RPR MLS License-What RPR can do with data

This post continues the more detailed look at the RPR agreement that we began last week. We are still referring to “Version 2010.01.22” of the agreement.

In this post, we’ll consider what uses RPR can make of your MLS’s data if your MLS signs the current RPR MLS Data License Agreement. As we shall see, the license agreement permits RPR to do things that its leaders have promised (on its web site and in presentations) that it would not do. I suspect that’s just because whoever drafted the RPR agreement wanted to skew it as much possible in RPR’s favor (damned lawyers!). But MLSs may want to consider incorporating the promised restrictions into the license agreement before signing.

Broad grant of license

First, consider the broad grant in Section 2(a). In it, the MLS licenses RPR the right to

access and use the Licensed Content for the purposes of

i)                    integrating the Licensed Content into the RPR Offerings,

ii)                   granting Authorized RPR Users  access to the RPR Offerings via a password protected database

iii)                 marketing and distributing RPR Offerings to RPR Customers 

iv)                 displaying to Authorized RPR Users all Active Listings in the Licensed Content and

v)                   displaying to Participants/Subscribers  and such other Persons authorized by Provider all Pending Sales and Off Market Listings in the Licensed Content.

Let’s take these permitted uses one-by-one.

Integrating the Licensed Content into the RPR Offerings. “Licensed Content” means essentially the entire MLS database, including member roster information. I noted last week that this must probably be read to exclude the data of brokers who do not consent to their data being in RPR. “RPR Offerings” is defined as “those business products, services and/or applications created and developed by RPR using the Licensed Content, including the RVM Product, the Match & Append Products and other products as from time to time developed by RPR.” This language poses no limitation; based only on it an “RPR Offering” can be any business product, service, or application that RPR develops. (But see below.)

Access to RPR Offerings by Authorized RPR Users. “Authorized RPR User” means “a Person who is a Participant/Subscriber or a member in good standing of NAR.” Essentially, the Authorized RPR Users with regard to a given MLS’s data are all that MLS’s participants/subscribers and all NAR members (regardless what MLS they belong to or whether they belong to an MLS at all).

Marketing and distributing RPR Offerings to RPR Customers. “RPR Customers” means “Persons who are not NAR Members and with whom RPR has contracted to provide the RPR Offerings.” This is not limited in any way; under this provision, NAR can provide the RPR Offerings to anyone.

Displaying all Active Listings in the Licensed Content to Authorized RPR Users. With regard to the MLS signing the agreement, this means that its active listings can be visible on the RPR site to all the MLS’s own participants and subscribers as well as to ALL REALTORS (whether they belong to this MLS or to any MLS at all).

Displaying all Pending Sales and Off Market Listings in the Licensed Content. With regard to the MLS signing the agreement, this means the off-market data will be available on the RPR site only to the MLS’s own participants and subscribers, unless the MLS authorizes further display. For example, two neighbor MLSs might allow each other’s participants and subscribers to see each other’s off-markets; that’s an inexpensive data share.

Let’s stop a moment. We’ll talk about the restrictions, but it’s key to understand the scope of this grant of license: under subparagraphs (i), (ii), and (iii), RPR can make basically any product and sell it to anyone. There is a catch-all clause, 2(b), that prevents any use or access by RPR “except as expressly set forth herein,” but the uses “expressly set forth” in 2(a) are essentially unlimited. If there are to be any limits on RPR’s use of the data, we’ll have to find them in the “Limitations and other Restrictions” section – Section 3.

Restrictions and limitations in Section 3

In general, the restrictions in Section 3 cover three types of thing: (1) RPR’s use of the MLS data; (2) clarification of rights under the Section 2 license; and 3) RPR’s conduct relating to matters other than the MLS data. We’ll look at each as well as a couple items in Section 5. (There is no Section 3(c) or 3(d) – the paragraphs are mis-numbered in the copies I have seen.)

