REdistribute’s revenue-sharing plan a 'turning point for the industry'
The newly formed data company, a joint venture between Bright MLS and CRMLS, will start delivering content to clients in early 2023.
- Initial payments to brokerages are expected to start by May 2023.
- REdistribute puts “data rights and usage” into the hands of the broker.
- More MLS investors are signing on, with details to be announced in the coming weeks.
REdistribute — which aims to transform how MLS data is aggregated and disseminated for institutional use — disclosed plans this week to begin serving its customers in January 2023.
Created by Bright MLS and California Regional MLS (CRMLS), the newly formed data company plans to aggregate and license MLS content primarily to lenders, insurers and government organizations, such as Fannie Mae and Freddie Mac.
Amy Gorce, acting CEO of REdistribute, described interest and participation by MLS organizations in REdistribute as "overwhelmingly positive."
"We have letters of intent from five additional MLS investors beyond BrightMLS and CRMLS and expect to announce those in the next few weeks," Gorce told Real Estate News.
She emphasized that REdistribute is not an agent or broker product. But brokers may benefit from the revenue the company generates. A major emphasis is to share revenue with participating brokerages on the data collected and redistributed for institutional use, "ensuring that participants are compensated fairly — and at true market value — for the data they provide," according to a statement from CRMLS.
Participating MLS organizations will receive a portion of the revenue generated. "REdistribute has committed to paying royalties on top-line revenue as soon as agreements are signed," Gorce said. Initial payments will likely start in the second quarter of 2023.
Gorce said in an interview that consumer-facing products are not permitted under the data licensing agreement. But she added that consumers still benefit from "more accurate decisions by banks and insurers" from real-time data aggregated and delivered to financial institutions and other organizations connected to the real estate industry.
Commitments from MLS organizations
The ultimate success of REdistribute will be determined by the "collective participation" of MLS organizations across the country, Gorce said. REdistribute already has commitments from MLS organizations in several major markets, comprising about 700,000 listings, she added.
"The higher the percentage of coverage that REdistribute can deliver across the U.S., the more value we will be able to generate on behalf of MLSs and brokers," Gorce said. "Demand for MLS data to help financial institutions, insurance carriers and the GSE [government-sponsored enterprises] power better risk management and valuation decisions in an already proven market."
Florida-based BeachesMLS and Broward, Palm Beaches and St. Lucie Realtors, a South Florida Realtors association serving more than 36,000 members, are among the first organizations to join REdistribute as ownership-partners.
"We look forward to seeing how this groundbreaking benefit helps our brokers thrive," said Dionna Hall, CEO of BeachesMLS and Broward, Palm Beaches and St. Lucie Realtors.
"We recognize how hard brokers work, especially in the South Florida market," Hall told Real Estate News. "It's only fair that they are compensated for the residential listings that they enter into the MLS."
In an open letter to MLS organizations and member brokerages, the CEOs of CRMLS and Bright said "the exchange of real estate data [has] turned into a one-way street. Missing out of this equation is the data rights, data management and fair market compensation provided back to the owners of the data — the brokers."
The leaders noted that as tech-based startups have entered the real estate industry, they have sought access to broker data to build out resources and services, allowing "companies to profit to the tune of billions of dollars — all without equitable compensation to brokerage firms who generate the data."
The goal of REdistribute is to change that by putting the control of data rights and usage back in the hands of the broker, which they describe as "a turning point" for the industry.