Takeaways:
- The Broker Public Portal has released a draft version of the data license agreement it hopes to sign with the multiple listing services participating in its site.
- The agreement includes terms regarding FSBOs, sold listings, listing data display and indemnification, among other items.
- BPP is asking for industry comments on the draft by end of day Aug. 24.
Imagine a hugely popular national real estate site where listing agents get every inquiry about a property because there are no competing agent ads next to their listings.
That’s the vision of a group comprising more than 100 MLSs and brokers who are on a quest to build the first national consumer-facing MLS listing portal. It’s called the Broker Public Portal, and now that the group has officially become a company and elected its leaders, it’s opening the kimono — at least partway.
The Broker Public Portal has released a draft version of the data license agreement it hopes to sign with the MLSs participating in its site and wants your opinion of the terms.
Victor Lund of WAV Group
BPP wants to create the most “likable” agreement possible by opening it up to everyone in the industry for comment and ironing out anything objectionable, Victor Lund of WAV Group told Inman. WAV Group provides consulting services to BPP.
The draft agreement — designed to favor MLSs and brokers — offers a window into the kinds of terms that are acceptable when MLSs are licensing data to an industry-controlled entity rather than to portals such as Zillow and Trulia.
The agreement’s terms also indicate what industry players think will help BPP be competitive. Home value estimates on active listings, for example, are unrestricted.
By creating a standard agreement, BPP hopes to avoid the transaction costs of negotiating separate data licenses with every MLS or broker that wants to be part of the portal.
But whether they achieve that goal remains to be seen, given there are some 800 MLSs and exponentially more brokers nationwide.
Zillow — BPP’s prospective top rival — receives direct feeds from thousands of brokers and MLSs.
The agreement’s initial “development term” will end in three years or when the portal website is released, whichever comes first. The subsequent “operational term” will last for one year and auto-renew for one-year terms unless terminated.
At the end of this month, the three work groups tackling the agreement, BPP’s branding and its technology RFP (request for proposal) will submit their work to BPP’s board for consideration in September, Lund said.
The draft will change as comments are reviewed, but here’s a look at what’s currently in and what’s out:
Opt-out vs. opt-in
MLSs will provide the licensed data on brokers’ behalf on an “opt-out” basis. This means that only the listings of brokers who have actively said they do not want their listings sent to BPP will not be included in the data feed.
“BPP views the opt-out model to be critical to the success of BPP because an opt-out model enables BPP to more efficiently serve its stakeholder MLSs and brokers,” wrote attorney Mitchell Skinner in a letter calling for comments on the draft. BPP retained Minneapolis law firm Larson Skinner to develop the data licensing agreement.
However, if the MLS does not provide data to any other consumer-facing site or app on an opt-out basis, an MLS may provide data to BPP on an “opt-in” basis, meaning that brokers must actively choose to send their data to BPP in order for it to be included in the feed.
Sold listings
The licensed data will include active listings and sold listings, unless the MLS does not provide sold listings to any other consumer-facing website or app.
“BPP leadership feels this is a fair middle ground for BPP, MLSs and brokers,” Skinner wrote.
Mitchell Skinner of Larson Skinner
“If the MLS has a policy of not providing sold listings, it won’t need to, but if the MLS provides listings to another public facing website or app, it should also provide them to the portal that seeks to be the most industry-friendly portal.”
The licensed data will include listing records of all categories, including but not limited to single-family, multifamily and condominium residential; lots and land; and commercial.
FSBOs
BPP will not commingle for-sale-by-owner properties (FSBOs) with the licensed data, including in search results and results displayed on a map.
This means that BPP could potentially have FSBOs on its site but not commingle them with MLS data, although that’s “not the intent,” Lund said.
“The intent is to display listings from MLSs that brokers authorize. If they choose to have a FSBO region of the site in the future, they could absolutely do that. This site is owned by brokers and MLSs so it will reflect their interests.”
BPP also will not make any changes to the way MLSs operate. Therefore, if an MLS accepts listings from limited-service brokers that, for a flat fee, list properties in the MLS but do nothing else for sellers, those listings would be considered MLS listings and accepted in the data feed, Lund said.
AVMs
The current draft of the agreement contains no restrictions on the display of home value estimates.
In a previous comment period limited to MLS participants of BPP, the “consensus was that MLSs are comfortable with the display of estimates of value on active listings in order for BPP to be competitive,” Skinner said.
“Commenters recognized that a good valuation model, based on local data, could be a competitive advantage for BPP.”
When asked whether this was a surprise given many real estate pros’ hostility to Zillow’s Zestimates, Lund said he expected there to be language added to the agreement allowing brokers to opt in or opt out of displaying home value estimates.
“Brokers have the choice to display their listing on the Broker Public Portal or not, and they have the choice about what to display on their listings, should they find things to be offensive,” he said.
The draft agreement prohibits BPP from retaining listing data that an MLS has removed from the data feed and from using it to compile “historical or statistical information.” This means the MLS listing data provided to BPP cannot be used to create home value estimates.
Instead, BPP would use one or likely multiple services to display automated valuation models (AVMs) to show the variability of such estimates, Lund said. He cited several potential AVM sources, including CoreLogic, Black Knight, Zillow, Collateral Analytics, RealtyTrac and Realtors Property Resource (RPR).
“A contract like this allows for something to happen, but doesn’t necessarily detail its execution,” Lund said.
Listing display
Industry-devised “fair display guidelines” are baked into the draft agreement. This means BPP will have no featured listings or ads for other brokers or agents next to a brokerage’s listing and will send free leads to listing agents and brokers.
