Can a real estate broker post another broker’s listings on Facebook?

Facebook and other social networking websites are increasingly popular not only for individual personal use, but also for business relationships. Real estate brokers can easily make connections with potential real estate purchasers through these websites. However, an important issue is whether a broker can use Facebook to distribute another broker’s property listing information.

While there are numerous ways for a broker to legally obtain another broker’s property listings, she is often restricted on what she can do with the information. A broker may be subject to a number of public laws and private contracts based on which organizations she belongs to and which licenses she has obtained. If a broker is a licensed real estate agent, she is bound by state real estate license law. If a broker is a REALTOR®, i.e. she is a member of the National Association of REALTORS® (NAR), she is bound by the NAR Code of Ethics. If a broker participates in a multiple listing service (MLS), she is bound by the MLS’s rules. And finally, a broker may be bound by federal copyright law if the broker is distributing information that is protected under copyright. A broker may fit all, some, or none of the above categories.

In general, state real estate law, the NAR Code of Ethics, and many MLS’s rules prohibit any advertising property listing information without the consent or authorization of the listing broker. Copyright law prohibits reproduction of copyright-protected works (like listing photos) without the permission of the creator of the works. Therefore, are Facebook posts considered advertising? And if so, is there some type of consent or authorization expressly or impliedly contained within an MLS’s rules?

Advertising

In relation to real estate, the definition of advertising varies, but is generally considered to be any communication between a broker and the public. This communication is often interpreted liberally to include distribution of information in any medium, such as electronic, print, radio, television, etc. Posting information on Facebook would likely be considered a type of communication between a broker and the public. However, other factors may alter this conclusion. Facebook has many levels of privacy settings that can limit the viewing audience. Further, the form of the listing information posted can range from merely a hyperlink to another website, to a complete package of information about the property. These details add complexity to the analysis and should be reviewed in relation to the specific jurisdiction.

For example, if a broker posts a listing on her Facebook page, and that page is available to all Facebook users or to all of the broker’s Facebook friends, chances are she is advertising the listing. If on the other hand the page is available only to a small group of her friends, perhaps consisting of clients looking for real estate in the neighborhood in which the listing lies, she might just be delivering listing information in the context of a brokerage relationship. But under the laws of some states, it may still be considered advertising.

We might also ask where the advertising is actually happening: If a broker posts only a link on her Facebook page that leads back to the display of the listing on her IDX web site, has she advertised the listing. IDX is unquestionably advertising, but is putting the link on Facebook to the IDX site a separate act of advertising?

Of course, even if a Facebook post is considered advertising, it still could be acceptable if the broker has the proper authorization or consent.

Permission

Each set of MLS rules is unique, but many MLSs use the NAR Model Rules as a guide. The Model Rules Section 2.7 state that advertising of another broker’s listing is prohibited without prior consent. However, three other sections within the Model Rules authorize a limited license for use of the MLS’s data compilation. First, Section 12 of the Model Rules authorizes reproduction of portions of an MLS’s compilation under certain restrictions. Second, Section 18 authorizes data display through Internet Data Exchange (IDX). Third, Section 19 authorizes data display through a Virtual Office Website (VOW).

Section 12, Reproduction: Depending on the MLS’s rules, a broker may be able to reproduce a reasonable number of single copies of property listing data to prospective purchasers. In the context of Facebook, a general post to the public will likely violate this rule. Again, using restrictive privacy settings or posting only a hyperlink to another site where display is authorized may be an appropriate mechanism to satisfy this provision.

Section 18, IDX: To qualify as a display under the IDX rules, a web site must belong to a broker participating in MLS, and it must satisfy various display requirements. Facebook is a website that is not owned or operated by the IDX participating broker. The display of Facebook is also likely to fail to satisfy the requirements of the IDX rules regarding display. If Facebook does not qualify as an acceptable website platform for the dissemination of IDX data, then there is no authorization provided by this section to share other broker’s property listings. Therefore, Section 18 will probably not grant necessary authorization (though local rules might vary).

