Back to the Future for MLSs

Jun 29, 2007 Michael Wurzer

I was doing some research today and ran across this article, which has some very interesting quotes:

As in other aspects of Internet life, the issue has now become one of how users will focus their attention, makes choices, and avoid information overload. The online real estate situation now somewhat resembles the early phase of a Monopoly game, in which contestants try to lay claim to as much territory as possible so as to generate revenues and survive.

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Ault said that based on his own experience, giving clients the ability to sift through real estate offerings themselves online may have an effect on the structure of fees in the industry. Hitherto, he observed, agencies have been paid contingency fees–somewhat like the lawyers who get paid a percentage of cases provided they win.

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Confirmation of that scenario came at the National Association of Realtors’ Midwinter Business Meeting in February. “Changing technologies are eliminating routine jobs,” NAR chief economist John A Tuccillo told about 4,000 attendees. “Realtors who are unwilling or unable to become information providers are likely to be squeezed out of the transaction and quite possibly the profession.”

“More and more, young home buyers are doing advance research on properties and coming to Realtors to complete the transaction,” Tuccillo said. “This in turn is fueling interest in unbundled, fee-for-service payment options where the client chooses from and pays for a broad menu of services.”

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. . . an effort is underway to merge at least the adjacent states’ databases, though probably not the entire organization’s. A similar situation exists in eastern Massachusetts, he said, and with three Vermont boards already pan [sic] of that network, it would make sense to unify the region, he said.

Before GSIN, it was common for real estate offices to belong to three or four multiple listing services so they could meet their clients’ needs, especially around Manchester, NH, Perkins said. Agencies near association boarders [sic] typically had to go both ways to survive.

“We just continue to try to eliminate the borders,” Perkins said. “That’s the basic scheme: keep eliminating borders.”

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Others, said Ault, are genuinely afraid and not necessarily without reason. At national meetings on RIN. “The gut reaction of some of the Realtors when they heard the presentation by Microsoft was ‘Good grief, why does the public need us? Suddenly the middleman is going to be eliminated’.”

Actually, Ault said, “They aren’t going to want to buy these things online.” There will still be a place for local real estate expertise, but, “you’re probably going to see a great shakeout of the people who don’t want to learn the new system and the new way.”

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“Everyone is afraid of change,” Ault said. “This is definitely something that will change our industry dramatically.”

Among those who agree is Saul D Klein, president of Saul D Klein Associates in San Diego, who addressed the NAR convention in February. For the agents who survive, “five years from now, you will be as proficient on the computer as you are on the telephone,” he predicted.

The date of the article? April, 1996.