Public MLS: Challenging the Online Home Search Goliaths

Can local MLSs launch public-facing listing portals that compete with the major home sites?

The San Francisco Association of REALTORS® used to list classes, events, and volunteer opportunities for members on its Web site, SFRealtor.com. Today, however, the same site is a real estate listing portal. REALTOR® associations in Charlotte, N.C., and elsewhere recently made the same move.

These sites offer local consumers what associations say is a more accurate and more complete alternative to the larger listing aggregators, such as Zillow, Trulia, and Homes.com. Plus, they say, they’re offering members what they want: a locally focused platform that will display only REALTOR® listings without competing advertising and that won’t sell leads.

But in today’s online real estate environment so dominated by mega real estate media sites—and countless startups in the wings—how can local associations compete?

Addressing a need

“I believe that by providing this [public listing portal], we’re giving our members an edge in the business and saving them some money,” says Walt Baczkowski, CEO of the San Francisco Association of REALTORS®, which operates it own multiple listing service. “I feel there’s a need for a site that isn’t going to charge or gouge members. We’ll never charge members to put their listing up, and we won’t accept advertising from REALTORS®, franchisers, or brokers.”

The advantage over the aggregators, which Baczkowski plans to market with advertising and through members, is real-time listing updates. “The aggregators can be 24 to 48 hours behind in updating, and that’s significant in a hot market like ours,” he says.

SFRealtor.com overcame many of the steep financial hurdles that come with launching a sophisticated listing portal because it’s built on a new free platform offered by Point2 Technologies. Like the competition, the site features a trove of data in addition to listings, including neighborhood descriptions, crime stats, geohazards, school district boundaries, and property record information. Plans are to include videos and data feeds from other Bay Area communities and to offer the site in Cantonese and Mandarin.

“My brokers are 100 percent behind me because they’re spending lots of money on these other sites,” Baczkowski says. “The whole idea is to work together and quit sending our data to the aggregators.”

Baczkowski recognizes the irony in his stand against the aggregators. As former vice president of Point2, which is also a listing syndication hub, Baczkowski helped build the nationwide network of MLSs that now enables tens of thousands of agents to feed listings directly to Zillow, Trulia, and others.

“I believed at that time that there needed to be a way for agents and brokers to get their property information out online because no one knew where consumers were looking,” he says.

These days, Baczkowski believes the multibillion-dollar megasites are serving neither the consumer nor the agent. “If you search on Zillow or Trulia and find a listing that matches a consumer’s exact requirements, paid listings come up first. I don’t believe that’s right for the consumer. I don’t believe it’s right for the agent when another agent’s picture pops up next to his listing.”

Other MLS-run listing portals have been born out of the same frustrations with the megalisting sites. One new site in Tennessee employs a user-friendly search platform powered by Solid Earth  with the goal of directly challenging Zillow and Trulia.

Solid Earth launched its new MLS public portal platform, called Spring, earlier this year in response to a growing dismay among brokers with the aggregators, says Bill Fowler, the company’s chief marketing officer. “These companies have disintermediation as their business model. Agents may not see the big picture.”

Spring is a listing data platform and public portal in one—as opposed to older technologies that build public search tools onto MLS participant-only listing data systems. “A public portal is merely a new shift in what a real estate data platform is,” says Fowler. “As these lines begin to blur, the MLS will not be different from the public side portal. The professional and the consumer will be under one roof.”

“We’re absolutely at the forefront of a new movement to empower MLSs,” Fowler says. “Solid Earth is a major champion for the validity and urgency of the MLS-produced public portal.”

The battle for local home buyers online

“To beat the aggregators in your own market, you’ve got to be better,” says Bob Hale, CEO of the Houston Association of REALTORS®. It’s a difficult task in most markets, but Houston’s robust listing site, HAR.com, attracts more unique visitors per month than Zillow, Trulia, and realtor.com®, Hale says.

The key to its No. 1 ranking, Hale notes, “is ensuring that brokerages work with the MLS to build the best product.”

According to a recent Houston member survey, 97 percent of members say the most valuable thing the association does for them is run HAR.com. The site will relaunch at the end of this year with even more tools for consumers, including rental listings, data feeds from other Texas MLSs, and the ability to let buyers link their HAR.com accounts with that of their real estate agent’s.