RPR uses of the data. Sections 3(b) and 3(f) do not really impose any restrictions on what can be RPR Offerings. Section 3(b) provides “Provider acknowledges that RPR may add or combine other data with the Licensed Content for purposes of creating the RPR Offerings.” This permits the MLS data to be combined in any way with other data to create RPR Offerings. A second sentence prohibits their combination for other purposes, but as we have seen above, the definition of RPR Offerings is very broad. Section 3(f) prevents RPR from redistributing the MLS data or licensing it to others “[e]xcept as authorized in this Agreement”.

The agreement allows RPR Offerings (a broad category); these two sections do not limit what can be an RPR Offering.

Sections 3(g) and 3(i) do actually limit the types of products that can be RPR Offerings. Section 3(g) provides:

RPR shall not allow access, use or display, or permit other[s] to access, use or display, any Licensed Content or any part of the Database on any third party Internet websites, or profit by or accept any consideration for enabling any third party to access, use or display Licensed Content through links to or by framing such Content or data from a website owned or operated by or for the benefit of RPR....

The emphasis is mine. This section appears to be intended to prohibit the display of actual MLS data (as opposed to RPR Offerings derived from the MLS data) on any website. There is an exception to this section that allows “Member” (an undefined term) to use the listing data “in the RPR database” to prepare “consumer reports.”

Section 3(i) prevents the MLS data from being used in any product for the purpose of

·         establishing an individual’s eligibility for credit;

·         establishing an individual’s eligibility for insurance;

·         evaluating an individual for employment purposes;

·         determining an individual’s eligibility for a government license or permit; or

·         in any other manner that would cause such use of the [MLS data] to be construed as a report by any authority....”

I interpret this section as preventing the MLS data from being used for purposes that would trigger the Fair Credit Reporting Act and similar regulations. If this section is read too strongly, it would undermine RPR’s business model: Indirectly, at least, an AVM is used to establish an individual’s eligibility for credit with regard to the subject property as part of the loan-to-value calculation. But the AVM is not a report about the consumer’s conduct (which is the common theme under the FCRA definitions).

Clarification of rights under license. Section 3(e) provides the agreement

does not convey or grant to RPR an interest in the Database or the Licensed Content but only a limited right to use the Licensed Content in connection with the creation of RPR Offerings. RPR agrees that it will not challenge or take any action inconsistent with [MLS’s] rights to the Database or the Licensed Content.

This provision in echoed in 5(a). But neither of them in any way limits the types of products that RPR can create under the moniker “RPR Offerings.”

RPR Conduct Restrictions. Section 3(a) requires RPR to comply with privacy and information security laws; 3(h) requires RPR not to compete with the MLS during the term of the agreement; 3(j) requires that RPR not use the data to break the law or infringe anyone’s rights. In Section 5(b), RPR agrees to put the MLS’s copyright notice on displays of the MLS data. None of these sections limits what can be an RPR Offering.

The bottom line: Broad license minus prohibitions equals what?

All this boils down to the following:

Under this agreement RPR can create any kind of product it wants incorporating the MLS’s data (RPR Offerings) and sell those products to anyone it wants (RPR Customers), EXCEPT:

·         Actually displaying the MLS data on any web site (other than RPR’s site for “Members”); and

·         Providing consumer “reports” that would trigger scrutiny under FCRA or similar consumer protection regulations.

Consistent with the claimed value proposition?

So the question is whether this agreement embodies the kinds of limitations that RPR leaders have claimed in presentations and on the RPR blog. As of Feb. 17, the RPR Blog provided the following FAQ answers, among others (the emphasis is mine):

Will my listing information be sold? The RPR business model is based on the sales of analytics, or aggregated information. No listing-level information will be sold or distributed.

Will my data be sold back to me? No. Access to the RPR is free for NAR members, and the company will not provide it to any entities which wish to resell it to NAR's members.

