MLSs are for profit entities. They have investors and a board of directors and have a stated goal of providing returns. Normally, the investors in the MLS are the Associations of REALTORS® or brokers that put up the initial funding for the MLS. The MLS was the natural extension of sharing property listings between real estate professionals pre-dating the founding of NAR.
When printed listings were replaced by the electronic MLS, the business model, payment per month by members continued. That model still exists today and is in line with how software as a service (SaaS) is typically delivered across all enterprises.
MLSs have a choice each time they add a new service. They may supply the new service as a component of monthly subscription fees, or allow agents to pay for it a la carte. There is a current debate today between Agents, Brokers, MLSs, and Associations about what is included in subscription fees and what is not.
Some MLS constituents want the MLS to provide a robust and comprehensive suite of services – MLS, Tax, CMA, CRM, Listing Syndication, Agent Website, Lead Management, Marketing through an MLS consumer site, , Virtual Tour, Appointment Software, Lockbox, eSignature, Transaction Management, Document Management, Forms Management, Data Licensing, Newsletter Marketing, Demographic Data, Market Data, AVMs, Market share data, Training, Reverse Prospecting, MLS Security and Single Sign-on, WalkScore, Custom Reports and Property Flyer Maker, Floor Plan software, Data Checking software, Data Sharing with other MLSs, Photography services, Foreign language support, Data Feeds to agent and broker technology vendors, school data, sign riders, and agent ratings.
That was the best I could do at picking categories – there were 38 in all – and all of these services cost dollars rather than pennies. Here is the debate. Many large brokers who contribute the most revenue to the MLS do not want the MLS to add services that duplicate tools they already provide to their agents. They call this practice – “leveling the playing field.” From the list above, aside from MLS, Tax, and lockbox – most large brokers offer these services. They offer these services to their agents for a number of reasons, including recruiting, retention, and to differentiate their services to the consumer. If the MLS offers the service, the broker and its agents are compelled to pay for them, and the broker still carries the financial burden of duplicating the services for their differentiation..
Most large brokers believe that the MLS should stick to being a data repository for posting listings they represent and making them available to other brokers to facilitate cooperation and offers of compensation. In the extreme view, only the MLS system standing alone would be provided. No other services. Not even tax.
Many small to midsized brokers want everything so they do not have to buy it for their agents. All 900 MLSs have differing middle grounds on the services they provide and offer.
Associations disagree on Non-dues revenue too. Associations think differently than brokers. In many cases, many of the most useful tools offered to agents were developed for the REALTOR® with member (agent) dues. A prime example is standardized real estate forms. Associations believe they should be the service provider to REALTORS® and that they enrich the agent with tools for productivity. Many Associations do not believe that is the role of the MLS and want the MLS to stay out of their business. In most cases, as shareholders, they get their way. Associations will choose to have the MLS add services, increase dues and pay higher shareholder dividends, or they will offer the additional products a la carte or as additional Association services. Where this topic gets hotly debated is in a regional MLS where different Association shareholders have different opinions on services offered.
In the middle of all of this are companies who are trying to help MLSs and Associations earn non-dues revenue. The non-dues revenue can offset additional services and curb member subscription/dues inflation costs. Here are some companies and the non-dues revenue services offered.
- Real Estate digital
- Real Satisified
- Cloud CMA
- CoreLogic Store (Clareity Store)
- FBS Spark Store
- RE Technology Success Store
- Clarus MarketMetrics
- 10K Market Analytics
- CoreLogic – MarkeTrends Premium
- PropertyInfo (Stewart)
- CoreLogic (Property Panorama)
Agent drip marketing
- CoreLogic – ePropertryExtra
- CoreLogic – ePropertryWatch
This is not intended to be a complete list. Rather a list of the primary programs for non-dues revenue that WAV Group has recognized as having significant adoption.
CoreLogic has programs that do not fit nicely into the categories above so I lumped them into drip marketing. They have a loyalty marketing solution called ePropertyExtra that pays money back to the MLS or Association whenever an enrolled broker, agent, or a consumer purchases an item through the program (like Groupon for real estate). They have another program called ePropertyWatch that pays advertising revenue back to the MLS/Association on consumer page views when agents send property reports and market updates to their customers.
There are a ton of services that are offered as Freemium services too. These products typically have a free version that is offered to all agents, and that free product acts as a launch pad to full featured premium products. Listingbook is perhaps the best example of a Freemium that is widely offered today. Listhub and Point2 are others.
If your MLS or Association is trying to navigate the challenging waters of non-dues revenue products, WAV Group can help work with you to find the best possible balance between the broker, the Association, and the subscriber.