Grant Hammond discusses the great MLS listing syndication war raging behind the scenes between the San Diego MLS, Edina Realty, Denver’s MetroList, Zillow, Diverse Solutions, Trulia and Realtor.com:
I almost never post any articles concerning Realtor squabbles, but there is a massive movement building online that deserves a few moments of discussion. Recently, several real estate brokerages and MLS administrators across the country have begun to pull their listings from a few specific listing syndication sites like Zillow, Trulia and Realtor.com. More recently, the San Diego MLS has added a text field to its listings that allows listing agents to enter contact information, including names, email addresses and brokerage websites to the data that is syndicated. In a second future step, the San Diego MLS will also add a watermark to all listing photos that identifies the listing agent. The intent is to force the Zillow’s and Trulia’s of the world to identify the listing agent and brokerage.
In other words, local MLS operators (typically owned by the local Realtor Associations) and real estate brokerages are launching a movement to regain control of the Multiple Listing Service information. The general fear created is that home listing information will not be as readily available to the general public if many MLS operators take the same steps as the few who have already begun to restrict MLS information. For instance, if you live in Minnesota, Edina Realty is the 900 pound giant in that market. In November of last year, Edina no longer sent their listings to Trulia and Realtor.com resulting in the inability for home buyers and sellers to find Edina Realty listed properties on those sites. Of course, all of Edina’s listings are still available on Realtor IDX feeds, meaning that you can still find all of their properties on any licensed real estate agent’s website, including their competitors’ websites.
According to Edina’s press release, “The inaccuracies we’ve seen on third-party aggregator sites give us cause for alarm, and the reality is that we are no longer willing to surrender our business – or the consumer’s real estate experience – to third party aggregators, who are not required to operate under the same rules and laws as brokers.”
Whether or not the real basis for the change was the stated reason, the move caused a minor shockwave through the real estate community. A conversation began and many real estate agents came to the realization they were no longer in control of their data. Let me take a step back: officially, home listings are the property of the principal broker of the local real estate office that gathered the listing information. That principal broker has an agreement with the local MLS provider to centralize and syndicate that information to all of the local real estate agents. That MLS provider (Realtracs in Middle TN) has an agreement to also syndicate that information to MLS aggregators like Point2 Agent and ListHub which source the information to users like Zillow and Trulia for a fee. While I am not aware of what the fee is, I imagine it is quite substantial.
It is easy to see how data could be lost or inaccurately transferred in this convoluted process. Just as importantly, it is even easier to see how the original listing agent and brokerage are completely lost in the transfer of information. In fact, Trulia, Zillow and most other public portals go out of their way to not identify the true listing broker. Instead, their monetization model includes selling listing sponsorship to any real estate agent who is willing to pay for that privilege. This is a problem, especially if you believe in servicing your clients to the best of your ability. As a listing agent, you have just lost the ability for a potential home buyer to call you to ask important questions like: Does the kitchen have a gas cook top? Is the master bedroom separated from the main living space? How close is the neighbor’s house? Clearly, these are questions the listing broker can answer immediately.
A fear that that some real estate agents have is that by identifying the listing broker on all listings, it will create an atmosphere conducive to dual agency. I concede that this is probably true, but as a buyer’s broker myself, I feel that it is my job to educate my buyers as to why it is in their best interest to have their own representation. Perhaps it is because I am an ABR or maybe it’s because I have a strong belief in consumer advocacy, but I do not believe this will be as much as of an uphill climb as many fear.
Here’s the rub.
The true owners of the listing information, the originating real estate brokerages and MLS providers, are upset their information is being sold back to them. At the same time, these same real estate brokerages want their listings to accurately reach as many potential buyers and sellers as possible in order to sell as many properties as humanly possible. But, the reality is that the syndication model is based in an era that is no longer applicable. Realtors no longer need 3rd party aggregators to disseminate listing information as they did 15 years ago. Almost all real estate brokerages and real estate agents have websites with a direct MLS feed. This was not the case 15 years ago.
