How peer to peer listing distribution could change the MLS forever.

Back when I was just getting started as a Loan Officer, my first big break was being introduced by a REALTOR® at the Jefferson County Board of REALTORS® monthly breakfast meeting. That day, I officially joined my first real estate based social network. Technology had come a long way since the days of index card file cabinets and MLS books. In Denver, an agent could pull potential listings through a device that looked something like a cross between a telephone and a typewriter. Shortly after, agents could even access the MLS via the web.

bottleneckNot a lot has changed since the first days of MLS access. Agents and brokers use the MLS as their primary distribution hub for sharing listings between other agents and to the public. From a technology standpoint, the MLS structure fits the client/server model. Brokers and agents (the clients) share listings with the MLS (the server) who then shares those listings with other clients. This system has served the MLS structure well, but as the value of data is realized, some brokers and agents see the status quo as a hinderance to building a competitive advantage, especially when old guard MLS politics begin to suffocate innovation.

Enter peer-to-peer sharing.

The concept of P2P sharing, popularized by Napster in the 90s, is largely responsible for fundamentally disrupting the music industry. Instead of a server that each client must talk to, the clients simply talk to each other. Each client is also a server. In real estate, a peer to peer (P2P) network could be as simple as a network of brokers who publish their own listings to feeds that they syndicate to each other.

We’re already seeing a business case for their creation today. Agents and brokers are using online networks to share pocket listings and pre-MLS listings. Frank Llosa, broker/owner of FranklyRealty.com, recently started “coming soon” Facebook forums in several markets and launched PreMLS.com. David Faudman, the CEO of Top Agent Network, has established an exclusive network of top producers for sharing listings that likely never make it to the MLS. Technically, these are still client/server relationships, but this model would be better served with P2P platforms.

While there are diverging views on whether or not pocket listings are good for real estate, technology has now made it very easy for agents and brokers to do it.

While P2P sharing is in its infancy today, I believe there’s a high potential that you’ll see this model used to share pocket and MLS listing data in the future. The MLS will simply be another client, not the server. Just as this self-published blog syndicates an RSS feed to its subscribers, brokers and agents have the technology in place to syndicate their own listing data. Bigger brokers have done it for years, but now that RETS has become an industry standard data set, building a listing feed isn’t a lot more difficult than building an RSS feed for a blog. The technology allows the broker to take control of how their listings are shared, and with whom (other brokers, publishers, data analytics companies like LPS…). The MLS would simply be another channel that brokers syndicate to (or not).

Should MLS executives freak out? No. So long as the MLS focuses on their core value proposition, they will survive. However, last week’s departure of Bob Bemis from Zillow was the result of frustration around their lack of progress in building direct relationships with MLSes. Meanwhile, a silent majority of brokers and agents want their listings on Zillow. MLSes need to decide if providing listing distribution is one of their value propositions. If so, working directly with the portals is something they really ought to consider. Zillow isn’t going to give up on securing direct listings, but they may give up on getting them through the MLS.

Organized real estate is a centuries old social network. Its primary reason for being is to share listing data. MLSes need to make sure they aren’t perceived as the bottleneck for that sharing.

Photo: Creative Commons license via Flickr user Gruenewiese86

4 thoughts on “How peer to peer listing distribution could change the MLS forever.

  1. Sam Scott

    Todd: The MLS provides a valuable compliance and QA function that serves to validate data. Public portals have succeeded because the majority of listings are sourced indirectly or directly from the MLS. P2P mechanisms for distributing data would be vulnerable to pervasive “gaming” of the system by less scrupulous operators and the lower quality data could undermine consumer confidence in those sites. The Bemis departure from ZIllow is noteworthy and a possible setback for MLS to Portal relations but I don’t think it represents a change in course for the real estate industry.

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    1. Todd Carpenter Post author

      Sam, I completely agree with the value of the MLS as a compliance function, but that compliance is not necessarily tied to the distribution of listings. For instance, Trulia works with several MLS’s to verify the accuracy of their listings through a product called Trulia Direct Reference. Here, the MLS provides just enough data on all of their listings for Trulia to identify inaccuracies. However, Trulia is still getting data from other sources. I think compliance of listing data via the MLS, mixed with divergent sources of listings from brokers, banks, etc could end up being the most popular option for Zillow and Trulia. Their interest in diverging their dependency on ListHub should be obvious to everyone. I know that Trulia and Zillow would like to have productive partnerships with MLSes, but If MLSes refuses to play ball, then they will look for other options.

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  2. Ray Schmitz

    Here in NYC something like this has gone on for years, with the largest Manhattan firms sending feeds directly to each other rather than sharing via an MLS.

    One thing it definitely did is facilitate pocket listings.

    In this case it, anther effect may have been to help keep the market concentrated on the listing side.

    I don’t think the latter would happen elsewhere now, but this is a case study of what occurred when a few deep-pocketed dominant firms tried it before there were standards to make P2P distribution less expensive to implement.

    Reply
  3. Andrea Geller

    Another thoughtful post Todd. The words that stand out is “The MLS will simply be another client, not the server.” It appears to me that statements and actions that MLSs have made recently are out fear.

    Over the last few years this has been and continues to be the way the industry tries to react and attempts to take back what they perceive is control. A combination of things has happened including the economy market conditions, technology and the consumer. If the associations/MLSs continue in the direction of trying to control the client/consumer back to where they want them(that damn Internet, isn’t it ever going away) they will be the new dinosaur.

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