CoffeeBeansThere are lots of brokers who subscribe to MLS services. They are called participants, and as participants they are provided data rights beyond agents, and way beyond vendors or third parties. Moreover, participants are the nucleus of reciprocal offers of compensation, an agreement that if one broker represents a willing buyer and the other broker represents a willing seller, they will share compensation.

There is a new brokerage model that has entered the MLS sphere, and I am not sure if it is a good thing or a bad thing. I will call this type of brokerage a “Data Only Broker” or DOB. These DOBs truly are licensed brokers under state law. They join the MLS conforming to policy. They pay dues. They typically do not have agents. You see, a DOB does not intend to list homes for sale, or show homes to buyers. They are simply in it for the Data Rights and possibly referral fees. Many of these brokers can make plenty of revenue with data, especially if they scale nationally.

DOBs see themselves as mavericks of the digital frontier. They breathe the spirit of virtual brokerage, virtual office, consumer self service, digital transactions. I think that Brad Inman is calling this the “Latte of Real Estate” for his upcoming NYC conference. Inman has developed a thesis that buying or selling a home should be as simple as buying or selling a latte. After all, there is a lot of technology behind the Latte – bean growers, bean toasters, transportation logistics, customs, FDA requirements, restaurant licensing, health inspections, labor laws, service solutions, commerce, and the ever-present espresso machine. Despite all of this complexity, if you wait in line at Starbucks for about 15 minutes, you walk out with a delicious Latte. Brad is correct. Using the right technology, a consumer can purchase a home online.

Interestingly enough, the digital home purchase was not developed by some outside pioneer looking to reThink Real Estate and deliver what is NEXT for the consumer. It was enabled and developed from within as a method to digitize and expedite the real estate transaction. If we write the book of digital genesis, Adam would be played by REALTOR® Associations who brought us electronic forms, and Eve would be played by title companies who brought us transaction management. I guess that the Apple would be Docusign, without which the original sin of an electronic transaction would not be possible. With sincerity, I pray that my Old Testament metaphor does not offend anyone’s religious piety.

Fundamentally, I think that the battle between DOBs and Traditionalists resolves itself in the notion of service delivery. In some small, remote way – real estate is like a coffee shop – it comes in all forms of service delivery from the self service concession based coffee maker, to the full service, sit down, luxury couch, waitress, music playing coffee shop. Consumers have a choice in real estate too – from DOBs to Full Service. Oddly, the coffee guy that sells the vending machine does not have a beef with the coffee shop that offers full service or driveup/walkup service. They live in their own separate worlds with the only common touch point being the commodity of coffee beans.

Listing data is the coffee bean of real estate. Specifically, MLS data is the coffee bean of real estate. It is the fundamental underpinning of every service model – from the vending machine of a DOB to the luxury experience of a Christies affiliate. There are huge differences in service levels operating off of the same data; but it breaks the offer of compensation paradigm of the MLS. Here is how.

In the coffee shop paradigm, there are not two baristias providing service. There is only one. In real estate, there are two service providers representing two parties in a transaction. The house is not the differentiator, only the service level differentiates the two. On one side you have Christies, on the other side you have a DOB broker. According to lore, the Christies broker gets little, if any support in the transaction from the DOB broker because their seller representation obligations ended right around the time that they submitted the listing into the MLS, and their buyer representation ended when they secured a lead. The DOB expects an equal (or nearly equal) share of compensation for limited service. Theres the rub.

The Department of Justice and the National Association of REALTORS® came to a settlement that protects consumers by insuring that they have access to DOB services. Their freedom to exist is protected by our forefathers and the constitution of the people. MLSs must treat them accordingly and the REALTOR® Code of Ethics requires that you welcome them into the industry with due respect. DOBs are a protected minority in a melting pot of real estate democracy.

A separatists movement in real estate may be in our future if traditional brokers wish to decline offers of compensation from limited service DOBs. Traditional brokerages may take their data and leave the playground. Alternatively, traditional brokers can segment their service levels like hotels. The new brokerage may have vending machines, a coffee shop, and a silver service cafe – giving the consumer a choice. Many service industry brands have tried this before and failed. Your brand needs to exude the level of service you provide, not confuse the consumer about what to expect.

Perhaps the industry needs to stop thinking about how purchasing real estate can be as easy as buying a latte, and direct our energy toward making the process fulfilling and uplifting. Technology and automation, used carefully and tactically, can contribute to that fulfilling consumer experience, but customer service needs to be directed completely toward elation and satisfaction. Move beyond the transaction and into Customer For Life.