As you can imagine the real estate community is torn down the middle on this issue. On the one hand your have excellent brokers like Jay Thompson in Phoenix who advocate syndicating all of the information to every site that wants it in effort to increase exposure (I have no beef with Jay, he is simply vocal). On the other hand, you have agents like myself who believe the listing information is intellectual property that needs to be handled with care. I do believe the information could be selectively syndicated, but we need to choose partners who will treat the information as we would. It needs to be accurate, not misleading and timely. For example: too many times, aggregators will knowingly display listing information they know to no longer be available because they live in a world of page hits, advertiser impressions and click-thrus. Simply put, their interests are no aligned with our client’s and that is where most problems arise. I do not believe that Trulia, Zillow or Realtor.com currently meet these best practice standards.
The best analogy I can think of.
What if the NFL broadcast the Super Bowl to every single TV network in the United States, but did not require those TV networks to sign a specific licensing agreement? In that same light, the NFL neglected to collect the appropriate licensing fee and further neglected to share that fee with any of the team owners and players. To complicate matters, the NFL then permitted the rebroadcast of the Super Bowl at anytime and allowed networks to splice together or cut the game short if they secured more advertisers. Further, the NFL did not have the ability to control or monitor what the announcers said on any of the networks leading to inaccurate statistics and scores. Finally, some stations decided not to air the current Super Bowl and just reran last year’s game to save some time and trouble.
It is clear that the above example is a broken system. The NFL would no longer have the ability to protect the integrity of its product and would lose viewership, market share and trust. This is exactly what is happening with MLS listing information. While certain rules and licensing agreements do exist, they do not go nearly far enough to protect the integrity of the information. Enter the San Diego MLS and their new protocols to help protect the original owner of the listing information. While I think what San Diego is implementing is a very good first step, there are many more to go before I am ready to declare several syndication sites good partners. Nor am I ready to concede the point that these 3rd party sites are even needed in 2012. Do a Google search for real estate in any city in the United States and tell me if you cannot find the properties for sale on a real estate agent’s website on the first page of the Google results. You will be hard pressed to prove me wrong.
A bad situation gets worse.
Enter the National Association of Realtors. Yes, NAR wants to get in on the lucrative listing aggregation and syndication game too. NAR wants its members to sign off on allowing the association to collect and distribute MLS listing information to 3rd party sites creating yet another middle man. My point remains the same, agents no longer need a 3rd party to syndicate their listings. There are over 1 million real estate agents in the United States and a great many of them have websites that display accurate, up to date MLS listing information utilizing IDX feeds available to Realtors.
If NAR wanted to get involved, one would think our own national association would want to create a single centralized MLS service that ALL home buyers and sellers would use to search for ALL properties listed by Realtors in the United States. I would expect NAR would want to identify, celebrate and lift up all of its contributing members. I would not expect my own national association to prostitute the information as planned.
A quick word about Diverse Solutions and Zillow.
For the Denver MetroList agents who are upset by their local MLS ending its affiliation with Diverse Solutions because of the recent sale to Zillow, I understand your frustration. I too, have spent an inordinate amount of time creating sections of my websites centered around MLS information. It takes days to create all of those links and to get the data displaying exactly the way you want. However, with today’s announcement that Zillow has hired the renowned ARMLS (Arizona Regional MLS) CEO Bob Bemis to become the new VP of Partner Relations, Zillow’s path is revealed. Speculation is no longer needed, Zillow wants the complete MLS feed. In my humble opinion, Zillow having access to the complete MLS feed is like the Iranians obtaining intercontinental missiles armed with nuclear warheads. Nothing good can come of it.
In conclusion, I believe real estate agents are entering a bold new era in which they realize the true worth of the services they perform. Agents who value their effort need to understand their work product is being treated inappropriately. Now is the time to speak up for the integrity of your profession and take note of this movement. For those who value their clients and wish to give them the highest level of service, you must educate yourselves on these syndication and aggregation issues.
By the way, I am also slightly offended by the notion that home buyers and sellers will not be able to find listing information if it is not on Zillow, Trulia or Realtor.com. Granted, these venture capital backed companies have outspent real estate brokers on search engine optimization, but their work product is inferior on accuracy, timeliness and boarders upon dishonest when it comes to the source of the listing data.
Grant Hammond is a 10 year veteran of the real estate industry who promotes professionalism with an emphasize on client service and work product.
