Persistent Blogs for MLS Properties?

An idea I was baking a few months ago was to aggregate publicly available MLS data, starting with a tight regional focus, being careful not to violate copyrights (but admittedly pushing the limit).  The thing that would be different would be to create a UUID for each property, and cross-reference additional data.  I suspended my designs for a while for conflict of interest reasons, and also because Zillow.com and others have come on-line recently.

But something is still missing, in my opinion.  Persistent "blogs", or more specifically a way for the community of buyers to aggregate their direct knowledge about properties.  Kind of a buyers' exchange, but tied directly into a portal that would be driven by properties actually on the market (thus, the MLS tie in).  As the prospect of an Open MLS has increased, I think this idea may still have some merit.

There are off course non-trivial design and legal questions.  Leaving the legality aside for the moment, the technical design wouldn't be too difficult to pull off with existing Open Source and a little bit of customization.  The hard part of the design would be community-focused.

To explain, there would be a strong "network effect" if such a site could actually generate active participation.  That is, when I go to open houses, or look at homes with my agent, what would encourage me to come back to the MLS portal I used to find the homes in the first place and write some impressions--good or bad--about what I saw?  I would probably be more compelled if others were doing the same.  One could then see how people would use the "user comments" to help refine and filter their searches.

I worry about gaming of such a system.  But, perhaps there is a mechanism someone could suggest to actually use such gaming, griping, and griefing activity to the advantage of the buyers too.  I posit that buyers are not stupid; at least not buyers who actively research buying a home on the internet.  They will be able to take in the noise with the signal, and make their own decision about the quality of the properties they're seeing.

A derivative effect could also be "encouragement" for landlords renting out homes they intend to sell later.  That is, renters are in the best position to know first-hand what all is really wrong with a place.  Perhaps there would be a way to entice them to come to such a site (or a sister site which can cross-reference the UUIDs) and share information they have about specific properties.

With enough participation, such information could easily exceed "home inspections" and other shallow Realtor(tm) tricks of the trade in terms of quality and usefulness to prospective buyers.  Sellers would hate such a service; at least sellers trying to pawn off lemons as apples.

In fact, in purely economic terms, I could foresee such a site going a long way to solving the "lemons market" problem that exists in residential real-estate.  The timing is right too.  As the market slows down and corrects, there will be an increasing interest from buyers in figuring out what a home is actually worth.

Any and all suggestions, ideas, or reasons why this is just a plain bad idea would be very useful.

--By Randolph Harrison

Comments

[Peter P]

How about an open house feedback database? It does not rely on the MLS database so it will not be violating any acceptable use policy.

Visitors will be able to post facts (like asking price, layout) and subjective items (like feel, traffic) on a database indexed by address.

We can push target ads to subscribers and visitors based on their taste. :)

[randolfe]

That's kind of the idea. I was just looking for a user-friendly way that regular people searching for homes could "link" what they find in the MLS' to the feedback. Address data, MLS listing #s, and anything else on the various MLS' aren't reliable (thus the need to smart-link everything to our own permanent UUID for each property...really the address).

[Peter P]

Address data should be more reliable than MLS#, which tends to get pulled and relisted.

To avoid it become "just another review site", some trusted persons will need to moderate the reviews by actually visiting open houses.

It needs a revenue model too.

[randolfe]

It needs a revenue model too.

I haven't had a revenue epiphany yet aside from the normal, boring ad-revenue junk, which I don't have great confidence in as a sustainable model.

As to needing to independently verify the comments: couldn't we instead take a self-meta-moderating approach where the community of reviewers self censors? Something like a slash-dot meta-mod, where you could set a threshold and only view "reviews" above that threshold? The default could be the level most people would want: obvious spam, crap and trolls ommitted. The readers themselves would randomly meta-mod the stuff. Not perfect, but an idea.

[Peter P]

As to needing to independently verify the comments: couldn't we instead take a self-meta-moderating approach where the community of reviewers self censors?

This is definite one way. It may need to attain some critical mass before meta-moderating can work well though.

[TN]

It doesn't seem apparent that you would have enough users having nexus knowledge of a particular listing to make meta moderation feasible. The temporal window is just too short IMO.

Why do you believe that address data is not sufficient for linking?

[randolfe]

I agree that meta-mod might be tough because of the short temporal window of interest. I am of the bias that thinks we are entering a bear-market for real-estate, lengthening the time-on-market for active listings to perhaps 30-60 days on average. Of course, that also implies less buyers, so perhaps the nexus won't happen.

I do think address data is sufficient, just notoriously unreliable until verified by actual visitors. Many MLS systems either mask or generalize (or purposefully mis-enter) address data for listings. This is especially true with new-construction where addresses may be yet to be assigned or consolidated.

[TN]

Off Topic:

Seems like you probably would know this: Can you differentiate for me the differences in opportunities between having an MBA in advance finance, and a masters of science in Finance Mathematics(or Financial Engineering)? Thanks.

[Peter P]

"Seems like you probably would know this: Can you differentiate for me the differences in opportunities between having an MBA in advance finance, and a masters of science in Finance Mathematics(or Financial Engineering)? Thanks."

I am interested in knowing too. I think they have all three at Stanford.

[randolfe]

I can share my opinion on the differences in opportunities. I'm biased, of course, being an MBA. I did look seriously into U.C. Berkeley's MFE program too.

MBAs are more general and widely recognized as a management credential. Even so, an MBA doesn't really qualify you for anything, it just serves as a differentiator against your competition.

