MLS Today, “The reports of my death are greatly exaggerated” and
MLS Tomorrow, MLS 5.0 - The MLS of the Future
What will be required to build on the current solid foundation of today’s MLS?
This paper attempts to answer this question and create a basis for an industry discussion. Open and frank discussion is essential to creating the tools and organizations that will position REALTORS® to provide services to meet the expectations of future buyers and sellers. This Paper is a vision and not a roadmap. MLS in the broad, generic sense, needs to be redefined in the age of information proliferation and online participatory environments. MLS is more than an offer of compensation and cooperation, but how much more? That decision is up to you.
Introduction:
In 1897, Mark Twain was traveling in Europe and heard that the New York Journal had printed his obituary. He responded to a friend in a handwritten note: "The report of my death was an exaggeration," which over the years has morphed into “The reports of my death are greatly exaggerated.”
A popular recurring MLS theme and discussion point over the last few years has centered on the idea that MLS is dead, or irrelevant, or both. Nothing could be further from the truth.
This Paper is a summary of the potential that the MLS can bring to the real estate industry and to consumers and, at the same time, it can be viewed as a subtle warning if brokers and industry leaders fail to grasp the strengths MLS currently possesses and employ them in a fast changing world, when consumer alternatives are popping up at every turn. It is based upon 33 years of MLS experience in many areas and at many levels.
Saul Klein has been a member of several MLSs in San Diego, California since 1975 and has been a licensed California broker since 1977. He served as the Vice President of the San Diego Association of REALTORS® when the MLS in San Diego County was regionalized from 11 associations and 4 MLSs to 5 associations and one MLS, creating one of the first large regional MLSs in the country in 1991. In 1993 he was the president of the San Diego Association and served as a Shareholder representative to the San Diego regional MLS (Sandicor) that same year. He has in depth experience dealing with MLS antitrust issues, locally and at the national level, consulting privately with many industry leaders as the IDX/VOW/ILD policies evolved and were debated and as NAR prepared for litigation with the US Department of Justice. Saul has served on the California Association of REALTORS MLS Committee continuously since 2003, and has facilitated close to 100 Strategic Planning sessions for both associations and MLSs nationwide and has provided consulting services to MLS vendors. He is widely recognized as a consultant to the industry and the first real estate industry Internet evangelist, preparing the way for the National Association of REALTORS® (NAR) initial thrust in technology, and he was instrumental in the socialization process which resulted in listing information flowing to the Internet in the Mid 1990s on REALTOR.com. He continues to be a student of MLS and is sought after as a speaker, consultant, and facilitator, helping to bring clarity to the industry as the role of associations, MLSs, and real estate licensees continues to evolve in a Web 2.0 world.
Saul currently serves as CEO of two technology companies, Point2 Technologies and Real Estate Electronic Publishing Company (DBA InternetCrusade®). For a complete Resume, go to: http://internetcrusade.com/Saul.asp
To Access this report on the web go to: http://TheFutureOfMLS.com
Take Away Terms
Authoritative and trusted source
Mission
MLS 5.0
Online communities
Parcel based
Property Wiki
Single Point of Entry
Single Sign-On
Social Networking
Strong (two party) Authentication
Syndication
Vision
Web 2.0
Note: Also included in the document are links to definitions and ancillary information that may help for a better understanding of the theme of this Paper.
Executive Summary
Time is of the essence.
The real estate industry has the opportunity to “take back its future.” In order to do so, it must begin the process of first socializing to associations, MLSs, brokers, consumers (all stakeholders) and then implementing MLS 5.0, the MLS of the Future. This will not take place overnight, but is a living process that must be engaged.
Many in the real estate industry have heard of Web 2.0, yet with all the press it has received, few understand or can define it. Understanding Web 2.0 and what it entails is essential to the understanding of MLS 5.0, as MLS 5.0 incorporates Web 2.0 concepts, principles, core characteristics, technology building blocks, applications, and uses.