Who are the customers to whom RPR will be selling analytical information? The market for analytics and trend information is primarily composed of lenders, servicers, insurance companies, securitizers, and government entities. It is important to note that no listing-level data will be sold to these customers, to whom only aggregate statistical information will be made available.

Will my personal information be sold? No. NAR member information will never be sold or distributed.

In one case, the RPR license agreement directly contradicts these answers. The “Match & Append” product that is expressly permitted in the mix of RPR Offerings is defined this way in the RPR license agreement (emphasis again is mine):

“Match & Append Products” means a list of properties created by the transmittal by an RPR Customer of a data set that includes property addresses to be matched by RPR against its database for the purpose of identifying those properties in the data set that are currently on the market for sale and the list price of such properties.

This looks like “listing-level data” to me.

In the other cases, the RPR MLS license agreement does not embody the promises in the FAQ. If the MLS expects to be able to enforce the promises in the FAQ, it should be prepared to incorporate them into the license agreement.

Conclusion

I’m not soured on the RPR idea. It may provide great value to brokers and salespeople, and the RPR Offerings may be a great way to pay for it. But RPR has been making promises about how data will be used (on its blog, in presentations, etc.) without incorporating those promises into the license agreement. MLSs that want to be sure that their data is used as RPR has promised will want to incorporate those promises into the license agreement before signing.

Your thoughts?

-Brian

Copyrights in facts and copyright licenses: Copyrights in MLS listing content Part II

As I explained in my last post, ownership in the copyrights in the data content in an MLS is 'scattered' in most MLSs:

• The MLS (or perhaps its MLS vendor or both jointly) owns the copyright in the 'compilation.' The MLS may own copyrights in photographs it commissions, if its agreement with the photography contractor provides for an assignment.
• The listing agents own the copyrights in photos they take and remarks that they write. Others, such as agent assistants, third-party photographers, and even home sellers, own copyrights in the images and text they create.
• Listing brokers own copyrights in little or nothing, unless their agents are employees or their independent contractor agreements directly address copyright assignment – most do not.

We want to address some of the problems that 'scattered ownership' of copyrights brings to brokers and MLSs. But first, we'll address two preliminary issues: copyrights in facts and copyright licenses.

(Again, this discussion relies on assumptions, most of which I laid out in my last post, but some of which I'll attempt to explain here. Your own organization's issues may be different.)

No copyrights in facts

There is no copyright protection for facts. The fact that 123 Elm Street is for sale is not protected by copyright. Neither is the fact that 123 Elm has three bedrooms. Creative expression relating to facts is protected by copyright, to the extent it includes a "spark of creativity." So copyright protects the MLS remarks of an agent who writes poetry (or even hyperbole) regarding the factual characteristics of a house; but not his statement that "123 Elm has 3 bedrooms."

This exclusion of facts from copyright protection goes one step further: If you are trying to get at the facts in a copyright-protected compilation (like an MLS database), it is permissible to make a copy of the copyright-protected compilation, even without the owner's permission, in order to get at the copyright-unprotected facts. In other words, so long as I'm just trying to get at the facts for a lawful purpose, copyright law does not prevent me from copying your whole database. I just need to 'discard' the parts that are subject to your copyright.

Express and implied licenses

As I mentioned in my last post, the transfer of a copyright, an "assignment," can happen only by a writing signed by the transferor. But assignment is not the only way to get the ability to use a copyright-protected work. The owner can also give a "license," which is permission to use the protected work. The "scope" of a license is often limited based on the use expected, a time period, geography, and other factors. For example, the author of a magazine article might grant "first North American serial publication" rights to a magazine; this grant limits the form, geography, and time period of publication by the magazine.

A license can be express, that is, the licensor says, "I grant you a license/permission to use my work in the following way." Licenses can be oral – they do not have to be in writing.

