By Susan E. Campbell
A Multiple Listing Service provides up-to-date databases of properties for sale that those in the real estate industry use and rely on regularly.
Sellers get maximum exposure to a regional market of prospective buyers. Buyers get quick, and free access to listings and have an easy way to refine searches and make comparisons.
Brokers who help one another sell properties are ensured of receiving a commission for their role in a successful transaction.
Locally, it is taking on a new twist.
But Stuart Thomas of Reality Realty of Saratoga, a director of the Saratoga Schenectady Schoharie Association of Realtors Inc., said he had an issue for decades that he and some of his long-time associates have recently resolved.
Thomas has taken the lead in creating a new kind of MLS, called First Choice MLS. He said it is the first known service that monetizes an MLS. It becomes a source of income for real estate professionals, even if the properties they list don’t sell during the six-month contract period.
According to Thomas, it is so easy to get listing information from the internet that all sorts of firms are drawing from these free databases to market their own products and services. For example, a moving company competes for the business of recent sellers looking to truck their furniture to their next home. Or a mortgage company looks to MLS as a source of leads for new mortgages or refinancing.
Address and demographic details for local listings are easily available at an MLS and other websites like Zillow. It only takes a few minutes to look up the homeowner’s name from the local town assessor’s website to finish creating a lead.
A direct mail package is compiled and sent to the seller’s home. If a moving contract is later signed, the company adds to its bottom line. But the one who posted the information is never compensated, said Thomas.
“Companies are making millions of dollars this way,” he said.
Thomas said when a listing is posted on MLS, the agent who writes the property description, collects all the data, takes photos and puts the property in the best light has a copyright on that document. The broker firm that manages the agent has a level of copyright as well, because it is up to that entity to maintain the integrity of the information published.
Finally, the MLS has a third layer of copyright. While this information is not accessible to the general public, the MLS maintains a compilation or “living listing” of the owners’ names, price offers, and other details that it essentially owns.
Thomas said that in every other industry, if someone uses copyrighted information they must seek permission and agree to pay for it. That will now apply to the new MLS.
“Brokers don’t realize they have been giving their rights away,” Thomas said. “So we are looking to create something more equitable.”
First Choice MLS has a new paradigm where real estate professionals can get compensated through a program called Royalties for Realtors.
“We rely on syndications and advertising to make that revenue stream available,” he said. “We will get strong support because we are seeking to do right thing for brokers, advertisers and the community.”
“The majority of homebuyers buy a home within 50 miles of where they are currently living,” said Thomas. “We have been negotiating to get local advertisers less expensive ads. Then communities in turn support the local businesses.”
“We want local businesses to get exposure,” he said. “The theory is community inclusiveness. If the advertiser is a big company with a local presence, like a big box store, that’s fine.”
First Choice MLS will take revenues from subscriptions, like any MLS, although the structure is different. Instead of paying a flat subscription fee of $500-$600 per year, First Choice can be joined quarter-to-quarter, if that’s what is best for a broker’s business model. The quarterly fee is $100 for an association or board member, otherwise $130 per quarter, he said. Any real estate professional can also post a single listing for $50 without becoming an association or board member.
Thomas said First Choice MLS was not designed to replace any particular MLS that agents may be using now. His real estate firm subscribes to four different MLS services to reach the markets it serves. Some Realtors don’t subscribe to an MLS at all.
“Many people don’t know that MLS subscription is optional,” he said.
For those who do subscribe, Thomas said, they can market their listings in as many places they choose, “but only First Choice MLS is willing to pay a royalty to compensate for the copyright.”
There is nothing proprietary about the new service or its software, Thomas said. There is no plan to franchise the concept. Thomas said he foresees opportunities to expand Royalties for Realtor into other areas without sacrificing his goal of enriching the community where he and his clients live, work and shop.
For more information, email Stuart Thomas at email@example.com.