Once again, as REALTORS converged last week for their MidYear meetings in Washington, D.C., the forces of stability and sameness were present, coming up with last-gasp-ways to protect the tattered vestiges of Real Estate, the Last Generation. New white-papers and shiny-Powerpoint presentations proclaimed the “we-can-renovate” mentality of Gen 2.0 MLS systems struggling to enter the 3.0 version of the industry. Much like Google and Yahoo - who refuse to admit their advertising model is crumbling in the face of social networks - MLS’s are trying one last time to burnish a brand that has already worn off the chrome. What’s left underneath are the mostly rusted pieces of a structure whose time has come and gone, even if some REALTORS still believe the Comparables Book will someday make a comeback.

It’s time for the real estate industry to implode the MLS model so they can build something better suited to the next generation of real estate practices.

To prove the point, let’s try to list 10 Reasons why MLS systems really must go. Only then can we see that we’re out of fingers on which to count the ways they might survive.

1. They are expensive. It’s absolutely incredible that brokers pay the kinds of fees they do, on a per-member per-month basis, for essentially data warehousing. A Google Mini, which is a kind of server/software system to let you create your own in-house Google database, only costs about $4000 for 100,000 document capacity. Clearly even a few years of local housing data doesn’t reach that capacity level, but double or triple it and it’s obvious the exorbitant fees aren’t for the hardware. If a 5000-person MLS pays $100 per person annually, that’s still $500,000… and we know it’s more than that in most systems. Deduct staff, technicians and programmers, you’re still overpaying for data warehousing. How can Craigslist store so much more data for free to its users?
2. The data integrity is awful. And that’s pushing away consumers. Let’s stop pretending that there’s any policing of MLS data; maybe a few fields are required and a few token fines issued. But one look at any site whose data is fed by an MLS (like REALTOR-dot-we-don’t-care-dot-com) and it’s clear that once you transfer responsibility for data quality from the broker/owner/manager to a MLS staff member, nobody is watching out for the consumer. Seller are horrified to see their property information incomplete online, with “too new for photo” for days, while buyers are duly unimpressed by the quality of data and its arrangement into pathetic “listing sheets.”  Data integrity is actually a barometer of brokerage oversight, which eventually falls to zero with the existence of MLS systems.
3. MLS “organizations” are dominated by No Men. These are the programmers, directors, engineers and others at the “software/hardware” department who essentially say “No” to anything brokers want to do with their own data. No, you can’t use your data in the ways you want. No, we can’t add that field. No, you can’t store more than 20 photos. No, you can’t feed your data by FTP but must type it in manually. No, it doesn’t work on a Mac. No, it won’t work with Internet Explorer (any new version for weeks). No, we won’t program it to look good on a smartphone. No, No, No. We won’t let you ruin our nice, neat little database!
4. MLS rules are anti-competitive. Forget any legal rulings, because they are meaningless. What’s anti-competitive about MLS rules is that they continually suck the life out of any competitive advantages a broker might try to implement. In a death by a thousand cuts, brokers are prevented from using their own data in ways they want - such as watermarking a photo or filtering certain results on their web page. They are forced, through horrific concepts like IDX or data-exchange, to display the uber-crappy data/photos of their worst competitors on their own million-dollar-plus websites, simply because it’s all-or-nothing in the rules. If one broker invest huge sums of his own money to get ahead with new feature on his website, you can be sure his competitive advantage will be diluted once the “MLS” adds that same feature for everyone else to benefit from later - at a group-subsidy rate.
5. MLS systems inhibit business model innovation. What if your company didn’t want to market properties by price - just features or neighborhood or some other feature. No chance, say the MLS software priests: price is a “required field” no matter what your marketing plan, simply because the gestalt says so. Want to link-out to your own video library. Nay, ye aren’t permitted, sayeth the Village Elders. We don’t supporteth links to the external world. And any further attempts to innovate or trick the system will land you in the Tower of London, you blasphemer!

That's the first five... want to read the other five reasons why MLS is dead? It's on our site at http://www.matthewferrara.com/rss/10deadmls