Why is there no National MLS?
Posted May 4, 2007 @ 9:43 am, Viewed by 541 Visitors, Read 542 Times.
This question is often discussed in local and national news articles, but I never see a "grass roots" explanation of why creating such an "all inclusive" database and allowing consumer access to it is such an issue. I hope this information will help people understand why this is so.
First, it must be realized that a property listing is legally just like any other written creation. It has an author, and that author owns the publication rights to their creation. In the case of a property listing, the author is the listing broker. In turn, the listing broker must have a valid listing contract with the seller, in which, and during the limited term of the contract, the seller grants the listing broker the authority to disclose certain non-public information about the property listing to other participating real estate brokers via one or more local and non-public Multiple Listing Service (MLS) systems. In the listing contract, the seller may also grant or deny the broker the authority to provide that information to the public, via public internet web sites.
Everything else flows from the above. If the seller instructs the listing broker to not make the listing available to public internet sites, the broker must comply with the seller's legal instructions in that regard. If the seller does not authorize their listing to be placed in a MLS service, the listing becomes what is commonly termed a "pocket listing", and not even other MLS participating brokers will know about it.
Even if the seller grants the listing broker all of the previously stated authority to provide the listing to the MLS and to public internet sites, access by public internet sites is further controlled by the MLS(s) that the listing is submitted to. Those rules typically state that access is granted only for the benefit of participating brokers who are members of that MLS, and that the listings may only be displayed on their personal or corporate web sites, or on a web site owned by the web hosting vendor that is under contract with the broker to provide specific listing presentation services. If the participating broker is going to use a contractor to program the site and present the listings, then additional rules apply to the contractor. In every case, these rules generally prohibit sharing of the MLS data with third parties, and prohibit display of the data except on the specifically named web site. In addition, each MLS may designate which data elements of a listing may and may not be displayed on public web sites, and may specify some elements, such as the listing brokerage name, which must always be displayed with each listing. These rules will vary by MLS. Therefore, anyone attempting to build a national MLS database must work within the contractual requirements each MLS and its internet data display rules, on an individual basis.
Technically, until some kind of universal standards are implemented, each MLS system has different database formats and structures, each of which requires custom programming by web developers before it can be displayed on a web site. While it may not be terribly difficult for a programmer or vendor to work with just one local MLS database, it becomes a logistical nightmare for any one vendor to accommodate all of the hundreds of different MLS database structures that would have to be imported into a single "least common denominator" database of their own, for consistent presentation on their web site. In addition, as MLS systems change their own vendors, and every time they do, every other broker and vendor that uses a data feed from that MLS may have to re-program for differences in that feed that may be introduced by the MLS's vendor. In the United States, the National Association of Realtors (NAR) has recently published new national technical standards for internet listing data exchange. However, its implementation across all MLS systems is far from complete, and each MLS system's implementation may not be 100% to the new standard, meaning programming "tweaks" by vendors will still be required in many cases.
The difficulty of dealing with the many legal and technical issues has not prevented a few national real estate conglomerates from attempting to build a national database of listings for display on their national corporate web sites. However, they are still subject to the same rules and limitations as described above. This means they must have very deep pockets, because they must maintain a dedicated staff of programmers and legal counsel to deal with all of the different MLS rules and data formats that currently exist.
First, it must be realized that a property listing is legally just like any other written creation. It has an author, and that author owns the publication rights to their creation. In the case of a property listing, the author is the listing broker. In turn, the listing broker must have a valid listing contract with the seller, in which, and during the limited term of the contract, the seller grants the listing broker the authority to disclose certain non-public information about the property listing to other participating real estate brokers via one or more local and non-public Multiple Listing Service (MLS) systems. In the listing contract, the seller may also grant or deny the broker the authority to provide that information to the public, via public internet web sites.
Everything else flows from the above. If the seller instructs the listing broker to not make the listing available to public internet sites, the broker must comply with the seller's legal instructions in that regard. If the seller does not authorize their listing to be placed in a MLS service, the listing becomes what is commonly termed a "pocket listing", and not even other MLS participating brokers will know about it.
