As the internet continues to become the dominant force in the real estate industry, many agents & Boards of Realtors are now realizing the long term impacts of choices that they may have made several years ago, and how they are impacting their business today. The latest news is of an IDX Civil War in Austin Texas regarding listing syndication and its impact on the industry as a whole.
Listing syndication is definitely a hot topic nowadays – and is definitely gaining momentum as persons realize the importance of their online presence. However, there is some misunderstanding even amongst agents themselves.
The issue REALLY needs to be broken down into 2 topics:
#1 How listings should be handled with syndication/advertisement on 3rd party listing aggregation companies (such as Zillow, Trulia, etc.).
#2 How listings should be handled among cooperating licensed brokers & agents on their respective websites that are members of the same Board of REALTORs.
Many persons mistakenly are attempting to lump it all together as “all internet advertising”. Touching on the first topic of 3rd party listing aggregation companies: essentially, these are a 3rd party group of venture capital funded persons whose primary business model is to take Listings for “free” from agents – and then sell leads directly (through selling of buyer leads themselves) or indirectly (through featured agent/listing placement on their site). Basically – they take something for free from agents, and then repackage it – and charge agents a fee for something that agents gave to them in the first place.
These 3rd party companies typically are not licensed to practice real estate, nor are they typically members of the local Boards of REALTORs. This also means that they do not have to comply with the same exact rules as licensed agents that are furnishing the listings in the first place. (Such as: These 3rd party companies generally are able to display SOLD listing data on their site, whereas licensed real estate agents generally are not.) This places agents at a tremendous competitive disadvantage. They have more rules and regulations with which to comply – and yet, they are competing for the very same internet presence that the 3rd party companies are attempting to get.
As a result, many agents are wanting a more level playing field. They feel that whatever these 3rd party sites are able to do (or not do) from a marketing standpoint, the same should be applied to agents. For the agents that are concerned about listing syndication for the 3rd party sites: its all about free trade, fair play in business – and a level playing field.
Additionally, many REALTORs that are primarily Listing or Seller’s Agents, are also wanting to get items added to the listings that are displayed such as Their Phone Number, Website Address, Email, Logo, Watermarking of their Photos with their Team Branding Contact Information, etc on these syndicated sites – so that customers can contact them directly without having to pay for the leads.
Editorial Note: I personally have no issue whatsoever with additional agent branding, contact info, etc being required for use on the 3rd party syndication sites.
The 2nd half of the topic is listing syndication commonly referred to as IDX across other agents websites. This is where the issue takes an entirely different spin. It needs to be recognized that there are 2 types of agents:
1. BUYER AGENTS
2. SELLER AGENTS (aka listing agents)
Unlike the above issue, Agents are all operating on the same level playing field from a rules/regulation standpoint of marketing. Those persons that want an internet presence to create a Buyer’s Brokerage, are free to allocate their time/resources/money toward that end. Those persons that want to solicit listings and be a Seller’s Brokerage (listing brokerage), are free to allocate their time/resources/money toward that desired goal.
Its all about cooperating and working together for the good of the industry, and making it easy for consumers. The addition of listing broker team branding/logos/contact information, etc – would cause the Buyer’s Agents to essentially be providing advertising for Listing Agents, as the consumer would be more likely to call the Listing Agent despite the lead being generated from the Buyer’s Agents website.
This would be fairly akin to saying: “Buyer’s Agents should be able to place THEIR sign in the yard of listings that other agents have”. After all, more advertisement is good for their seller, right? It makes the exact same sense.
Listing agents already have a tremendous amount of advantages in place: yard signs, open houses, local media advertisements, postcard mailouts, etc, etc. Beyond the internet, what do Buyer’s Agents have that will realistically generate business in today’s market? Very little. The conversion numbers of customers from a postcard that says “Want to Buy a Home? Call me.” are going to be very low, compared to what the listing agent is able to generate with advertising their listings.
If listing agents were allowed to have the additional contact information, or branding advertisements (logos, watermarking of photos, etc), this will completely segment real estate agents as a whole – because Buyers Agents will not advertise listings that have their competitors contact information on it. What would consumers do if this happens? This would be a tremendous blow to the industry, as it would force consumers to go to the 3rd party listing aggregation sites to find “all the listings” that are currently on the market.
The solution is to separate the topic into 2 issues. Address them separately. And to unite REALTORs together for the common good of the industry.
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Jon – Spot on with this post. There are two separate issues at play here, and they likely need to be separated to make any progress.
Great article and very well put. Agent greed should not drive changes that will affect the overall experience of the consumer. Why a board would even consider these changes blows my mind.
Jon, Thank you for separating the issues. “For the common good of the industry” sounds great. I, like most Realtors, represent both sellers and buyers (but not in the same transaction). I’m pro-IDX. It’s all over the place now and is a great way to ensure my listings have as much exposure as possible.
Jon – As far as I see it, the listing agent currently has the option of opting out of IDX if they do not want their listings on other agent websites via IDX. The purpose of IDX was to cooperate. Now, the listing agents want to be the only source of contact for their listings and have the ability advertise through watermarks on all websites. I’m sure not even the third party sites would appreciate that. They can’t sell leads to agents when another agent has their name and phone number all over the pictures.
