A Change For The Worse or Back To The Dark Ages

A Change For The Worse in Listing Syndication
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.

Here is what Edina Realty had to say regarding the pullout from a blog by a sales associate.

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.

6 thoughts on “A Change For The Worse or Back To The Dark Ages

  1. Sam DeBord

    IDX and syndication are not equal or particularly similar. They disseminate information to completely different groups.

    Aggregators create great traffic. Brokers create much of that traffic through the syndication of their listings. They’d be wise to continue syndicating in the current climate, for their client’s sake.

    Most consumers search big first, then make their way to a local site. IDX is more accurate, and up-to-date. The question, long term, is whether or not it’s sensible for brokers, as an industry, to give up web traffic, SEO, and revenue, and direct their clients toward outlets which have far more accuracy issues and are not licensed professionals.

  2. Tina FIne

    Third party sites display data statistics that hurt home sellers. If you can sort a database and show which properties had the largest drop in sales price, how does that help sellers whose listings feed those databases. Whose interest do Trulia and Zillow have, the listers whose content they show, or the buyers or come to look? Whose interest is put first? Maybe Edina and ARG are trying to protect their clients? and stop the excessive competition for buyers eyes that Zillow and Trulia are creating to their own gain? Buyers and sellers really only need ONE, consistent, fair and up to date site. I think ARG and Edina realize that data ,and who controls the data is up for grabs! No reason it has to be Trulia and Zillow.. it could be Google, it could be anyone or Brokerage firms joining together under a new umbrella.

  3. Jeffrey Douglass

    Sam, Thank you for your comments. Like you I have found Clients start on large sites and as they get serious have an agent set up an auto alert when something comes up in the area that they are looking in. Time after time the Client has a favorite search method. National sites are very expensive to build and maintain and something needs to pay for them. If you don’t want to support a Zillow or Trulia, why would you not want to support Realtor.com in some way? Everyone seems to want the solution to be free, which is unrealistic.

  4. Jeffrey Douglass

    Tina, so are you saying that we should not have on-line sites with comparable active and sold sales? Everything should be kept secret so the buyer would not have the option to see if his offer is within “market value”?

    Edina is all about a one stop service and the more than can keep in house, the happier they will be. I don’t see the argument that you are protecting the seller by exposing his or her listing to the maximun amount of buyers. ARG seems to be more of an argument that the listing agent should be clearly identified and implies that the buyers will only get the most reliable information from the listing agent. That is the job of a listing agent to do so, but ARG’s goal seems again to keep dual agency alive and healthy.

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