To understand MLS 5.0, consider the evolution of the MLS, which over the past 30 years or so looked something like this:
• First Generation - Three ring binders with weekly updates and daily errata
• Second Generation - The bound MLS book
• Third Generation - Computer access to the data through "dumb terminals"
• Fourth Generation - Web based MLS (no more banks of phone lines and busy signals)
• Fifth Generation - MLS 5.0
A key element of MLS 5.0 is that it is parcel based and not listing based. It includes all parcels of real property in the Town/City/Region/State/US, not just the inventory of properties available for sale at any given point in time. It leverages property information from various sources accumulated over time to bring consumers and real estate professionals together on the Web to participate in an ongoing conversation with real estate at its center.
MLS 5.0 has a public facing side for consumers to interact with real estate professionals and a private side (business network) for the use of real estate professionals.
An army of real estate professionals have the local knowledge to create a force that can compete with those companies currently working to harness the power of property information as the center of their online business model. Consumers frequent different destinations on the Internet for different reasons. MLS 5.0 will be the authoritative and trusted source of all real property information, not just property “for sale.” MLS 5.0 is the resource that will give real estate professionals the opportunity to transcend the present and continue their success into the future as relevant participants in the lives of their customers, serving as trusted real property advisors. Along the way it will be required to leave some ideas and habits behind. Knowing that old habits die hard, it will require nothing less than a “Crusade” to socialize and then transition associations, MLSs, brokers, and real estate professionals to this new tool. MLS 5.0 recognizes that we exist in the age of information.
MLS 5.0 is built in the spirit of Web 2.0, open, collaborative, self-organizing and self-policed. It is no longer sufficient to advocate that real estate professionals be at the "Center of the transaction," as was promoted in the 1990s. To be at the center of the transaction, the real estate professional must now be at the "Center of the conversation" about real property, and this is essential to the mission of MLS 5.0.
In addition, through the use of Open APIs that provide access to listing data, applications can be built cost-effectively, leading to a richer ecosystem of features and software that will benefit real estate professionals and ultimately consumers, encouraging user experience design.
MLS 5.0 provides a single point of entry for listing data. Based upon the election of brokers or their agents, it will distribute that information to web portals, newspapers, radio and television, and applications, and then track and return information about prospects to the broker. Why pay for Internet leads generated from your listings? With MLS 5.0, you benefit from inquiries about your listings.
MLS 5.0:
• Is a property wiki
• Is a social networking site.
• Incorporates “Single Sign-On” in a range of ways
• Will change many aspects of the real estate business, reflecting and satisfying the needs of real estate professionals and real estate consumers as technology evolves and new generations come of age.
It is not the intent of this paper, nor is it possible, to answer every question about MLS 5.0, rather it is to begin the discussion and move to outcomes that will be beneficial to the stakeholders…consumers, agents, brokers, vendors, associations, MLSs, staffs and anyone interested in MLS.
Let the discussions begin. Time is of the essence.
Concept
The real estate industry has the opportunity to "take back its future." For a number of reasons, it has appeared over the last few years that forces, out of our control, were at work to reshape the real estate industry -- from technology, to the Internet, to the United States Department of Justice, to new business models that are the darlings of Wall Street, to the press, to the divergence of the different generations, and to economic conditions. It is now time to fight back, and in doing so, all concerned will be winners, REALTORS® and consumers alike.
It is upon this theme that the concept of MLS 5.0 is introduced, as the MLS of the Future. It is time to look at what MLS seemingly has “always done,” and bring it into the new millennium. This will require bold initiatives. To get the most out of this Paper, you may need to suspend your skepticism and step into the future. Ask yourself: “What is the value a real estate professional brings to consumers when information about everything, including real estate, is so abundant on the Web? MLS 5.0 should provide the tools to enable the real estate professional to deliver value, part of which will be to put the information available into context for the consumer.
