Ever since Craig Cheatham put the MLS industry on double super secret probation there has been much speculation about what The Realty Alliance’s grand plan is and how they will go about implementing it.
Well, I’ve spoken to over a dozen individuals and believe I have connected all the dots at this point.
I must qualify this by saying these are still rumors – the “word on the street”, so to speak, but I’m confident I have all the major details worked out.
What the plan?
Basically the plan is to create a database upstream of the MLS providers. This will be a national broker database, not any sort of regional, “lets try it and see if it works” sort of thing.
Brokers will put their listings in this database first, then decide where those listings go, who to share them with, an under what terms. So if this thing ever gets traction (it won’t in my opinion) brokers could decide to send listings (only some?) to the MLS, or not. They could syndicate, or not. They could share with other brokers, IDX-style, or not. And they would not be subject to any rules regarding monetization of the data.
The key here is brokers want to gain leverage over their MLS providers by creating a national upstream database.
How do they make money?
The idea is to charge brokers up to $2.00 per listing to upload listings to the database. That’s not a joke. $2.00 per listing. Memories of Homestore come to mind. Having done RFPs on many of the large franchisor websites I have a fair understanding of the cost involved in creating (and maintaining) a listing database. So I just wonder if anyone has really done the math of this sort of effort. Nevermind the complexity of getting brokers to implement another listing upload program.
Oy Vey!
What I’m also hearing is that they also hope to repackage this data and sell it to Wall Street. One spin on this is that they may highlight the “Berkshire Hathaway” name when doing this. Who loves Warren Buffet more than Wall Street? Their partner in this effort would be Collateral Analytics. Collateral Analytics has been requesting MLS data on behalf of their broker clients for the last year or so but is running in to problems with some MLS providers as to the nature of how they are using. it. I guess they think by having this data outside the MLS, and stamping Warren Buffet’s name on it, it will be all good. If RPR, CoreLogic and, dare I say, REBIG couldn’t make this happen I very skeptical that these guys could make a dent.
Who wrote the plan?
My sources say the business plan was put together by The WAV Group, most notably Victor Lund. I don’t believe the selling of data to Wall Street was part of the plan put together by WAV Group. But the upstream national broker database and charging brokers up to $2.00 per listing to upload was proposed in the plan put forward by WAV Group. As I said, the plan written by WAV Group hopes to increase brokers’ “leverage” with MLS providers. Phase One would be to create this upstream national broker database. I believe this is the “big initiative” The Realty Alliance voted to proceed with last month.
I believe WAV Group is also responsible for drafting the RFP for this database and facilitating vendor selection. What is puzzling to me is why The WAV group, which has been hawking their strategic MLS planning services pretty hard lately, would venture in to this territory. Gotta eat, I guess.
Who is going to build it?
I haven’t seen a definitive list of vendors, and I doubt any of them would confirm or deny involvement, but I can make an educated guess about two of them.
In all cases I don’t see any clear win for vendors (inside the industry) who choose to cooperate. Seems like kryptonite to me.
1. CoreLogic, always a WAV Group favorite, seems an obvious player. But as one of the biggest providers of MLS software to the industry already committed to share any “Wall Street Revenue” with MLS providers I don’t see the logic here.
2. RED- Real Estate Digital. RED aggregates data for RPR (via LPS), builds broker platforms, and builds and sells public-facing MLS websites (something TRA abhors). Since the broker database is upstream from the MLS they can’t really leverage their MLS data aggregation know-how.
Plus, take a step back. A broker database business model that relies on brokers paying $1 to $2 per listing to operate? Really? I may not be the smartest guy in the room but that idea seems batshit crazy me. What vendor would want to be involved in that quagmire?
And I’m also hearing that not all members of the Realty Alliance are confident in the plan.. And not just a few, but a lot of them. Which is why this stuff is starting to get out.
In Summary
This is a bad deal for brokers and MLS providers. Actually I think it’s worse for brokers because of the time suck and money wasted. The MLS providers will just sit on the sidelines laughing their asses off.
I still think cooler heads will prevail. The members of The Realty Alliance are smart business people. Some might be more ready for change than others. But they have to realize you can’t put the genie back in the bottle. You have to find new ways to win.
As I’ve said in my first post on this subject…
“Stop listening to the consultants you’ve hired. Stop drafting new business plans. Go sell a ton of real estate. You have the MLS community attention. Take advantage of it.
Don’t lose this opportunity.”
Now that’s a fun read Greg. Makes me want to start partying like it’s 1999 again 😉
Really, doesn’t anyone ever learn from past mistakes?
Stu
Don’t know why you dragged WAV group (down?) into this- if someone wants to pay them to draft biz plans, so be it. I doubt Victor pulled aside Craig Cheatham and whispered “psst buddy, want to buy your own MLS?”.