A license can also be implied. If your conduct unambiguously implies that you are granting a license, then you cannot later complain that you did not grant the license. So, for example, when a real estate agent allows a photo he took to be uploaded to the MLS, we expect the MLS now has an implied license from that agent to use the photo for the purposes permitted under the MLS's rules and policies. If the MLS copies and distributes the photo throughout the MLS to other brokers and agents, the agent who took it cannot argue this is copyright infringement.

One problem with implied licenses is that their scope is often unclear. By putting the photo in the MLS, is the agent granting a license for the MLS to commercialize the photo in other ways? Can MLS license MLS data including the agent's photo to RPR, First American, or other third parties? Can the agent demand that her photos be excluded from such licensing? In many cases, the answer is unclear.

A second problem with implied licenses is that the licensor can often revoke them. In other words, the implied license lasts only so long as the licensor does not take any action that destroys the unambiguous implication of consent. For example, "I do not consent to my photo being used for X."

-Elizabeth

MLS exec comments on RPR and its license agreement

(BNL Note: This post comes from the CEO of a Medium/Large MLS. Like all posts of this kind, views expressed here are those of that author, not necessarily of our companies or our clients.)

Dale Ross has been discussing RPR for a few years now at national conferences, there never has been a real buy-in to the concept from my opinion.  Now that we have a contract in addition to a concept, things are still not clear to me.  Having seen the contract, and having legal representation review, I don’t think RPR is actually promising anything.  In our opinion, the silence is deafening when it comes to what they claim they will do in the contract language. 

Having seen the contract, I still do not understand how it correlates to what they are saying. 

Essentially, I understand they are providing us with ‘free’ tax or public record data.  This constitutes a whole plethora of additional questions that although I have asked them directly, there has been no response. 

·         Access to Free Public Record Data

o   That would be great if it contained as much as I am getting now from my current provider but it does not.

o   Free from RPR is one thing but I can guarantee you it will not be free to have my current vendor integrate that data into my MLS system. 

§  Which then brings up exactly how are they providing this free data to us?

·         API

·         Raw Data

o   Can they come close to matching the integration we currently have between our MLS and Public Records provided to us from our current vendor?

§  Again, silence

o   How often is this free data updated?

§  Assessment Data?

§  Deed Transactions?

o   I understand that their idea of Revenue Sharing is that they are giving us this data for free.

§  However, as stated above, is it really?

Here are some facts directly from the contract:

·          RPR intends to create, or have created on its behalf, business products, services and/or applications using the Licensed Content, and desires to access and to use Provider’s [MLS’s] Content as source material for the creation of such RPR offerings.

·         Provider [MLS] is willing to grant RPR the right to access and use the MLS Content contained in Provider’s Database for use in the RPR Offerings subject to the terms and conditions of this Agreement.

o   Definitions:

§  Licensed Content:  means the content contained in the database that is to be provided or made available to RPR pursuant to this Agreement, including Active Listings, Pending Sales, Off-Market Listings and Participant/Subscriber Roster Information.

§  RPR Customers:  Means those Persons who are not NAR members and with whom RPR has contracted to provide the RPR Offerings.

§  RPR Offerings:  Means those business products, services and/or applications created and developed by RPR using the Licensed Content, including the RVM Product, the March and Append Products and other products as from time to time developed by RPR. 

§  Match & Append Products:  Means a list of properties created by the transmittal by an RPR Customer of a data set that includes property addresses to be matched by RPR against its database for the purpose of identifying those properties in the data set that are currently on the market for sale and the list price of such properties.

§  RVM Product:  Means automated property valuations generated by an analytical model.

·         Grant of License:

o   Subject to the terms and conditions of this agreement, Provider hereby grants to RPR during the term a limited, revocable, non-exclusive, non-transferrable License to access and use the Licensed Content for the purpose of (i) integrating the Licensed Content into the RPR Offerings, (ii) granting Authorized RPR Users access to the RPR Offerings via a password protected database, (iii) marketing and distributing RPR Offerings to RPR Customers, (iv) displaying to Authorized RPR Users all Active Listings in the Licensed Content and (v) displaying to Participants/Subscribers and such other Persons authorized by Provider all Pending Sales and Off Market Listings in the Licensed Content.

