Why Did the MLS Lose Its Technology Leadership?

A week ago, the California Association of REALTORS held a very interesting panel discussion on the MLS, and live-streamed it. I hope I’m embedding this correctly below.

Seriously, watch the whole thing if you haven’t already. It’s really good.

I’m sure there are other things to talk about from this panel, but for now, I want to highlight one issue that Joel Singer, CEO of CAR, brought up.

Then I want to ask a question and get your answers and thoughts.

What Happened to the Tech Leadership of the MLS?

The issue is how the MLS used to be a technology leader, but then lost that leadership.

At 1:25:00 mark or so, Joel asks whether the MLS is “missing the ballpark” when it comes to giving the broker and the agent the ability to compete.

He then tells a story about how he recently bought a house, and used the Redfin app. He had a terrific broker (I assume he means agent), then says that his agent — and other agents — started sending him data from the MLS. Then he says, it didn’t compare very well to what he received from Redfin.

Joel then asks: “The data was great; the presentation was great. Is this a problem for us?”

He goes on:

Do we need to give our agents the same type of value when they’re dealing with their customers as their customer gets directly from Redfin, Realtor.com, Zillow, Trulia?

He then says, “This is the embarrassing part for me” before talking about how the MLS used to be technologically innovative and superior. The MLS was at the vanguard of technology; it was “one of the few small businesses who used elite technology to create informational advantage for our members.”

Great discussion ensues afterwards.

My Question

My question is a simple one: Why did the MLS lose the technology leadership?

I don’t need a history lesson. Nor am I looking to “blame” somebody, as so many low-information Realtors are wont to do: “NAR soldz us outz!!!11BBQ!11!”

I’m asking what your opinion is on the fundamental reason the MLS lost that tech leadership that it once had.

If you don’t think there was a fundamental reason, so it was just bad luck, happenstance, etc., then go ahead and provide your answer. I’m curious what it might be.

I’ll leave it there for now. I have my opinions, but wanted to see what the best informed audience in real estate has to say about that question.


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Rob Hahn

Managing Partner of 7DS Associates, and the grand poobah of this here blog. Once called "a revolutionary in a really nice suit", people often wonder what I do for a living because I have the temerity to not talk about my clients and my work for clients. Suffice to say that I do strategy work for some of the largest organizations and companies in real estate, as well as some of the smallest startups and agent teams, but usually only on projects that interest me with big implications for reforming this wonderful, crazy, lovable yet frustrating real estate industry of ours.

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24 thoughts on “Why Did the MLS Lose Its Technology Leadership?”

  1. I coincidentally discussed this with my Board of Directors today without seeing the livestream or your post. I was noting the sea change I feel from talking to my brokerage keaders. For years, the philosophy from MLSs has always seemed to be provide mediocre products in an effort not to compete with well-equipped brokers, but equip somewhat the non-resources brokers. The amount of real estate company startups with really great tech (Redfin, etc) and then the big Z, I’m finding brokers who just two to three years ago said don’t compete with my tech are coming and saying you’ve got to compete and provide better tech. So, I am starting to feel that change in my brokerage community.

    However, that immediately led to a conversation about resources and what kind of technology do brokers and agents expect for such a small monthly fee?.

  2. I guess it comes down to which MLS is the topic of discussion. CRMLS under the leadership of Art Carter has come a very long way from where was just six years ago. CRMLS has whittled out the crap left over from long term contracts with shitty tech vendors.

    CRMLS recently announced they will be rolling out Remine that will finally begin to replace the piece of crap that Realist. Realist by is still using effing Flash! What a bunch of Dbags.

    We also just got Homsnap Pro which I think people will start to see is an equal if not better competitor to Zillow and Redfin. We have three of the four Cloud suite products from W+R Studios. I’m hopeful we will get Agent Inbox as well.

    It appears to me that CRMLS is taking a page from Apple’s book of a thousand NO’s for every Yes. I’m very difficult to please from real estate tech standpoint but I’m way happier now with our MLS tech than I have been in the past.

    • Art does great work over at CRMLS, for sure.

      But are you saying, Roland, that the MLS still has the leadership in technology compared to the Zillow, Redfin, Realtor.com, and Trulias of the world?

  3. Hundreds of small mls vendors kept their clients (us) happy but could not individually afford to lead the way in new technology. Publicly traded technology companies, like $Z, have the talent and resources to develop far superior products or buy them from the independent developers. MLSs lost the leadership when they sold their soul to the MLS as a means to the membership growth end. It kept associations and their MLSs fragmented far past the point of return. Now technological advancements occur too frequent for those fifedoms to compete. Time for associations to get back to basics and show value outside of our poorly lead MLS.

