The Point2 NLS - A Different Kind of MLS

On January 2, Harley Rouda, CEO of Real Living commented on Inman News that “companies such as HomeGain and HouseValues, Zillow and Point2Homes are playing a role in aggregating property data, … and it's not clear where this trend is leading the industry.” That statement is very true, but it should be noted that the 4 companies listed are playing very different roles. I’m not surprised however that Point2 shows up in the same sentence as HG,HV and Zillow.

Homegain and HouseValues provide consumer portal that primarily grab contact information which is sold in the form of a lead to real estate agents and brokers. Zillow provides a consumer search portal designed to open up information to consumers and earn money with an advertising model. Where those companies are consumer focused, Point2 focuses on building applications for real estate professionals. While we operate a consumer search site at www.Point2Homes.com, solutions to focus on creating opportunities for the real estate professional and connecting consumer facing products to our real estate software that our brokers, agents and builders use.

In November, we displayed a booth at the NAR Expo and participated with the over 600 other vendors. After the show, we had a series of strategy meetings on messaging and development philosophy. We noticed at the show how easy it is to have your message lost in a sea of noise. Not only do we get mentioned with the 3 companies above, we are also mentioned with the likes of Advanced Access, Z57 and Homes.com. How can we tell the industry all the things what we do, how we are different and deliver one strong message that stands out above all others?

The answer we came up with was to execute on a 4 year plan and reveal what we are truly doing: creating 1 marketing system that allows real estate professionals to cooperatively market their listings online with complete control. Let’s be the answer to the DOJ threat. Let’s help real estate professionals take back their future. Let’s tie our product together and announce the 1 National MLS – the Point2 NLS.

Current members will notice that they have a more robust profile that might mimic what you could access in an MLS, but with more information. That profile will be what shows in Agent Handshake when you are managing relationships, on the message board and in the Point2 Homes directory. Members will notice that the referral system is now tied to that profile. Handshake has been improved so that the community can more effectively manage their Handshake relationships with rules and have more faith in the system. Members will automatically fall out of participation if they are blocked by other members for content reasons. Fair play will be necessity, not just a wish. The community will truly be in control.

The system is now more open with more choice for any real estate professionals. There is no longer a need to create a Point2 website for a member and use our software. Listings can be entered, involved in Handshake, syndicated and then posted on any website the real estate agent or broker is using.

Current MLS data was never meant for marketing but became the de facto standard. MLS’s have become most valuable as marketing tools however. Point2 NLS is a different kind of MLS. Data entered into the Point2 NLS will generate better results, have more photos, automatic virtual tours, deep analytics and complete control. In fact, members will even be able to opt out of displaying their listing on Point2 Homes (something we don’t expect to see many people doing).

Today is step one. All current Point2 members are now members of the Point2 NLS. Over the next few months, we will be releasing more features geared to enhance online marketing and facilitate the local cooperation of real estate professionals.

The real estate industry is one of a kind. In no other industry do competitors cooperate to the degree they do in real estate. But there are a lot of different business models coexisting with many different self-interests and industry views. The competition in light of the cooperation creates complicated dynamics that can only be addressed by providing choice, control and community imposed direct democracy (count the c’s in that sentence!). It’s why we love our simple slogan, ‘compete together’.

Let’s make 2007 a good year for real estate.

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Why Zillow Will Never be the National MLS

There’s been a lot of discussion around Zillow’s latest announcement and there have been a lot of people asking for Point2’s perspective. This is my personal perspective on the issue and why I’m not that concerned about Zillow adding listings to its portal.

Much of the discussion sparked by Zillow’s announcement has been around the emergence of a national MLS or a portal that will replace the current MLS systems -company that all real estate buyers and sellers will use.

Why I’m not waiting for Zillow to be ‘THE’ place.

The September 2006 monthly internet portal statistics from Realtor.org claims the total traffic to the real estate vertical was over 40 million visits. The list contains 25 portals in the vertical. The highest trafficked portal is Realtor.com with 6.1 million visitors, accounting for roughly 15% of the total. But there are many noticeable exceptions to this list: real estate sites such as Zillow.com, Point2Homes.com, busy media sites like the NewYorkTimes.com, Boston.com, major classified search sites such as Oodle.com, Craigslist, Backpage.com, LiveDeal.com, vertical search engines such as Google Base and Edgeio, large regional brokerages such as RealLiving.com.

Give the above, Realtor.com’s share of the real estate vertical traffic is much smaller than 15%. In fact it’s infinitely smaller if you want to include all of the thousands of brokerage websites and all the personal websites from over 1.2 million REALTORS®; 80% or more have a site they market. You see, real estate is a local business and that’s why there isn’t one national search site with all the data and all of the eyeballs. All those REALTORS® don’t have for sale signs with the Realtor.com url on it and they won’t be advertising Zillow.com either. I’m not saying that Zillow can’t or won’t ever operate a wildly successful portal. But being the one spot for real estate is more than a challenge.

Why Zillow is NOT the national MLS

The exercise above is all academic. More importantly, the issue around an MLS replacement is moot if we are talking about Zillow. Zillow is a consumer search portal gathering data, making it freely accessible for buyers and sellers. They are now allowing sellers to post homes for sale, will allow buyers to search and contact the poster of the listing directly.

An MLS on the other hand is NOT a consumer search portal. An MLS is a system that facilitates the cooperative sharing of information and the cooperative marketing of listings between real estate brokers. Marketing is the most important part of that definition. While the cooperative sharing of information may change as times change, because more information is being made universally accessible, the cooperative marketing is key. Organized real estate adds value to consumers because you can have hundreds or even thousands of local professionals working together to sell homes. Real estate is a local business that involves the sale of complex capital assets. Those assets can’t be purchased over the Internet. Homes need to be seen and it is preferred by most home owners, that the transaction is further facilitated by a real estate professional.

While commissions may change, and brokerage models may change, and methods of marketing may change, real estate brokers will continue to be essential by cooperatively marketing listings and offering to share compensation. Consumers will become more informed, new real estate portals will come and some will go, but the real estate professionals will remain essential. An MLS system is required to allow real estate professionals to cooperate.

It would appear that Zillow’s focus is on the consumer and not on building a system that facilitates brokerage cooperation. Bottom line: a consumer search portal is not an MLS.

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