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Revenue Generation Emerges in MLS strategy

by Victor Lund on August 14, 2013

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 […]

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