Even if the seller grants the listing broker all of the previously stated authority to provide the listing to the MLS and to public internet sites, access by public internet sites is further controlled by the MLS(s) that the listing is submitted to. Those rules typically state that access is granted only for the benefit of participating brokers who are members of that MLS, and that the listings may only be displayed on their personal or corporate web sites, or on a web site owned by the web hosting vendor that is under contract with the broker to provide specific listing presentation services. If the participating broker is going to use a contractor to program the site and present the listings, then additional rules apply to the contractor. In every case, these rules generally prohibit sharing of the MLS data with third parties, and prohibit display of the data except on the specifically named web site. In addition, each MLS may designate which data elements of a listing may and may not be displayed on public web sites, and may specify some elements, such as the listing brokerage name, which must always be displayed with each listing. These rules will vary by MLS. Therefore, anyone attempting to build a national MLS database must work within the contractual requirements each MLS and its internet data display rules, on an individual basis.
Technically, until some kind of universal standards are implemented, each MLS system has different database formats and structures, each of which requires custom programming by web developers before it can be displayed on a web site. While it may not be terribly difficult for a programmer or vendor to work with just one local MLS database, it becomes a logistical nightmare for any one vendor to accommodate all of the hundreds of different MLS database structures that would have to be imported into a single "least common denominator" database of their own, for consistent presentation on their web site. In addition, as MLS systems change their own vendors, and every time they do, every other broker and vendor that uses a data feed from that MLS may have to re-program for differences in that feed that may be introduced by the MLS's vendor. In the United States, the National Association of Realtors (NAR) has recently published new national technical standards for internet listing data exchange. However, its implementation across all MLS systems is far from complete, and each MLS system's implementation may not be 100% to the new standard, meaning programming "tweaks" by vendors will still be required in many cases.
The difficulty of dealing with the many legal and technical issues has not prevented a few national real estate conglomerates from attempting to build a national database of listings for display on their national corporate web sites. However, they are still subject to the same rules and limitations as described above. This means they must have very deep pockets, because they must maintain a dedicated staff of programmers and legal counsel to deal with all of the different MLS rules and data formats that currently exist.
Ron Goodman, Broker-Associate
Prudential Colorado Real Estate
http://www.DenverHomeValue.com
1-800-381-8014
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Ron Goodman and the Denver Home Value Team are experienced Prudential Colorado Real Estate agents who specialize primarily in the Denver Colorado South Metro communities of Highlands Ranch, Lone Tree, Littleton, Centennial, Greenwood Village, Cherry Hills Village, Englewood, Parker and Castle Rock. Read More
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While I can't speak for all states, I can speak for Nevada and Illinois since we are licensed in both states. MLSNI and GLVAR are serviced by completely different vendors with different rules and regulations, some of which are mandated by state law. In Nevada, real estate agents have to take 45 hours of Nevada State Law since it is not an "Attorney" state. There are numerous differences practicing real estate in Nevada and Illinois especially when it comes to Associations, Water rights, rental laws, etc..etc..etc.. In my opinion, having a national MLS would be the equivalent to a national licensing system for real estate agents which is not going to happen. Issues to protect consumers in Nevada are different then Illinois. (While there are many common factors, there are also factors that are not even an issue in the other state.) While obviously categories such as price and # of bedrooms are the same, square footage is not even used for many listings in our area of Illinois. (As silly as it may sound, the classification and the count of bathrooms is also different.) All in all, just combining these two MLS systems would be a logistical nightmare and that's without even including the politics that would come along with it. I often come across blogs crying for a national MLS... often times written by journalists who have no understanding what it takes to obtain a real estate license (and I suspect as having other intentions for bringing it up in the first place) who for some reason give the impression that the MLS is a publicy funded entity... which for all of us that pay into it for access....know the reason why it exists in the first place. How can these people write about something they know nothing about? Interestingly, more often then not, you'll also find some kind of subtle advertising somewhere in their blogs for third party sites who would be the biggest benefactors in such a system. Is it really an issue to need a National MLS? Who would really benefit from it? Does the consumer looking to purchase real estate in our area of Chicago really care about our listings in Las Vegas? And if they do, don't you think they could get the information they needed? The issue of providing a National MLS system is being brought up by third party companies who would certainly benefit the most. Suggesting that it benefits the consumer is ridiculous when a consumer can go straight to the source for that information if they sincerely have an interest in the first place.