The predominant buzz in real estate this week was focused on successful and unsuccessful buyouts. On the successful side of buyouts, a talented team of managing executives from LPS was able to complete a buyout of non-MLS products and form a new company called RED, an acronym for Real Estate Digital. In a more straightforward buyout, CoreLogic purchased MLS provider Tarasoft, rolling that system under their Marketlinx brand. On the unsuccessful side of buyouts, the Arizona State Association of REALTORS was unsuccessful in its bid to purchase the shares of ARMLS, its first leg in a course to develop a statewide MLS.
Although it may be a stretch of the imagination, there is a synthesis among these transactions. We see that there are three ideological philosophies that are becoming more defined in real estate, each represented by one of these buyouts: The Broker/MLS-centric ideology; The MLS-centric ideaology; the State Association-Centric ideaology.
The Broker/MLS-centric ideaology: The folks at Real Estate Digital see that there will be two sales channels in real estate. Products sold through MLS relationships to agents/brokers; and products sold directly to agents/brokers powered by MLS data. By becoming a broker/agent product company, RED is free to explore relationships with brokers directly, and other MLS system providers directly. They have always been able to do this, but there are challenges when you are a divisional entity living under the umbrella of a large corporation. Sometimes that umbrella shields you from the sun and rain you need to grow.
The MLS-centric Ideology: CoreLogic is clearly bullish on the long-term value of MLS systems as the centerpiece of their relationship with real estate agents and brokers. MLS is a low margin business, but it is steady. MLS contracts have multiyear durations from customers who pay on time. Contract renewals run over 90%, perhaps higher now Marketlinx has added a 5th system to choose from. They offer InnoVia, MLSchange, Tempo, Fusion, and now, Tarasoft.
Today, CoreLogic Marketlinx supports more than 50% of the MLS system and MLS Tax systems (REALIST) in America. They have effectively leveraged this base to expand non-mls product offerings like Data Co-op, and Partner InfoNet. Like RED, they have a comprehensive offering of agent and broker products. CoreLogic is among the few MLS system providers to have productive reseller relationships: these include Kurio, Showing Time, Imprev, GeoJet and Property Panorama.
The State Association Centric Ideology: This is a case of East vs. West, local vs. state. There are many states in the East where the MLS covers an entire state, or mostly entire state. Nothing like that has developed in the West. I thought that Arizona would happen – they needed the shareholders in ARMLS plus Tucson to reach 80% of the membership mass, it did not happen.
The California Statewide effort seems to have some legs with the merger of CRMLS and SoCALMLS. They may have around 70,000 subscribers under that corporation now – running three MLS systems. There are roughly 200,000 members of the California Association of REALTORS and perhaps 40 or more MLSs. They have a long journey and many difficult challenges to unite the state under one MLS. The history of Western Progress has always been ‘one wagon at a time.’
If you did not catch the week in review last week – you should check it out. We provided updates on AVMs, including the launch of Trulia Estimates and updates on RPR, Partner InfoNet and Zillow. There was also some discussion on new listing syndication channels. RE Technology is hosting a drawing that gives away $10k in free technology to agents.
Not sure what next week will bring, but the last two weeks before the Council of MLS conference are always full of buzz. WAV Group will be at the conference – call this week if you need to meet with us. WAV Group is also hosting an online webinar for brokers next week. The webinar is scheduled for Thursday, September 22, 2011 at 12:30 Eastern, 9:30 PST. To register and access webinar instructions, please click here. The webinar is designed to talk about enterprise broker technology solutions that require support of multiple offices and Multiple MLSs.
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