Making your computer talk to my computer: A new software standard will allow computers to interpret one another’s information for greater access and use.

BY ALLAN SHAPIRO

Real estate is still a local business. But real estate information, propelled by the Internet, has gone global.

From E-mail to virtual home tours to the electronic transaction, REALTORS^® are adopting tools and techniques to help them profit from electronic communications. Those who succeed will be able to get the right information to the right people at the right time at the right place in the right way.

At the same time that REALTORS^® are moving to become managers of the electronic transaction, they’re taking a hard look at how they manage their own information. Traditionally, associations have entangled property descriptions in a maze of local variations. And MLS vendors have built closed systems using proprietary technology. Such practices obstruct the open flow of communication that powers the Internet.

Recognizing the dilemma, the NAR Board of Directors has been studying industry readiness to accept a standard method for exchanging property information. In late 1998, it appointed a task force to explore the issue with association executives, MLS operators, brokers, and technology vendors.

The task force found “strong agreement on the need to move forward,” says Dale Stinton, NAR chief financial officer and chief information officer. “It also discovered a shared sense of urgency that the REALTOR^® community had to move quickly to solidify its leadership position in the electronic real estate transaction.”

Techies in skunks’ clothing
Enter the Skunkworks. No, it’s not a counterculture perfume factory. It’s a cross-industry working group that began meeting in February 1999 with the aggressive goal of having a functional standard for the exchange of property information in place by the end of the year. The Real Estate Transaction Standard (RETS) and related documents can be viewed at www.rets-wg.org. Development of the standard is somewhat akin to the discovery of the Rosetta Stone, a tablet that displayed the same text in three languages and enabled scientists to understand Egyptian hieroglyphics.

“When most people think about creating a standard way to describe real property, they imagine a monster listing input form,” says Bruce Toback, an NAR consultant and cochair of the Skunkworks. “But the way we’re approaching the problem is exactly the reverse. RETS is intended to define how computers can handle all the different ways local real estate associations deal with property information, not settle on one best design for everyone.”

Using RETS, a computer (called the “host”) that houses a property database will be able to exchange information with another computer (called the “client”) that’s entering or retrieving data. The information could be MLS listings, flat or 360-degree photographs, video or audio clips, tax records, office information, or any other type of file.

A single computer could even play both roles at different times. For example, a broker’s in-house system could act as a “client” to pull data from a local MLS server and then act as a “host” for the company’s salespeople to search listings using an RETS-compliant software package.

The four standards
The full RETS specification encompasses four separate but related standards. Three govern technical functions that are largely invisible to most users--communications, data exchange, and Internet formats--and the fourth defines a change process to keep the standards current.

The communications standard uses well-accepted Internet conventions. It establishes how the password is controlled, critical for system security. To make certain the right level of permission is granted, it also identifies the person signing on and the software being used.

Once logged on, the client uses the data exchange standard to find out what information is available on the host system. Because of the wide differences between MLS databases, it asks the host for what is called a metadata file. Using a defined layout that may include up to two dozen variables, the metadata describes each data field in the system.

From the metadata, for example, the client may determine the host has a field called “street name” that is abbreviated “stn”; contains from one to 32 characters; accepts both letters and numbers; is required when a listing is entered; and uses a pull-down table, or “pick list.” Having that information lets the client computer download and manipulate the data it needs for the task requested by the user, such as creating a flyer or a market analysis.

The process for entering and modifying listings under the RETS specification relies on a similar metadata approach to describe the system’s governing business rules--the rules that say what data salespeople and brokers may and may not enter. That task becomes significantly more complex because of issues such as field interdependencies (example: a list of valid school districts depends on what county is entered) and conditional relationships (example: “selling agent” must be entered if the listing’s status is “sold” but not if the status is “active”).

The specification includes an Internet format standard based on an emerging technology called XML (for eXtensible Mark-up Language). Many observers believe XML has the flexibility and power to transform electronic commerce because it makes information self-describing--that is, it sends “tags” with the data to tell the receiving computer what the information is, how it relates to other information, and what to do with it. For instance, a search result may report one feature of a house as a “3.” To know whether that means three bathrooms or three bedrooms or three acres in a traditional MLS system, the receiving computer must be told about the database structure on that particular host. In XML the specific host is immaterial. By reading the attached XML tags, the receiving computer could recognize that “3” means the house has three bedrooms, a bedroom is a type of room, and the number of bedrooms can be included in the total number of rooms.

“Eventually, XML may provide the industry with a universal language for electronic commerce that describes properties across MLS systems,” notes Richard Mendenhall, NAR first vice president. “But real estate practitioners will go down that path only if the competitive marketplace produces a total XML solution that makes good business sense.”

RETS Version 1.0 uses XML as a cutting-edge tool for an Internet browser to retrieve and display basic property information across different MLS systems. The specification includes a dictionary of the fields initially available in XML for RETS--the only part of RETS that bears any resemblance to a listing form.

The fourth standard is a change process that governs how RETS can be modified or expanded. Its purpose: to assure both
REALTORS^® and software providers that the standard will evolve through a fair and open set of rules and will respond to the needs of the real estate community.

Job one: gaining acceptance
A number of major technology vendors have committed to support the new standard as part of their future systems. But RETS is far from a done deal. To become a compelling force in the real estate marketplace, it must be widely adopted by MLS systems. That will create a big market for compliant products and build momentum toward a RETS-based platform for electronic commerce.

Technology companies know that open designs are essential for their survival in an Internet environment. At the same time,
REALTORS^® will need to move beyond the territorial thinking that spawned the current maze of local property descriptions. Far more is at stake than the latest feature set for new MLS systems. RETS reflects basic changes taking place in how people communicate. Communication, in turn, provides the structure on which relationships are built, and relationships determine how business is done.

Why sign on to RETS on the basis of its potential? Because a standard can prove itself only after it has been widely adopted.
REALTORS^® must be prepared to accept both the potential and the uncertainty of charting a new direction if they are to become future managers of the electronic transaction.

Shapiro (allanshapiro@mindspring.com) was market information manager at GEAC Interealty, an MLS systems provider. He’s now an independent consultant based near Washington, D.C., and a member of Skunkworks.


What RETS could do for real estate
As with any set of standards, RETS brings only the potential for change, not change itself. If it’s widely adopted, it could become a foundation on which to build better technology solutions. Here are 10 possible ways the industry could use the new standard:
1. Improve the price-to-performance ratio for property information systems
2. Encourage a greater array of new applications for real estate practitioners
3. Permit stronger vendor competition within geographic markets
4. Allow dial-up and Internet information systems to work in parallel during transition periods
5. Simplify data exchange with internal broker systems
6. Allow more profitable integration of the Internet into business
7. Establish framework for the electronic real estate transaction
8. Supply core technology around which industry sectors can collaborate
9. Introduce an accepted process for technological initiatives in the industry
10. Provide a platform for improved service offerings to consumers

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