The future of multiple listing services (MLSs) is collaborative. The industry is stronger, more resilient, and more successful when we all work in step. And if recent industry news is any indicator, increased MLS cooperation (and collaboration) are going to redefine the future of our industry—both how we work with consumers and with each other.
Last Wednesday, Andrew Binkley, President of Constellation1, had the opportunity to chat with Clint Skutchan, SVP, Organized Real Estate at T3 Sixty about all things MLS, real estate data, compliance, and cooperation. One of the topics they discussed was formal data strategies and how much easier it would be for MLSs to collaborate with each other, their members, proptech companies, and the general public if they had them. Sadly, a lot of MLSs don’t have these kinds of strategies—or if they do, they often leave out the answers to key questions that would make them even better. Thankfully, crafting a data strategy is easier than it sounds, and MLSs can take just a few easy steps to write this important document. Let’s take a look at what they are.
Hear even more MLS insights in Andrew’s T3 Sixty interview
What is an MLS data strategy?
MLSs are the backbone of the residential real estate industry in North America, and MLS data is its lifeblood. But while many MLSs have public policies about their data and how to access it, few have formalized strategies (whether private or public) that consider how they want their data to be used, what kinds of compliance rules they want to put in place and why, and ways they could work better together with other MLSs, their members, and the public. This lack of strategy means decisions aren’t always made in the best interests of the industry, but simply because they seemed like “good ideas” at the time. This can lead to frustration and hold the industry back due to a degradation is service quality.
A word on MLS compliance
Compliance is absolutely necessary in the real estate industry. It has to be strong enough to deter bad actors and ensure data is used correctly and fairly, but it shouldn’t be so strong that it hinders or limits the good actors who are using data responsibly.
The way some MLSs have approached compliance adds a ton of work but doesn’t change the outcome: data is still misused. And as compliance balloons into a much larger operation, it adds significant costs that need to be absorbed (and unfortunately, often passed on to members). Thoughtful, effective compliance rules would help reduce the burden of compliance while ensuring data is used properly. As an industry, we would also do well to collaborate more on standardizing these rules, but that’s a topic for a different day.
How to draft a workable MLS data strategy
To create a cohesive strategy that guides and grounds their decision-making, MLSs should start by asking themselves the following questions:
How do we want our data to be used?
It sounds like a simple question, but many MLSs don’t have a definitive answer that they can use to justify their decisions and inform how they form new partnerships. As technology advances, there will inevitably be novel ways to use and share data, and with the answer to this question as their guiding star, MLSs will be able to make the right choices for them and their members.
Who should have access to our data?
How widely do you want your data to be shared? In addition to your members, what kinds of entities or platforms should be able to access and display your data? When is it in your and your members’ best interests to share data, and at what point is sharing no longer in your best interest? Answers to these questions will help you create use cases and categories to structure your data sharing more effectively.
What kinds of hurdles should we put in place to access data?
Vetting potential data partners is a must, but not all data partners are created equal.
There are potentially dozens of different parties who want to use your data, including both MLS participants (franchises, brokers, agents, etc.) and third parties, like proptech companies, data partners, and more. MLSs’ data strategies should take these different groups into account and create different hurdles or restrictions that account for how involved they are in maintaining the integrity of the data, what they need it for, and the degree to which they are helping consumers in general and our industry as a whole.
We don’t even know all the ways data will be shared in the next 5 years or what kinds of new stakeholders will emerge who want to access it. A clearly defined strategy that is supported by publicly available policy documents will ensure MLSs stay on track and true to their mission.
How much should data cost?
Your MLS probably has a business strategy. How does data fit in? Data can become a sustainable revenue stream that can help reduce costs for members, and if this is your goal, it should be enshrined in your data strategy document and tied into your business strategy.
It’s time for your MLS to formalize your data strategy
At Constellation1, we have been building a center of excellence for real estate data for the past 2 decades. Our team knows the challenges everyone in the MLS data landscape faces because we’ve been helping them overcome these challenges for the past 20 years.
If your MLS needs help creating a sound data policy, our team can help. You can visit constellation1.com or reach out to us at sales@constellation1.com and our team will put you in touch with the right Constellation1 expert for your needs.