If you want to write about “bat sh*t crazy” ideas, look no further than MLS Stores trying steal 10-30% of gross revenues, and $3000 upfront fees etc. for companies to sell their products with the Store’s RETS feed.
No company in the history of forever has spent 30% of their gross revenue on marketing and RETS feeds.
NOW THATS batty poopie cray-cray.
Pingback: The Realty Alliance said to be planning national broker database to address grievances with MLSs | Long Island Real Estate Investment Association
How did WAV Group get dragged down? I think that WAV Group’s involvement is the least surprising thing about this story. WAV Group, like many consultants, have always had broker and MLS clients.
Greg, As you can see above, I only pondered if dragged “down?” was the appropriate term as opposed to “into this”.
Your phrase “gotta eat I guess” that follows your puzzled inquest as to why WAV helped with their biz plan is what struck me. Perhaps its just an over or mis-used phrase I think it panders to negative connotations of a companies viability. As if this contract is the reason they have food on their tables.
That is, if WAV really had anything at all to do with it.
And where is the consumer in all this? Still searching real estate on non-broker/MLS websites. So what changes?
Pingback: The Realty Alliance said to be planning national broker database to address grievances with MLSs | Calusa University
Greg, I appreciate the shout out. You are correct; Real Estate Digital is currently the technology provider to some of the largest Brokers and MLS’s in the country. And as such your speculation is spot on: Since RED does such a great job, I too would be shocked if RED was not considered as a possible candidate. Whether we would respond is a different manner, but as we have yet to see an RFP, all we are doing is speculating.
Pingback: The Realty Alliance Plan - GeekEstate Blog
Pingback: Agentage | The Realty Alliance said to be planning national broker database to address grievances with MLSs
Great story Greg, and I have to disagree with your prediction on this…I think it will be done, and if done properly, will be the answer for both Brokers and Consumers to the current “Cluster” that is Z/T/R.
Consumers want accuracy & Transparency, which none of them can provide, and Brokers want their “Power” back (Like they had with the Listing Books)
How it is run, and more importantly by whom (Corruption and Greed can not be the order of the day, as it is now) Will determine if it is successful, or yet another ill fated attempt at normalcy!
Good read, as usual, Greg =)
PS – If they don’t partner with the Core Developers at WordPress on this, then they are as “bat s%#@” crazy as everyone says they are!
Pingback: The Realty Alliance said to be planning national broker database to address grievances with MLSs - RE/MAX DEMO
It constantly amuses me that everyone believes that ANOTHER new MLS database/website will be the “end-all” to address the headaches, accuracy issues and other alleged grievances bemoaned by brokers nationwide.
Vendors know, if they are candid enough to admit it, that MLS databases are fairly similar in their admin features. The deal is people…there has to be a universal application as to the way the rules are addressed. PERIOD. Then…and only then…will you have accuracy in your data that is deserved by both agents and the public.
As it stands now, you have some associations that have committees or committee chairs that check for rule violations (sometimes)…some association’s staff do an excellent job checking for rules violations and follow through…but other associations just do nothing at all or there is some “gray area” mish mash of checking. So…as a national set of MLS rules is the basis for all of the state MLS rules…and then trickles down to the local…there is ZERO consistency. And hundreds of thousands of dollars, if not millions…and how many thousands of hours are spent belly aching about this issue…when it is all based on JUST FOLLOWING A FEW SIMPLE RULES. Not how good or bad a vendor’s product necessarily is…but, how well we monitor the information that is entered. I can tell you that the data entered is uber-sloppy….as well as the monitoring, and there is zero excuse for it, and could be easily corrected if staff is allowed, and made to do its job.
But, do we really need a bunch of long winded, expensive meetings with a bunch of blowhards going over and over stuff we already know? And when there are (supposed) rules already in place that everyone is SUPPOSED to be following? THESE RULES ARE SUPPOSED TO SEPARATE THE PROS from the NOT-SO-PRO. (yes…I used “supposed” ALOT) …why have them? Throw them out…and quit having the lame MLS rules meetings…arguing over new rules if no one is going to enforce them! Seriously! It’s a waste of time!THEN…the brokers will REALLY have something to bellyache about!! LOL!
As far as the transparency issue goes…do NOT get me started…we’ll be here for a very long time!! BUT then again…I AM a super-hero! ToTheRescue!!
Pingback: Can the Industry Combat the Portals Long Term? And If So, How? - GeekEstate Blog
Pingback: Can the Industry Combat the Portals Long Term? And If So, How? | Calusa University
Pingback: Can the Industry Combat the Portals Long Term? And If So, How? | ShackShout News
Pingback: Can the Industry Combat the Portals Long Term? And If So, How? | Michigan Real Estate Agents
Pingback: Link list of best April Fool’s Day Posts. | Vendor Alley
Nice piece Mr. Goldstein. A hot market will be another stick in the spokes of this project. And yes, $2.00 per listing is a death nail.