Why understanding the basics of RETS is key to managing broker reciprocity, electronic transactions, and your technology future.

By Brian N. Larson, president and general counsel, Regional Multiple Listing Service of Minn. Inc.

Tom Simonsen doesn’t care about MLS back-ends and data transfer protocols. The broker-owner of Prudential Premier, REALTORS ®, in Burnsville, Minn., just wants his agents to have MLS data.

Last year, he contracted with Virtual Properties Inc., a Madison, Wis.-based systems vendor, to provide his company with a comprehensive back- and front-office brokerage management system, including integrated MLS data. When Simonsen’s MLS, the Regional MLS of Minnesota Inc., asked Virtual Properties how it would like to receive the MLS data, the vendor replied, “RETS, please!”

RETS, or Real Estate Transaction Standard, is a type of data interchange sponsored by NAR and developed by a consortium of technology companies with links to MLSs and brokers. This transaction standard should not be confused with the transaction platform , called “eRealtor.com,” which NAR is also sponsoring.

The standard facilitates the free flow of information between various users of the real estate transaction data. With RETS, brokers, third party software vendors, associations, and MLSs will all be able to share data, regardless of the type of software they use. This standard is expected to be adopted by mortgage bankers, lenders, and other real estate-related industries in order to facilitate the electronic transaction.

RETS in action

So far, RETS has been a welcome tool for MLSs in delivering MLS data, or portions of it, to brokers and third parties. Especially since NAR’s Internet Data Display policy was developed, MLSs have needed a uniform and consistent way to share listing data with brokers who use a wide variety of software products.

But too few third party software developers and system vendors have adopted RETS, says Jim Harrison, chief executive officer of North Texas Real Estate Information Systems Inc., an MLS system vendor. “I would like to eliminate dealing with vendors not using the RETS interface,” he says, although this is not a viable solution at this stage.

The standard explained

RETS has two parts, according to Bruce Toback, vice president of Office Products Technology Inc., which works under contract with NAR to assist in developing and maintaining the standard. The first part is the communication protocol and the second is the data type definition , or DTD. This two-part communication system can be likened to two people trying to carry on a conversation on two-way radios. For them to communicate at all, they have to observe certain communication “protocols:” they must be on the same frequency and they cannot hold down the transmit button if they want to hear their counterpart talking. But even if they follow such protocols, these two people still cannot communicate unless they speak the same language. In this example, the radio protocols represent RETS. The language is (RETS) DTD.

In cyberspace, the RETS communication protocols handle things like security, permission levels, and how communication sessions are begun and ended. The DTD language describes the data that is being transmitted. According to Toback, such protocols are what makes RETS superior to other proposed competing standards, which only provide the language. Both language and protocols will ultimately be necessary for MLSs and brokers to make full use of the technology, Toback says.

Implementing RETS into your MLS

MLSs, especially large ones, are embracing RETS as a means of delivering MLS data to brokers and third parties. Metrolist MLS in Denver, which operates a home-grown MLS system called MyMLS.com, did its own programming to make its system compatible with RETS. Patricia Bybee, president of Metrolist, says, “While there were some things that were unclear in the standard, and some things didn’t work exactly as the standard intended, it seems to be running very well now.”

Metrolist requires third parties who want to integrate MLS data into their products to use RETS. “We’ve been down the road with other proposed standards, like DxM, but we’ve never gotten support from the vendors. If we don’t impose it as a requirement, we’ll be back where we started,” says Gale Chicoine, Metrolist’s product software director.

Other MLSs have found uses for RETS outside of working with REALTOR® desktop applications. Both the Traverse Area Association of REALTORS ®, Mich., and Sandicor, the San Diego County MLS, use RETS to deliver data to MLS-owned or third party aggregator Web sites.

Not all MLS system vendors, however, are anxious to provide RETS interfaces to their MLS back ends. According to Jeff Gellman of Clareity Consulting Ltd. of Minnesota, which sponsored the RealFuture Conference on Technology, vendors frequently do not promise to provide a RETS interface in their standard MLS contracts. In fact, Gellman says that many MLS system vendors will only provide a RETS interface when customers specifically demand it—and many customers haven’t been.

“We had hoped, as did NAR, that the MLSs would recognize the benefits of the standard and embrace it quickly,” says Grant Effertz, RETS product manager for San Diego-based VistaInfo Inc. “We’re finding the adoption rate to be a little slower than NAR anticipated,” says Effertz, who took part in early development and testing of RETS. Only about one third of VistaInfo’s client MLSs have paid the optional setup and maintenance fees to add RETS to their systems.

The vendor’s view

Technology vendors appear interested in developing interfaces to RETS-compatible MLSs but want to be assured that their development costs will pay off. According to Dale Stinton, NAR’s CFO, making a front-end product RETS-compatible is more complicated for the vendor the first time around. But as the vendor moves into other MLS markets, the costs of customization are greatly reduced.

One vendor who believes it has benefited is Atlanta-based HotPalm.com, which has developed a wireless real estate application for an Atlanta area real estate company. According to Andrew Witt, a product manager at HotPalm.com, “The RETS standard has been extremely useful in our development. While the elements included within RETS have not always contained the necessary elements to suit our customers’ needs, the structure has been flexible enough to allow us the ability to readily integrate additional elements as needed.”

Since there is no certification authority for RETS compliance, how can associations and MLSs be sure that the technology they’re buying is really RETS-compatible? Buyers who want products conforming to the standards can incorporate the standards definition documents into their contracts.

What’s in the future?

NAR, which has sponsored RETS from its inception, is not standing still while the standard gradually wins acceptance. In meetings this spring, NAR developed plans with groups representing the mortgage, legal, insurance, and real estate data industries to coordinate the development of all standards and ensure that they can communicate across industry boundaries. The goal? A comprehensive set of standards to permit all aspects of the real estate transaction to be handled electronically—a cornerstone of the e-transaction.

With NAR sponsoring the RETS standard and investing in eRealtor.com, a transaction management venture with Homestore and others, observers might conclude that NAR will guide the standards’ development to its own venture’s advantage. But according to Stinton, NAR is committed to keeping the standards open, available, and non-proprietary. The national association recognizes that transaction management platforms will have to be interoperable since not every broker and mortgage bank will choose the same platform, Stinton says.

The future viability of RETS may depend largely on the willingness of MLSs to require RETS interfaces from their technology vendors and RETS compatibility from those who want to access MLS data. RETS is gradually gaining acceptance, but without strong support from MLSs and associations, it may not achieve the mass implementation necessary to ensure that all desktop providers, third party users of data, and MLSs can speak the same language.

For more information about the RETS working group and exhaustive details about the standards, including the full text of RETS version 1.0, go to www.RETS-WG.org.

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