MLS, Meet the Internet

Five MLSs, and their respective boards, have added--or switched to—Internet technology. Here are their stories.

January 1, 1999

The industry is buzzing these days over the debate about unplugging existing MLS systems in favor of Internet-based systems or running the two types in tandem.

Although only a handful of MLSs in the country have adopted Internet technology so far, many others are researching the available products, asking questions about the costs and benefits, and considering whether—or when—to make the jump, say the heads of MLSs that have already done it. In fact, REALTOR® Magazine Online found another major metro area establishing an online MLS shortly before this article went live at the site.

The trend is likely to grow as MLSs continue to regionalize, existing proprietary computer systems become antiquated, multiyear MLS vendor contracts expire, and salespeople become more familiar with the Internet.

Not surprisingly, the early adopters include one of the country's biggest metropolitan areas as well as some of the second-tier cities, such as technology hotbed Seattle.

More than a dozen MLS vendors, including familiar names and technosavvy newcomers (Moore Data, Quest Technologies, Interrealty, and GTE), are touting variations of the Internet-based MLS. The new systems include public access to MLS data through the Internet as well, although sensitive information, such as property addresses, sales commissions, and practitioner-only remarks, is off-limits to consumers. Think of the public version of these sites as regional property listing sites akin to REALTOR.COM.

How was it for you?

Some early adopters say the transition from a proprietary MLS to an Internet-based MLS was traumatic for brokers and salespeople; others say their launch went smoothly. Direct and frequent communication with the brokers, intensive training for the salespeople, and running the existing system in tandem with the new one seem to ease the pain. Most pioneers believe the universal access and fancy search capabilities offered by Internet technology are worth the uncertainty and techno-stress of the training and start-up phases.

"Our primary objective was to create an MLS that didn't require proprietary software," says Jim Naccarato, president and CEO of the Wasatch Front Regional MLS in Salt Lake City. "We wanted an open data base. We wanted to use current technology. So, we went to a open database and an off-the-shelf-type of software. The transition has been fairly successful, [although] we have run into some problems as I'm sure anyone would expect with [new] technology."

Transition problems aside, experts caution that the technology is in its infancy. "Access speed is critical in the MLS. The Internet still faces bottlenecks and at times is very slow--not an ideal situation when you're sitting with a client," notes Bob Goldberg, senior vice president, marketing and business development, for the NATIONAL ASSOCIATION OF REALTORS®. "When the overall speed improves so will the willingness to use it as the standard."

For most, money hasn't been a problem. The costs of introducing Internet technology have been borne mainly by the MLS operating companies, many of which are association-owned nonprofits. Exact figures aren't disclosed, but MLS executives say the costs were far from burdensome and had little or no impact on monthly fees paid by MLS members. In Seattle, for instance, the MLS charged salespeople $30 for the proprietary browser software and $30 a month for usage fees--no different from the fee they paid under the old system.

And in some areas, sales associates have saved as much as $19.95 a month by canceling another Internet access account, because their new Internet-based MLS duplicates their former provider's browser access and E-mail services.

However, brokers and sales associates have also faced the additional costs of upgrading their computer equipment and adding high-speed telephone capabilities to take advantage of the MLS enhancements.

Tennessee MLS breaks with tradition

Perhaps the biggest success story so far in terms of committing completely to an Internet-based system has been the Middle Tennessee Regional MLS's. It switched from the existing system to one with an Internet browser on the front end; SQL server at the back end; and TCP/IP, a communications protocol for Internet communication, on Jan. 1, 1998.

At the time, only half the 5,700 members were up to speed on the browser. Everyone else jumped on board within a few months.

No doubt the three full-time and two back-up technicians MTRMLS hired to train members and implement the system contributed to the success of the transition. "We also have a communication person who does mailings and training programs and manuals," says Stuart White, president and chief operating officer of MTRMLS. "And we hired a director of customer happiness, who visits offices that need help. We inundated members with as much help as we could provide."

