The Dawning of the Age of IDX
Joe Frey
February, 2002
Article reprinted courtesy of National Association of REALTORS®

Pretend you were a buyer who decided a couple of years ago to purchase your first home. You were so early in the process, you didn't even know what you didn't know. But it was the dawn of the 21st century, so the first place you looked was the Internet. You found lots of Web sites with information about local real estate, but one stood out. Someone called an accredited buyer's representative had a site that seemed to have everything you needed: neighborhood and school information, area maps, mortgage and cost-of-living calculators, even links to movers, utilities and local merchants. It was all there—except property listings. To look at those, you had to leave the buyer rep's site and go to another site.

You had no way of knowing, but the reason MLS listings weren't on this exclusive buyer's rep's otherwise perfect Web site was because unless a rep, agent or their brokerage listed a property, MLS information about that property often couldn't be posted on their Web sites—and even then it couldn't be posted without the listing broker's consent. And that applied to all brokers and agents, not just buyer's reps without listings. So you had to move on to look at property listings. If only you could have searched from that buyer's rep's site, you never would've sought out another site. Instead, you never returned to it.

Now, pretend you were that buyer's rep and that was your Web site. You had put a lot of thought into your site, but knew that it could be made more effective if you only could display other firms' listings. And while there was no way you could know that you just lost that buyer as a client, you probably had suspicions that something like that was happening. Maybe more often than you cared to think about.

Of course, any buyer's rep—or any agent or broker, for that matter—knows that this was no game of pretend. This was a reality that probably happened to anyone who has a Web site. But the likelihood of that happening just dropped dramatically.

Now you can add MLS listings to your Web site
As of January 1, 2002, Multiple Listing Services must, according to the NAR's Internet Data Exchange (IDX) Policy, "enable MLS Participants to display on Participants' public websites aggregated MLS active listing information subject to the requirements of state law and regulation." What's more, "Participation in IDX is available to all MLS Participants who are REALTORS and who consent to display of their listings by other Participants." That includes Participants who don't even have listings of their own in the MLS, like exclusive buyer's reps.

IDX, also called "broker reciprocity," is in many ways simply the logical extension of the MLS, but it's greater than just that. "The Internet is all about relationships," says Lennox Scott of John L. Scott Real Estate, which has been posting all its own listings on its Web site since 1995, "and so is Buyer Representation. The Internet is also the greatest marketing tool in the history of real estate, and IDX is a huge enhancement to it."

"This is one of the most significant things to happen to the real estate industry in a long time," adds Cindy Butts of the Maine Association of REALTORS, "especially since NAR was specific in its demand that buyer's reps not be excluded from IDX."

Educated consumers drive wide acceptance of IDX
Consent to participate in IDX is usually presumed, unless the Participant expressly opts out, either on a blanket or listing-by-listing basis. However, by opting out on a blanket basis that Participant surrenders the right to post MLS information from other brokers. Yet, who would opt out?

When the Regional Multiple Listing Service of Minnesota started their IDX in January of 2000, only 12 of over 1,200 brokers opted out. Today, that number is down to 9, well under a half percent of all members! In Portland Oregon, Beth Murphy of RMLS reports that their three-year old IDX includes 98% of all area listings. In fact, more listings are shared between brokers than are posted to aggregate sites. The Florida Association of REALTORS is even offering IDX free to all of its members.

Indeed, IDX had been enthusiastically adopted in many areas before the 1/1/02 mandate, but some in the industry resisted the entire concept. "A few agents worried that IDX would undermine their control," recalls Brett Frosaker of John L. Scott Real Estate in Seattle, a very tech-oriented market. "But what you get with IDX is a more educated consumer. As a Buyer's Agent, you're concentrating less on the property and more on the transaction, functioning more as a counselor or consultant." Tom Dooley, former Chairman and CEO of the Real Estate Buyer's Agent Council, points out that much of the criticism aimed at IDX sounds familiar. "There's opposition from some large brokerages," says Dooley, "who fret that IDX offers easy pickings of choice listings. But that same argument was made against MLSs when they were introduced thirty years ago." And just as consumer demand drove universal acceptance of MLSs, that same force drives—and will continue to drive—IDX into widespread use.

The buyer-consumer stays at your site
To really appreciate how beneficial IDX will be to all, a few myths about IDX must be dispelled. First, IDX does not bestow any unfair advantages to anyone. How can it? Each MLS Participant has the same access to the same information. Second, the MLS is not required to provide and maintain a Web site. All the MLS must do is ensure that its data is accessible for transfer to individual Participants' Web sites. This information was usually accessible by consumers before; IDX just makes it easier for them to display it on the Internet. And the easier it is for home buyers to find listing information, the better that is for everyone involved in the transaction. The biggest difference, however, and the biggest advantage to brokers, listing agents and buyer's reps alike, is how MLS information is displayed.

Before the IDX Age, there were three ways for brokers, listing agents and buyer's reps to post listings on their own Web sites: show property data about their own listings; provide a link to aggregate sites, like; or provide a link to the local MLS—if it had a consumer-searchable function. All three made the consumer leave the site to view property listings. And once they were gone, often they were gone for good.