  4. Money. Many of the 500 boards profit from the broker data. They want to maintain their fiefdoms while “protecting” their brokers. They are entrenched in a modus operandi that is steeped in the past.
    Many folks involved in decision making bring up the “MLS book” at any industry event in our area. The old school is missed by these voters. We need a newer regime to get us where we need to go.
    Ultimately, the folks who navigated us into these waters are still in charge. To expect the same captain to deliver another destination is wishful thinking…
    What is the answer? The best minds in real estate juggle the permutations. In CA, consolidation with CRMLS is looking like one of the best options. We get an economy of scale with local representation. The REALTOR brand needs to get this ‘ish together before someone else steps in to fill the gap.

  5. I’ve always said real estate is an interesting business and slow to change partly because of its demographic makeup. Because real estate agents are independent contractors, many of them stay in the business long beyond when the traditional employee might opt for retirement. It’s not unusual, in some markets, to see a 75 year old agent pushing property. Now, there’s certainly nothing wrong with this, and quite frankly, I’m quite impressed at the deep relationships these agents have built over the years – to the point that some of them are literally WRITTEN INTO THE WILLS of their clients that they’ll be the agent to list the home when said client passes (yes, I have seen this situation on more than one occasion). But what it results in is a very low rate of change and innovation. “This has worked for me for 40 years… why should I change it now?”

    • But these 75 year old agents aren’t the tech leaders at MLSs. The tech leaders seem to have lost their passion, or at least the motivation to create a better product.

  6. When Sandicor went to Paragon, it seemed a backward move. I laughed when Sandicor said Paragon was “intuitive” I don’t laugh when I have to use the tax database and end up going to a title company database instead. And printing? If a listing has fewer than 25 pictures, we get pages of sheets that are wasted and printed with “No Image” all over the page.
    I guess Sandicor has no programmers in house.
    The old MLS system was very adequate and I agree – technology is not a strong suit for most MLS systems. That’s why I believe some outside firm will create the “World MLS” and take it away.

  7. Why?

    Because at first we didn’t think the outsiders were a threat, and that a spiffy Redfin website all by itself could be a lead generator that sucks business away from realtors.

    Then when it looked like it could be a threat, we figured they would never get big enough to take over.

    Now we’re just waiting to be slaughtered. Not necessarily by Redfin alone, but by all outsiders. The residential-resale industry is a sitting duck.

    It’s too bad too, because none of the traditional big-box brokerages, NAR, CAR, or any industry leader – except Rob – is stepping up to the microphone to declare a new future with solutions. We’re just wondering who was driving the truck that just ran us over.

    • What is fascinating to me in the video, and then some of the comments, is that people are forgetting that Redfin is a BROKERAGE. They aren’t a portal, although their website is sexier than other brokerages and rivals the large tech players.

      While their business model is different that the traditional brokers, everyone needs to remember that they are a brokerage and a participant in the MLSs in their markets.

      This isn’t poking at you, Jim. It’s a reminder to everyone to make sure they’re not confusing Redfin with a portal.

  8. From a reader who requests anonymity:

    Isn’t it a great question? I’m going to venture a guess just from my knowledge from within my area. BUT, you must NOT attribute what I’m about to say to me or my area or association as it would be a problem for me. Here’s my thought.

    The MLS is handled by the true techies. They create the Realtor and consumer facing reports and data. It looks terrible. Never do they ask an agent or working Realtor or consumer what should be shown and how. It’s all the same data as Redfin or Zillow but looks terrible to those who have to use it. It’s a lot about aesthetics. Our technical/MLS people need to bow out of the front face or allow the opinions to come in about the aesthetics. My 2 cents.

  9. I see two driving forces:
    1) The history of agents wanting to control the data, not share it. The MLS was conceived as a product FOR agents, not consumers. Redfin & Zillow rose up to fill a void. The guy who created the software that put home listings on a map, actually offered it to real estate agents first and they turned him down. They didn’t see the point in spending the money on it when they liked having to force potential customers to come to them for the information. The MLS needed such a seismic shift in thinking, from an insider service to a consumer service.
    2) There are what, hundreds(?) of local MLS across the US. Trying to communicate and sync-up with them is tedious & laborious. It’s like a modern tower of Babel. No one entity has control over them all.

