Should real estate brokers be allowed to package and sell MLS data to banks?
The fair use of listing information is undergoing a major reevaluation.
financial institutions.
Of course, RPR’s main goal is to support members. It uses data licensed from
around 600 MLSs to fuel the REALTOR
Valuation Model®, which is free for members, associations, and MLSs to use.
“The idea is to create a sort of virtuous
circle, where fully authorized data can
be used to support members’ transactions,” says RPR President Marty Frame.
RPR also has just begun providing a
consumer-facing AVM for brokers to use
as a widget on their sites. RPR’s product
won’t be in competition with brokers who
choose to develop an AVM solution, because RPR isn’t licensed to use MLS data
for such purposes.
For some MLS members, the fact that
other companies are using MLS data to
create valuation tools is enough reason to
allow brokers to participate.
“RPR makes money off of MLS data.
Some MLSs make money off of MLS data.
Are we really going to say that brokers are
the only ones who cannot make money
off of MLS data?” Henry Brandis, senior
vice president of corporate services at
Edina Realty in Minneapolis, asked at the
MLS committee meeting in May.
Larson says that argument doesn’t
necessarily apply, because brokers have
the option to prevent their listings from
appearing on sites where their MLS has
a licensing agreement. He says this new
policy doesn’t allow them to opt out of the
AVM use of their listings.
Greg Moore Jr., co-owner of Informed
Solutions Realty in Milan, Mich., a brokerage that specializes in BPOs, says he
doesn’t mind if participating brokers use
his data to value and sell properties in the
area. But he draws the line at companies
that sell MLS data to banks.
“There are instances in which data
needs to be shared so we can sell homes,
Clareity Consulting CEO and co-
founder Gregg Larson, who supports the
policy change, says AVMs are functionally
the same thing as BPOs.
“One of the main purposes of the MLS
is to be able to use the data to do valua-
tions,” he says. “This makes total sense;
this is technology moving forward.”
Gregg Larson has been encouraging
brokers to create their own AVMs since
2002, regardless of size or affiliation.
“You don’t need to be a big broker; one
guy can have access to the database.
All you have to do is be a participant,” he
says. “You could call CoreLogic and say ‘I
want to be your guy in Amarillo, Texas.’”
Gregg Larson says brokers can use
consumer-facing AVMs to attract clients.
He says brokers can use their own local
knowledge to tweak AVMs and create
a powerful machine, helping agents
estimate home values almost instantly
and attracting more consumers to their
website. “It can be used as a real-time
tool and a differentiator,” he says.
The Black Market for Data
For every reputable company like RPR
and CoreLogic, there are plenty of others
selling MLS information inappropriately.
Sometimes they steal access to the data
through scams. Or they’ll be granted
limited access to MLS data, but they’ll
resell it or use it in ways that violate MLS
agreements.
“We run into these guys all the time,”
says Gregg Larson. His contacts at
Bank of America tell him they reject
around one solicitation a week from
illegitimate resellers of MLS data. “They
don’t have booths at trade shows, but
they’re out there.”
Frame says this fact highlights one of
the benefits of using RPR, as it’s commit-
ted to only using up-to-date MLS data in a
way that has been expressly authorized.
Frame adds that MLSs are generally
vigilant about protecting data, but that
their resources are often thin: “They do
good work, but sometimes they could use
more tools.”
Resource Management
Brian Larson worries the new policy
might strain resources further. He says
MLSs rely on members policing each
other’s VOW and IDX feeds, but AVMs
are different. When an AVM is used in the
back room of a brokerage—to monitor
a bank’s portfolio, for example—it isn’t
operating in a public place where others
can scrutinize it. “Many MLSs rely on
that sort of tattle-tale enforcement,”
Brian Larson says. The backroom AVMs
present “a more opaque barrier. How
does an MLS staff even get into an AVM?”
He says brokerages may have to submit
to technology audits to make sure they
are in compliance with MLS agreements.
“Because of the cost of technology
audits, most MLSs don’t do them. Now
maybe that will change.”
Back in May, Coile noted an element
of déjà vu in the opposition to the policy
change. “Two years before Zillow came
out with its AVM, realtor.com® was ready
to go with something similar,” he said.
“But we shot them down. We were afraid
of that.”
The change won’t be in effect until the
next edition of the Handbook on Multiple
Listing Policy is published next January.
But the debate over listing data will rage
on, as a testament to the power of data—
and who gets access to it.
By Meg White
