I’d like to share some of the information I have gathered over the past few months while trying to come to some understanding of what MLS service might look like in five years time. Here’s some of the trends I see happening.
Using 3rd Party Vendors for MLS Service
Today, 73% of MLS service for real estate boards is provided by 3rd party vendors (like First American or Multi-List Vallarta). Only 5% actually still own their own systems, and this number is dropping. Its expensive to own your own database system, better to have someone else do it and pay for the upgrades.
The “Good Enough” Revolution
There is a strong trend these days called “Good Enough”. Don’t make it complicated, just make it do the job. What consumers want from a product is fundamentally changing, they now favor flexibility over high fidelity, convenience over features, quick and dirty over slow and polished. Having it here and now is more important than having it perfect. A great example is the new “Flip” digital video recorder that many real estate offices are now using. You don’t need an instruction manual to use it its so simple. And its killing the more sophisticated video cameras vendors. 20% of the effort, features, or investment often delivers 80% of the value to consumers. You can drastically simplify a product or service in order to make it more accessible and still keep 80% of what users want – making it “Good Enough”. Take a look at MLS systems and take this into consideration – what delivers 80% for 20% of the effort? This is what Craig Newmark, of Craig’s List had to say about this: “Most people’s needs are simple, all you have to do to serve them well is build a minimal infrastructure allowing them to get together and work things out for themselves. Any additional features are almost certainly superfluous and could even be damaging”. Well, you can’t get more simple (or successful!) than Craig’s List!
The Internet is radically transforming businesses – is real estate next?
There was a time that record producers controlled music, especially when it was only available on vinyl. Then came cassettes, which allowed people to copy it, and they lost a little more control. Then came digital formats and Napster and iTunes – then the record producers lost complete control. Consumers now control the distribution of music. They do the same with books through Amazon, with classified listings with Craig’s List, and information on Wikipedia. What about the real estate industry? It is being seriously challenged by services such as Zillow, Redfin and Google. The consumer are the winners in this new world model, especially with the introduction of social networks such as Twitter and Facebook. Is real estate next to undergo a revolution? It already is.
How sophisticated of a system do we really need for MLS service?
Here’s some interesting numbers from Multi-List Vallarta: •30% of the offices have 5 or less listings •60% have 10 or less listings •75% have 20 or less listings •95% have 50 or less listings. Can a legitimate, sophisticated system be built upon this? First American’s system, as it says on their website, is built for medium to large systems. Like 10,000 users. MLV has 200 users. Is this the best system for AMPI’s MLS? The most popular American MLS 3rd party system is offered by Systems Engineering, which has 50% of the market share for small MLS systems in the United States.
Advent of Consumer MLS Systems
This is where MLS systems are going. As former NAR president Billy Chee said back in 2002, “The consumer is the lion coming over the hill.” If the consumer wants the information and Realtors aren’t delivering it, they will find a way, or someone will find a way, to deliver it. And that’s what Zillow and Google are doing, creating open systems that involves involvement of everyone, including FSBOs. Our system, (Multi-List Vallarta) is still a “closed” system in that we don’t allow FSBOs and only offices that have complied with the requirements of AMPI. There are some open systems out there available for the consumers in Vallarta, but they are weak, don’t work well and don’t have sufficient content. But its coming, its just a matter of time.