A Random Thought on LEAP (Listing Exchange and Access Policy)

I’m waiting for a webinar I’m supposed to speaking on to start, but came across an excellent post by Sam DeBord of RESO on a new site I hadn’t seen before. The title of the post is LEAP Forward: Six Questions to Answer on Brokers’ MLS Data. LEAP stands for Listing Exchange and Access Policy and it can’t get any more inside MLS baseball than this, but many of you are MLS people, so…

Reading through it, I had a random ass thought and figured I might as well spend a few minutes before the webinar gets started jotting them down and sharing them with you.

Is LEAP (and NOW Policy and everything else MLS data related) just a bit of a trying to do too much on too unrelated a set of issues? I can’t help but feel that it is trying to coordinate various policies that inherently can’t be coordinated.

Maybe there is a simpler (note, simple is not easy) solution to all this pain and hassle. Let me explain.

Two Different Needs

Seems to me that LEAP is trying to deal with the fundamental problem of the MLS, articulated so long ago by Geoff Lewis, then the General Counsel of RE/MAX, at the 2006 Congressional hearings on competition in real estate:

The concept is simple: you earn a customer, you get to use the MLS with the customer. The concept is not: you get free access to the MLS and then you use it to advertise the properties of your competitors in order to attract customers.

The broker/agent has two different needs:

1. Service the client
2. Acquire a client

Similarly, the real estate listing — which is what we’re talking about — has two different dimensions.

One, it is fundamentally an advertisement of a house for sale. That is its most important function. No homeowner anywhere would allow some agent to come take all kinds of information and photographs of his family home and put them out to the public if he were not looking to sell the house.

Two, once a listing gets past the point of letting a potential buyer know that a house is for sale, it then has to provide information that the buyer can use to make a bunch of decisions. Most fundamental of those decisions are: “Do I want this house?” and “What is it worth to me?”

To be sure, there is information about a house that is so important to a buyer even considering the house that it straddles the line between Advertisement and Decision. For example, Bed/Bath, Price, and Location are likely so critical to a buyer even considering the house that it has to be part of the Advertisement value of the listing rather than the Decision value of the listing.

Let’s relate the two needs of the broker and the two values of the listing.

Service the Client

To service a client, the broker needs the Decision value of the listing. It’s hard to advise a buyer if you don’t know some of the details about the property: what kind of heating system does the house have, or what are the property taxes, or whatever. The MLS data contains hundreds of fields that are really truly relevant for Decision making.

On the listing side, to service the homeowner in promoting his home for sale, the broker has to obviously advertise the home, and include as much information as possible so that the buyer can make proper decisions. But the broker also has to assist the homeowner in the key task of pricing. That requires access to comps: solds, pendings, actives, withdrawns, terminated, etc.

In both cases, the consumer rarely cares one way or the other about any of that until he is quite serious and is likely working with an agent to help guide his Decision.

And the broker/agent doesn’t care one bit that other brokers/agents need that information to service their clients. In fact, brokers and agents want the other brokers and agents to get all of that information from the MLS so that they don’t have to spend time sending them all the info one-by-one.

This is, if you will, the cooperation part of “cooperation and compensation.” The MLS reduces the cost of discovery and the cost of information distribution for brokers and agents to service their clients.

Acquire a Client

The situation is dramatically different when the need comes to Acquiring a client, rather than Servicing the client.

Here, the broker/agent just wants to use the MLS data to acquire a client. What the internet has done is make brokers and agents believe that putting all of the homes for sale on the web will lead to inquiries from consumers, who can then be converted into clients. (I say “believe” because more and more brokers and agents are opting to go without using listings and property search for lead generation.)

If we’re going to be honest about it, this is the source of all of the consternation. Listing brokers and agents think that they deserve all of the inquiries from consumers, because they spent enormous time and energy and money getting the listing. They’re the ones who know the house the best. They can answer consumer questions. Sure, they’ll advertise the listing because they have to in order to service the seller, but they ought to reap the client acquisition benefits of getting the listing in the first place.

Note how different this is from helping another professional who has already acquired the client, and is looking to help that client make Decisions.

IDX policy from the start was the idea that brokers who have no interest in helping other brokers acquire clients would do so, because they can then use those other brokers’ listings to acquire their own clients. The whole enterprise depends on the idea that brokers will gain more than they give up.

This idea was always questioned, is being questioned, and is likely to be questioned into the future.

For example, here’s a key element of LEAP, from Sam’s post:

The listing display or advertisement is clear so that a reasonable real estate consumer understands:
a) Who is the Listing Broker,
b) Who is the Advertising Broker and
c) How to contact that Listing Broker.