Does RPR Offerings and Match & Append really describe anything?

What a contract that allows them to create new uses for the Licensed Content without prior consent?  (…other products as from time to time developed by RPR…)

From what we have seen so far, there remains far more to be answered that has been done to date.  There is no question that the demo indicates a really neat web site but the fact that remains, does this really help our members?  If so and our Board direct us to participate, we will support that decision and participate willingly.  But I, for one, will compare side by side what features we gain vs. what we lose.  If it is a losing proposition, why would we place that burden on our members in an already difficult market?

Conferences just got a lot more interesting this year!

Brokers' rights to control uses of their data and the RPR license agreement

Elizabeth has begun a series of posts about copyrights in MLS content. I believe another in that series is coming out tomorrow.

With this post, I want to point out another basis of rights in listing data: the right of listing brokers to control the use of content relating to their listings under NAR policy.

The NAR policy

If your MLS is affiliated with NAR and subject to NAR policy, it is bound by NAR Statement of MLS Policy 7.85:

Use of listings and listing information by MLSs for purposes other than the defined purposes of MLS requires participants’ consent. Such consent cannot be required as a condition of obtaining or maintaining MLS participatory rights. MLSs may presume such consent provided that listing brokers are given adequate prior notice of any intended use unrelated to the defined purpose of MLS, and given the opportunity to affirmatively withhold consent for that use.

(See NAR Handbook on Multiple Listing Policy [HMLP], 2010 ed., p. 28.) HMLP defines the MLS this way:

A multiple listing service is:

• a facility for the orderly correlation and dissemination of listing information so participants may better serve their clients and customers and the public

• a means by which authorized participants make blanket unilateral offers of compensation to other participants (acting as subagents, buyer agents, or in other agency or nonagency capacities defined by law)

• a means of enhancing cooperation among participants

• a means by which information is accumulated and disseminated to enable authorized participants to prepare appraisals, analyses, and other valuations of real property for bona fide clients and customers

• a means by which participants engaging in real estate appraisal contribute to common databases (Revised 11/04)

(See HMLP p. 3.) Note that I have underlined “participant” in each bullet point. That is to make the point that the ‘defined purpose’ of MLS is to provide MLS listing content to participants, not to the public or other business entities. Any distribution of listing content by MLS to anyone but participants (and their affiliated salespeople/subscribers) requires listing broker consent, unless it is specifically permitted under another NAR policy. Let’s consider some of the ways MLS data is licensed:

• MLS sends data to Realtor.com, Zillow, Trulia, etc.; the listing broker must be able to opt out, as advertising of listings is not a core purpose of the MLS. (See HMLP Statement 7.57, p. 12, which makes this crystal clear: “An MLS may not require a participant to use, participate in, or pay for ... advertising or access to advertising (whether print or electronic), including classified advertising, homes-type publications, electronic compilations, including Internet home pages or websites, etc.”)
• MLS operates a consumer-facing website with listings on it; the listing broker must be able to opt out. Same analysis as the previous point.
• IDX; the listing broker must be able to opt out, as the IDX policy provides for it.
• VOW; the listing broker has no ability to opt out, as the VOW policy expressly precludes a listing-broker opt-out.
• MLS provides listing data to a third party that uses it only to deliver technology services to that MLS’s participants and subscribers; the listing broker cannot opt out, as the third party has access only for the purpose of delivering services to participants. For example, if an MLS hires an MLS vendor to deliver services to its members, listing brokers do not get to opt out. I’m not sure the policy actually says this, but it must be implied, or most MLSs would stop working very well ;-)
• MLS provides listing data to a third party that will expose the listing data to consumers or third parties or will create products based upon the listing data for consumers or third parties; the listing broker must be able to opt out. This is the situation for MLSs considering licensing to First American or RPR under the proposals now circulating.
• MLS provides listing data to government agencies; listing broker has no ability to opt out. Like the policy on VOWs, this is an exception to the general rule. (See HMLP Statement 7.3, p.21.)