Today, MLS is not the only way to gain exposure for listings. Yahoo, Google, Zillow, Trulia, Craigslist, VAST, Point2Homes, REALTOR.com and many more have the potential to expose listings to more potential buyers than ever before, and for a fraction of the cost of traditional advertising. If you were a consumer selling your home, wouldn’t you want it marketed everywhere? In the age of information, consumers and REALTORS® are becoming more comfortable using these new tools and new databases, and will become even more comfortable as the concepts of Web 2.0 become better appreciated and understood. MLS must reflect the new realities. Many REALTORS® are not acquainted or familiar with some of these realities. It will take more than vision to bring the ideas and concepts of MLS 5.0 into reality. It will take courage and leadership, as old paradigms, territorial rights, politics, potential job loss by MLS executives and staff, and fear will undoubtedly create obstacles to successfully altering the mission of MLS. And that is what we are talking about, altering the mission, and with a new vision for MLS. Objections, real and imaginary, will be heard in abundance. Be prepared to field them.
Question (which has been asked many times over the past 10 years, but never really answered:
“If we were to build an MLS today, with the technology available and for the different generations of REALTORS®, home buyers, and home sellers, what would we include and how would we go about the task?”
Answer:
• Parcel Based – Best described as a “Property Wiki”
• Built upon Web 2.0 Concepts – Using technologies to engage:
• The Consumer
• The REALTOR®
• Vendors
• Developers
• Public Side and a Private Side
• Online communities for REALTORS® (public and private)
• Online communities for consumers (public and private)
• Multi lingual
• Employ Agile Software Development Processes; aligning business goals with technology capabilities
• Built with an Eye on Generational differences and expectations
• Agent rating system
• Referral system at no charge to agents
• Extensive agent profiles
• Builds and improves neighborhood information through user input
• Works to create Federations and implements SSO (Single Sign-On)
• Continues to have a governance structure and service centers for real estate professionals
• Enables Innovation
• Is built with a Vision (“If you don’t know where you are going, any road will take you there,” to paraphrase Cheshire Cat in Alice in Wonderland)
• Is built with a Specific Mission
Vision Statement of MLS 5.0:
MLS 5.0 is the authoritative and trusted source for all things related to real estate, for REALTORS® and Consumers.
Mission Statement of MLS 5.0:
Keep the REALTOR® in the Center of the real estate Conversation, realizing that that conversation extends from far in advance of a purchase and continues after a purchase of real property. Real estate is a lifetime conversation.
MLS 5.0 will use the resources of:
• The aggregated listing information, which are assets owned by the brokers that created and financed the businesses to contract those listings, and
• Information associated with a property even when that property is not for sale.
• And allow it to be augmented by images, sound, video, and text and include it in a database of all properties, not just those for sale.
• Sold data accumulated by MLS
• Public data
• Consumer-generated content from online communities, groups, blogs, and other Web 2.0 technologies and applications
MLS 5.0 will leverage that information to bring consumers and real estate professionals together on the Web to participate in ongoing conversations with real estate at the center. Much of what affects the lives of individuals centers on their home, their neighborhood, and their community.
MLS 5.0 will have a public facing side for consumers and for consumer to REALTOR® interaction, and a private side for the use of real estate professionals, a business to business network.
This is a far cry from where MLS is today, and this is the challenge. If we do not take up this challenge as an industry, to create the authoritative and trusted source of real property information on the Web, it will happen anyway -- in fact, the battle has already been engaged.
Background
The reports of my death are greatly exaggerated - Mark Twain
While currently at risk of becoming irrelevant in the next generation, MLS has within its power, the assets needed to continue to lead the real estate industry and become an even stronger, more essential player. It is important to note that no other entity or organization has what we in organized real estate have (and they all want it), and that is the authoritative source of all properties for sale and sold, and an army of REALTORS® with the grassroots power and local knowledge to create a force that can compete with all comers. Through the creation of MLS 5.0, MLS will continue to be the most important tool of the real estate industry. MLS is the tool that will give REALTORS® the opportunity to transcend the present and continue their success into the future...but they must be willing to leave some ideas and habits behind in the process.
If we decided to build the structures and organizations of today’s MLS from scratch, it would not look like what we have currently. Building an MLS is not the challenge; we have been doing it for years. Building an MLS and property database to serve the needs of REALTORS® and consumers as technology changes methods and habits of accessing information, building an MLS that reinforces a compelling argument for the use by consumers of a real estate professional in the transaction with an abundance of information about real estate found everywhere on the web in bits and pieces, and overcoming the political and parochial interests, that is the challenge.