Section 19, VOW: Similar to the IDX provisions of Section 18, the VOW provisions authorize data transfer for websites that satisfy a number of requirements. However, the VOW provisions are typically even stricter than the IDX provisions. For example, before a consumer can access the information on a VOW, the broker must establish a broker-consumer relationship, as defined by state law. Typically this involves affirmative assent to the relationship by both parties, and the consumer must agree to certain terms and conditions of use when utilizing the website. Facebook does not require assent to necessary terms and conditions as defined by the Model Rules, though it does have terms of use to protect Facebook’s interests. Therefore, it is unlikely that Facebook will satisfy all the requirements of the VOW rules. If Facebook does not qualify as an acceptable VOW, then there is no authorization provided by this section to share other broker’s property listings. Therefore Section 19 will probably not grant to necessary authorization (though local rules may vary).

Summary

While Facebook may be a very fast and efficient way to distribute property listing information, brokers should be wary of potential problems arising from these actions. It is not only the MLS rules that they may violate, but also state real estate license law, the NAR Code of Ethics, and even Copyright Act. Without the proper permission, a broker cannot advertise another broker’s property information. This permission may be contained within a given MLS’s rules, but careful examination of the rules and the state laws is required to make this determination. If a broker wants to promote other brokers’ listing on her Facebook page, she will be safer if (1) she displays only a link on her Facebook page back to the listing on her IDX site; and (2) she displays the post on her Facebook page only to her Facebook friends who are clients likely interested in the property in question.

What do you think? Should the MLS rules make it easier for one broker to post another broker's listings on Facebook? Should the rules clarify that it is NOT permitted? Are things fine the way they are? I'd like to hear from you.

-Brian

"Something, something, something RPR"

I've just been looking back over traffic statistics to various recent posts on MLSTesseract. I noticed that posts with "RPR" in the title appear to have about twice as many hits as other posts. The Emperor in Family Guy's Star Wars spoof discovers that the secret to writing his lines in those movies is that many are of the formula "Something, something, something Dark Side." I'm wondering now if the same is true in industry discussions this year.

I'm not complaining - I'm very grateful for the couple hundred folks who click through to read the  non-RPR posts. But for the couple hundred who appear to be reading only the RPR-related posts, I encourage you to check out the other stuff. We know at least as much about that stuff as we do RPR! (Note I didn't promise that we know much about any of it...)

For my part, I'll be trying to work "RPR" into more post titles, just to make sure I've got your attention.
-Brian

Online Contracting: Extending legal rights over data pirates?

Many MLSs are expanding the data they permit to be displayed in IDX – including off-market statuses and fields they previously excluded. This is in response, in part, to the arrival of VOWs and to requests by Move, Inc., to be able to display more data on Realtor.com and other Move sites. With greater proliferation of the listing data, data piracy grows to be more of a concern. Web sites operated by shady companies are cropping up showing portions of MLS listing data, and scam operators are using portions of MLS listing data to commit fraud on Craigslist. The problem is compounded because the vast majority of MLSs fail to secure legal rights to stop certain kinds of piracy through a simple policy change.

Assume a broker is operating an IDX website and a data pirate visits the site and begins scraping data. Further, the party distributes this data through a separate, competing website and adversely affects the business of the broker. What are the broker’s or the MLS’s legal options against this data pirate? Currently, there is no mechanism for completely protecting data on broker IDX websites from data piracy. Federal copyright law protects some data available on broker IDX websites. For example, it protects the photographs, so if a pirate steals and uses the photographs, the MLS (or brokers) will have legally enforceable rights. But the majority of the information is factual and not protected by copyright (see Elizabeth’s previous posts on copyrights – part I and part II). Principles of electronic contracting provide one way to get the legal upper hand over pirates even where the factual information is concerned.

“Click-wrap” vs. “browse-wrap”

Web site owners often want to impose terms, conditions, and even contractual obligations on visitors to their sites. The two most common approaches that web sites use are “click-wrap” and “browse-wrap” agreements. Click-wrap contracts specifically require a visitor to click a box or button where she is affirmatively agreeing to certain terms and provisions. This might work in various ways:

• Before getting to the search page, the consumer must click on a box or button that says “I agree to the end-user license agreement” (with a link to the full text of the agreement).
• The “SEARCH” button is grayed out and will not work until the visitor checks a box next to it that says “I agree to the end-user license agreement” (with a link to the full text of the agreement).

