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Real estate data, particularly marketwide property transaction information, is incredibly valuable to businesses and communities. There is a cost to produce it. And the creators of this societally important information resource should be rewarded for its production.
But the creators’ right to those rewards is being increasingly challenged in a dynamic digital marketplace. There’s a need for forward-thinking leadership by formidable industry entities to create a clear defense for it.
MLS data everywhere
The real estate industry that generates this information resource has a perception problem of its own making. Its brokers have democratized property data access through multiple listing services (MLSs) to the point of near ubiquity in consumer technology.
This creates the impression to consumers and industry outsiders that generating and distributing quality real estate information are simple processes that are free to all. They are not. But the illusion is strong.
Today’s consumer experience with MLS data
Agents and brokers working with consumers produce the most timely property information in existence. They aggregate this data into MLSs and license it to be used in consumer-facing apps and websites.
Behind the scenes, this network of licensed practitioners, data management professionals, and technologists are allocating their resources to curate this data set. They ensure its accuracy, timeliness and breadth. They produce property statistics, descriptions, photos, videos, floorplans and digital tours.
The brokers, through the MLS, grant licenses for the data and media’s usage to parties that agree to the rules of participating. This sausage-making process is kept mostly out of sight for the benefit of the consumer experience.
Brokers and agents license the aggregated data from the MLS to power their websites and apps. Popular national property portals, including Zillow, Realtor.com, Homes.com and Redfin, do as well. Real estate listings are instantly populated into consumers’ search results by these MLS-supported systems.
This is the consumer experience: transparent, timely, widely accessible and free. So when new property marketplaces appear online, there is a set of assumptions often made by industry outsiders that seems reasonable at a glance. Sellers want as many buyers as possible to see their listings, and buyers want to see all of the listings, ergo every consumer should want every website to reproduce all listing data.
Assumption-driven development
This simplistic assessment played out recently in a big way. Bing, the search engine and sidekick of Microsoft’s OpenAI-powered chat and Copilot services, released the Bing Real Estate portal.
Bing Real Estate had full MLS property listings with photos, ads for mortgages and home inspectors, and features like the ability to favorite listings, claim your home, and see current valuations like Zillow’s Zestimate. Users of the site, if they browsed past the Bing portal’s primary features, were then directed to the websites where Bing had sourced the listings.
Microsoft didn’t have a license to display this data. The aforementioned property portals displaying it had agreed to licensing terms from the MLS data sources before they were allowed to display it. Bing’s portal had simply duplicated that data from the license-holding portals and displayed it on its own site.
Microsoft found data and media, replicated it, displayed it and surrounded it with monetization features without asking whether it should. Forgiveness seemed to be the preferred ask, versus permission.
Move fast and break things
The Bing brand misusing MLS data might not raise a lot of eyebrows, being such a minor player in traditional web search. But with the advent of AI search integrated into chat, voice and productivity tools, where this property data might end up being employed is an expansive open question.
It’s possible that Bing’s employees didn’t know that they needed a license to display MLS data. With a nod to Hanlon’s razor, there’s wisdom in not attributing to malice that which is adequately explained by ignorance.
Technologists who work for search engines come with a default find-and-repurpose mindset. And entering a space full of what seems to be unlimited repurposed public information, licensing limitations are possibly, even likely, unforeseen impediments.
But assumptions don’t trump facts. Microsoft didn’t have rights to display the data. They were asked to stop. To their credit, after concerted communications by multiple portal organizations, Microsoft pulled down the MLS listings.
Why the fuss?
An intelligent industry technologist and my 11-year-old son both asked me the same question: “Why would anyone want to stop Bing from displaying this information? Doesn’t the seller win? Doesn’t the buyer win? Don’t the agents and brokers, therefore, win?”
Taken standalone, the idea that all parties win with unlimited display might sound reasonable. But viewed within the context of the current industry landscape, those “wins” are hollow.
A seller’s MLS listing today already sits at the top positions of every set of search results from consumer apps and websites, whether visual, voice, traditional or AI-assisted. It takes a consumer just seconds to find any listing they desire through their preferred technology platforms.
It’s virtually impossible that a willing seller and buyer cannot find each other through MLS data on the web today. Only with that understanding in mind does the rest of the calculation for additional uses of MLS data make sense.
So what’s the incremental gain for sellers if another 1,000 unregulated websites carry their listing? It’s certainly not providing a material increase in access to consumers. Practical ubiquity has already been achieved. The potential detriment to sellers is also important to understand.
Understanding the why on rules and licenses
Real estate brokers, through their MLSs, place rules on how their listing data can be used. Brokers work directly with consumers and, over time, have created data usage rules that ensure their clients get broad exposure alongside reasonable restrictions.