Brokers and salespeople weren't thrilled about the expense of upgrading their computers to use the new system; however, meetings with the MLS and its technology partner convinced the brokers of the need for the investment. "It's a known fact that everything is going to technology, so they had to bite the bullet and do it," says Liz Kemp, 1998 president of the Greater Nashville Association of REALTORS® and an associate broker with Barnes Real Estate Services in Nashville.

Costs to MTRMLS included a monthly fee for leasing the equipment it needed for the new system and "astronomical" phone costs, according to White. He notes that costs to members under the old and new systems is about $37.

The genesis of MTRMLS' new system began with a debate between the MLS and its former vendor about which of them owned the listings data in the existing system and evolved into an effort to broaden the MLS's strategic vision. "We wanted an open platform. We wanted to be able to move quickly if technology changed. We wanted standard software," says White. "Our ultimate goal is to be able to use the information in a way that members can input listing information once and publish it [repeatedly], whether for advertising, Web sites, or even transaction management systems," he says. That is, White and others hope the system will enable users to import listing data directly from the MLS into newspaper ads, flyers, Web sites, and other marketing venues.

A transaction management system, by the way, is an electronic method for tracking all the components of a transaction from listing agreement to closing. "We envision a process by which the listing and selling salespeople can tell what's been completed or when activities are scheduled to be completed," says White.

MLS Net browser wows Seattle members

Given the West Coast's technology bent, it's not surprising that nearly half the Northwest MLS's 13,700 members have paid a one-time $30 fee for a customized Internet browser that enables access to a new Internet-based MLS. Feedback is favorable.

"It's absolutely wonderful. I think it's faster, and I like some of the search formatting better," says Rose Galloway, president of the Seattle King County Association of and an associate broker with Windermere Real Estate in Federal Way, Wash. "One benefit is that if I'm at the home of clients who have [a computer with] Internet access, I can access the MLS right in their home and answer any questions that come up." (Under the old system, you'd need a computer with the proprietary software to get into the MLS.)

The browser option has been available since June 1997, and new features, such as a CMA application and the ability to input listings online, are scheduled to be added soon.

Use of the Internet browser is voluntary, and there are no plans at present to shut down legacy system, which is running in tandem with the new system and which is still the only way through which to input listings. "Our philosophy is to provide choices. When we come out with something new, we're not taking away the old necessarily," says Jack Johnson, president and CEO of Northwest MLS in Kirkland, Washington.

Utah brokers prefer sticking to tradition

An open system was also a priority in Salt Lake City where the 6,200-member Wasatch Front Regional MLS runs an Internet-based system that can be accessed with just about any Internet browser.

"The primary objective was to create an MLS that didn't require any proprietary software. We now have an open platform that allows us to collect data that's on the Internet and other open platforms. In my mind, the charge for the MLS is to provide and interpret data so that members can use it to sell real estate," says Jim Naccarato, president and CEO of the MLS. "We've been able to provide much more information and many more services," he adds. The intent is that the system will eventually enable users to easily access other information, such as tax records, which you can't access via a legacy MLS.

Nonetheless, sales associates throughout the state are unhappy with the system, says Mary Ann Brady, 1998 president of the Salt Lake City Board of REALTORS® and a sales associate with Louis, Wolcott & Dornbush in that city. "The biggest complaints are that the system is too slow, it drops data, and you can do a search one minute, then do the same search 10 minutes later and get different results," she says. "It's been a very painful transition, with a lot more problems than anticipated." The system was introduced in August 1997.

Naccarato says much of the discontent would fade if people knew how to properly use the system. "We started training a year ago, but people said, 'No, we'll learn it when the time comes.' The time is here, and they still don't want to learn it, so we're the ugly stepmother making them do things they don't want to do," he says. "The other issue is that the new technology requires considerably stronger telecommunication links and some upgrading of existing salesperson and broker equipment. We're lucky to have ISDN and frame-relay available at a fairly reasonable price. The problem is, many practitioners don't want to be bothered [with the technology] and say, 'I just want to sell real estate.'"