But now, if an MLS has a frameable site, have the option to post that MLS's consumer-searchable function on their own Web sites in "smart frames," customized borders around MLS data that maintain the broker's, listing agent's or buyer's reps identity the entire time the consumer searches property listings. Just consider the advantages. The "stickiness" afforded by "smart frame" access to MLS data keeps the consumers' "eyes" on the site, rather than leaving it to get listing information. That can only reinforce the personal branding so important in garnishing new client leads.

Consumers and brokers win
IDX especially makes sense in markets where no broker has a dominant market share, since all brokers stand to gain relatively equally in proportion to the listings they contribute to the MLS. As Brad Tertell, Director of Industry Relations for the MLS of Northern Illinois says, "If the market is evenly distributed among brokers, they all have nothing to lose from IDX and everything to gain from it." It's ironic then that two of the early-adapting markets both have brokers with large market share: John L. Scott Real Estate and Windermere Real Estate in the Seattle area and, Edina Realty and Coldwell Banker Burnet in the Twin Cities of Minnesota.

According to Brian Larson, President and General Counsel of the Regional Multiple Listing Service of Minnesota, "In our case, IDX was leader-driven. Our Board took a more philosophical approach. We watched what they were doing in Seattle, and saw that it was consistent with our mission to point consumers to brokers." In this way, IDX really didn't change the existing inter-broker relationship dynamics. "A rising tide raises all ships," says Larson. And while he too made the MLS/IDX connection, he was able to aggressively market IDX to RMLSM members by reminding them that "the MLS was the right outcome thirty years ago, and IDX is the right outcome today. In the vast majority of instances, it's a business mistake not to share listing information."

Though Larson says IDX is a big win for brokers because it's such big win for consumers, he also says, "Exclusive buyer's reps really clean up, since they don't have any anxiety about giving up their listings." Still, he says IDX offers advantages to both large and small brokerages, just in different ways. And for both, the focus is on branding and marketing. "It's the same focus," he says, "the same message. IDX just puts it in a different form."

IDX raises the marketing bar, requires follow-up
But don't make the mistake of believing that all your problems will be solved by IDX. Jim Blaha of Realty Executive Services in Western Springs, Illinois takes a slightly different slant on the marketing angle, offering this cautionary caveat. "IDX is a good hook, another tool in your marketing repertoire to make contacts. But it's not a panacea. You don't match buyers and sellers that way; you just get clients. To make it worth their while, you still have to provide them with the kind of customer service that can only be provided if you have strong market knowledge."

Indeed, all this interconnectivity can create new challenges for real estate professionals. While an IDX-enhanced Web site could certainly be a good resource for fertile leads, that's only true if the owner of the site follows up on those leads diligently. As Realty Times publisher Blanche Evans wrote in the magazine's November, 2001 issue, there's a gap "between online buyers and sellers and the salespeople who are supposed to serve them." In the same article, Chip Roach, president of Fox and Roach REALTORS characterized this gap as a "wasteland of opportunity," due mostly to poor lead follow-through. So, as always, it all comes down to customer service.

Despite reinforcing this lesson in follow-up, there's no denying the opportunity that IDX represents. And to take advantage of it, all you need is a software solution that is compatible with your MLS's IDX. While the technical aspects of implementing an IDX system is beyond the scope of this article—and there's really no reason to know all the computer how-tos—it is important for real estate professionals to know that there are a variety of solutions that can be tailored to the needs of each unique MLS, regardless of size and demand. Implementation of IDX in your specific MLS is contingent on a variety of factors that affect your market, such as state laws, the number of Participants and the average number of listings. But how you choose to use IDX is pretty much up to you.

Welcome to the Internet Age
For brokers, agents and buyer's reps, there are two basic options to presenting MLS information on their Web sites: create a framed link to the consumer-searchable MLS, if one exists, or to an aggregate site like, pursuant to a written license agreement. Brokers can also build their own listing database in the same way an aggregate sites does, but due to its sophistication this approach is more expensive than "smart framing." Contact your MLS for software solution referrals.

Once the IDX software solution is in place, Participants can overlay their "brand identity" on MLS data. And as Larson points out, a one-person office can create a Web site that creates the same kind of impact as a multi-office brokerage. Still, it's all about relationships. "This business is 80% relationship-driven," he says. "It's just that a single-office brokerage works in one sphere and a multi-office works in many spheres. What IDX does is help all to expand these spheres." More and more, "these spheres" are encompassing the digital world of the Internet as much as the more corporeal world of traditional home buying.

Though from his perspective here at the Dawning of the Age of the IDX it's hard to say what the ultimate effect of IDX will be, Stefan Swanepoel is optimistic about the future. "Internet-savvy consumers increasingly want convenience, a simpler transaction in real time," says the well-known industry strategist, and author of REBAC's new elective course, e-Buyer. "IDX is a major step forward in allowing REALTORS to offer the comprehensive, consumer-centric one-stop home buying experience they're demanding more and more."