For example, sellers in the past told their brokers that they did not want their homes’ listings displayed on websites that promote potentially objectionable content or adjacent to ads for distasteful products. The rules that their brokers employ ensure that an MLS data licensee doesn’t place these kinds of problematic media around their clients’ listings.
The rules create very little effective limitation on the listings’ exposure to consumers, as has been illustrated by the plethora of applications with MLS listings. However, they do create some standards of practice to safeguard the quality of the listings’ reproduction.
Moreover, the aggregated data set also has value to companies that are not providing brokerage services to buyers and sellers. MLSs, with their brokers’ support, are reselling limited data sets to financial institutions through a new initiative called REdistribute. They’re putting a price on the value of MLS data over and above serving the transacting public. And their customers are proving that the data has financial value.
Precedents and policy with Bing
The need to enforce these rules against misuse of the data is clear. Unlimited, unlicensed middlemen inserting ad-filled features into the user experience is not a pro-consumer outcome.
Setting precedent is critical. If any organization, even the most valuable company in the world, can use and monetize MLS data and media without a license or repercussions, then there’s no reason to have any policies or licenses around the data at all. A seller’s interior home photos could be incorporated into any digital display or derivative product by any entity, no matter how offensive or objectionable that venue is to the property owner and the licensed professional they’ve hired to represent them.
So there’s a need for rules and enforcement. Most cases involving MLS data misuse are cut-and-dry. The organization has the license to display the data or it doesn’t. Setting a precedent by shutting down unlicensed uses is not only pragmatic in the short term; it also creates a documented history of license enforcement to support legal arguments in future disputes.
The search engine indexing wrinkle
Bing, being a search engine, invites additional analysis on a narrow topic. It’s an important nuance for industry decision-makers to address: indexing website data for consumer search results.
Most MLSs in the U.S. are operated by Realtor associations, and they abide by MLS policies from the National Association of Realtors. In the policy describing the usage of data feeds known as Internet Data Exchange (IDX), MLS broker participants are defined as the only parties allowed to display this MLS data set. They cannot relicense or sublicense it to some other party for display.
There is a technical clarification in this policy:
“MLS participants may not use IDX-provided listings for any purpose other than IDX display. This does not require participants to prevent indexing of IDX listings by recognized search engines.”
The intent of the policy was to allow search engine results pages to direct consumers to MLS participants’ listings on their IDX-supported websites.
This language surfaced some opportunistic but ultimately facile arguments that the Bing Real Estate portal was actually just indexing MLS listings from other portals for search results. Even Bing Chat’s Copilot, when asked whether Bing Real Estate was simply a search engine results system, said it was not. It was a property portal.
This situation adds depth to the precedent. It creates an opportunity for leaders who make these kinds of policies to refine them for future technology applications.
Google, Microsoft, Apple, Amazon, Meta — the most powerful companies in the world — are all invested in the emerging technology space of information query-and-respond problem solving, whether through a traditional search engine or AI generation. So awareness of this dynamic reality can guide future business practices, recognizing technology possibilities without getting too specific about the ever-changing technical systems themselves.
A number of industry participants have asked about whether the way data licenses describe this situation should be updated. The discussions lean toward considering clarification, such as:
Use of MLS participants’ IDX data in non-participant search results displays are only compliant if they primarily and immediately direct users to the MLS participant’s own display of the referenced content.
This could add assistance in defining disallowed activities by non-participants and guidance for when corrective measures might be needed.
Paying the price, reaping the rewards
The digital real estate marketplace is inherently complex. And it’s clear that MLSs’ rules are providing critical support for its value delivery.
Sellers get predictability, visibility and higher prices through increased demand. Buyers get better housing opportunities through increased supply and timely, accurate data. Consumers and professionals can transact more efficiently through better buyer-to-listing matches in the cooperative market. Markets see more transparency, liquidity and frequency of transactions creating economic growth.
This virtuous cycle didn’t create itself. The professionals involved in MLS spend their time, expertise and financial resources to create and enforce the rules that make it work. The parties that participate in the system trust it with their residences, investments, and livelihoods because they and their representatives control the rules that make it effective.
An age-old question about the value of MLS data is being answered more thoroughly through precedent-setting prohibitions on misuse, and new MLS initiatives putting a price on the sale of data. The underlying facts haven’t changed.
Real estate data, particularly marketwide property transaction information, is incredibly valuable to businesses and communities. There is a cost to produce it. And the creators of this societally important information resource should be rewarded for its production.
Sam DeBord is CEO of Real Estate Standards Organization (RESO). He has served as the National Association of Realtors President’s Liaison for MLS and Data Management, President of Seattle King County Realtors, and Managing Broker for Coldwell Banker Danforth.
