Broker Reciprocity The IDX System--Or It's Not Really My Listing

IDX stands for "Internet Data Exchange" commonly called Broker Reciprocity.

IDX allows non-listing brokers and agents to freely engage in cooperative brokering whereby listing agents and brokers agree to the sharing of proprietary information with other MLS members belonging to a specific MLS Board.

The IDX system allows an agent or broker to show you the entire database of properties listed in a specific MLS Service region even though the broker or agent dispensing the information is neither listing agent or broker. This is a critical point to digest.

The real estate community has determined that the IDX system is a legal way of profiling listings that are not specifically owned or controlled by an individual broker. This widens the playing field so that a seller's property gets broader exposure to all MLS members.

In practical terms, this means for example:

You, the real estate consumer, are researching the Bay Cove area of Anywhere New York State. You've found a super website that lists every property in Bay Cove. You hit the link for a parcel you have interest in.

Immediately, you are taken to 2345 Wavecrest Avenue, Bay Cove, Anywhere, NY. A detail sheet appears profiling 2345 Wavecrest Avenue. Taxes, the school system, bed and bath numbers, square footage, and more enrich your understanding. You are a happy consumer because you've found out a lot about the property you wanted to research.

After reading the information, viewing static photos and perhaps a slide show or video, you scroll down to the bottom of the information sheet. The IDX mandatory disclaimer reads something like this

© 2010 Multiple Listing Service of The ABC County Board of Realtors. All rights reserved. Information deemed to be reliable but not guaranteed. The data relating to real estate for sale on this website comes from Multiple Listing Service of The ABC Board of Realtors and the Broker Reciprocity Program. Real estate listings held by brokerage firms other than XYZ real estate firm are marked with the BR logo and detailed information about them includes the name of the listing brokers. Listing broker has attempted to offer accurate data, but buyers are advised to confirm all items. Information last updated on 2010-11-19.

The disclaimer actually announces that you, the consumer, are reviewing a listing presented by a cooperating MLS member and NOT NECESSARILY the listing broker. Although there are many instances where the information will be offered by the listing broker, more often than not, the information sheet will originate from a different source.

Those sources are somewhat contentious from the broker and agent view. Let's suppose you have found some real estate of interest on Zillow, Trulia, or a similar site and, I am a member in good standing of my MLS board.

Furthermore, I also advertise on Zillow. Due to my status as a paid advertiser, my name and contact information show up on every listing in a specific zip code. In other words, no matter what broker owns the listing, my contact information is presented.

You may wrongfully assume I am the listing agent, where in reality, I am simply an MLS member who advertised well. My ad campaign successfully engaged your business.

Now extend this main principle to just about every conceivable on-line real estate information aggregator. My name and contact information is appearing AS IF I am the owning broker/agent. I am receiving your lead based on the IDX principle of Broker Reciprocity because I have employed a clever marketing strategy.

Since this marketing technique works with and against individual listing agents and brokers, I suppose you may surmise the IDX System a zero sum game. The seller benefits greatly, the buyers are exposed to the widest content for research purposes, and the broker/agents get the opportunity to slice the pie in half instead of eating it whole.

You may have other ideas about the Internet Data Exchange (IDX platform). When you call-you may want to ask if I am the listing agent or broker-or, you may not care. I know as an agent, I care a lot.

John Kavaller

Example of IDX Sheet

The MLS and You,The Real Estate Consumer

As a real estate consumer, you may be interested in understanding how competing brokers and agents really do business with relation to the MLS System.

Let's get into a fairly typical example of a home-buyer lead coming into a broker's office.

Joe Q. Public calls the ABC Real Estate Brokers Exchange on Monday morning, 9:00 a.m. sharp. An agent named Mary Lou answers the phone. After a brief hello, Joe asks Mary Lou about a property he's seen advertised on-line.

Mary Lou does not recognize the property in question. It is not an office listing, company listing, or personal listing. “Hm Mary Lou muses, wonder whose listing it is?” In less than 2 seconds, Mary realizes that Joe has called her office based on a listing owned by a competitor.

Mary Lou needs to buy a little breathing room here so she can keep Mr. Public as a client. Since the information is not readily available, Mary Lou says: "Joe, I'll get that information right out to you. Just give me your contact info. By the way, what did you say the MLS listing number was--perhaps you have the address as well?”

Joe responds politely with a bit more info on the property in question and leaves his contact info before the conversation ends. The call is over and Mary Lou gets to work quickly.

She has the MLS number or the address of the property Joe wants to know about. The MLS number, or Multiple Listing Service Number makes researching the competitor's listing a snap. In several minutes, Mary Lou brings up all the data she needs to get back with Joe Public.

Mary Lou emails Joe the MLS information sheet with all the details Joe wanted to know. Pictures, tax information, school district, number of bedrooms, baths, pool size, and so on. On the emailed info sheet, Mary Lou’s name and company affiliation stand proudly so Joe knows who to contact when he requests more info or wants to schedule a showing.

Mary Lou has done such an efficient and professional job relaying helpful information to Joe that he schedules a home tour of the same property with Mary Lou. Joe and Mary Lou tour the property and two hours later, Mary Lou receives a purchase offer on the home just viewed.

End of story? No, not by a long shot. First off, this is an over simplified description of just one situation that frequently arises in the real estate business. Secondly, even within this scenario, other factors come into play that can confuse a client or customer and cloud the relationship between agent and consumer.

The Multiple Listing Service is a well-known data provider to most consumers. The idea is to gather all broker listings in an electronic format featuring every Member Broker's (read dues paying in good standing) listings. (BTW--in NY State, the broker "owns" a specific listing no matter what agent actually sells that service.)

All members of the MLS have proprietary access to every listing of all the individual MLS Board Members. By express agreement of all the member brokers, all brokers and their agents also have the express permission to access all data collected.

Hence--the MLS system actually sanctions, allows, and encourages co-brokering whereby unaffiliated agents and brokers can share commissions based on one party bringing a buyer and the other bringing the seller to the table.

Statistically, it is far more likely for a property to be sold using the cooperative nature and spirit of the MLS system. Most sellers are aware of this system and ask prospective listing agents if their brokerage firm participates in the MLS system in their respective area.

It is interesting to note that many prospective buyers are unaware that properties are routinely co-brokered. MLS listed agents consistently stress that, no matter what broker or agent actually booked the listing, any MLS agent in good standing has the legal authority and right to co-broker a deal.

To sum this up: If you, the real estate consumer pass a property with a sign that advertises the XYZ Real Estate Company, and you call Mary Lou at the ABC Real Estate Brokers Exchange, it's perfectly acceptable, legal, and honorable to do so as long as both belong to the MLS system. Most brokers and agents do participate.

If you see a listing on other web hosts like Trulia, Zillow, Active Rain, Hotpads, etc., the same principle holds true. You should feel free to contact any agent or firm for more information and a showing as long as they are members of a specific MLS.