Breaking the Real Estate “Walled Garden” Of Information
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The real estate world has always protected their MLS data like it was gold, and to them it is. Go to almost any real estate office and see the security that is put on the MLS computers. If you think of Fort Knox you are not far off. But the protection of the data that the MLS thinks is what gives the power to the real estate agent is breaking down.
With the advent of online listing services the data is being put out there many different ways. The agents realize that their worth is not being the conduit of the information as it was in the past, but rather the services, support, and institutional knowledge they offer to their clients.
Will this lower commissions, sure, but not that much. I would be worried if I was an agent that thought that putting a sign in a lawn was marketing a home.
Professionalizing the industry and weeding out the dabbling agents is the benefit of breaking the walled garden mentality of data protection. Once the data is available to all then the true worth, knowledge, and skill of an agent will be the defining criteria for paying a commission.
Selling a home is a complicated and difficult process. The buyer and seller can do somethings alone, but there will be a large part of the population that will need the help that a trained and caring real estate professional can offer.
The idea that an agent can hold the 6 percent commission hostage is long gone, but an effective agent will find that being a true professional they will bring enough benefit to the public to have a long and prosperous career.
The triple threat of a weak market, legal pressure and increasing competition has compelled real estate professionals to offer their information more freely online, putting cracks in a walled garden of data that stood strong while the industry enjoyed its breakaway growth. It also presages an end to the days when sellers must list their homes with a broker so buyers can see them.
The trend revolves around the nation’s roughly 900 multiple listing services, or M.L.S.’s, where local brokers post information about homes they are selling. In years past, these services were highly restrictive about where and how that information could be distributed — for instance, frequently not permitting Web sites to display M.L.S. listings alongside for-sale-by-owner homes, bank foreclosures or other properties not represented by real estate agents. via the New York Times
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Comment by ideal4investors on 12 May 2008:
The best agent I’ve ever hired was through a flat-fee MLS service. He negotiated like a pit bull on my behalf and I feel this was because he made his money from referrals, not from a commission upon closing. For too long, the main reason for working with an agent was the MLS listing or list. Now that this info is available on the Web, agents will have to act like professionals who negotiate on your behalf.
Comment by Rob Dawg on 12 May 2008:
Once the data is available to all then the true worth, knowledge, and skill of an agent will be the defining criteria for paying a commission.
How’d that work out for travel agents? The entire real estate sales service conduit is being disintermediated. We don’t need to go into retribution or justice or blame games or any of that. It is happening.
Comment by Brad Kimmelman on 12 May 2008:
The breakdown of the Real Estate “Walled Garden” of information is a blessing for those of us who treat our business like a business. Even though the industry is changing, it is forcing the unskilled, unprofessional, and lazy agents out of the field. Service, information and professionalism will allow us to earn our commissions for long into the future.
Comment by Tom on 12 May 2008:
Rob
The difference between disintermediation between a realtor and a travel agent is the difference between 1 bad week of your life and a 10 year mistake.
T
Comment by Landflip on 12 May 2008:
I taught school for ten years and the new laws regarding teaching and learning really set new and higher standards for teachers. The same is happening in real estate. Professionals are having to take on new challenges and step outside the box. I like how you said that it is no longer putting a sign in someone else’s yard…that is the truth! You must know your clients, the market, and marketing strategies for the area.
Comment by Realtor4u on 13 May 2008:
I’ve been a realtor for almost 14 yrs here in Florida. Of course the business is changing. Can you name one business that in the last 14 yrs hasn’t undergone a major change? From discount brokerages to MLS listing companies everyone is trying to find different ways to make money from real estate.
I welcome the diversion and look forward to what the future holds! There are no more sacred cows….
Comment by Danilo Bogdanovic on 13 May 2008:
It’s the old school mentality of holding on to the information for deal life because it’s the value proposition Realtors used to offer.
That is no longer the case. Realtors’ value proposition is in the interpretation of the information and professional advice and guidance through the real estate process. The raw data and information is available to the consumer and will continue to be available in greater proportion as time goes on.
We are no longer the gate-keepers of information. We are now consultants. Some get that. Most do not (including NAR - just check out their latest white papers on the Gateway/TREC project).
Comment by Townhomes in Murfreesboro TN on 28 October 2008:
If I was a agent I would be more worried about the market than the MLS.