“There’s a uniform display. We believe that’s going to be a consumer benefit,” Lund said.
There’s nothing more confusing to a consumer than to connect to an agent who has never seen the property before, yet “it happens all the time,” he said.
Listing detail pages will display “in plain sight” the listing agent and broker’s name, office name, address, email address and phone number, and the agent’s team name if it’s provided by the MLS.
BPP and how it will display on different devices has yet to be designed, but the reference to “in plain sight” indicates BPP’s intention to make it easy for consumers to reach out to the listing agent or broker rather than hiding their information from view, Lund said.
Ads can appear on the site so long as they are not on listing detail pages, but if they are for brokers or agents other than listing brokers or agents, they must be clearly distinguished from listing content.
BPP must post a redirect link provided by the listing broker on listing detail pages and cannot interfere with the search engine optimization (SEO) of those links. This means that BPP will not add “nofollow” tags to redirect links, Lund said. Such tags tell search engines not to crawl certain links.
Indemnification
Legal liability has been a concern for some MLSs in negotiating with third-party portals. The BPP draft agreement says BPP will indemnify and defend the MLS and its customers, among others, against any losses, damages and costs arising from any third-party claim of intellectual property infringement, “except for such claims that are based solely on the Licensed Data.”
This means that if, for example, a broker authorizes the MLS to send a photograph to BPP and someone claims copyright infringement of that photograph, that claim would be passed on to the MLS, which would then deal with the broker, Lund said.
“The MLS already manages that relationship today. In most MLSs if you submit content to the MLS, the broker is warranting that that content is allowed to be used,” he said.
“It goes back to the person who supplied the information.”
In addition, any party that breaches the agreement agrees to indemnify and defend the other parties from claims arising from the breach.
Noncompete
While the agreement is in place and for one year thereafter, BPP will not compete with the MLS by providing a platform for real estate brokers to make or receive offers of cooperation and compensation.
Although some previous commenters noted that the noncompete should be longer than one year, many jurisdictions will not enforce a noncompete longer than one year, Skinner wrote.
Agent reviews
BPP will not display reviews of agents or brokers unless the agent or broker chooses to allow reviews.
Syndication
BPP cannot syndicate to third parties. It will also not permit framing of its site.
Fees
The draft agreement does not specify the fees MLSs will pay to participate. BPP leadership is still considering the fees, Skinner wrote.
“BPP does not expect MLSs to enter into an agreement where MLSs [do] not first know the fees and payment terms,” he added.
“At this time, BPP leadership does not anticipate that any fees will be charged during the Development Term of the Agreement.”
Cost will not be different from one market to another, according to Lund.
“It’ll just be a flat cost for anyone participating. They’re going to have to make a determination whether it’s per subscriber or per listing. I would just say that it’s going to be fair, balanced and equitable for all parties,” he said.
BPP is not an MLS
The agreement says, “BPP may not provide consumers any interface, URL or marketing language that purports to allow them to ‘search the MLS’ or ‘search all homes for sale,’ or make any similar assertion about the completeness of the listing data.”
This is both to make it clear to the consumer that BPP is not an MLS and to avoid any legal liability from consumers thinking that BPP has all the listings, Lund said.
Ownership
Earlier this year, Brian Larson of Larson Skinner cautioned MLSs against accepting a standard agreement when negotiating with portals.
“[W]orking with the portals to develop a standard agreement is negotiating against yourself. Such documents may have real value, but you must regard the terms in them only as a floor and not as a ceiling,” Larson said in a blog post.
“Starting with an agreement that the portals have already said they’d be willing to sign is potentially leaving a lot of value on the table. You will never know whether a given portal will agree to a term unless you ask for it.”
Lund said BPP’s agreement is different from standard agreements with other portals because it’s “pro-MLS, pro-broker, pro-agent and pro-consumer.”
“This is like the MLS licensing data to itself, not a third party. It technically is a third party, but like an MLS licensing data to its shareholder subsidiary. [They are] part and parcel to one another.”
So far, 101 brokers and MLSs have contributed $5,000 each in seed money for the project.
“Those initial monies will be turned into units — LLC term for shares — when the unit price is set at some point in the future,” Lund said.
MLSs that participate in BPP will also be asked to contribute a yet-to-be-determined nominal fee, perhaps $100, that will get them an ownership stake in the company, Lund said.
“It’s really a gesture. The idea is that it’s owned by the people who benefit from it,” he said.
“They’ll be eligible for the board. They’ll be able to vote their units. They’ll be able to participate in the governance of the organization. The units themselves cannot be resold or retransmitted. They have no value other than to provide you with unit-holder rights,” he added.
BPP has not yet determined whether one participant will be able to buy more units than another, Lund said.
He himself does not own any part of BPP, he added. Only MLSs or brokers can be owners, he said.
Separate agreements
Lund said he does not yet know whether BPP will negotiate separate agreements with MLSs or brokers if an MLS does not want to agree to the final version of the standard agreement.
“This is why we’re going through this commenting phase right now … so that we can ferret out any problems that the agreement has today so that we don’t have to go negotiate a lot of separate agreements in the future,” he said.
“I believe if somebody brought a really good reason to alter this model agreement to the Broker Public Portal, it would go the board of directors, we’d discuss it [and] if it was a good idea, we’d make the change. If it’s a change, it should be universal; there shouldn’t be any exceptions.”
If an MLS does not want to participate, there’s nothing prohibiting a broker in that market from sending data to BPP, Lund said.
Got an opinion of the terms? Email bppcomments@larsonskinner.com by end of day Aug. 24.
