Why we Won't Sell IDX to Everyone

Services for Real Estate Pros with iHOUSEweb Inc.

IDX (Internet Data Exchange) allows agents and brokers (and their clients!) to access MLS data from their websites. For IDX to work, the IDX provider needs to have an agreement with the MLS, allowing them access to what is called FTP feed data. IDX providers are constantly working on forming new relationships with MLS boards and expanding their reach to new areas. The IDXPro Support team has worked tirelessly to acquire new agreements, and with over 320 MLSs IDXPro has one of the largest reaches of any IDX provider. That said, there are about 700+ MLSs in the US. Our 320 number may not sound so great now, but the truth is, it is impossible to have agreements with every single MLS in the country, no matter how hard we try or how much we want to.

Why, you ask?

1) Some MLSs haven’t digitized their data yet. Really? Yes, it’s true.  Real Estate is a field where people tend to be early adopters of new technologies, but that doesn’t always hold true. Is your board still only using listing books? Then we can’t sell IDXPro there (and neither can anyone else). Until every MLS has an FTP Data feed for IDX providers to access, 100% MLS coverage is out of reach.

2) Some MLSs have a data feed, but it is not available to Third Parties. In some cases this is because the board wants to sell their own IDX solution and wants to eliminate competition. In other cases the board has made a long term agreement with a single IDX Provider. Sometimes they negotiate a "discount” for their members, but even if they do, the agents lose out on the competitive benefits of a capitalist marketplace.

3) Some MLSs Charge for access to their data feed. This runs the gamut from reasonable to outrageous. If the fee is high enough and/or the board is small enough, we run into an issue where we could sell IDXPro but not make a profit. Usually we have to pass those fees on to our customers, which sometimes means the total cost is more than the local market is willing to pay. The fees are often in place to pay for the service that created the FTP feed in the first place and that is fair enough. Sometimes though, it is just another way to discourage third parties from entering the market. (Even if that is not the intention, it can definitely be an unintentional effect.)

4) Some MLSs only allow Brokers to use IDX products. This is less of a problem for IDX providers like us, but it can make it more difficult to get the first customer we usually need to establish a connection. (After all, why have a data feed from an MLS if no one is using it?) If you are not a broker, you might feel strongly about this particular MLS rule. Even some brokers may feel strongly about it, since it often does not work out well for either the agent or the broker. Consider this: Fewer potential customers for IDX Products means less competition among IDX Providers like us. This could lead to lower quality MLS Search products at higher prices. Also, it has been proven over and over again that agents doing more business, more efficiently, can only be good for their brokers. And in this day and age, every agent should have an MLS Search solution available for their clients (and future clients!).

Some MLSs have a rule (which is more of a midpoint between brokers only and total access) that agents can use whatever IDX product their broker uses. This is part of the logic behind the IDXPro Office package, which comes with additional “Agent Links” at a reduced cost, allowing agents to have their own search page without pointing to their broker’s site.

On a basic level, this all comes down to economics. When a board sets very restrictive rules and lots of barriers to entry, you end up with fewer options to choose from for your MLS search, and they tend to be lower quality and cost more. When there are less barriers to entry, agents get access to the more advanced tools of the online world and at a much better price.

So now that you know our perspective as an IDX provider, feel free to share your experiences with MLS rules by commenting below.


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