Reprinted from www,jeffreydouglass.com.
I’ve been saddened and surprised by the latest debate and recent actions of Edina Realty regarding 3rd party websites displaying real estate listings.
For years most of us in real estate have felt that our data has been taken from us, and then sold back to us with the likes of Zillow, Trulia, and Realtor.com. With that said, many realized the benefit for Sellers of having listing information widely available. Kinda a two edge sword. Not unlike the old print advertising, you could choose to advertise or not, and pick the venue with the biggest circulation (eyeballs). These 3rd party websites are not unlike advertising magazines of a bygone era.
I ‘ve always been an advocate of the Multiple Listing system with the ability for all real estate brokerages to share in a common location listings. Much more that just a database, the MLS allows compensation be paid regardless of agency and an almost complete and collective inventory of homes for sale. Yes, some idiots have opted out of having listings released to the Internet and IDX feeds.
Good for the consumer for two reasons, one they don’t have to wade through a dozen brokerage websites, and secondly they are free to choose who will represent them rather than have the listing agent thrust down their throat.
From the consumers standpoint my belief is a collective data base is far more desirable than visiting dozens of brokerages sites to get a complete picture of what is available for sale in the marketplace. Any company that would consider pulling out of major 3rd party or IDX sites, are doing so for one simple reason – to keep sales in-house with the listing agent or an agent in-house, thereby making double the commissions. It is just another method of defending the status quo.
The cancer that is growing in the real estate industry is lack of cooperation and competition between brokerages for the benefit of the consumer, and the building of walled gardens to protect and promote the brokerages listings.
Enter Home Services that owns dozens of brokerages across the county and owned by Warren Buffett.
For years they have been an advocate of a one stop shop, owning escrow and title companies, mortgage companies, home warranty, and other related services. The goal is to direct as much business to these affiliated companies to bring up profits. While no brokerage is foolish enough to insist on it’s sale associates to use a particular service the quite conversation with the Client is they will be taken better care of by staying “in the family.” Very similar to why go elsewhere than the car dealership for a good financing option. Most realize that would not be a wise choice without shopping the offered loan to make sure it was competitive.
Edina Realty is responding to the changing business models of third party aggregators. Third party aggregators are not brokers and they are not required to abide by the same rules and regulations as a broker. They get listings for free from brokers around the country and then display them online, collecting and distributing leads for a profit. [Ed. Note: an earlier version incorrectly reported that NAR was not affiliated with Realtor.com; it is, through an operating agreement with Move, Inc.]
We’ve since discovered that much of the data and information showcased on aggregator sites is inaccurate if it comes from non-MLS sources. According to a recent data conducted by Trulia.com and published on Inman.com, 69 percent of errors in online real estate listings information were directly related to third-party syndication of information by non-MLS sources. This points to the need for more diligence regarding ownership of our clients’ data and where we send it – be it directly to an aggregator site or through syndication.
“The company reviewed about 1.2 million listings from about 250 data sources during the third quarter and found about 120,000 inaccuracies in listings information. More than half(51 percent) of those inaccurate listings had errors in price, 41 percent had status errors, and 8 percent had errors in both price and status.”*
*Source: Trulia.com and Realtor.com respectively
Edina Realty will no longer provide a broker feed of our listing inventory to Trulia.comstarting Nov. 30, 2011.
We also intend to discontinue sending our listings toRealtor.com by the end of the year. Third party aggregators are not brokers. They get listings for free from brokers around the country and then display them online, collecting and distributing leads for profit. We believe it makes the best business sense for our agents and Edina Realty to control our own listings in order to ensure that:
- Our agents don’t lose future business opportunities because a non-listing competitor pays to present themselves as the contact for your listing.
- Our agents don’t have to pay – directly or indirectly – for leads on their own listings.
- Our sellers can be assured that leads on their listing are being handled by an expert –
- The quality and accuracy of your listing data is assured.
- Potential buyers are provided with fast, knowledgeable responses via the listing agent or our seven-day-a-week customer service department.
Here is my personal opinion:
We don’t want to cooperate with other companies or buyer’s agents. Exactly the opposite of what the MLS encourages.
Any halfway bright Edina agent will realize being off major 3rd parties sites is a terrible disservice to their Clients. Secondly I’m sure that the Company will have clever strategies to capture associates income to promote their listings as “premier or featured” on the closed website.
I’m sorry, but having the Seller assured that the listings leads are being handled by an expert is just code for “dual agent” and why rock the boat, can’t we all just get along and not worry about the details, of many listing agents.
The quality and accuracy of listing data is historically poor, regardless of being in-house or syndicated.
The last one really says what the motivation is – we want the buyer and we don’t want the buyer to bring their own agent.
I think Craig and others might want to step back from the Kool Aid stand a bit and sober up.
One of the brilliant minds from outside our industry is Brian Boero over at 1000 Watt. Here is what Brian had to say:
If I am a big broker, I have:
Gotten my splits chewed down to the nub by agents.
Had to contend with license-warehousing chop shops that gave those agents bargaining leverage.
Seen small, web-driven buyer brokerages build businesses on a database of listings I create.
Watched my MLS try to keep its piece of the Realtor dollar by peddling products, creating consumer destination sites, seeking to build its “brand” and otherwise stepping into a channel I’d like to call my own.
Seethed as the NAR launched a sprawling web application and data licensing business (RPR) that thumbs its nose at my desire for remuneration.
Oh, yes, and a cratering housing market.
Now Brian brings up some really good points as to why big brokerages are feed up with the lack of control.
They are also desperate to offer some tangible ”value proposition” for the lumbering, inefficient, and top heavy dinosaurs they are. What better way than to step back in time. Never mind the consumer will suffer from lack of choice.
Companies that grow to large become only profit motivated.
First published on www.jeffreydouglass.com on November 19, 2011.