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IDX, MLS Reciprocity and DDF: What does it mean for you, a buyer?

[I originally posted this article in early 2014 and it's been reposted often by others (with and without permission). I have reposted it here with updated content to reflect some of the realities in 2016.]

In an increasingly digital world, it's really important to have at least a very basic understanding of how some of the advances in technology affect you as a consumer. This is true even when it comes to looking at purchasing real estate. While searching for homes online makes the hunt for real estate a heck of a lot easier, you will likely find yourself lost in "information overload" and why hiring a real estate agent to help you before you start a serious search is important. Real estate agents have access to oodles of data and can help interpret it by separating the important details from the myriad of other data. At least they should be able to.

When it comes to searching for real estate online, particularly with things like IDX and MLS Reciprocity, what does it all mean for you, a buyer?

What are IDX and MLS Reciprocity?

Both are essentially providing the same online services for agents. Prior to IDX and MLS Reciprocity in about 2005, only the agent's own listings were permitted on their own websites. IDX and MLS Reciprocity came in to amplify the exchange and cooperation between REALTORS® and to facilitate the sale and purchase of real estate. With the consent of the seller, (which is a now standard term in the Alberta Seller Brokerage Agreements) every real estate agent in the real estate board is permitted to display and market the property on their own public website instead of the agent only having private access to it within their real estate board's local MLS® System.

And DDF?

DDF is something that came about in roughly 2014 to allow real estate agents to automatically get their listings on websites other than their own. For example, as I understand it, now brokerage franchise companies like RE/MAX, Century 21 and Royal LePage are now able to display all the property listings whereas previously they could only display a subset that included only their own franchisees' agents' listings. DDF is the system that keeps the data all in sync and relatively up to date. It also allows agents to display listings from other real estate boards that they don't actually belong to on their own websites. (This is really only beneficial in markets where agents from one board need to regularly cross the fuzzy boundaries into areas of neighbouring real estate boards in order to serve the needs of their clients.) DDF is also an additional revenue source for our national association so they can collect fees from third-party websites, online listing services and other advertisers. 

What It Means to You, the Buyer?

MLS Reciprocity and IDX means that, if you're perusing a number of different agents' real estate websites searching for your dream home, you will likely find yourself coming across the same properties time and time again on the different websites. This is good news for you in your search and good news for the seller in getting the exposure they need and are committed to paying for. (For the DDF feed, you'll also see the source board that provided the data.)

It also means that you may have some difficulty in determining the true source of the information – that is, the listing agent. While the listing firm (the owner of the information) is required to be displayed in fine print somewhere in the property listing, services like IDX and MLS Reciprocity may make it appear as though a particular property listing belongs to the particular real estate agent that owns the website, when it technically doesn't. We say technically because, in listing a property for sale in the MLS® System, the property listing now actually belongs to ALL the board's member-agents to market it as they see fit (as long as they don't change the information in any way). This, and the required co-operative commmission offered, is why the MLS® System has been so successful in Canada in getting sellers' homes sold efficiently and for top dollar. Without this "System", sellers would only be able to rely on their own agent through an "exclusive" listing to market their homes and find the buyers without the involvement of other agents. And that's not a very efficient system that should indicate a lesser fee being charged due to only one agent being involved in the sale. However, the seller may actually end up paying a premium for the privacy and the required work to get the home viewed and eventually sold.

If you already have a real estate agent working on your behalf in the purchase of a home, you will likely be sending them the addresses or MLS® System #s of the properties that you're interested in and have them schedule appointments for your viewing of the properties. Or, if you have not yet hired your own agent, you can call any agent about the property and ask them questions on the properties or possibly set up a viewing appointments. Keep in mind two things: Until you hire the agent, they are not working FOR you (they are working WITH you) and they cannot provide you any real estate advice. Once you hire the agent, they can research the property and provide you with advice and far more information that even the listing agent is legally permitted to share or probably even knows.

A final note on IDX and MLS Reciprocity: While it may seem like these services muddy up the real estate marketing waters, they do allow for a far greater reach of a property listing and make the entire system incredibly efficient.

If you really want to get in touch with the listing agent (and I'm not sure why any seroius buyer would actually WANT to do this), you can cross reference the MLS® System # and/or the address on the aggregator of the various MLS® Systems, at "realtor.ca". There, you'll be able to find the listing agent of the property you're interested in, as well as any co-listing agents and what should be their direct contact information without having to go through their real estate brokerage's switchboard or answering service. Keep in mind that realtor.ca will only provide you with a somewhat dated and abreviated subset of the total listing information available (since that system is meant to market listing agents and to get you to call them directly – thereby cutting out any buyer representation and therefore the sharing of the total commission offered by the seller.) Today, even though there's a huge payday for the listing agent should the buyer not have their own (buyer's) agent, a good number of listing agents are taking the higher ground and are refusing to show the properties that they have themselves listed for sale due to the increase in potential legal liability created by a buyer assuming that the listing agent is working for them when, in fact, they're working for the seller and against the buyer's interests! That's why, in Alberta, buyer representation must be in writing and as is a "Customer Status Acknowledgement". Without a written buyer representation agreement, the agent is working against the buyer in the transaction and working for the seller.

The buyer representation agreement also details how much money the seller will be expected to pay for their services. This is one reason that property listings that the seller doesn't offer a fair (or sometimes effectively any) commission tend to sit on the market without much activity. Today, buyers are instructing their agents to not show them any homes that do not pay their agent through the proceeds of the sale  afterall, it is the buyers' money that's paying for the house and any commissions for BOTH agents involved in the sale.


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