1) The market needs agents

2) Agent groups think if they let go of the data the data they will get cut out of the revenue stream

3) Preventing free distribution of basic MLS data hurts agents AND buyers/sellers by hampering innovation

The market needs agents: As a buyer, I never want to see a house being shown by a home owner. Agents also need to ensure quality of information in listing and provide market info to buyers and sellers. At closing the agents make sure everything comes together. These are all very important roles which need an agent and for which agents should be compensated.

Letting go of data: The basic listing info about residential real estate should be centrally controlled but freely distributed. As Kevin pointed out, agents should ensure the quality of listings (and be compensateded for that). But I can’t grasp the business model where the basic descriptions are restricted. It’s like charging someone to look at your advertisement. Ads should be professionally created but freely distributed. A listing is an advertisement.

Preventing free distribution of basic MLS data hurts the market: If the real estate agents will open up their listing service then the market will create applications that will drive more traffic to agents. I would love to see a query mechanism where I can search for houses within a 45 min public transit commute of my office. All of the data to do that search is open, except the real estate listings. If the basic listing info (location, price, description, pictures, etc) were openly available then apps like this would spring up. And THEN I would find houses and call an agent to see the house. I’d still use the agent, I’d just be more refined in my ability to find houses which I am interested in buying. Agents could drive an ecosystem around professional listings but they refuse, I presume, out of ignorance.

I am house hunting right now and I see agent groups that restrict listing information as my biggest impediment in finding houses I am interested in. Do I resent the fees they charge? Damn right I do because they are actually making the process harder. I want to pay an agent to help me with any number of aspects of house buying/selling. But I don’t want them to make it harder for me and then demand their economic rent.

My thoughts are biased by having gone through the sale of a house a few months ago in Virginia and now looking to buy in Chicago. Here’s a slightly less emotional take on the current state of real estate agents by Sean Park over at parkparadigm.com:

The bond salesman and the estate agent: a modern-day parable: http://www.parkparadigm.com/…/the-bond-salesm