At ICNY, proptech leaders Eileen Romito, Derek Hooper and Catharine MacIntosh explained how cumbersome MLS rules led to the rule of real estate portals, and what can be done to take the power back.
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While most of the industry is focused on the escalating battle between Zillow, Realtor.com and Homes.com, proptech innovators Eileen Romito, Derek Hooper and Catharine MacIntosh say there’s a better path — if agents, brokers and tech leaders are willing to fight for it.
“What you’re seeing happen today with the portals is a more transactional experience for the buyers. They’re being turned into leads,” Hooper told the Inman Connect New York crowd on Thursday. “It’s not as relationship-based as it maybe once was, so that’s the opportunity for the industry to come together and find ways to create those engagements with the clients sooner and give them great tools to see the value in the Realtor.”
The trio said portals’ dominance is tied to antiquated multiple listing service (MLS) policies that have created a highly fragmented and cumbersome experience for agents.
“In your MLS, of course, all your different brokerages can share their listing so that you don’t have to miss out on that, and the challenge is that is not happening at the MLS level,” said MacIntosh, who is the founder and CEO of Listed. “As long as that doesn’t happen, you hit a wall when you’re an agent.”
“Agents in certain areas can’t serve [up to] 53 percent of the market unless they join multiple MLSs,” she added. “There is another way, because you know who can go outside the boundaries of MLSs? Brokerages and portals. It’s very interesting. And I think a lot of work needs to be done.”
Zenlist’s Romito said it’s up to the proptech industry to create tools that enable agents to reclaim their spot as consumers’ entry point into the market, especially as a growing list of buyer-broker commission lawsuits cast doubt on agents’ value.
“When you look at the way the industry is set up, it’s not setting you up for success with upcoming changes from a technology perspective,” she said. “The buyers are expecting professional tools out of you. And when their alternative to what you’re giving them is Zillow, they’re going to go to the portal.”
“There needs to be tools that you can offer them to provide an elevated professional level experience, along with all of the knowledge that you have,” she added.
Hooper, who is the founder and CEO of off-market listing platform Knokd, said the current system tends to treat sellers as a monolith and gives agents little flexibility in meeting specific consumers’ needs.
“That’s one of the challenges with some of the regulations around MLSs and posting and public sharing of off-market listings,” he said. “It’s not giving the agent the tool to respond to the specific needs of the customer.”
“I just have a strong belief that, as a Realtor since 2009, the Realtor should have a tool in their back pocket that can help them respond, and then strategies can include both the off-market exposure and the MLS,” he added. “But that should be left to the professionals, like the ones in this room, to talk to the seller and see what’s best.”
Although off-market listings are undeniably an important tool for agents, MacIntosh and Romito said they threaten consumers’ rights to see the full range of options in their market. To mitigate that risk, both women said the industry has to have a strong set of standards and regulations that prevent agents from abusing the tactic.
“We just want to make sure that the consumer is getting the choice and able to do that,” McIntosh said while urging agents to join groups like the Real Estate Standards Organization. “A commercial agent was joking about the difference between commercial real estate and residential real estate and just saying, ‘It’s the Wild West.’ We cannot lose this technology to the MLS.”
Looking forward, Romito said the industry has the foundation and structure to create a more effective MLS system, if brokerages are willing to jump into the fray and advocate for necessary changes.
“I believe that a rising tide lifts all ships and MLSs and brokerages need to work together,” he said. “But we have a lot of stepping stones to jump across in order to service our customers because every single customer has a different MLS, or they might have agents across 15 MLSs and their data is the same.”
“So we’re big proponents of RESO because that’s so important to innovation,” she added. “Standardization results in good outcomes for technology or your agents.”
Email Marian McPherson