In contrast, browse-wrap agreements are theoretically created by the visitor merely accessing the website, with the terms and conditions being available somewhere on the site. But the visitor is not required to take any affirmative step to assent to the agreement. There are many different approaches to browse-wrap, but here are two common ones:

• The site prominently displays the language “Use of this site is subject to the terms of use” (with a link to the full text of the terms of use). This might entail displaying the notice near the top of the web page or next to the “SEARCH” button whenever it occurs.
• The site displays “Terms of use” (with a link to the full text of the terms of use) at the bottom of each page of the site, in small type, often in a color that does not contrast markedly with the page background.

Note that the NAR VOW policy and rules require the use of a click-wrap agreement: under Section 19.3(d) of NAR’s model rules, the “participant shall require each Registrant [site visitor] to review and affirmatively to express agreement (by mouse click or otherwise) to a terms of use provision....” But NAR’s model IDX rules, in Section 18.3.8, provide only:

Participants... shall indicate on their websites that IDX information is provided exclusively for consumers’ personal, non-commercial use, that it may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing....

The law of online contracting varies from state to state, but in the modern trend, click-wrap contracts are generally enforceable, while browse-wrap “agreements” often are not. Especially unlikely to be enforced are browse-wrap “agreements” where the terms of use are posted inconspicuously. Thus, the click-wrap agreements on VOW sites are likely to be binding in site visitors; the browse-wraps on most IDX sites are likely not binding agreements.

An MLS looking to increase legal protections for its data should consider altering its IDX policies to require a click-through on IDX sites, where the visitor to the site affirmatively assents to the limitations in the IDX policies. We’ve drafted these rule changes and also helped MLSs distribute model “end-user license agreements” for their brokers to use on IDX sites. This simplifies the process.

Two concerns

Some brokers are concerned that consumers will not be willing to click through a license agreement to search listings or to see listing results. The evidence we have from our clients that have implemented this requirement in IDX does not support such a claim. That’s not surprising, when almost any web-based service you use requires you to click through an agreement first.

Second, some folks will argue that data piracy is practically not worth pursuing: the listing data ends up everywhere at the listing agent’s direction anyway... why make a fuss about it? This is a strategic question. We like to think that we can help MLSs help brokers influence how their listings are used, even if we cannot give them absolute control. Your MLS might think this is not important enough to take action.

Data piracy is a problem, but how important is it to you? The conventional form of legal protection (federal copyright law) is incomplete, while online contracting tools provide powerful improvements. What are your thoughts?

-Brian

Issues for MLSs to Consider Before Licensing Their Data to Third Party Vendors

Recently, some major players in the industry, including CoreLogic (formerly First American), Move, Inc., and NAR’s subsidiary RPR, have offered an exchange to MLSs: access to software/interface tools for MLS data. These three companies (and others like IMAPP) want to be licensees of your MLS’s data.

Remember, though, that whatever you think you are getting in a deal with any of these players, the contract between MLS and licensee determines what the obligations of each are. If the things you were offered during demonstrations and negotiations are not in the contract, then you cannot demand them later. The fact that a contract might be only one page long does not diminish its binding effect on your MLS.

I want to urge you to get legal advice before signing any of these contracts. This post identifies some issues your legal counsel should address with you.

(I do not intend this post as a comprehensive treatment of this subject or as legal advice. Earlier in the spring, I wrote one or two posts about the RPR contract. RPR has since revised its license agreement for MLSs. Of course, you don’t need to hire my firm to get good advice; so feel free to share these thoughts with your lawyer. This post is also not the only checklist out there: WAVGroup did one and John Rees did another, both useful tools for legal counsel.)

Before entering into an agreement with any licensee, we recommend that each MLS consider all the options. The terms of a partner’s proposed agreement can take various forms.

What are the MLS’s principal benefits and costs from the agreement?

Prior to signing an agreement, the MLS should ensure that it understands and weighs the benefits and costs of the deal. Some are asking for data in exchange for access to their software, while others are offering monetary compensation or a combination of both. We have seen a few common trends in these agreements that are worth highlighting.

One reason your MLS might agree to share its data is the benefit of the software/interface tools being offered. For example, some consider the “Find” software developed by Move, Inc. to be an impressive interface providing real estate agents access to real property information, demographics, and public records all on the same system. One specific feature that is exciting (for areas like south Minneapolis) is the availability of airplane flight pattern noise.

