On a recent post I did about some implications of the DOJ/NAR VOW settlement, The Notorious Rob left a comment that exhibited some cynicism about how MLSs will react to the settlement. He wrote:

As laid out, the incentives are just enormous for an MLS to create public facing websites, dirty up its IDX rules, and have everyone else toe the VOW line — especially the “signup” requirement that creates a walled garden around listings, except on a MLS website. I just can’t imagine why a MLS would not pursue this strategy.

He based this conclusion on some premises, which I think are generally correct. He said:

1) An MLS public website is not subject to the VOW signup requirement.

2) An MLS can create truly ridiculous IDX rules, because IDX was not covered by the NAR-DOJ settlement.

3) An MLS cannot not prohibit brokers/agents from sending listings to Trulia/Zillow/etc. as that would violate Sherman Anti-Trust Act. But the MLS is not required to provide Trulia, Zillow with any data either, unless Trulia signs up as a broker subject to VOW rules.

Rob accused me of not being cynical—music to any lawyer’s ears. I admit I often have my head in the clouds, but I try to keep my feet on the ground. I think the scenarios Rob described, while possible, are not likely. Here’s why.

First, the “VOW signup requirement” is not all that daunting anymore. So many applications folks use online now require registration. The key is to ensure that the consumer trusts you will not bombard her with crap email after she registers. You cannot use Facebook or MySpace without registering…. In the real estate space, I expect we’ll see more applications that rely on registration, or that at least have an “account” mentality. 1000Watt’s post about Dwellicious suggests that it might be an example.

Second, I think the VOW policy gives many MLSs incentives to make their IDX rules more open. By including more fields and statuses in IDX, the MLSs can make it easier for a broker to deliver information through the more-regulated IDX method, rather than encouraging her to use a VOW, which is harder for the MLS to regulate and monitor. I have MLS clients that have already indicated to me their intentions to take this approach. (In fact, I speculate that restrictive IDX rules will actually make it easier for brokers to get consumers to register for their VOWs. “I can show you X more listings if you register….”)

Third, many MLSs have embarked on “listings syndication,” which makes it easy for their brokers to send listings to places like Zillow and Trulia. We did a whitepaper on syndication this last spring (though it seems hopelessly outdated to me now). MLSs recognize the value they can bring to their brokers with syndication. Some still have “protectivist” tendencies, but I think the trend is moving to more syndication.

As to whether public-facing MLS web sites are good or bad, I think there has never been a debate, really. Those who want to believe public-facing MLS sites are good have argued for that view; those who believe they are bad likewise. Each side ignores evidence that does not support it. We did a whitepaper in May with Focus Forward Consulting (Kevin McQueen’s firm) that addressed some of the problems with the MLS-public-facing debate. Those problems remain unaddressed. Neither the pro-MLS site camp nor the anti-MLS-site camp has shared with the community meaningful data supporting their central arguments. I don’t think anyone wants to pay for research that might prove them wrong….

I suppose one could argue that I’m outwardly optimistic about how MLSs will behave because many of our clients are MLSs, and it’s my job to sing their praises. In fact, I can think of a few of our MLS clients who might take Rob’s cynical scenario to heart. Frankly, though, if most of our MLS clients were that way, I’d be looking for another job.

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