Michael Wurzer The “sindication” debates continue with recent announcements from Sandicor, Northeast Florida MLS, and Metrolist in Colorado. Following these announcements, Rob Hahn wrote another post arguing that logic dictates that these and earlier announcements by others portend the doom of IDX. In essence, Rob argues that the arguments of syndication apply with equal force to IDX and so those stopping syndication also are killing IDX.
With this post, I’m hopeful to clarify the different types of syndication and how IDX is different from all types of syndication. Here are my definitions:
- Broker Syndication — Where the broker chooses (opts in) to send their listings (and only their listings) to a third-party listing advertising portal. MLSs can and do provide tools such as ListHub or Point2 to help brokers syndicate but that is to be distinguished from MLS Syndication.
- MLS Syndication — Where the MLS syndicates a feed of all listings (other than those opted out of the feed by brokers) direct to a third-party listing advertising portal. As indicated by the bolded terms opt-in and opt-out, MLS Syndication is different than Broker Syndication in that MLS Syndication sends all listings by default unless the broker chooses not to send them (opts out) whereas Broker Syndication is an opt-in approach. (Theoretically, an MLS could syndicate the entire active listing database to a third-party portal with no ability to opt-out, but I’m not aware of any MLS doing that and so have limited the definition of MLS syndication to an opt-out broker choice.) This distinction between opt-out and opt-in broker choice (and, therefore, between Broker and MLS syndication) is very important, because opt-in (Broker Syndication) will significantly reduce the number of listings being sent to any one third-party portal whereas opt-out (MLS Syndication) will result in more listings being sent to the third-party portal.
- IDX — Where brokers (MLS Participants) agree with each other to share listings for display on their respective web sites. The primary distinction between IDX and syndication (both MLS and Broker) is that IDX does not involve display of the listing on a third party portal. Instead, the web sites involved are the broker’s or their agent’s own sites and the IDX policy is the terms on which they agree to share listings on their web sites. IDX policies actually come in two flavors as well, opt-in and opt-out, but the primary difference between syndication and IDX is not whether the broker is opted-in or out but rather the destination site and who controls the rules for display on that site. With syndication, the third party web site dictates the terms and with IDX the terms of display are dictated by the IDX policy.
- VOW — Another important MLS policy that applies here is for Virtual Office Websites or VOWs. I know there are all kinds of legal documents (e.g., the DOJ/NAR settlement) defining a VOW but, for purposes of this post, I’m simply going to say that a VOW is a web site that is like the brokers real office in that it has a front-door and requires the consumer to identify him or her self before getting service. If the consumer identifies him or her self (by signing in and agreeing to the terms of use), the broker can disclose MLS information to the customer on the VOW web site just as they could if they walked in the front door of their office. VOWs are very different from IDX in that basically the entire MLS database (with some limited exceptions) is involved, just as it is in their physical office.
From the above definitions, there are two major distinctions among the terms:
- Who controls the terms of use for the listing information (third party portal or the broker or agent); and
- The extent to which the aggregate of MLS data is involved versus just the listings of one broker.
These two themes impact each other, because the more the aggregate MLS data is involved (as opposed to just the listings of one broker), the more important is agreement (terms of use) among the brokers regarding how the aggregate listing information is displayed and used. Applying these two distinctions, we can more easily see the gradations between Broker Syndication, MLS Syndication, IDX, VOWs and even MLS consumer portals or other listing portals.
Syndication involves sending listings to third-party sites, which typically dictate the terms of use (how the listing information is displayed, how the listing broker is displayed, what ads can be sold around the content, etc.). In contrast, the terms of use for IDX, VOWs, and MLS portals are defined by the brokers through the MLS. This fundamental difference (who determines the terms of use) is why a decision by a broker or the MLS not to syndicate does not inexorably lead to a decision not to participate in IDX.
Of course, the lines of distinction I’ve drawn above are not hard and fast as demonstrated recently by Sandicor’s attempt to influence the terms of use on third-party web sites. Will the new rules from Sandicor change the terms of use of the third-party portals and require more prominent display of the listing broker? If so, this could create an entirely new way of forging agreements for syndication that could allow broader use of the MLS aggregation.
Similarly, Zillow’s purchase of Diverse Solutions (an IDX provider) poses the potential to blur some of the lines between syndication and IDX. Also, the creation of the Real Estate Network syndication channels for major franchises and independent brokerages creates the potential to aggregate listing data via syndication outside of the MLS. Again, however, the key issue here is who controls the terms of use. To achieve critical mass with any of these approaches requires the terms of use to balance the competing interests of the brokers as accomplished with IDX and VOWs. And, even there, we know from recent controversies over IDX that the balance of competing interests is fragile and requires constant evaluation to ensure the balance is maintained so the MLS aggregation can be used properly. This is what MLS organizations do well, create cooperation among competing brokers, and why MLSs and the IDX and VOW policies created through that cooperative process will continue to survive regardless of what happens with the syndication debate.