In a joint press release today, Redfin and Constellation1 announced an agreement whereby Redfin has converted to the Constellation1 data aggregation service. The two companies have been collaborating on the transition in stealth mode. The Constellation1 managed MLS data is now live on Redfin.com. If you are an MLS providing data services to Redfin and have not gotten a new three-party data application, you probably will soon. I think that they might be moving through this one state at a time.
Redfin was among the few national real estate firms that were doing data aggregation on their own. A single firm doing data aggregation is a significant investment in resources. Redfin gained an online advantage from this investment for many years through listing accuracy and speed when listings were being transmitted via RETS. Today, APIs and RESO standards have diminished a lot of those advantages. Redfin can now redirect those significant financial, human, and technology resources into other strategic efforts.
The burden of data aggregation requires the same effort for one brokerage as it does for serving thousands of brokerages. That is the Constellation1 advantage. Constellation is among the longest standing data aggregators for brokerages in North America. For decades, they have been working with MLSs across the nation in support of brokers and agents. They have teams of people working with MLSs on data license agreements, teams managing MLS compliance, teams of engineers adjusting the aggregation and normalization process 24 hours a day when MLS fields change or fail (which they do every day). Once you have a system of ingesting MLS data feeds in place, then providing API access to the broker for their website or application is as easy as dipping your straw into root beer float.
MLS efforts like The MLS Grid are growing to handle data aggregation and data normalization for the brokerage and application development community. If you are not an MLS member of the MLS Grid – check it out.
The discussion was held with Shelley Specchio, MIBOR, Joseph Szurgyi, CEO of MLS Grid and Cass Herrin, Data Services Director from Moxiworks outlining the key benefits of a centralized data distribution service owned and operated by MLSs without a profit motive.
Constellation1 has seen tremendous growth in their data aggregation services as a result of two significant transactions. First, Constellation1 acquired Real Estate Digital (RED). Ira Luntz and John Hensley developed an amazing platform that was used to service most of the HomeServices of America companies. Second, the industry leader Wolfnet was acquired by OjO Labs who abandoned providing data aggregation services for other companies. The former Wolfnet team focuses on the needs of OjO Labs and their consumer site Movoto.
What makes this announcement significant is the understanding that Redfin would not have switched to Constellation1 unless the service was better for their business. In the category of data aggregation, better is defined by comprehensiveness (all markets), timely (quickly get changes live on Redfin.com), accuracy, and price. Speed is among the most critical elements because new listing or updated email listing reports are triggered when changes in the MLS data feed hit the brokers’ website application. Redfin was damn good at data aggregation. We measured them against benchmarks like Zillow and Realtor.com. Redfin was better.
This announcement tells us that Redfin finds Constellation1 to be equal or better in terms of quality, and delivers significant cost savings. Otherwise, Redfin would not have made the change. We are not surprised. WAV Group ran speed benchmarking of HowardHanna.com (also powered by Constellation1) against Redfin, Realtor.com, Movoto, and Zillow and they did great.
Disclaimer: WAV Group has had dealings with both companies, but we did not do the data aggregation RFP for this project.