why couldn’t they be enforced through terms of use? A contract is a contract.