“I want to replicate HAR.com in each or our markets,” says Fowler. “Bob Hale is our Lewis and Clark.” Yet Hale admits that keeping up with the aggregators is challenging. “It’s not just about having the listings anymore,” he says. “Zillow and the others—they’ve got lots of cool stuff, and listings are just one of the things they offer.”

Trulia recently added natural disaster risks and rental fee comparisons to its data trove. Zillow added a mortgage education center featuring articles on everything from the basics of borrowing to underwater financing. But as Baczkowski notes, “all the information in the world about a property is useless if you’re not connected to the person who can show it to you.”

If you build it ... will they come?

For most MLSs, the financial and technical hurdles to launching a competitive listing platform are high—even if the members want one, which in many cases, they don’t.

“At every MLS in the country in the last 10 years, the question has been raised about having a public-facing MLS portal,” says Bob Bemis, veteran MLS executive and former vice president at Zillow. “Some launched and quickly closed in spectacular fashion, others stuck and stagnated, others flourished. I don’t know of any market that has bet against a public portal that then changed its mind.”

From his time at Zillow, Bemis says: “There were a few MLSs considering taking back their listings from syndication and [running their own public-facing listing portal], but very few.” 

There are a variety of reasons. For one thing, ­local brokers might see a public portal as an unwelcome competitor to their own sites or to their expensive enhancements on the aggregator sites. Large brokers may oppose a local public portal on the grounds that it would level the playing field, reducing their competitive advantage over smaller companies.

“It’s really important to deliver a reasoned ROI for a public portal in a loving way,” says Fowler. “There are simply places where [public portals] will not happen, but we’re reaching a point now where our argument is more convincing.”

Nonproliferation of listing data

Although Baczkowski doesn’t feed data from his MLS to Zillow or Trulia, he doesn’t stand in the way of members who want to. However, the association is planning an education campaign to persuade members to rethink that strategy.

And Baczkowski isn’t alone. “MLSs in a few markets are realizing that they should rethink their hands-off syndication strategies,” Bemis says. “They’re thinking that they owe a duty to MLS participants to help them navigate the syndication landscape.”

Today, MLS participants can upload their listings to dozens of sites, which often republish the listings to even more sites. MLS participants often don’t understand how their listings appear online in the variety of places that they do, says Baczkowski.

Syndication confusion is the reason more associations and MLSs are offering classes for members about how—and whether—to syndicate listing data. The classes also cover the types of advertising and premium programs the aggregators offer.

Midwest Real Estate Data, one of the nation’s largest multiple listing services, was the first to partner with Trulia this year on its new “Shared Success Program,” which provides guidance to agents on how to get the most out of Trulia’s local and mobile ad platforms and suite of membership plans.

Many MLSs and brokerages see syndication as a part of standard industry practice today and feel that there’s no way to put the genie back in the bottle. Recently, Bay Area Real Estate Member Support signed on to provide Zillow with a direct listing data feed that also will automatically populate Yahoo! Homes, Google Now, HGTV’s FrontDoor, and HotPads. Their strategy is to make sure all online outlets have the most accurate data and that participants understand their options.

Yet, as more companies profit from business models built around agent listing data, agent resentment grows, says Saul Klein, senior vice president of Point2. “I feel the discontent around the diverting of leads growing,” he says. “I think the industry is starting to wake up to that. I think brokers are starting to wake up.”

Earlier this year, in response to broker and MLS concerns, Point2 enacted restrictions on how the mega-aggregators can use the listing data it feeds to them from agents and brokerages.

Klein says the new rules stipulate that a listing must prominently display the listing broker and agent’s name and contact information and must not be used to sell leads to other agents or brokers.

Realtor.com® isn’t typically lumped in with the other megasites when it comes to overall aggregator disgruntlement because its data, fed from MLSs, is more accurate; also it doesn’t list for-sale-by-owner properties and it promotes the REALTOR® brand.

Still, for Baczkowski, Hale, and others, a local MLS listing portal is the best way to put REALTORS® at the forefront of local homebuying and selling. “REALTORS® are the best ones out there to provide the data and the context that is necessary to buy a home,” says Baczkowski. “It will be a lot easier to put the genie back in the bottle than people think.”