Mechanics of broker consent

As long as the MLS provides listing brokers “prior notice” of the intended license, and the listing brokers have an opportunity to withhold their consent, the MLS may license the data for the specified use. In practice, many MLSs provide brokers a means of consenting or withholding consent electronically. This is the basis for listing syndication services, which usually offer the listing broker a “dashboard” where she can specify which “channels” will receive her listings. Some MLSs also have screens or fields on the MLS system where brokers can opt out of IDX or display on Realtor.com, etc.

One question MLSs must address is whether a data use will be “opt-in” or “opt-out” for brokers. In other words, will the MLS send a broker’s data only if she affirmatively consents (an opt-in system); or will it send her data unless she withholds consent (an opt-out system). NAR policy permits either approach in most cases.

An opt-in use defaults to no consent; an opt-out use defaults to consent. As a practical matter, most brokers will not pay attention to MLS communications. Thus, the default consent situation will be the de facto consent situation for a large percentage of listings. Consequently, opt-out data uses tend to provide much more data than opt-in uses.

Our advice to MLS clients is to make a licensed use an opt-out use if the leadership believes the use is strategically important to the MLS – this will ensure that most listings are included. If the MLS is uncertain, or if the proposed data use is controversial, the MLS can make the data use an opt-in. Then the MLS will include in the data use only the data of brokers who have affirmatively decided to support the data use.

Broker Consent and the RPR License Agreement

The RPR MLS license agreement is disappointing in that it does not address the broker consent issue. Section 2(a) of the agreement provides that MLS “grants to RPR during the term a limited, revocable, non-exclusive, non-transferable License to access and use the Licensed Content.” Section 1(j) defines “Licensed Content”:

“Licensed Content” means the Content contained in the Database that is to be provided or made available to RPR pursuant to this Agreement, including Active Listings, Pending Sales, Off-Market Listings and Participant/Subscriber Roster Information.

Section 1(e) defines “Content”:

“Content” means all information provided by Participants/Subscribers including, but not limited to, information relating to the offer, sale, lease or transfer of any interest in real property, including Active Listings, Pending Sales, Off Market Listings, text, images, maps, audio, video, software and other informational content and data, MLS Participant/Subscriber Roster Information and any compilation, collection or combination of any of the foregoing. (Emphasis is mine.) 

The MLS promises RPR that it has authority to provide this license in Section 9(d): “Authority. Each Party warrants that it has full power and authority to enter into and perform this Agreement....”

There is no carve-out from these provisions for MLS to withhold data where the listing broker has not consented. In a comment on an earlier post, RPR President Marty Frame said that “Broker consent is assumed in the paragraph on Authority [presumably 9(d)].” That’s not the way I read these paragraphs.

MLS options

Usually when we do a license agreement for an MLS licensing data for a non-core purpose, we include a provision that clarifies that some listing data will not be included if the listing broker must consent under MLS policy and the listing broker does not consent. I would suggest that any MLS entering an agreement to license data for non-core purposes (including RPR and First American) add such language to the agreement.

The MLS has to make another decision though, and that is whether to make licensing into such a use an opt-in or opt-out for listing brokers. If your MLS/association is uncertain about the value of the relationship, or if your listing brokers are anxious about the possibility of their data being commercialized, you could choose to make these data uses an opt-in. Note however that such a decision probably makes your MLS’s data much less valuable (because the licensee will be getting much less of it).

Your thoughts?

