The National Broker Public Portal — Not for everyone?

The National Broker Public Portal announced appointment of its initial board of managers this week. In the press release they state that the project is designed to fill “an unmet need in the online marketplace.” Unfortunately, don’t define what that need is, leaving many readers still scratching their heads wondering “Wha??” Have these folks divined a gaping hole in the Zillow/Trulia product strategy and set about to fill the vacuum before anyone else sees it? With hundreds of listing portals and tens of thousandsBroker Portal Logo of agent and broker IDX sites, how could there possibly be any “unmet need” remaining anywhere? We shall see what that means.

In their earlier information releases, the group described the project as “the Creation of a National MLS Consumer Facing Property Search website.” Apparently it evolved to a Broker website in the past 30 days which is most interesting given that it is to be funded by MLS dues to the tune of somewhere between $1 and $3 per MLS subscriber per month.

The funding basis was made possible by a redefinition by NAR some time ago of what Basic Services are in MLS land. Basic Services now includes public facing MLS websites which can be supported by dues paid by ALL MLS subscribers even though they may compete with SOME subscribers and their brokerages. Interestingly enough, the larger brokerages and franchises fought this change heartily. In May, 2013, The Realty Alliance wrote a letter to the MLS Policy Committee stating, “… since we are not in favor of MLSs establishing public-facing listings display websites, we certainly do not favor leaving only the words, “establish or maintain” in the authorization to use our dues/fees/reserves as it is too wide an authorization. Significant dollars of ours could be spent “maintaining” these sites, including marketing and promoting these in competition with broker IDX sites.”

Bob Moline, President and COO of Berkshire Hathaway Home Services and the first name on the announced list of newly elected managers of the Portal, wrote at the same time:

We have no doubt, based on proposals and communications of others of which you are, no doubt, aware, that some want to use the fees and dues collected by MLSs and Associations to actively market public-facing sites. Such expenditures–and the public facing websites themselves–would put MLSs and Associations in competition with many of their broker-members, specifically their larger broker-members.

Therefore, we strongly suggest that the proposed new language on advertising specifically exclude the use of MLS of Association dues or fees to market public-facing website. (emphasis added)

Yet, that’s exactly what happened. Despite the protestations, the NAR Board of Directors approved the MLS committee’s proposed rules change and included MLS public facing sites in the definition of Basic Services. Now the Realty Alliance and other major brokers are backing the biggest implementation so far of the new policy.

Please don’t misunderstand — I am not accusing any of the major brokers of doing a flip-flop on this issue. It actually makes great sense for the brokers and major franchisers to back such a move, even though they opposed the rule change that made it possible. From their astute perspective, it is easier to manage one national MLS portal than 600-800 small ones. By imposing the Fair Display Guidelines (see below) from the top down, they need not fight the multiple skirmishes that would surely arise from a bottom up approach.

Much conjecture and critique has been levied at the project and it’s not even off the drawing boards yet. But in all that’s been written about the Broker Public Portal, one question has not been asked that I think needs to be addressed before it goes further.

One of the core tenets of the project is the adoption of the Fair Display Guidelines that the Realty Alliance developed back in 2012-13. Guideline number four states, “ No Ads For Other Brokerages Or Agents Displayed On Or With A Brokerage’s Listing” and goes on to explain:

Only the actual listing broker and agent may be displayed on the property details page. No ads from companies that may compete with a broker’s affiliated business such as mortgage, title, or escrow companies will be displayed on an individual property listing page.

So only the listing agent and brokerage will appear on property detail pages. Buyers’ agents, who by definition do not have any listings, will not be given any exposure at the “point of purchase” – the moment when a potential buyer has a question but perhaps doesn’t want to ask it of the legal fiduciary of the seller for fear of disclosing something about his/her negotiating position. Those buyers agents are members of the same MLS that is supporting the Portal; they are paying the same dues as the listing agents; and $1 to 3 of their dues payments each month are going to fund this portal project. Yet they get nothing in return? How is it that no buyers’ agents have asked the magic question, “What’s in it for me?”

If the average MLS subscription fee is around $25 to $28/month, then somewhere between 4% and 10.7% of the gross revenues of the MLS are going to pay for a Portal that benefits only the small minority of agents who actually take listing contracts. That seems grossly and unfairly lopsided. I’m surprised someone hasn’t challenged that model yet.

About Bob Bemis

Founder, Procuring Cause Advisors -- consulting with leading MLSs, Associations, Brokers, Agents on strategic issues facing the real estate community.

• Formerly VP Partner Relations – Zillow (February 2012 to July 2013)
• Named by Inman News as "100 Most Influential Leaders in Real Estate" for 2011 and 2013
• CEO - Arizona Regional MLS, Tempe, AZ (October 2007 to February 2012)
• Representative on the NAR’s MLS Issues and Policy Committee; served on Presidential Advisory Group studying IDX use in Social Media
• Formerly a Director on the board of the Council of Multiple Listing Services, a national association of MLSs
• Formerly Interim president of the MLS Domains Association, an organization seeking to acquire the Dot.MLS top level domain for exclusive use by MLS systems
• Vice President of Customer Care for MRIS, in Washington DC/Baltimore (2001-2007)

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5 Responses to The National Broker Public Portal — Not for everyone?