  10. When the governance and guiding light of the MLS industry is in the hands of the lowest common denominator of the industry, is this still a question? The failed MLS industry is made-up of the same mix of members as organized real estate. This industry is being led by a “pay dues to play real estate” governance structure. I can still recall back in 1980 (yes, those digits are in the correct order) when PRC showed up at the offices of the San Mateo / Burlingame Board of Realtors with a phone handset was attached to a machine by suction cups that spit out miles of heat sensitive paper based upon a request for SC and SL. Those were not models of Mercedes Benz cars, they stood for search comps and search listings. In seconds after the release of this “technology” member screamed bloody murder and demanded that an MLS book be published weekly to replace their lost printed listing tear sheets. Why? Because the lowest common denominator of the industry refused to “learn how to use the new technology.” Any supposed leadership in technology decisioning back then – and up to now – originates from largely non-productive members of the MLS serving on MLS committees across the Nation. The change – or the lack thereof – is being “led” and determined by the masses of non-productive Realtors. Then sprinkle into this mix a very technology orientated consumer of real estate and you have what exists today. The result? A frustrated, disgusted consumer and vast complaints from the productive minority of the industry who are fed up with the MLS force-feeding of mediocre MLS technologies. And oh yes, the MLS steering committee meets next week on Tuesday at 12pm and lunch will be served. And so, at least for the moment, I rest my case.

  11. Pride and complacency. We (MLS leaders, members and participants) thought that we were the only ones who should collect the data, hoard the data and disseminate the data at our discretion. Perhaps thinking this way would prove our value to the public and in the past this was true. We were once the only source of listing information. Remember when the MLS was in printed book form before computers? If you wanted to know what houses were for sale you either had to drive around the neighborhood or consult your realtor. Having the MLS information gave us power and business. When technology came along I feel like this attitude remained thinking we would always be the source.

    • So true! And because many old timers still hold on to memories of the MLS giving us power, their continued faith in the MLS has turned it into the emperor’s new clothes. Not too long ago, NWMLS rolled out an app called HomeSpotter. My industry veteran friends think it’s super awesome that their clients can now search for properties on mobile devices. And at a networking event for luxury brokers, the MC gushed about how much fun it is to see nearby listings as she drove around different neighborhoods. But HomeSpotter is an embarrassment! More often than not, new listings show up on Redfin 20+ minutes before the information is available on HomeSpotter. That’s ok, says many a long-time agent, because not every client spends all their time on Redfin. Or do they? My 80-year-old neighbor, for instance, gets Redfin notifications on her phone every time a nearby house comes on the market.

  12. MLS and the tech companies that support them, never had an outside competitor until Z came along. So, the competition was between the vendors to keep “1” up over their vendor competitors. MLS’s were and for the most part are still not “tech” companies. Also our customers’ the agents and brokers – are not tech savvy – so they don’t demand it and often can’t handle the technology of today. Most successful business is built on relationships and the top Producers (and brokerages) hire people to support the technology and how to use it the best to assist those agents.

  13. An MLS can often be a monopoly (at least it is in Denver) and market forces don’t “require” it to be competitive since we don’t have a choice in using different MLS systems. An MLS often doesn’t have the budget to compete with a Redfin type company. Also, I see 2 sides of this topic. 1) Is the MLS providing agents the tools they need to list properties and disseminate listing info to the proper channels. 2) Does the MLS provide me the tools I want to have a better consumer facing tools and to convert leads. I see #1 as a requirement and #2 as something I want but not a true requirement by the MLS. To get #2 – dues would need to go up, etc.

  14. The MLS caters to agents to provide said agents with tools to supply their clients, both prospective and acquired with data and information required to be bettered armed with the transaction of a property. Those tools are relatively robust, though not elegantly displayed. The consumer facing aspect of zulia (ha ha), redfin, movoto ( one of the first in the space over 10 years ago – PS I am a Product Designer / Manager at Movoto ), realtor etc… allow consumers to easily find MLS data. Most of the aforementioned also have tools for agents to work referrals and clients through the funnel to close on transactions. The truth be told is that when you look across the landscape the consumer facing tools are simply mouse traps for agents to acquire additional lead sources. Redfin, Compass and Movoto are slightly different as they actually hold brokerage licenses and offer end-to-end solutions for home buyers and sellers.

    What I find most interesting in both agent and client behavior is that when an agent client relationship is built a majority of agents (at least within California) still rely upon the MLS to create search feeds for their clients and those clients regardless of the UI are still willing to cross reference and accept the MLS interface. It is in fact the industries source of truth.

    So my question to the community is, if the MLS has missed the boat, why are agents and clients still relying on the information and the CRMs? Agents jump from brokerage to brokerage with no real loyalty partially because the MLS is sufficient enough for agents to feel compfortable in the tools they have available to them that are part of there doing business. In my opinion the opportunity the MLS’s missed was to expose the MLS data in a more user friendly and highly publicized way aka the tools don’t look and feel modern, but they still have a strong hold in their practical usefulness. Craigslist interface hasn’t changed much in 20 years, but its utility is amazing.

