In recent business history, spurred on by the open access of the Internet, traditional gatekeepers have been falling by the wayside. The most prominent is the recording industry. They are the folks that put music on various sorts of plastic discs and are kicking themselves that they let Steve Jobs talk them into iTunes.
In my business, real estate, the Canadian Competition Bureau went after the Canadian Real Estate Association for the seemingly anti-competitive way homes are listed for sale. In fact, the main complaint was about “limiting consumer choice” because of the rules governing the way the member-to-member listing database was run. Making parts of MLS® public meant that everyone got a glimpse as to how useful the database was and everyone wanted to participate. If you’re selling your home on Craigslist or kijiji you likely won’t get as many truly motivated buyers as you would through MLS®. Thus, it is said, consumer choice was limited.
I am not about to argue the merits of the Competition Bureau’s claims or the general sense in the public that real estate agents are just a bunch of crooks. But I would like to point out the similarities of public reaction to any gatekeeper — what has been referred to as a “copyright middleman”. Whether it is a recording industry or a real estate association, the idea is not to artificially increase the scarcity of data but to ensure there’s value added to it.
For example, buying an album used to be an experience: an album cover was a piece of art — that’s additional value over and above the recorded data (music). In the music business (which is not dying by the way, but growing in huge ways — distinct from the recording industry which is clearly shrinking), time spent with the artists is a scarcity. Concerts, personal appearances, and even dinners with the artist are things that are actually paid for by fans. Fan-bases are grown by wide distribution of a non-scarce product.
In real estate, the listing, the photos of the home, and the data describing the home are non-scarce entities — these things can be copied and distributed widely. I maintain that they should be distributed as widely as possible to generate interest in the home. However, MLS® still has a key role to play: ensuring the quality of the data, reputation, and connections between real estate professionals — those are scarce resources and are quite valuable. Any home data appearing on other websites simply doesn’t have the “trust factor” that a genuine MLS® listing has. The Toronto Real Estate Board, for example, spends a lot of time and money tracking down and correcting listing errors, as well as counseling and disciplining members who violate the rules.
My own role I see not as a gatekeeper, but as an enabler: helping people to understand the data, apply it to their own situation, and personal interaction with potential buyers and other agents.
Selling your own home, like many do-it-yourself endeavors, is a worthy pursuit. But some people don’t have the time, patience, or talent for fielding inquiries, hosting open houses, following up, writing up offers, reviewing offers, negotiating counter offers, and so on. There have always been home sales by owners. There have always been discount real estate brokerages who leave much of the process in the hands of the buyer or seller. There will always be premium services where every step of the transaction is handled by the real estate agent.
In the future, there will be less of a role for “guardians of the data” and more of a role for “helpers and guides”.