The insistence that public display of listings always identify the Listing Broker and include his contact information strongly suggests that listing brokers now think they’re not getting enough value for what they’re giving up.

There are so many other elements and issues here, but let’s try to keep this focused on the random thought. The important distinction here is that brokers have no problem with using MLS data for servicing clients; they have major issues with using MLS data for acquiring clients.

What If… We Remove the MLS from Client Acquisition Entirely?

The random thought then is what would happen if instead of all these cumbersome policies, we simply remove the MLS from the Client Acquisition game entirely?

That is, what if we simply eliminated IDX altogether?

The MLS can still serve every function that brokers and agents need for Servicing the client. It can provide all of the photos, the information, the data, etc. It can provide the data for comps, for analysis, for broker back office, and for client access to information.

We can eliminate most of the rules as it pertains to MLS data, since most brokers and agents have no issue with others using the data to service their own clients. As long as MLS data is not shared with the public, and only with existing clients, there really is no real need for barriers, for restrictions, etc. etc. Seriously, think about it. What restrictions and policies are really necessary on MLS data if the data were not going to be shared with non-members who are not clients of members?

Model Syndication Agreement

And then, for the Client Acquisition needs, simply go to a Model Syndication Agreement.

We’re all familiar with syndication. There was a time when all portals used syndication data feeds, and negotiated licenses individually with each MLS, each brokerage, each franchise.

Why not simply create a model syndication agreement with various options for each brokerage to select? With advances in technology, it isn’t exactly difficult for brokerages to execute that Model Syndication Agreement one-to-one. A single website can aggregate all of the Model Syndication Agreements, make them available to be executed via Docusign, then provide a Dashboard to each brokerage so it can select whatever options it can select.

All of this technology exists today. I can’t imagine it will be all that expensive or difficult to put this together.

Furthermore, it seems to me that it would be infinitely easier to create a Model Syndication Agreement — similar to various forms that states have created for a Sale Contract, with options — than it would be to create a national MLS data policy. Why would it be easier?

Because each brokerage has the freedom to choose, to negotiate, to make sure it is getting more than it gives. With a MLS-wide policy, that choice is taken out of the brokerage’s hands.

If KW believes that syndicating its listings to other brokerages or other websites is a net negative, it can decide not to syndicate its listings. The MLS still has all of the information necessary for other brokers and agents to use KW’s listing data to service their clients. If RE/MAX believes syndicating is a net gain, then it can do so very quickly by clicking a few buttons and selecting a few options, then routing the whole thing through e-signatures.

Since it’s a syndication agreement, which has to be negotiated, instead of a MLS Data Access agreement (which is of right as a member), each brokerage can insert its own favorite provision. So the “display listing agent contact info” thing can be something that Realty Alliance brokers insist on; other brokerages are entirely free to accept that and get the listings, or reject that provision, and not get the listings. Or some combination of things. I hear brokers and agents are expert negotiators used to working off of forms; let them do that for data sharing.

As long as the MLS has all of the information, all of the data for use by professionals in serving their clients, I can’t imagine what problem this approach poses. So I ask, why does the MLS have to be involved at all in data access for the purpose of client acquisition?

Lock a bunch of lawyers representing all sides in a room, have them come up with a Model Syndication Agreement, promulgate it under Creative Commons licensing, and let people go to town.

In Summary…

I guess what I’m saying is, instead of all this angels-dancing-on-a-pin kind of stuff with all sorts of difficult rules and mandates and such, let’s simplify by usage, simplify by the needs of the broker or agent.

If the need is service to an existing client, make it One Size Fits All rule from the MLS, with very few restrictions, because none of that can be used for lead generation or for client acquisition. But we still need this piece to be from the MLS, because it’s about cooperation between brokers and agents to serve an existing client.

MLS = Client Service. Period.

If the need is client acquisition, make it Let A Thousand Flowers Bloom, with no rule/policy from the MLS or the Association, and move to a Model Syndication Agreement that allows each and every brokerage and each and every website to negotiate a deal that makes sense for each. The technology to do this exists already, is not all that difficult to implement, and we won’t need NAR votes, layers of bureaucracy, and years of fighting over this minor issue or that minor issue.

Syndication = Client Acquisition. Period.

Simple. Not easy maybe, but simple. And it might be a good idea for the MLS to be a simple kind of a MLS, something brokers love and understand.

Your thoughts are, as always, welcome.

-rsh