-Brian

Text of the RPR agreement and 'public debate'

RPR has so far refused to post the text of the RPR MLS Content License Agreement online. RPR’s president Marty Frame said (in a comment to a previous post about the agreement) that he hoped more of the discussion regarding relations between RPR and MLSs “will happen out in the open so that everyone can have the benefit of it.” When I asked Marty to post the agreement, he told me via email that “at this point the only public discussion we see about the agreement is coming from vendors and consultants,” that he’d like to see more debate coming from MLS execs, and that until they are the source of the comments, he’d rather “negotiate contracts as is typically done in private and among businesspeople and their attorneys.”

One of our clients consented to us posting the agreement they received from RPR on our blog. Interestingly, that client did not care to be identified as the source of the copy and wanted to make sure we removed any reference to it before posting. Legally, I suppose we could do that, but I’m concerned about introducing errors in the process of copying the text of the agreement, and consequently, I’d rather not post it.

This is not the only example that I have noted of folks with something to say or discuss regarding RPR who prefer not to be identified as the source of comments. I think this reasonably arises from a tendency by some in the industry to brand those who question or disagree with NAR’s plans as “traitors to the REALTOR blue.” I’ve witnessed some of that first-hand over the years – it is not merely paranoia. This is probably why Marty is not seeing MLS execs or brokers commenting in the public forums as frequently as consultants and advisors.

So, I’ll make an offer to the industry: If you are a broker or MLS exec and want to share a comment about RPR anonymously, please email me, and I can post it as a comment without identifying the source except in general terms (E.g., “From the CEO of a medium-sized MLS” or “From the marketing director of a large regional brokerage firm.”)

Also, in some upcoming posts, I’ll comment on specific provisions of the current version of the agreement, with reference to section numbers, etc. If you are an MLS exec and want to follow along, request a copy of the agreement on the RPR blog (link on the right invites: “MLS: Request Enrollment Package”). If you are a broker, ask your MLS to get you a copy. If you advise MLSs as a consultant or lawyer, ask one of your clients for a copy – as far as I know, they are free to share it with you. If you have a copy and are willing to post it, please do so and let us know so we can link to it from here.

-Brian

Broker comment on RPR

The following comes from George Percel, a Florida broker and former association/MLS manager. I offered to share it with MLSTesseract readers. (I added the links to his text. Like all posts of this kind, views expressed here are those of the author, not necessarily of our companies or our clients.) I'm very interested in hearing from folks with contrasting views, so if you don't have your own blog but want a comment posted here, please feel free to email me. For example, see a comment I posted earlier today on another MLSTesseract post. Of course, it's easier for me if you just post your comment here on the blog - there is an anonymous post option.
-Brian

Hi Brian,

I respect Mike Audet’s opinion very much and I just read through John Rees’ very thorough check list. I also watched for the second time Mona Steen’s video demo on the RPR website. The first opinion is: It’s an MLS on steroids. Actually I like very much the slick, professional and comprehensive body of work. However, being a lowly Broker in the backwaters of the Everglades, I wonder how this is going change the world of real estate as we know it.

MLS has always been, and remains today the most valuable service the LOCAL Realtor Board/Association can provide to its members. The explosion of the Information Super Highway on the scene, and the inherent savings of Internet connectivity (no more long distance calls to log into the MLS), allowed for local MLSs to band together to achieve an Economy of Scale. We were told to entertain the idea of merging with adjacent, and some not so adjacent, MLSs into one regional MLS to save Subscribers money. In view of the fact that 90% of Realtors make 90% of their sales within a 25 mile radius of their home base, this, in my opinion, makes the argument in favor of Regional MLSs imperfect. Now we have Super Regionals and State-wide MLSs, or at least State-wide “data sharing”. Most Realtors do not need nor can they absorb all this information. In fact, most do not use more than about 10% of the capabilities that most MLSs offer. RPR’s apparent ease of use, breadth of information and packaging may change this.

