1 – The roost model is interesting from a listing coverage point of view as they “only” need 800 MLS feeds and they will get about 90% (2007 NAR report indicated that 10% of agent represented properties did not make it onto the MLS) of the MLS listed coverage. This is a task that I’m not sure even REALTOR.com has been able to accomplish but I’m sure you know the answer Additionally, some brokers may not want the FSBO coverage and therefore one of the value propositions of the site may not be fulfilled for the consumer.

2 – If a MLS faces pressure from the other brokers in the area who don’t like the model, they may pull the feeds or change the rules. At that point, leaving roost to get listings like T & Z via broker submitted feeds.

3 – The next issue maybe the monetization of the site with the CPC model. Although details having been released its been indicated that it’s on a CPC model. http://www.roost.com/web/realtors.action

Since users are paying for clicks to each individual listing, it’s not unlikely that a user may look at 20-30 listings in a single session at say a guess of .10 per click to a listing – then that users visit may cost as much as $2 – $3. If the same user grows accustomed to using the site (which would be desired and the ultimate goal of roost) and returns 5 times prior to contacting an agent, then the cost of that buyers visits maybe as high as $10 – $15. If that is the case the brokers would not see the value and could do it cheaper via cpc on the se’s. If the model is only paying once per user session at say .50 then roost would need significant traffic to get profitable. Again, I don’t know the details just making assumptions based on the known CPC business model.

4 – Getting Traction? Since the site is hosting sub-domains and possible outside domain to be in compliance with MLS rules, it would seem difficult to get organic search traffic like say Trulia. This means everyone needs to come via the front door of the site. This may lead to roost to do significant advertising via cpc to generate traffic. At that point they are doing click arbitrage (paying G .20 and selling traffic to agent at .50) competing directly against local brokers. If there is not enough users the brokers may not see the benefit and pull the listings.

5 – I also think an upcoming trend of the MLS’s themselves becoming more of a destination site for consumers much like HAR.com is doing and now some of the other MLS sites may impact the roost model. If the trend gets traction and is supported by the brokers, the MLS may change the rules, pulling feeds as they don’t want to create competition for themselves.

It will be interesting to follow their moves and see if they can make it happen. I fairly certain Alex and team will review post like this to find solutions to the possible issues that have been pointed out – so I don’t doubt we will continue to see them evolve as needed.

See http://www.roost.com/web/industry.action.

They have a relationship with iHomefinder.com to get the data. The brokers who use their services simply submit IDX paperwork to their respective MLSs using a roost subdomain.

If approved, they are good to go. If they must have a custom domain, Roost accommodates for compliance. They are doing a nice job. However, their only differentiation is in the simplicity of their model and the potential to cover “all” listings.

You make some very interesting points (and many of which I agree with)…

But I think there is a bit more to the site than you’re giving them credit. Here’s why:

1) They do have FSBOs… And they are allowed to as long as they don’t “commingle” the listings on the same map/list. See this [san diego] search for an example of how they implemented this.

2) Because they are grabbing an IDX feed, they only need one broker in any given area to get all the MLS listings.

3) Definitely not today with their existing inventory of listings, but it’s not clear to me why you think they couldn’t compete in the long-term.

I’ll work on interviews with the Move team… but I didn’t even go there for the first round.

Because Roost is broker centric, and they went after a few powerful brokers, they got the mls to roll over.

How is what they are doing any different then what Vast is out there doing?

Also there are a couple of holes in Roost’s “We have all the listings argument”
1) For any given market, they don’t have FSBOs and can’t due to regs
2) For a given region, Roost may not have cut enough deals with key brokers to have the appropriate coverage
3) At a national level, they can’t compete w/ Realtor.com or even any of the other Web interlopers aggregating listings

I will give Alex credit that he was clear that Roost isn’t in business to support agents – it’s a broker focused model. And that he acknowledges that in this particular market, start-ups need to demonstrate real value or they will go away (VC funding doesn’t keep flowing, just like house prices don’t keep going up).

Look forward to the other interviews – btw – can you get one from your ex-employer Move.com. Would really like to know if those guys are going to get their heads out of the sand and do something. Everyone always says that it’s theirs to lose.

So glad to have you reading, although I would never claim to be smarter than anyone… Not the least of whom would be the BHB folks. Those are some smart cats… uhh… I mean dogs!

You’re now on my radar as well and I look forward to reading your stuff!

Well, you now have my attention. The BHB flap elevated you from the “newly added” to the top of the list. You’re smarter than me, and I’m really interested in what you’ll say next.

I look forward to it..all.

Best,

CJ

You’ve definitely hit upon an interesting element of their business model… My take is that they’re definitely following all the rules in terms of displaying the listings appropriately, but if MLS start to enforce the “primary website” element (which I was unaware of), then it could start to be an issue. But from everything I’ve heard, they seem to have great interest and support from the brokers currently using their system, which I think will greatly enhance their chances into the future…

It looks like they co-brand the page to the broker and mask the roost domain name with the broker providing the IDX listings, and display all listings in an mls market.

Are MLSs cool with this?

It would seem that roost is either scraping IDX listings, which is a violation of IDX rules and regulations in IDX data agreements, or that the broker is providing IDX data to a third party – which is also a no-no in most mls IDX agreements. The language reads something like “IDX listings may only be displayed on the brokers primary website” which is listed in the agreement.

I think that what they are doing is great, and definitely broker-centric, just not sure what will happen when roost grows and comes under the watchful eye of MLS executives.