  15. “Why did the MLS lose the technology leadership?”
    I would take the potentially unpopular position that the question is flawed and irrelevant. First, because there was never an MLS; there are hundreds of them. It was mentioned in the video around 700.

    Have some MLS organizations been technology leaders? Yes, but only leaders among other MLS organizations. They have never been leaders in technology as a whole, and have been like any other bureaucratic organization — slow to adopt change. Certainly slower than an unregulated market such as what has occurred in Silicon Valley.

    At some point technology companies began exploring opportunities in the real estate industry, and ever since that time it has been MLS organizations playing catch up at a very slow pace. MLS organizations would sign multiyear deals with platform providers. The moment those systems were implemented they were years behind.

    Meanwhile, Silicon Valley has been plunging ahead, leaving MLS organizations in the dust.

    I think the question should be, “what role should MLS organizations play to make their broker/agent members relevant in a future where access to data filtered through machine learning is ubiquitous?”

    I can’t imagine any technology expert coming to the conclusion that MLS organizations are going to be able to compete with the most intelligent and well funded multinational technology companies on the ability to innovate. It must be something else that the MLS becomes.

    • I don’t think it’s a terrible answer. But Joel Singer’s statement wasn’t about one or two MLSs that were technology leaders; it was about the MLS industry as a whole.

      I also like your new, different question, but this one was about an industry that had technology leadership at one point, and then lost it. Is it as simple as, “the real tech companies turned their attention to real estate”?

      • The real estate industry had an advantage before the technology revolution for sure, but I think it is a false premise to posit that the MLS as an entity, or the real estate industry as a member organization, was ever a technology leader in the post internet revolution sense of the word. Unless we are talking about low tech, like MLS books being printed and sent to each office, etc. That’s a great collaborative accomplishment, and probably the last time the MLS was current on technology.

        As soon as the internet revolution happened and the data science field developed, it is data science and algorithms that offer the technological advantage for real estate. The MLS is not going to out innovate or spend Silicon Valley in the technology department. It just took a while before any effort was devoted to real estate, which was a non-technology field at the time, and the average MLS would not have a technology leader running the organization.

        The real estate industry, whether that is through local MLSs or association of Realtors, has the advantage of owning the client relationships and expertise in negotiating and handling the real estate process. For now, we still kind of sort of own the data as well, and have attempted to hold back tech from taking over through lobbying efforts. Unfortunately we’re selling our MLS data and handing it over to big tech for very little in return.

        I just gained Homesnap Pro access through CRMLS. It’s a great tool, and works well. I t could even have been a potentially helpful thing with clients and an answer to them being on Zillow and Redfin apps.

        The problem? We (NAR, CRMLS, and whoever else put together this deal) negotiated a bad deal. We give them all of our highly valuable data — not only the listing data, but the agent data, user behavior data, agent sales history and relationship data, etc. — and we get nothing back from them. We get no data back from them, no open API access to integrate with the app and our clients in our CRM, VOW, IDX, or MLS front end of choice, no ability to tie the app to our clients through a unique referral app link in the iTunes or Google Play store without having the client go first to a Homesnap website and hopefully enter their mobile number to get a text message, and no ability to export our client’s usage data or do our own marketing or run Facebook/Google advertising for the app.

        Instead, we have to send clients to Homesnap and hope they make an effort to connect it to us. We allow Homesnap to own the relationship, and if we want to advertise to our clients on Facebook through Homesnap, we cannot utilize the best aspect of Facebook advertising: the ability to advertise to a targeted audience of our choosing. Instead, we pay Homesnap a premium on top of the Facebook ad fees so they can put our advertisements in front of other Realtors and Brokers in a particular zip code, and nobody over the age of 54 sees the ad.

        It’s genius on their part, and I commend their negotiation team. A small ~30 employee company could have been acquired and used for our advantage as an association of Realtors, but instead we all got nothing and they are going to profit from the deal. Just like with many other historical deals (cough, Realtor.com), the industry as a whole has not made decisions that are in the long-term best interest of its members. We gave Homesnap a huge windfall of value and access to our data and clients, but negotiated nothing for the member agents in return. I’m assuming the negotiators for the National Association of Realtors saw it at a win, focused on the annual subscription cost per user rather than the MUCH more valuable data cost.

        That’s just one example, but I’m sure you can think of many others over the years *cough* Realtor.com *cough*.

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