Atlanta: Internet MLS training top priority

Real estate practitioners in Atlanta have two MLS services with territories that partially overlap each other. The smaller of the two, Metro Listing Service, unplugged its legacy system in late 1998 and now uses an Internet-based system. Metro hired a PC company to train practitioners months ago. One month before the changeover about 7,000 of the 11,000 members had completed the training and received a password for the new system.

Another 1,500 members were expected to be ready in time, but the rest face a rude awakening. "We've been working on this since January 1998, and the system change was brought up at the meetings," says Van Johnson, broker-owner of RE/MAX Executives in Atlanta. "Some people said, 'Do you think we ought to wait?' But everybody else said, 'Hell will freeze over before some of these folks get their training. He who hesitates will be out of it.'"

The training program consists of three three-hour classes in computer basics, Internet basics, and the new MLS system. Each class costs $40, but technosavvy sales associates can skip the first two classes by passing an Internet proficiency test and paying $10.

A few months' time should reveal whether Atlanta's experience will be as sour as Utah's or have the happy ending enjoyed by Middle Tennessee and Washington state. Either way, other MLSs are sure to follow—and learn from—the lead of these four pioneers.

Gigantic Chicago-area MLS looks to the Internet, too

Multiple Listing Service of Northern Illinois in Lisle, Illinois, plans to begin offering Internet browser access directly into its legacy system in January 1999. "We have a Moore Data Compass system that we've hooked up to the Internet," explains CEO Jay Huffman. "Subscribers can [access the database] using Microsoft Internet Explorer or Netscape Navigator." A public site is expected to debut in March or April.

Initially, browser users will be charged an extra $74 annually. "We don't anticipate that all of the subscribers will take advantage of it. We don't want the ones who don't to subsidize those who do," Huffman explains.

The biggest challenge in implementing Internet browser access is members' "general unfamiliarity with the capabilities of technology," Huffman says.

He guestimates that only one-fifth of the MLSs 27,000 members are using the Internet. Some of the REALTOR® associations in the metropolitan area conduct Internet training, and the MLS is looking at training specifically on using a browser for MLS access. The existing dial-up access won't be disconnected for at least two years.

So, What's an Internet-Based MLS?

The phrase "Internet-based MLS" is something of a misnomer because these newfangled MLS systems aren't on the Internet in the usual way. Rather, these systems are private password-protected intranets that incorporate the Internet's widely accepted standards for open platforms, hotlinks, and programming languages.

Replacing older technology (often referred to as "legacy") with Internet technology opens up a whole new world for MLS users. Existing--or legacy--systems generally are direct dial-up accessed, closed, and proprietary. That means they can't easily communicate or share data with any other computers or networks. (For instance, REALTOR.COM must pull information from proprietary MLSs through a file-tape system.) Internet systems are browser-accessed, open, and standardized. They can communicate and share data with just about any other Internet-based computer or network and users can link from the MLS database directly to other sites on the Internet.

The simplest way to conceptualize the technology of MLS systems is to think of them in three parts. The first part is the software application that users employ to access the system from their computers. The second part is the communications protocol that is used to transmit the data from the MLS to the user's computer. And the third part is the hardware that stores the listings data.

Proprietary legacy MLSs are islands unto themselves. They use specialized custom software applications, dedicated dial-in telephone services, and older communications protocols for data transmission. To store the data, they generally use old mainframe-type computers running the UNIX operating system or a proprietary operating system developed by the manufacturer or the MLS vendor. These older closed systems are many times more expensive to design and support.

In comparison, Internet-based systems use off-the-shelf Internet browsers, such as Microsoft Explorer, Netscape Navigator, or AOL's user interface or customized versions of those browsers. They connect to the MLS through an Internet service provider using the TCP/IP communications protocol. Internet-based systems tend to use Microsoft's SQL (pronounced "sequel") Server and standardized Internet programming languages like HTML.

By matching the conventions and requirements of the Internet, these open MLS systems can network with the global communications village.

Marcie Geffner is a freelance writer based in Los Angeles.

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