At this point, not being familiar with the business proposition of RPR, I wonder how did we get to the prospect of allowing non-Participants to “propagate” MLS data (or its derivatives), when Participants, the actual owners of the data, can’t. I think it might be wise for the Brokers to ask themselves some of the questions John proposes before they allow their listings to be entered into any MLS. The MLS’s function is simply to make other Participants aware of a listing and the details about the property, while making a unilateral offer of compensation to another Participant who brings a ready, willing and able buyer who closes. In my office 99% of the offers come from local Realtors.

The display or advertising of listing information should be left to the Brokers. We have a very wide distribution of our listings on the Internet. The benefits should be evident; however we are not selling more of our own listings. The Internet aggregation of active listings appears to be mostly beneficial to the aggregators. It appears that by merely throwing a switch RPR could be easily morph into a public website as well. Many MLSs in the early stages of the game set up a public website where most of the active listings were displayed. Many decided that the same information about the listing would be made available online that is given to a consumer who walks into a Broker’s office. Reasonable. In many instances there is enough information on public sites to write a reasonably well informed offer on a property. Now the dilemma: will the listing Broker refuse to compensate the non-Participant Broker who brings an acceptable offer? In most cases, of course not. RPR will in actuality make one of the fundamental principles of the MLS: the offer of compensation to only Participants a moot point. Or, will there be universal offer of compensation. What about non-Realtor Brokers? Are we looking at a new DOJ drama?

Within a virtual minute the business of “Internet Display” of active MLS data was seized by uncontrollable zeal. Today, I dare say that a lot of that information is scraped and used by those (like moving companies) who can profit from access to the data. (Do you remember having to properly dispose of unused MLS books?) Recently R.com and NAR decided that historical or off-market data should be displayed on the Internet. This of course helps the AVMs become a little more reliable and debilitates another service offering by the Realtor (CMAs/BPOs). We all know the timeliness and reliability of getting sold information through “official” tax data. So, for the purveyors of AVMs – advantage. RPR attempts to trump this by making the RVM available to Realtors only as a service offering. Will a version of the RVM be available to the consumer on the public version of the site? Maybe for a fee? Oh, I’m getting carried away.

The Internet has changed our business landscape on a scale that many Realtors are still unable to embrace. While NAR has gathered a very competent and experienced group of individuals to lead this venture, I think we are babes in the wilderness entering an arena strewn with unforeseen challenges. We are now going to attempt to compete with people with a ferocious commitment to exploiting the application and sale of “information”. As an Organization are we going to be able to respond with the required velocity to the dynamics of the information industry evolving at breakneck speed? I fear that that if we continue to attempt to embark on ventures which are beyond our scope, resources and ability to control, we will certainly become a weaker entity.

The bottom line is that I want my MLS to provide reliable, timely data to the Associates so that they can do business within their market place. I want the Local, State and National Association to focus on making sure that we can continue doing business unencumbered by regulators. I recognize the possibility of “outsiders” creating a similar platform. I am more concerned about the prospect of how the local Association will cope with the loss of revenue currently provided by their MLS. (Brokers could upload their listings to RPR through the RETS Client. That would create significant savings for Realtors – no more MLS fees.) Will RPR share some of the $60 million of the projected revenue with the local Associations/Boards? I do not want the Realtor Organization to get in the middle of the business cycle if it is going to raise the cost of doing business.


Best Wishes,

George A. Percel
Managing Broker
Prudential Florida Realty
Marco Island
www.GeorgePercel.com

Another checklist for MLSs considering licensing to RPR

John Rees has offered another checklist for MLSs considering licensing data to RPR.

John's list of questions takes a decidedly more legal perspective than Mike Audet's (mentioned in yesterday's post). Taken together, these two posts identify most of the issues that MLSs considering licensing data to RPR should consider. I'll try to provide a supplement later this week to fill in any gaps, if I actually find any gaps.

Any MLS considering signing the RPR license agreement should at least review these checklists and the questions on them. You owe it to your brokers to think this issue through and not make a knee-jerk decision for or against RPR (as I have heard some MLSs have already done).

-Brian