This post continues the discussion regarding listings as advertising or information and brings in days on market, data accuracy, long-tail search, hot sheets, and improving listing promotion inside and outside the MLS.
There’s a belief in the MLS world that the MLS data is the most accurate data regarding home sales. This is a nice statement of faith but often is frustrated by the members of the MLS themselves who are intent on trying to “promote” their listing and are willing to distort the data to do so. This point was driven home by David Harris, the Director of IT for FMLS in Atlanta, in his post The Listing: Advertising or Information, where he says:
Each day our compliance department has to address issues where the property may not be described accurately or the listing may contain information that does not pertain to that property (ie. a picture of the list agent as the 4th property photo
David then also alludes to the mess that is days on market when he says:
I would love to set up a ‘history’ link on a listing so you can click to see any past times it has been on market to allow for an event better idea of the property, but that could be a concern with some agents as well.
(Emphasis added.) Of course, this is the perennial issue of days on market and the desire of agents to have a low number for marketing purposes. But, as Jonathan Miller of Matrix pointed out some time ago, days on market requires one to determine “what market”, which fundamentally is dependent on price. The “market” for $1,000,000 homes is different than the market for $250,000 homes. Accordingly, Miller prefers to measure DOM:
DOM From Last List Date – Measured from the last time the list price was changed, if ever. The calculation is: Last List Date Change – Contract Date. This is the more useful of the two methods because it shows the market’s ability to absorb a property once it actually enters the market. Essentially, its the list price of the property just before it goes to contract. In other words, its the list price that brought the property into the correct market segment and attracted buyers.
Of course, Mr. Miller is coming at this from his perspective as an appraiser, which is more focused on the information. Yet DOM has become a tool for advertising, despite the idiosyncracies involved in determining “the market” and calculating an accurate DOM. So, now we have MLSs everywhere trying to figure out a better formula for DOM to tie various listings together but the real problem is that members want a low number and will often manipulate the data in order to get it, whether that’s canceling an existing contract and re-listing the property or shifting the listing to another agent in their office or a myriad of other approaches. Regardless of the rules developed by the MLS, the clever agent will find a way around it, because they are more focused on an “advertising” mentality than an “information” mentality.
If Realtors could develop a product that had all of the information – All of it – They could use that as a tool to gain what everybody wants – consumers’ trust. (just having the information is not sufficient to earn trust) Everyone else is doing that (Zillow, Trulia, etc.) but for now, Realtors have the best data – for how long?
But what’s to trust about days on market or other data that is manipulated for advertising purposes?
This same issue came up following our recent release and some changes we made to the hot sheet. One user wrote to me and said that the new format frustrated her efforts to promote her listings, because users were now less likely to click on the text change section of the hot sheet, which she often used just to promote her listings. In other words, she was making changes to the text just to get it on the hot sheet, even though those changes had no substantive value. Of course, these manipulations make the hot sheet less, not more, useful.
One of the comments to Jim Duncan’s post tied these issues back to the revolution being wrought by the web for consumers:
I think the internet has changed the entire concept of selling things, but some less visionary people still don’t get it. I think the old methodology of selling things was just to cast a wide net, hoping that someone would see your ad and be convinced to buy. The power of the internet is that it allows people to be far more specific about what they purchase.
My question is whether it’s possible for MLS operators and vendors to leverage the desire to promote the property into creating more, instead of less, data accuracy. For example, could listings with more property details or photos be promoted on the hot sheet more or longer than other listings? Can listing addresses that are validated by a geo-coding proces or GPS be promoted more or longer? Or will these approaches simply result in more manipulation? Are fines the only approach to help members “get it” when it comes to data accuracy?
All of this has a lot to do with data standards, of course, and one of the better conversations I had this last week at the NAR convention involved the idea that the RETS standards and the new RESO governing body may want to consider extending the discussion to MLS rules in addition to data, as the two are inextricably intertwined. Data standards require rules about data validation. I believe that its possible to establish a “base” set of rules and data standards that allow for “blind” entry of a listing into any MLS system and move us toward true enter once, distribute everywhere. Without such a “base” standard, single data entry isn’t possible unless there is only one MLS, which, of course, is just another, more complicated and expensive, way of creating a “base” standard.
The “base” standard could involve tiers of validation that would promote listings more or less within an MLS system, as described above, such that those with more accurate and broader and deeper data would get more prominent and longer promotion in the MLS. There could be search fields for rule compliance or validation levels, for example, so that users could search only on more or less validated listings. Of course, the trick is in defining what is validated or not and that’s why broadening the discussion among the MLS community over standards is so important. There is no question in my mind that the future for MLSs requires exploring new ideas for encouraging data accuracy over manipulation and moving from advertising, which inevitably seems to involve manipulation, to becoming the trusted source for accurate and detailed listing information.
Postscript: It just struck me: Wouldn’t making the information more public be one of the best incentives for creating accurate data? After all, while agents may be willing to deceive their fellow MLS members, are they also willing to risk deceiving the public if it’s easy for them to be found out? Listing history is a great example. Why not make the detailed listing history public as David suggests? Facts are facts, to be judged objectively. Disclose them and the need for accuracy increases dramatically.