What a difference a decade makes!

Picture someone standing before a group of real estate professionals 10 years ago and predicting that open information networks would enable a diverse array of real time, property information products to be accessed over a common information platform. He or she would have been subject to stares of disbelief, polite applause and no few skeptical smirks. After all, experience had shown that real estate information was always closely held, difficult to obtain and expensive to update.

But in a few short years, our Internet-driven society has become the most information-empowered generation in history, and real estate has been at the forefront of change. We have liberated information by transitioning to open data networks, interconnected by enabling technology like XML. And it’s hard to believe that we ever lived and worked any other way.

MLS boards are rapidly converting from closed-loop information networks to Web-based systems that are more current, comprehensive and, most assuredly, easier to use. Web-based MLS users know more about their markets, react faster to market changes and provide a level of customer service not dreamed of a few short years ago. They connect with the latest information, and to each other, using numerous electronic channels that keep them constantly informed.

Web-based MLS systems provide a host of obvious user benefits: real estate listings are more current, comprehensive and easier to access, because true Web-based systems employ the latest database designs, enabling real-time updates. Presentation quality and user experience are enhanced through the use of graphics, navigation tools and specialized applications, like mapping and digital photography. Also, Web-based MLS systems are accessible using a host of desktop and hand-held applications that keep users close to a new world of information, and to each other.

These functional improvements are complemented by operational efficiencies that make Web-based MLS systems easier to maintain, and which provide a fertile environment for new applications development. These efficiencies allow MLS software organizations to deliver on the promise of faster, cheaper and better—long the performance trajectory sought by information technology organizations.

Traditionally, MLS systems consisted of property listings provided and maintained by its members, complemented by a relatively small number of third-party databases such as tax assessment and deed transfer files licensed from specialized providers. These databases were developed and maintained through bulk data fulfillment processes—literally delivered in flat-file records on nine-inch magnetic tape reels, from which MLS vendors extracted data to develop and maintain specialized files. Property files were updated infrequently and at considerable expense because they involved complicated production and development processes. Users had the convenience of multiple data sources available through a single platform, but the information often lacked detail and certainly suffered from the latency caused by a protracted production process.

Each third-party data relationship had a high attendant licensing and operational cost, so MLS organizations entered into relatively few data licensing relationships. Consequently, MLS members who relied exclusively on the MLS system for listings and property information had limited data options.

In the new Web-driven era, data relationships between MLS systems and third-party data providers are dynamically maintained across a common information network—the Internet. There is no longer a need to engage in complex arrangements involving periodic bulk data fulfillment. MLS members using a true Web-based system can order and receive the latest market, demographic and property information on demand from databases maintained by third-party providers.

Improved data connectivity has reached the market at the same time that use of the Web by consumers and real estate agents is soaring. The result is an unusual nexus, where technology’s capability is coincidental with user demand for real-time data. Consequently, conversion to a Web-based MLS platform is neither risky nor costly; it is a pathway to improved data performance and user productivity.

Users of Web-based MLS systems have a greater variety of data choices, thanks to a growing number of quality providers eager to participate in an open data network. Traditional data providers unable to communicate interactively with Web-based MLS systems are giving way to alternative sources that can deliver more current and reliable data using transaction-based technology such as XML.

A true Web-based MLS offers data providers a flexible point of entry. Because of technology like XML, where customized data streams can easily be ordered, retrieved and integrated into Web applications, diverse data relationships are possible. If an MLS adopts an open network philosophy for data exchange, complemented by a Web-based MLS capable of supporting the policy, users likewise have extraordinary flexibility to choose their information sources.

Open information networks create choice and competition and result in better performance. Quality information providers who are dedicated to accuracy and timeliness welcome the opportunity to showcase their capability in these new open networks.

Web-based MLS systems managers following an open systems philosophy can integrate and deliver to its members a wide variety of information products and services. And they can do it quickly and cost effectively, with time-to-market measured in days, not months.

Users of Web-based MLS systems can access a host of new applications while enjoying fundamentally better performance. Using a Web-based MLS, users can easily and dynamically integrate property listing information with tax roll and sales transfer data, improving accuracy and accelerating workflow. Agents and consumers who access public record data can also obtain complementary products, such as tax assessor maps, deed images and property valuation tools.

Best of all, the responsibility for acquiring and maintaining the large public records database now rests with the data vendors, not systems administrators. This enables the MLS to focus the organization’s spending on new user applications sought by his members, like virtual property tours of new listings and transaction management.

Web-based MLS systems provide a powerful one-two combination of low cost and improved functionality. More significantly, they open the door to open information networks and greater competition. Thus, they provide an unprecedented return on technology investment and unparalleled end-user efficiency.

How long before Web-based MLS platforms become the industry standard? As quickly as contracts that govern traditional, closed-loop systems come up for renewal. Given the benefits of new technology, there is no comparison.

Tim Kennelly is vice president of national accounts for First American Real Estate Solutions, a member of The First American Corporation (NYSE: FAF) family of companies.

Published: July 22, 2002

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