If the MLS subscribers use these software features, this benefit is potentially highly valuable. Therefore, you may want the agreement to contain a mechanism to quantify the usage, typically in the form of periodic usage reports provided by the licensee. For example, if quarterly usage reports from the licensee show that only 3% of your MLS subscribers are using the tool regularly, you might hesitate to renew the agreement, especially if the software tool is the only thing of value your MLSs is getting from the deal.

If the software or interface your MLS gets is the most important value, make sure you know what you are getting. Are there specifications or a description somewhere? Do your subscribers automatically get the newest version at no charge to your MLS or subscribers? It seems the licensees here want to be able to change the software at their will – if they diminish the software’s capabilities, can your MLS terminate the agreement?
Another possible benefit to MLSs and their brokers is the increased consumer exposure and greater market efficiency by connecting consumers to more data. (Not everyone sees this as valuable – we’ll save that for another discussion.) How will your MLS measure whether it is receiving that benefit? Can the licensee help with measurement?

One potential cost associated with sharing data is the broker notification process. (As I posted earlier, NAR policy requires NAR-affiliated MLSs to give listing brokers the choice to opt out of licensing their own listings in these deals) Your agreement with any licensee should make it clear that you will not supply data of brokers who opt out.

What is the scope/limit of the data license?

Agreements licensees draft will likely have broad language defining the scope of the data license. MLSs often limit the scope in a number of ways: An MLS will not be willing or able to share third-party data that is not located on its servers; an MLS may not want to share off-market listing data for the periods preceding the agreement formation; an MLS may desire to limit where the data can be displayed (i.e. only specific web sites); and others. A clearly drafted agreement should reflect the MLS’s elections.

If the licensee will use the MLS data in data products and on web sites, will the licensee provide periodic reports indicating where and how it is using the MLS data? This could be important if the MLS wants to assess later how valuable the listing information really is. It will also be important in assessing and negotiating future opportunities with other potential business partners.

What is the MLS’s exposure to liability/damages?

It is imperative that any agreement an MLS enters has sufficient protection for liability or damages resulting from sharing its data and using the licensee’s software. Each of these provisions is one that you should discuss with your lawyer – if you do not understand the risks the MLS is assuming in the deal, how can you make an informed business decision about it?

Often, an MLS will prefer to strictly limit its liability, include specific indemnification language for potential agreement breaches, disclaim all or most warranties associated with its data, and protect itself from any claims of infringement of third parties’ rights. An MLS may also elect to specify what types and amounts of damages are available to the contracting parties in case of a breach.

Conclusion

Whether you choose to license MLS data to these players is a strategic decision. But once you’ve decided to move ahead, make sure you address these and the other legal issues before you sign on the dotted line.

-Brian

Why MLSs should pursue their own top-level domain: .MLS

(Disclaimer: My company is doing work on a variety of fronts for MLS Domains Association, the group formed by 15 leading MLSs to seek a new top-level domain, .MLS, in the Internet, for use only by MLSs. I also approached CMLS, these leading MLSs, and leading consultants in the industry last fall urging that the industry consider this idea. I am by no means unbiased on the issue - on the contrary, I feel very passionate about it.)

MLS Domains Association formed last month, and the response from MLSs has been very supportive: many MLSs have expressed an intention to join the Association (and one joined as a Founder last week); some have expressed uncertainty about whether the idea will work; a few have indicated that they do not think they will join; and a very few have expressed outright opposition to the idea. I wanted to take a few words to explain why I think the industry should get entirely behind the MLS Domains Association.

For the last eight months, CEOs from some of the most innovative and successful MLSs in the U.S. have been doing intensive research, thinking critically about the future of MLSs on the Internet, and investing the resources of their organizations to consider, develop, and launch MLS Domains Association.

Why do these MLSs believe .MLS makes sense?

The main reason is that top-level domains on the Internet are poised to change radically in the next couple years. (A "top-level domain" or "TLD" is the part to the far right of a domain name, .COM, .NET, .ORG, etc.) The .COM TLD is the gold standard today; but almost every conceivable word or name on .COM is already registered. It's very difficult to get decent names on it. The erosion of the dominance of .COM may already have begun. Consider the businesses that use two-letter country-code TLDs for their services now:

• Social bookmarking site del.icio.us
• URL shorteners bit.ly, goo.gl, and ow.ly;
• Arts magazine vita.mn (pronounced 'vitamin');
• Online radio station jack.fm;
• Music sharing site blip.fm.