  1. John Wake says:

    Only the actual listing broker and agent may be displayed on the property details page.

    As an agent, I don’t understand why that isn’t already the standard MLS policy. I assume each individual MLS has the authority to adopt such a policy for themselves right now but they’ve chosen not to.

    If an MLS had it’s own website, competitive with Zillow and Trulia, they would probably be more likely to adopt such a policy.

  2. “What’s in it for me?” asks a buyer agent? To what is the buyer agent entitled exactly, with regard to the display of listings. Explain please.

    The MLS serves Sellers and their listing agents by providing a repository of listings with a unilateral agreement to share and pay a commission. Everything starts with the seller and the listing. Without the listing, there is nothing for a buyer to buy.

    The public facing portal is a “safe” place for buyers to look for listings free of scam ads, forced signups, missing and wrong data, etc. When they are ready to buy, they are not generally going to buy the listing they call about. That rarely happens. That is not the “point of purchase”, at all.

    Buyer Agents need to find ways to earn the trust of buyers without making themselves dependent on piggybacking on other agent’s displayed listings. There are a lot of way to do that.

  3. Bob Bemis says:

    That’s an interesting perspective, Steve. I think the buyer agent should be entitled to an equal amount of service from an MLS to which the agent is paying an equal subscription fee.

    By your logic, there is really no place in the MLS for any agent who doesn’t list properties. You said, “Without the listings there is nothing for a buyer to buy.” But a buyer’s agent is not limited to just properties in the MLS. They would be paid under their agency agreement if the agent represented them in the purchase of a FSBO or a new construction property (most of which are not in the MLS, as I’m sure you know).

    If agents who represent buyers exclusively are excluded from equal participation in the MLS, they would be better served by spending their money on ads on Zillow or Trulia to find buyers rather than pay subscription fees to an MLS from which they derive no benefit. (That presumes a majority of the properties for sale in the MLS are also displayed on the portal sites.)

    Interestingly enough, that is very close to the dynamics in the Australian real estate market. Listing agents post properties for sale on a national portal (realestate.com.au is the biggest one, owned by REA Group which in turn is majority held by NewsCorp who recently bought Move, Inc., operator of Realtor.com here). Agents pay to post their listings, often passing along the cost to the seller whether the property sells or not. Buyer Agency is a new phenomenon in Australia. There are just 100 Buyer Brokerages in the country, out of about 35,000 total in the country. There was speculation when NewsCorp bought Move that they would try to import that business model here, but so far we have seen no hint of that.

    The NAR Handbook on Multiple Listing Policy (the Rules) defines the MLS as having five purposes. Compensation and cooperation are embodied in bullets 2 and 3. Appraisal is covered in 4 and 5:

    A multiple listing service is:
    • a facility for the orderly correlation and dissemination of listing information so participants may better serve their clients and customers and the public
    • a means by which authorized participants make blanket unilateral offers of compensation to other participants (acting as subagents, buyer agents, or in other agency or non agency capacities defined by law)
    • a means of enhancing cooperation among participants
    • a means by which information is accumulated and disseminated to enable authorized participants to prepare appraisals, analyses, and other valuations of real property for bona fide clients and customers
    • a means by which participants engaging in real estate appraisal contribute to common databases

    If you limit the role of the MLS to just collecting and publishing listings (bullet #1) without embracing the agents representing buyers as necessary to the efficient functioning of the market, you completely remove the basis upon which the MLS is built. We would have a whole new system, one that reflects the Australian model. I don’t see much support for that change.

  4. Hi Bob,

    Thanks for the thoughtful reply. As I read it, it seemed like you were actually making my case for me, though I doubt you’d agree, so I think it’s just a matter of how we all look at complex issues through different subjective lenses.

    But of your 5 items listed, all in fact do benefit buyer agents and are used and valued by buyer agents.

    What missing from the bulletpoints is “MLS listings shall be lead generation assets for buyer agents”. And it should be missing. Buyer agents are not entitled to promote themselves alongside other agent’s listings. I think our point of disagreement is that.

    Buyer agents who wish to use listings to attract buyers can do so via IDX. This is proven to work when done well, as seen at sites like Redfin and Movoto. We have a local Brokerage in Austin that generates a lot of online leads as well. It’s not easy, it’s not cheap, so those who wish to compete that way should understand the realities of doing so and not expect a free piggyback ride alongside other Broker’s listings.

    Steve

  5. Bob Bemis says:

    Steve,
    Yes, we’re pretty close, but with slightly different perspective. I have never understood the rationale that a buyer agent is permitted to advertise next to another agent’s listings on an IDX site, but not allowed to do the same thing on another website. The result is the same — using listings (not their own) to attract buyers. Just the URL is different. To me it’s like going from point A to point B, one way by driving and the other by taking the bus. Same result, different vehicle.
    Thanks again for your comments.