MLS 7.0 (re-post because I’m stupid)

Apr 9, 2007 Michael Wurzer

I’m re-posting my MLS 7.0 post because, incredibly, I deleted the original. I started the post with my primary laptop but finished it with my tablet. Unfortunately, I had my laptop in standby mode with the edit window still open, and when I returned to my laptop today that confused WordPress and me into thinking the MLS 7.0 post was just a draft . . . oops. So, I’m re-posting the article copied from my feed reader but the comments are gone. I apologize to anyone who commented and to those who have linked to the old post.

One possibility for why I’ve been yawning so much over the last few days: Zillow supposedly is trying “to suck every bit of oxygen out of the residential real estate space as a vertical market[, because they see] the information marketplace for homeowners as a single unified whole . . .”These claims apparently are in response to my question as to why Zillow is taking the circuitous route of encouraging non-owners and non-listing agents to report/advertise other people’s homes for sale on Zillow, when other companies, like Trulia and Google, have gone the more direct route of getting the data directly from the listing brokers. The theory is that “Zillow’s objective is not to accumulate short-term listings data but to acquire and archive long-term records about homes . . .” Further, though the listing database admittedly is critical, “the ever-improving real estate and user databases are a secondary consequence, a side-effect of the creation of a community.”

If a community is what Zillow is aiming to build, they certainly seem to be going about it in an odd way. Community means having common interests, but Zillow’s “report anyone’s house for sale” approach is divisive. First, assuming a house is for sale, either the owner or a listing agent is promoting the sale in the way in which they choose. Apparently not enough agents or owners have been choosing to promote their listings on Zillow, and so Zillow figured they’d choose for them by encouraging others to put the listing on Zillow anyway. Forget about the potential ethical violations for REALTORS® engaging in this behavior, my question is how this shakedown approach (put your listings on our site or someone else will!) builds a community of shared interests? Or, put another way, what kind of community does a lack of choice build, and who are its leaders?

Here are quotes from Zillow’s FAQ on posting homes for sale on their site:

Who can post homes for sale on Zillow?

Homeowners and real estate agents are the primary folks who will post homes for sale on Zillow, but we are now inviting anyone to tell us a home is for sale. Yes, anyone. Real estate professionals, owners, and neighbors — anyone — can share information on Zillow that a home is on the market.

Why do you allow anyone to tell you a home is for sale?

Allowing anyone to tell us a home is for sale may seem a bit unusual, but it’s really not. Think of a bulletin board at a community center that has information posted on it about babysitting services, homes for sale, and apartments for rent. Zillow’s “Tell us a home is for sale” feature is just like a community bulletin board, only it’s online.

OK, how do I tell you a home is for sale?

Just enter an address in our search box, follow the link to that property, then click on “Tell us it’s for sale” at the top of the page. On the next screen, choose your role (owner, agent, or other) and enter the sale price. Once you click “Save,” the home will be updated with the sale price and a link to your profile — and photo, if you uploaded one.

Why would I tell you a home is for sale?

Ultimately, to be a valued contributor in your real estate community. Community is all about asking questions and sharing information. Also, if you tell us a home is for sale, a link to your profile and photo — if you uploaded one — will appear with each home that you tell us is for sale. For real estate professionals, this is valuable free marketing exposure.

What about the listing agent or owners? Won’t they be angry?

We anticipate owners and agents will be thankful the community is spreading the word that their home is for sale. And, a listing agent or owner can add their contact information to that page at any time by clicking the “Take over this listing” link on that home.

That Zillow feels they need try to answer the questions, “What about the listing agent or owner? Won’t they be angry?” should give them pause. That they have to explain that it may “seem a bit unusual” should be an indication to them that it is, in fact, unusual. Their attempts to answer these questions is just doublethink.

No, this divisive approach from Zillow will neither build a community nor a database. I’ve said before that Zillow’s idea of starting with the public records data is a good one. But what’s now obvious is that the public records data is too old and lacks sufficient detail to be of sustainable value. Zillow needs a richer transaction history to last. The “report anyone’s listing” approach may get them a few more listings, but it will not build a community. Instead, this approach will simply create another of many fractured databases, making it all that more difficult to truly serve the consumer.

Ironically, though Zillow is dubbed the ground-breaking and community centered web 2.0 offering, the MLS may well be one of the earliest examples of a user-created content community. Long before web 2.0, there was MLS 1.0 (the coffee shop), MLS 2.0 (looseleaf binders and fax machines), MLS 3.0 (MLS books), MLS 4.0 (terminal access), MLS 5.0 (distributed access), and MLS 6.0 (web access and IDX). Yes, indeed, the MLS community of competitors has a long history. A foundation.

Though it is popular in some corners to bash the NAR and the MLS as anti-consumer or protectionist, the truth is that both NAR and the MLS have done more to put high quality listing data in the hands of consumers than any other organization. Through IDX policies, MLSs have created a cooperative agreement among brokers to allow them to display each other’s listings, provided they follow some basic rules. Such agreements are what build a community, not doubletalk. IDX has distributed more listing data to more sites by far than any web 2.0 site. Without a doubt, the web 2.0 sites are innovating and the real estate community must respond, just as they have in the past. Many MLSs are already evolving into what I’ll call MLS 7.0, with the harmonization of local databases through broader and deeper listing data standards and others reaching agreement on the distribution of sold data. I believe this process of building the community is much more in the sync with the web 2.0 design pattern than the divisive approach of Zillow.