Not to be overlooked is the fact that MLS is an offer of compensation. Until buyers are ready to sign commitments to pay brokers and agents for their services whether the buyer buys or doesn’t buy, this offer of compensation is an important piece of the MLS value proposition.
Evolution of MLS – What is MLS 5.0?
MLS has been transforming since its creation. For the purpose of this paper, the author, based on his own experience, can trace four distinct changes in the method of access and distribution of data. The change from the way it is done today to the way of the future requires acknowledging that major changes have successfully taken place in the past and, it should be added, over the objections of many well-intentioned individuals and organizations.
• First Generation – Cards and then Listing sheets and ringed binders with weekly updates and errata, which were used to update the inventory manually, everyday or every other day.
• Second Generation - The bound MLS book. This book was printed every two weeks. The San Diego Association MLS printed a book every week. One week the MLS would print a book with Single Family inventory, the next week it printed a book with Condos (common interest subdivisions) and two to four units. Each week there would be a “hot sheet” for the previous week’s book. Even in a good real estate market, no one dreamed of anything close to a system where the inventory was updated daily. The idea of Real Time access (like one can find on certain web sites like Craigslist), would have been discarded as eccentric.
• Third Generation - Computer access to MLS data through "dumb terminals" over telephone lines…no monitors, no video display. In San Diego, two types of terminals were available. One was a large, stand up model; the other was portable, which was the size of a medium suitcase. Each had a coupler referred to as “Mickey Mouse Ears.” To access the computer database, one would dial a number, wait for an answer and for the “electronic handshake,” and then jam the telephone receiver into the “Mickey Mouse Ears.” Often, if it was a busy time of day, all of the access lines to the computer database were in use and a busy signal heard.
• Fourth Generation – Web-based MLS (no more banks of phone lines and busy signals), access with a browser, only one type, Internet Explorer, and through a dial up at 14,400.
• Fifth Generation - MLS 5.0 – Let your imagination run a little here…
Built in the spirit of Web 2.0, MLS 5.0 is open and collaborative, incorporating all the current and future tools of Web 2.0 (and Web 3.0), from the LAMP stack, to the applications such as blogs, RSS, Widgets, APIs, Wikis, taxonomies, social networks, mash-ups and more. 
MLS 5.0 is:
• The authoritative and trusted source for all things related to real estate. This begins with the accurate inventory of currently available property for sale, and the best “Sold” data available anywhere. This information is like fly paper when it comes to attracting consumers to a web site.
• A Property Wiki – all information about properties (by parcel or address) that can be ascertained and that can be augmented. It becomes a comprehensive historical record.
• A Social Networking Site – REALTORS® meeting REALTORS®/REALTORS® meeting consumers/consumers meeting consumers.
• Built understanding generational differences, serving the REALTOR® of today and the REALTOR® of the future, to better serve the consumer of today, and the consumer of the future.
• Private and Public facing components
• The REALTOR’S® home online
• A closed business network for subscribers and participants
• Online neighborhood information, contributed by neighbors
• Open and closed communities and groups and forums
• Appropriately Secure
• The "Single Point of Entry" for data distribution (Syndication of Listing Data), as a choice for brokers and agents - Distribution Trumps Destination
• Multi-lingual where and when appropriate
• A Public display of available inventory (public facing MLS)
• A Public display of appropriate sold data
• A place for REALTORS® to “prospect” for buyers and sellers
• Designed with Single Sign-On (SSO) to other web destinations in mind
• Open yet secure, information available without artificial geographic boundaries; ensuring that the data is accessible to the widest audience possible while obeying regulatory restrictions.