Beginning early in 2011, the door will be open wide for businesses and associations from around the world to apply to ICANN (the international company that runs the top-level domains) to operate new top-level domains. I anticipate that we will see many of the following:

• Industry TLDs. NAR has already said it is seeking a 'unifying' TLD for all aspects of real estate. There will almost certainly be .LAW, .MED, and similar profession-oriented TLDs.
• Last name TLDs. As of 1990, there were more than 2.5 million folks in the U.S. with the last name "Smith." Most of them probably did not register their own names as domains when that was possible; NancySmith.com was gone a long time ago. I expect some enterprising entrepreneurs will attempt to set up. .SMITH, along with .JOHNSON, .WILLIAMS, .JONES, .BROWN (all representing surnames numbering more than a million in the U.S. alone). Then Nancy will be able to have Nancy.Smith and Tom will be able to have Tom.Jones as their domain names.
• Company TLDs. You don't have to be particularly imaginative to think of the applications for a company like FedEx to have .FEDEX or for Pepsi Co to have .PEPSI. We anticipate many large corporations will seek to own their own exclusive 'real estate' on the Internet.

According to Bob Parsons, CEO of leading domain registrar GoDaddy, some parents won't give their baby a name if the domain for that name is not available; but in the future, he expects that everyone will get a domain name as soon as he/she is born. With the proliferation top-level domains and the paucity of available .COM domains, it's likely many of those names will be on TLDs other than .COM.

In such a world, search engines will guide consumers to the new TLDs because the contents available at sites on them will be relevant to the consumer's searches. Sites at .MLS domains will receive higher rankings if consumers search for “MLS” on search engines. For example, a search for “denver mls” on Google would certainly rank a site at “DENVER.MLS” high in the results. But because .MLS addresses will be so relevant to real estate and real estate listings, it's likely a search for "denver homes for sale" will also give ranking preference to "DENVER.MLS." Consumers will be more prone to select search results that have .MLS TLDs because consumers may believe they will provide more reliable information.

MLS Domains Association has plans to market the TLD to consumers as the only place on the web where they can be sure they are connecting with a real MLS.

It might fail

The web is changing, and MLS Domains Association is positioning MLSs to take advantage of the changes. Of course, the Association's effort might fail. Perhaps too few MLSs will join, or they will not claim enough addresses on the domain for it to be viable. Perhaps the Association's application to ICANN will fail.

But the entire effort to attempt to get the .MLS TLD will cost less than $1 million over two years, of which 16 Founder MLSs have already committed more than $300,000. Compare this to the cost of other industry-wide (or even local) efforts, and you can see why it does not make sense NOT to seek the .MLS TLD.

I've been thinking and advising clients about how best to serve the interests of brokers on the Internet for more than 15 years. One thing I've learned is that we have to make decisions about the future based on imperfect knowledge. But with vision, determination, and resources, we give ourselves the best chance to make the future in which we want to do business.

What do you think?

-Brian

Pinning Down the RPR Strategic Proposition

4/26/10 SEE IMPORTANT UPDATES BELOW (Based on follow up email we received from RPR today. Look for additions and deletions.)
For the last two months, MLS execs and brokers have frequently asked me, “What about RPR: Would you license data to them?” And always, my answer is the same (and probably disappointing to my interlocutors): “It would depend on what strategic objectives I was trying achieve.”

It seems to me that most folks are not breaking down the RPR proposal to answer the first two essential questions about any business deal: “What are we giving up?” and “What are we getting in return?” Because MLSs have limited time to develop lines of business and make deals, I would immediately add a third question: “Is what we are getting of strategic importance to our organization?” MLSs should not spend time on business deals unless it calculates those deals to achieve strategic objectives.

