What the Internet and Uber are doing to the taxi business is happening in its own way to real estate brokers and the MLS.
Earlier this month, Inman News reported from an industry conference that a study by Jonathan Green, vice president real estate services for CoreLogic (CLGX), found that nearly half of all homes sold last year were never listed in an MLS or were listed only after a buyer was lined up.
The MLS, that coveted and proprietary listing report that gave unique value and advantage to real estate agents using it for decades, is falling out of use in favor of more open, free listing services, such as Zillow (Z) and other off-MLS listings.
Inman reported that CoreLogic’s analysis compared public record transaction data with MLS data in four counties, and extrapolating on those findings shows that MLS use is rapidly declining.
Inman reported that Corelogic says that this raises significant questions for the industry:
Will the prevalence of off-MLS listings (or FSBOs) continue to grow?
Will behavior change in proportion to inventory?
Will brokers attempt to systematically or effectively monetize pre-MLS listings?
Will this behavior dilute the “first position” status of the MLS as a marketing engine?
Will this behavior change the perception of the MLS as the record of choice for listing and sales content?
What’s hurt the MLSs has been good for companies like Zillow. And Zillow has been aggressive in taking things to the next level as the company grows. Zillow’s website is an open listing for both real estate brokers and buyers.
In mid-March Move (MOVE) and the National Association of Realtors filed a lawsuit against Zillow and Errol Samuelson, chief industry development officer for Zillow, in a Washington state superior court, alleging breach of contract, breach of fiduciary duty and – most critically – misappropriation of trade secrets.