RealTown's RealTalk

The following was submitted a few years ago by Bill Shiller.

This has been available via autoresponder since Bill first created it (MLSVendorEvaluation@InternetCrusade.com)

Saul

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Points of Comparison (POCs)

For Evaluating Internet-based MLS Systems

By Bill Schiller, GRI, CRS, RECS - Technology Coach / Certified e-PRO Trainer

Bill@BillSchiller.com 219 791 4678 BillSchiller.com Highland, IN

Copyright© William E. Schiller, all rights reserved.

Our MLS (GNIAR. Merrillville, IN) made the conversion from a Moore Data (now VISTA INFO) Compass System to RapattoniMLS system last year. I would like to offer some suggestions to help other MLSs make these complicated and tough decisions. I'm not suggesting what you should conclude, just raising some issues to be considered as you look for the POC's (points of comparison) involved in selecting an MLS vendor.

"The Seven Pieces"

First, I suggest that any MLS system should be viewed as seven separate but interrelated parts with POCs for each:

1. Listing input screens

2. Search input screens

3. Search results display

4. Reports (for agents, appraisers and clients; both detailed and summaries)

5. Statistics on agent & office production

6. Special functions (emailing reports, emailing flyers, built-in agent & company promo pages, PDA connectivity, WAP connectivity and third party software compatibility

7. Public side data display (public search screens & public report screens)

When viewing these seven areas, think about how you currently do those functions. What would you like changed? How does each MLS vendor do it? Are they willing to incorporate your style?

"The Exodus Factor ?"

Another issue for MLS's to evaluate is what I call the "Exodus Factor". The "Exodus Factor" is the number of MLSs who used to use a particular MLS system, but then decided to leave that vendor and go to a totally new vendor. The existing and previous clients of a vendor know that vendor best. They know the true functionality and reliability of that company's products. They know the reliability of promises. They know level of and style of customer service provided. They know the hidden cost factors. MLS vendors will not normally volunteer this information about their industry, for fear of being labeled as "mudslingers" toward their competitors. They all know who is losing accounts and who is winning them. If you ask them directly, they will tell you, if you grant them "Mud Slinging Immunity". If a vendor, which you are considering, is losing existing customers and not winning many new accounts, you owe it to your members to examine this issue carefully and investig

ate why the people who know the company and it's products best, are leaving and going elsewhere. It could indicate trouble-plagued products or poor customer service. Besides that, if a company is losing existing accounts and not winning new accounts, this could foretell financial trouble for the vendor because of decreasing cash flow.

"Vendor Financial Stability ?"

That leads to another factor; the financial stability of the vendor. Today, more than ever, an MLS would be wise to look at the financial strength of the vendor as part of their MLS decision. A MLS system is typically a three to five year relationship. You want to be able to expect that your vendor will still be in business for at least three to five years. The amount of factual financial data available about the MLS vendors varies a lot. Some are privately owned companies and some are publicly traded on the NASDAQ. If the vendor is a publicly traded company, much information is available about them at the click of the mouse. For instance, just using yahoo.com you can go to "Finance" and check the stock price of Realtor.com's holding company "Homestore.com" which is known as "HOMS" on the NASDAQ. (It is not an MLS systems vendor, but illustrates the process.) With another couple of clicks you can get the 52 week high & low prices of this stock, view a price trend gra

ph and get a wealth of other factual information about the company, all at no cost. In today's market, an MLS might be well advised to get the opinion of an independent financial advisor to give their professional opinion on the financial standing and projected future of the vendors they are considering. Those vendors who are not publicly traded companies are a little harder to get a handle on. However, you can look at the length of time they have been in business and whether or not they have any other on-going sources of cash flow, that could carry them through any lulls in MLS system sales.

"Size of Vendor's Client Base ?"

When comparing vendors by size of client base, don't forget to compare the number of Internet based accounts they each have. I think this is a good indicator of who the market leaders are because it's based on where the MLS system world is going, not where it has been. Many MLSs who where locked into three to five year no-escape contracts are nearing the end of those agreements. They are out there talking to vendors trying to figure out the best move for the future of their members.

"Pricing Model ? "

Another factor is the pricing model of the vendor. Two typical models out there are "fixed dollar amount" per month and a "fee per agent", which varies as the MLS membership changes. One time up front fees may also apply. When doing POCs on cost, remember to factor in these differences for the best comparison.

"Impact of reductions in MLS membership ?"

Some industry experts have projected a great reduction in the number of real estate agents over the next three to five years. If an MLS is locked into a fixed dollar amount contract, that could be a heavy burden if the number of agents went down significantly. On the other hand, if the fee were per agent it would be reduced proportionately and thus be less burdensome.

"Costs to expand an MLS's geographic territory ?"

Previously, in many areas, the cost of phone lines and long distance charges where a hindrance to expansion of a MLS's geographic territory. Now Internet access has changed all that. Boards and MLSs are rethinking their local and not so local alliances. Some vendors can provide such expansion at a very low cost; others might charge a lot for such additions. Some vendors can even provide for a separate MLS to live under the database umbrella of another MLS. This could facilitate cost savings for both MLSs.

"Extra cost software required ?"

Is any special extra cost software required to access the MLS or is it compatible with any browser?

"What are the ongoing costs ?"

Are there additional costs for upgrades, updates and fixes performed by the vendor? Is there a charge for changes in the system requested by the MLS? Is the MLS going to be locked into a no escape contract for three to five years? The real estate industry is changing rapidly. If the MLS is constantly paying large fees for changes, it could be quite costly.

"Proprietary software ?"

Is the MLS vendor's property database written in popular industry standard software or some proprietary system?

"MAC compatibility ?"

Is the system compatible with Macintosh computers on both the agent and public side?

"Membership database compatibility ?"

Operating an MLS also involves keeping track of a lot of membership records pertaining to agents and offices. If the MLS property database can integrate with the membership database there could be some obvious benefits to the MLS.

"Is the system appraiser friendly ?"

In any MLS, the number of appraisers is usually small in comparison to agents. Many times the appraisers feel their special needs are not addressed by various MLS systems on the market. However, some vendors have created special reports designed by appraisers, which make it easier to fill out the more popular appraisal forms like the FNMA 1004.

I hope these suggestions are helpful to MLSs as they try to select the best system and vendor for their members.