Many MLSs have said, “If RPR will not revenue share, we won’t license to them.” This strikes me as odd. MLSs have had the option of licensing MLS data for commercial purposes for years. Some MLSs have engaged in it on limited, others on wide-spread, bases. But is making money from the MLS data really a strategic objective of most MLS organizations? Well, it could be. But MLSs have often been reluctant to license MLS data in exchange for money for several reasons:

• It has been unpopular with listing brokers, whose consent it generally requires. They want to know where the money will go, and how much of it they will get. In other words, the brokers are unsure what they are getting for their data.
• When those asking for MLS data explain the products in which they want to use the data, they don’t make it very clear how the data will be used. In other words, it’s unclear what they are asking the MLS to give up – what MLS will permit as part of the deal that MLS did not previously permit – so brokers and MLSs are unsure what they are giving up for the money.
• The unforeseen consequences of including MLS data in third-party products are, well... unforeseen. Again, this casts doubt on what the MLSs are giving up for the money.
• And it’s not really worth it for MLSs to deal with the uncertainty in these first three points for a little cash; in most cases, if the MLS really needs money, it raises fees. (Not popular, I know, but it’s easier to explain that value proposition to the brokers.) In other words, small amounts of money are not of strategic importance.

RPR’s strategic proposition

Let’s look quickly at what MLSs that license to RPR get and give up and consider how to evaluate that bargain from a strategic standpoint.

What MLSs get

If an MLS licenses data to RPR, RPR claims it will get the following benefits:

• RPR will be a much more valuable tool for the MLS’s REALTOR® subscribers. That’s because RPR without MLS data is much less useful than RPR with MLS data. Remember, though, that every REALTOR® will already have access to RPR whether her MLS licenses data to RPR or not.
• RPR will be available to the MLS’s non-REALTOR® subscribers. Because they are not REALTORS®, they would not otherwise be entitled to access RPR at all. This is important if many of your MLS’s subscribers are non-REALTORS®.RPR previously said that MLS subscribers of licensing MLSs who are not REALTORS® would be able to use RPR. RPR has changed this position, and now only REALTORS® will have access to RPR.
• All the MLS’s subscribers will benefit from the exposure of their active listings to other broker/agent users of RPR all over the country. (Realtor.com pretty much already provides this advantage, but perhaps RPR does it in a better context.) Your MLS gets to decide which other MLSs' subscribers get to see your MLS's active listings; RPR says it's finding that most MLSs "want to share actives with everyone," which makes sense to us in light of the Realtor.com comment.
• If the MLS consents, other listing statuses would be available on RPR to subscribers of other MLSs that permit such access. In effect, RPR could serve as an MLS data-sharing platform between neighboring MLSs. There would be no offer of compensation, and probably not IDX sharing, etc., but a broker subscribing to MLS A could use RPR and data from MLS B to prepare a CMA or other broker service based upon the data of MLS B that are sharing.
• RPR and NAR contend that having MLS data in RPR products will result in the real estate market being much more liquid. This theoretical argument might benefit from further discussion in another post (comment if you want me to take this up on the blog).
• (Am I missing anything?)
  

What MLSs give up

• Basically, MLS allows RPR to use the listing data in a wide range of data products. This is a troubling item, because the uses RPR may make of the MLS data are ill-defined in its contract and communications. (RPR maintains that it has "been explicit in defining the products which will use the MLS data, the RVM and Match and Append." That's good news; but in our opinion it's not what's currently in the RPR contract. That's an easy problem to solve: We just revise the language of the contract to be consistent with what RPR says it will do.)
• Assuming that RPR is a success with brokers, and assuming the MLS perceives NAR/RPR as a competitive threat, MLS is giving RPR a relationship with the MLS subscribers and permitting it to study their behavior on RPR – two things that could be very valuable to NAR if the fears of it attempting to ‘nationalize’ MLS ever materialize. I’m skeptical that NAR could stage a meaningful ‘hostile takeover’ of the local MLS role – but I’ve been accused of being naïve before.
• (Am I missing anything?)
  

How to evaluate the exchange

Balancing these two categories – what the MLS gets vs. what it gives up – is no easy task in this case. It’s not a task for the MLS CEO or staff alone, because it is essentially strategic in nature. Strategy is why your MLS has a board of directors made up of market participants.