The primary value of the MBA is the network of people you get plugged into. The MBA network is more well established and much bigger than the other degrees.

MFEs are pretty new. The jury is out on whether they pay off. MFEs are hard degrees to earn, and are much more in the pure qualification camp. I only know a couple of Berkeley MFEs, and I think both of them went to work for hedge-funds. That is what I'd expect at this point until there are more MFE degrees out there to filter into mainstream finance. One thing is certain, MFE is really more of a quantitative credential than a management credential.

Masters in Finance/Mathematics is similar to MFE, just more theoretical. I don't know anyone personally with these degrees outside of academia. Some of the finance professors seem to favor this degree and do things like theoretical financial research, publish papers on new quantitative models, etc. I'd guess that there would be these kinds of guys working for HFs too.

[Peter P]

"Masters in Finance/Mathematics is similar to MFE, just more theoretical. I don't know anyone personally with these degrees outside of academia."

I asked my Financial Mathematics professor (intro class) about his views in the business world. He said, "I am a mathematician." The math can be quite intense though.

[Peter P]

Should the site be called sillio.com or something like that? It can first focus on properties in the silly valley. :)

[randolfe]

I'm terrible at coming up with catchy names. Something that is provocative and easy to remember.

The more I think about the critical nexus problem, the more I worry that a site such as this would require quite a healthy kick-start. That may be the biggest barrier.

[Peter P]

"The more I think about the critical nexus problem, the more I worry that a site such as this would require quite a healthy kick-start."

Just let it be a battleground for housing bulls and bears. Together they will "mod" themselves. :)

[randolfe]

Any suggestions on how to create an environment conducive to such a sparring ring? Keep in mind that the goal is to reach out just a bit more mainstream than the standard blogosphere.

[TN]

Interface is key. I would conflate the simplicity of craigslist's formatting with the conversation threading javascript style of gmail.

[Peter P]

I think it is better to have a very barebone interface just to get the hardcore users first. They will give directions of what the "ideal" environment should have.

The most important part is to incentivize people into giving unbiased, accurate and critical information.

[randolfe]

So the best incentive is that people get something out of it too. That is, they find out useful stuff about properties they're interested in, so they're willing to share like information. Just getting the ball rolling is the hard part. There's really not much else of value we could add on such a site that's not already done elsewhere (reviews, aggregaters, valuations, etc.)

[Peter P]

"So the best incentive is that people get something out of it too."

But can't they get something out of it without contributing?

[randolfe]

They can, but there need to be enough contributors to make the threads valuable. I'm not sure what general ratio of contributors to lurkers would work, but there need to be at least enough to counter sellers and agents trying to control the reviews.

[astrid]

If I understand your proposal correctly, you’re thinking of an epinion forRE. While this could be a wonderful service (esp. as an add-on to a portal like Zillows or realtor.com) I think the temptation to game the market would be too great. It would be like talking up/down stocks.

The feedback model works well for epinion and ebay because a buyer has virtually no stake in the success or failure of a product. The products graded are available by the thousands or millions. In contrast, RE is unique by definition; people who see a listing and wish to buy have a strong incentive to discourage others from seeing the house. The potential benefit of acting selfishly is so great that it is almost irresistible. I am less worried about seller side boosterism, those can be easily checked by house visitors.

I want to throw a more modest idea growing out of this thread. How about a subscription based tool kit for a home buyer. They can provide zip code based selling information, tag interesting properties, customize notes, rapidly create comparison chart, and fast export of collected information via excel files.

My other idea is to create the equivalent of restaurant critics who collectively visit all open houses. This deals with the objectivity issue but is probably economically unfeasible, unless you can find a large number of serial house visitors with no intent on buying and willing to share their findings for free.

[randolfe]

astrid,

Great points. I think you've demonstrated that I'm the victim of my own biases. I hadn't given any thought to buyer-side self-interest gaming, only to seller-side issues. Indeed, buyers have an enormous interest in providing false/distorted information for properties they would think they may want to purchase. Thanks for pointing this out.

I like your idea of critics, but I also fear that this is a tough logistical and cost justification problem. With enough critics, objectivity becomes less of an issue, but costs (direct and implied) become a greater factor.

A basic toolkit may be of some value. I've seen a lot of these on the web, but they tend to fall into a bimodal distribution. They are either too complicated for average users/buyers (or they are geared towards investment purposes/landlords), or they are too simple to be useful (or they are just thinly masked advertising tools).

A solid toolkit that has deep analysis tools but is easy to use would be useful to many people. But I really doubt anyone would pay for it directly. The revenue model would need to be advertising, referrals, etc. This leads right back to a problem of maintaining neutrality.

[astrid]

How about developing a toolkit for FSBOs or regular RE sellers? If you can develop a kit that can help them price properly and link them to RE professionals(esp. reputable RE lawyers, inspectors, and appraisers). FSBOs might be more willing to have a subscription service if the service can provide unbiased and useful information.

I know the first thing I did when I helped my parents sell was collect recent sales in the neighborhood from county records and have my boyfriend run a regression on Excel(I'm dreadful at math). That immediately helped me clarify what the market valued and how (square footage not including basement was the most important factor, with smaller homes yielding a higher price per sq. ft.). Not enough for me to forgo a realtor, but it was an extremely useful reference when I was interviewing the realtors.

I think there's a market for buyers and sellers wishing to quickly educate themselves about the market with unbiased information.

I know quite a few FSBO helper firms already exist, but I'm pretty dubious about the level of service they provide for the price. I haven't done an extensive survey of what's on the market but I'll keep my eyes open and report back if I see anything.