Realty Times February 13, 2006

Is Your MLS Helping Put You Out Of Business?
by Blanche Evans

You've paid a lot of money to search engine optimization companies, webmasters and search engines to get your site to the top of consumers' searches on sites like Google.com. But, someone even smarter than you is using the resources of your MLS to launch businesses that don't advertise themselves as brokers.

If they aren't brokers, what are they doing with your listings?

It's one of the disturbing trends that is happening on the Internet.

In a market like Atlanta, where agents have multiplied like mushrooms from under 9000 in the late '90s to over 36,000 in 2006, competition for business is stiff.

Here's how one company is beating other agents at their own game.

AtlantaHomeView.com bills itself as Atlanta's official search engine. It's also a brokerage, and is using IDX listings from FMLS. It's also got a prodigious number of links on its site to bolster its claim of being a search engine. The problem is, many of the links are dead.

The links are to mostly top Realtors, like Jim Crawford, who is annoyed because he has over 20 sites, but some of those sites on AtlantaHomeView are dead links. To add insult to injury, he says, he never was asked nor gave permission to AtlantaHomeView to use his links to bolster their site.

"Everyone has gotten stupid," says an angry Crawford. "They seem to want you to search the top of the page where the homes for sale are, and not the bottom where the links to the agents are."

Emails and calls to AtlantaHomeView.com have gone unanswered. A quick search of godaddy.com shows that the "whois" search is privacy protected -- so no actual names are available.

That's strange. According to FMLS and ARELLO.org, there is indeed a broker of record, which raises a number of questions:

  • Why would a broker call himself a search engine?

  • What is a search engine doing with MLS listings?

  • What makes this site official, and why isn't there an MLS rule prohibiting such advertising?

  • Is it ethical for a broker to have a "blind" site where consumers can't see who owns the site and where they are being delivered as "leads"?

  • Is it ethical to promote a website that uses MLS listings that isn't a brokerage?

  • Is it ethical to be a brokerage and not say so where consumers can find such information easily on the site?

Similar questions could be asked of Zillow.com, an advertising site that uses home evaluations to lure consumers. If Zillow.com is an advertising site, why did it join an MLS in California? The company's founder has told media outlet after media outlet from the New York Times to BusinessWeek that brokers are earning too much in commissions and that an empowered consumer with more information will be better able to negotiate lower commissions.

If Zillow.com has no intention of selling listings -- the purpose of listing brokers' putting them into an MLS in the first place -- why is the company being allowed access to them?

Apparently all they have to do is pretend to be a broker. When Realty Times asked why Zillow hired a broker of record to join a California MLS, spokesperson Amy Bohutinsky responded, "To get some of the data. One of the ways to get that data is to become a registered broker to have access to data."

Zillow is using the listings and other MLS data to deliver home valuation reports to consumers that allow consumers to do their own transactions or engage a Realtor while demanding a significant reduction in commission fees.

The bad news is that the National Association of Realtors has been distracted by the Department of Justice lawsuit against its online data-sharing policies. The good news is that the Joint Work Group of the Interpretations and Procedures Subcommittee and the Professional Standards Committee is looking into key concerns and issues, among them:

  • Agent websites that appear to be separate companies, lack of adequate disclosure of firm affiliation.

  • Co-branding of websites should be permitted providing the website operator is readily apparent to consumers.

  • Capture and use of consumer's personal information -- disclosure and consent for other uses (e.g. transferring information to third parties).

  • Deceptive framing and linking -- actual source of information being "masked" or hidden.

  • Deceptive manipulation of listing data.

  • Disclosure of affiliated business relationships on websites.

  • Appropriate requirements for REALTORS establishing contractual relationships with consumers online (e.g. should more than a quick mouse-click be required?).

  • Realtors' responsibility for the content of electronic communications, including firm and agent weblogs, electronic newsletters, etc..

But the main issue is the public's (and the DOJ's) perception that MLS data is or should be a public utility.

When was the last time anyone got free water, electricity, gas, trash pickup? Those are public utilities, with real costs associated with them, and those costs are passed on to consumers.

The Group is also looking into MLS issues:

  • Ensure that the MLS means more than "data" to Realtors and to the public.

  • Contrast data with the offer of compensation and cooperation made through the MLS (with companies like Zillow.com, where is the cooperation to sell listings?).

  • Assure correct use of the terms "MLS" and "multiple listing service."

  • Diresgard for MLS rules/ Violations viewed as the "cost of doing business". Consider increasing maximum fines and other penalties.

  • Clarify permitted uses of listing information -- authorized and unauthorized reproduction and retransmission (e.g. making Realtors/licensees aware of what is permitted and what is prohibited).

  • Increase industry awareness of MLS and value of MLS.

  • Ensure that the MLS "brand" is accurately understood by real estate professionals and by consumers.

How about adding one more? That MLS information may not be given to companies or their parent companies for any purpose other than to cooperate with the listing brokers to get the listings sold.

Period.



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