So, if I were the CEO of an MLS, I might advise my board to use this process:

1. Get the directors to acquaint themselves with RPR by visiting the demo on RPR’s site. They should be thinking about how valuable the RPR tools would be to them as practitioners. I think it’s useful for them to do this alone the first time. It forces them to formulate their own thoughts before getting together with others. If a board member is a broker that does not actually use MLS systems, have her assign a couple high-producing agents in her office (or their assistants) to do this evaluation.
2. Gather the directors to have a ‘guided tour’ of RPR – probably with an RPR representative present either physically or via webinar. The goal of this session should be to (a) encourage the directors to discuss their ideas about the value of RPR with each other; (b) ensure the directors understand exactly what features of RPR would be available only if MLS licenses data to RPR. This last bit is really important: Remember, much of the RPR system is available to all REALTORS® free of charge, whether your MLS provides data to RPR or not. The addition of MLS data to RPR, not RPR itself, is what your brokers get from the MLS licensing data to RPR.
3. In a second session, lead the directors in a discussion of the strategic value they place on the things that the MLS gets if it licenses data. Review the five items in the “What MLSs Get” category. The directors should articulate how those values fit in your organization’s strategy. The directors and management together should decide how they will measure whether the MLS is actually receiving that strategic value.
4. Now, assume for a moment that you can address the concerns raised in “What MLSs Give Up,” is the bargain interesting to the board on a strategic level? If the answer is ‘yes,’ start talking about specific ways to address the concerns raised in “What MLSs Give Up,” and work through them with RPR. If the answer is ‘no,’ give data licensing to RPR a pass for now.
5. Finally, if you’ve decided to proceed with data licensing to RPR, get into the weeds of contract negotiations with them. A first step might be to have a conversation with RPR about exactly what kinds of data uses RPR intends to pursue and whether your MLS can incorporate a narrower definition in the contract with RPR.

I would not consider involving my attorney until step 4 or 5, though I’d want to include any trusted consultant I intend to use for the project starting at step 2.

Has your MLS made a decision about licensing data to RPR? Are you happy with the process it used? Do you have thoughts about the (im)practicality of what I’ve proposed here?

-Brian


(Full disclosure: Our firm is working on a consulting project with Focus Forward Consulting (Kevin McQueen) for NAR that does not relate to RPR.)

NAR: 1994 Called, and it Wants its Photo Policy Back!

OK, before you criticize my choice of title ("Hey, Brian! 2003 called, and it wants its snarky remark template back!"), hear me out.

The Council of MLSs wrote a letter to NAR earlier this month regarding an item that will be on the agenda at NAR's mid-year governance meetings in Washington DC next month. This issue arises from one of the dumbest policy interpretations I've ever seen come out of NAR. If you are a member of NAR's multiple listing policy committee, I urge you to adopt CMLS's recommendation; if you know a member of the committee, I urge you to urge the member to adopt CMLS's recommendation; and if your MLS can write a letter supporting CMLS's recommendation before the NAR meetings, I urge you to do that.

It's best if you read the letter, but here's the basics: NAR has told some MLSs that they may not require submission of pictures of listed property as a condition of having the property included in the MLS, and that an MLS cannot require participants to submit property disclosure forms as a condition of having a property included in the MLS. NAR policy staff has stated that NAR policy prohibits such requirements.

In our experience, a great many MLSs require brokers to submit a property photo for each listing. More and more MLSs are requiring that property disclosures that the seller must disclose to the buyer up-front also be included on the MLS.

CMLS's view is "that an individual MLS can, at its option, require a listing broker to submit to MLS any non‐confidential information relating to the property that is reasonably available to the listing broker, including: One or more photos, including an exterior front‐elevation photo; and any documentation required by law to be provided by seller or listing broker to prospective buyers at or before the time of showing."

As CMLS's letter points out, the NAR policy interpretation does not make sense for brokers, and it does not even appear to be supported by the NAR policy documents.

I think NAR's interpretation would have made sense back in 1994. In those days, digital cameras were expensive and crappy, and requiring brokers to photograph listings with film and then mail in or drop off the prints would have been an unreasonable burden on them. Don't think that photos were not important back then, though. In those days, most larger MLSs and many smaller ones hired photographers to go out and take pictures of all the listings, for which the brokers paid (either on a per-listing basis or as part of their MLS fees).

I'm hoping NAR will make the move into its "Second Century" (and the 21st for the rest of us) and clarify this policy next month.

As always, I welcome your comments.

-Brian

(Disclosure: Though you probably would not guess it from the tone of this post, I'm engaged in a consulting project for NAR that has nothing to do with this issue. BTW, nice to see y'all again. I've been so overwhelmed with work for the last couple months that I've neglected posting. I'm guessing many of you are happy you didn't have to read those long, boring posts for a couple months.)