• The center for Transaction Management Applications
• Open to and encouraging of innovation, allowing for various front end software to be created and used to access the data. Members of the MLS could choose a Rapattoni front end one day and select a FNIS front end the next. A user might find that one front end is good for some things and one is good for others, and use the appropriate tool to get the job done. Openness should allow for more applications and solutions and lower prices for REALTORS®
MLS 5.0 is a Property Wiki - (Parcel based not listing based)
A wiki is a collection of web pages, where the content is written by contributors (Wiki in plain English). Wiki software can have many uses and applications, the most well known being Wikipedia, which is an encyclopedia written by volunteer writers and editors. Companies today often use wiki software to create searchable, retrievable information about the company. A wiki begins with something referred to as a “Stub,” which can be a word or a phrase and then contributors write about the stub. Because of a concept known as the “wisdom of crowds” the information about that stub becomes more and more comprehensive and accurate. Wikis are fundamental to Web 2.0. Do not be led to believe that wikis are not accurate. To test, go to Wikipedia.org and search for a word or phrase that you are familiar with and check the accuracy.
The word wiki is the Hawaiian word for fast or quick. If you have every flown into the Honolulu International Airport, you have probably taken a ride on the Wiki Wiki Shuttle.
A property wiki then is a wiki where the stubs are property addresses or parcel numbers, to which information from contributors and editors can be added to create a comprehensive record.
Imagine a blank web site for every property address in the US. To that blank Web site imagine adding anything publicly known. Now imagine inviting the property owner and REALTORS® to add what they know about the property. While there are some concerns about accuracy, Web 2.0 concepts, self-policing, flagging, and social capital will in time minimize the inaccuracies.
This is a key to understanding MLS 5.0. A listing is merely a moment in time of the life of a property. MLS data is a subset of a larger body of data relative to a parcel of real property. Of value to REALTORS® and consumers is information about a parcel before the property is listed for sale. Property history, in one convenient place, is a valuable asset that grows in value as more information is accumulated over time. Pictures, video, audio, text and other formats of information relevant to a property and conveniently aggregated have value. A prospective buyer might be interested in pictures of a home before and after a remodel.
Who Will MLS 5.0 Serve?
MLS 5.0 will serve the customer of today and be ready for the customer of tomorrow. That customer is the REALTOR® and their customer, the buyers and sellers of real estate. According to NAR, Gen X and Gen Y made up 78.8% of all first time home purchases in 2007. This is a significant milestone. While there is a variety of information and definition about the different generations, one thing for certain is that there are truly generational differences based on the times in which people live, the seminal events in their lives, and the world conditions they experience during their lifetime. MLS has always been a Broker to Broker (Business to Business) Network. It was not created as a central platform to facilitate marketing efforts. Marketing today needs to take into consideration generational destinations, modes of communication, and targeted marketing messages.
At who is this message targeted?
Understanding and Adapting to Generational Differences
From Wikipedia:
Generation X – Baby busters - 48 Million
• Original Latch Key Kids
• Independent
• Skeptics
• Techno literate
• MTV generation
• Inception of the Internet
Generation Y - Echo Boom - 80 Million
• Generation Me
• Confident
• Collaborative
• “Bathed in Bits”
In their book, Connecting to the Net Generation, Reynol Junco and Jeanna Mastrodicasa found that in a survey of 7,705 college students in the US:
• 97% own a computer
• 94% own a cell phone
• 76% use Instant Messaging and social networking sites.
• 15% of IM users are logged on 24 hours a day/7 days a week
• 34% use websites as their primary source of news
• 28% author a blog and 44% read blogs
• 97% have downloaded music and other media using peer-to-peer file sharing
• 49% regularly download music and other media using peer-to-peer file sharing
• 75% of college students have a Facebook account
• 60% own some type of portable music and/or video device such as an iPod.
They represent Tomorrow’s REALTOR® and Tomorrow’s Home Owner. MLS 5.0 is built to fulfill the expectations of the REALTOR® and consumer of today as well as the REALTOR® and consumer of tomorrow.
Being at the Center of the Conversation
It is no longer sufficient to be at the "Center of the transaction." If a REALTOR® waits until the transaction, it is too late. To be at the center of the transaction, the REALTOR® must be at the "Center of the conversation" about real property and participate with consumers far in advance of the actual listing or sale. This of course has always been the case, and is now, more and more, taking place through visibility and participation on the Internet, through social networking and social influence marketing. MLS
