The IDX Elephant in the Room: It’s Time to Reclaim the Value of Your Data
Let’s talk about the IDX elephant in the room.
We regularly encounter “brokers” who are licensed in all markets and offer their data services. These are individuals and companies who are not participating in real estate transactions; they are simply reselling IDX data feeds as their business.
While it’s difficult to quantify the exact size of this “grey market”, everyone running or working at an MLS or association has received complaints about these kinds of businesses or has dealt with them firsthand.
As the industry evolves, MLS leaders are increasingly forced to confront uncomfortable realities regarding their most valuable asset. To understand where your organization stands, you must be able to answer these four questions:
- Who has access to your MLS Data and what specific permissions do they have to use, distribute, or monetize it?
- Are entities receiving your data directly from you, or from a third-party source that lacks the authority to redistribute it?
- What are the hidden pitfalls of allowing entities to replicate your data in bulk?
- How can you minimize the “grey market”, the unauthorized use and resale of your members/subscribers’ hard work?
To answer these questions, we have to look at how we got here, and why the tools/systems that MLSs, associations, and practitioners have built are now being leveraged like a public utility.
The Original Intent of IDX (the “Kleenex” of data feeds) vs. Today’s Reality
When the National Association of Realtors (NAR) adopted the Internet Data Exchange (IDX) policy in 2000, the goal was simple: Broker Reciprocity. It was designed by practitioners for practitioners to allow brokers to advertise each other’s listings with blanket approval, keeping consumers on branded broker websites.
VOW (Virtual Office Website) feeds arrived later to serve a different purpose. These are specialized data streams that allow practitioners to provide consumers with restricted property data, such as sold prices and historical information, typically accessible only behind a secure login after a formal broker-consumer relationship has been established. If you want to learn more on the history of VOWs, this concept was pioneered by e-REALTY and a famous antitrust case against the National Association of REALTORS® in 2005, followed by the DOJ vs NAR Settlement in 2008.
However, over the last two decades, these pro-consumer tools have been leveraged by entities with no interest in the real estate process. They have turned the hard work of local MLSs and on-the-ground professionals into their own products, finding workarounds to resell data with little to no benefit returning to the source.
Significant dollars are being left on the table simply because the abuse of bulk data delivery is not being addressed.
The Danger of the Status Quo
The risk here isn’t just lost revenue, it’s the loss of relevance. When unauthorized “grey market” entities provide easier access to your data than you do, they become the primary source of truth in the eyes of the industry. To protect the exclusivity and value of an MLS membership, boards must transition from passive data providers to active Data Custodians.
Building a Plan for Remedy
The technology exists today to stop the leak. To regain control, MLS strategic plans should focus on three critical technical and commercial pivots:
1. Move from RETS to API (The Oversight Pivot).
The legacy RETS (Real Estate Transaction Standard) model relies on bulk dumping, which is where oversight goes to die. Once data is replicated to a local server, you lose visibility. By moving to a RESO Web API-first delivery, you gain granular oversight. You can see exactly who is consuming data, when, and for what purpose. If you discover unauthorized redistribution, you can kill the feed for that specific user instantly without affecting your legitimate partners.
2. Flip to Usage-Based Billing (The Revenue Pivot).
Flat-fee quarterly invoicing is a costly administrative nightmare. It fails to capture fair revenue from large-scale vendors while closing the door to long-tail innovators who can’t afford a high entry price. We’ve seen success with organizations like San Diego MLS (case study), which moved to a per-URL fee for IDX vendors. Automating monthly billing creates a predictable, recurring revenue stream that scales with the market.
3. Customize Your Product Tiers (The Licensing Pivot).
We need to move beyond “All or Nothing” feeds. If a vendor, or a Proptech company that you like, or even an institutional data consumer only needs a subset of data, perhaps even a single data point, for a specific use case, you should be able to set that up with zero manual effort and price it accordingly. This On-the-Fly customization allows you to say Yes and participate in new use cases on your own terms.
The Strategic Mandate
Data governance is no longer just a technical checkbox; it is a primary pillar of financial health and membership/subscriber value. Modernizing your delivery service allows you to:
- Reclaim the Value of Membership.
Ensure the data your members/subscribers work to collect isn’t being devalued by free unauthorized access elsewhere. - Ensure Predictable Cash Flow.
Shift from manual, annual invoicing to automated monthly intake. - Protect the Cooperative.
Ensure only legitimate participants benefit from the data shared within the MLS.
It’s Easier to Log In Than to Break In
The grey market thrives in the gaps left by legacy technology. When an MLS runs its data delivery like a modern, efficient line of business, it starts to eliminate these gaps. By providing a superior, standardized, and easy-to-access Front Door, you drive data consumers away from unauthorized resellers and back to the authoritative source: You.
It’s time to turn your data back into a strategic asset and start leading the conversation on your own terms.
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