Maybe we should go back to the days when everyone represented the seller. Seriously, this should be about what is best for the client. We have so much infighting now and much of it, the consumer does not understand or care about. I’m certain most sellers want exposure for their home and buyers want the right to choose their realtor without having to hunt down the listing agent to view a home online.
Excellent article, Jon! REALTORs who are promoting and using the services of third party aggregation sites (such as Trulia, Zillow, etc.) and have been essentially paying these companies (for years) to put them out of business should take a look at this blog. Hopefully the industry is able to come together and salvage something of the wreckage before all listings are syndicated and these companies are able to charge exhorbinant fees for their services – and REALTORs will have no choice but to pay.
Well written! These really are 2 separate issues that most agents and boards have not really thought through. Thanks for helping to clarify.
Great article. I agree completely. I think agent branding our individual web sites is not in the spirit of why the IDX was created. The IDX was created to let agents share their inventory and agree it should not be changed. I fully support individual listing agent branding on 3rd party sites like Zillow. Great article. There are plenty of agents that don’t understand the difference between the issues and I am sure many of them would agree that one can be changed without changing both.
Great article. 100% spot on! The fear I have is that a large portion of agents will not understand (nor take the time to understand) that there are two separate issues and may end up voting for the wrong side because of their lack of knowledge on this topic. Hopefully I am wrong.
This is why I think a national open IDX will never see the light of day. There are too many opinions as to who owns what data. At the end of the day, I believe the agent owns the data, but the moment it’s submitted to a widely distributed database for reciprocity, the data is no longer theirs.
The agent needs to make the decision as to whether they want to try and market their listings themselves without the Internet (hah), or allow it to be propagated everywhere. You’d hope they’d act in the client’s best interest, which is obviously favored toward free propagation around the net free of restrictions. The end goal? For the client to sell their home. That’s it. For you to not act in this intention, in my opinion, violates your fiduciary responsibility to represent their best interests.
Sidenote: They’re probably giving away their data already and not even know it. Ever read Pinterest’s TOS? The moment a property gets pinned on their site, voila, ownership rights have been given away.
I absolutely agree, sending data to the aggregators is ultimately hurting agents themselves. However, as a listing agent, my fiduciary duty is first and foremost to my client’s best interest – which includes fully marketing their property through all available platforms. It’d be hard to justify NOT advertising a property on some of the most trafficked real estate websites in the world.
Excellent points, Alex. Let me get my devil’s advocate hat out. (please keep that in mind when reading…..)
Duty:
I would argue that you have a primary duty to what is for the good of your business first (assuming its legal, ethical, etc, etc, etc, etc, etc). That’s why when agents get that $80,000 condo listed, they don’t take out a Superbowl Ad promoting it. Nor do they take out a full page ad in the New York Times. Despite it being in your client’s best interest to promote their listing to the greatest audience possible – its simply not cost feasible to sustain your business by doing things like that. So you don’t do it.
Same goes for rebating 100% of your commission. That too would be in your client’s best interest. Again, your business wouldn’t be feasible, so you don’t do that either.
So, just because something happens to be in your client’s best interest, does not automatically equate to it being something good for you to do.
And I would argue, that while the 3rd party sites are “not particularly” harmful today…right this second…that it most definitely poses a significant threat in the future (3 years, 5 years, 20 years, etc from now).
Traffic:
Yes, we’ve all seen the wonderful claims of HUGE traffic. I would argue that a great portion of that traffic is meaningless…because its simply not relevant.
How much of their traffic is generated by Celebrity Homes? http://www.google.com/search?hl=en&site=&source=hp&q=zillow+celebrity+homes&oq=zillow+cele&aq=1&aqi=g6&aql=&gs_sm=3&gs_upl=1505l8263l0l9476l31l31l12l0l0l0l186l1994l11.8l19l0&gs_l=hp.3.1.0l6.1505l8263l0l9476l31l31l12l0l0l0l186l1994l11j8l19l0.frgbld.
When those stories about Tim Tebow or Grammy Awards Nominees show up on AOL or Yahoo, a LARGE amount traffic is generated to their site…but its not people wanting to buy that $80,000 condo you have listed.
Carrying on, how much of their traffic is generated from Zestimates? Listings agents looking at their own listings? Sellers looking at their own listings? etc etc. (you get the point)
And finally: Many of the big real estate sites provide phantom numbers for stats/traffic. How is that generated? Easy: Every time your listing is a “match” for a particular search, that counts as a hit. So, if you have someone that starts off a search at state level, that’s 1 hit (even though there are thousands of listings in the results, and the listing was never actually viewed). Lets say they flip threw a few pages of those…each of those is a hit. Then they tweak it down to County level…where there are still thousands of listings…that’s another hit. And they look at a few pages of those…all are counted as hits. Then they tweak it down to City level…yup you guessed it….more hits.
A listing can generate a LOT of “hits”…and never actually have ever been seen by someone.
(devil’s advocate hat off)
For me, its really easy to justify NOT advertising on those sites.
Extremely well put. It is good to see you pointing out the differences between these two things. I will be curious if what happened to Google places in regards to scrapping content will happen to Zillow and the other like sites.
Great article, Jon. As a the managing broker of a pro-IDX brokerage here in Austin, we firmly believe that the IDX system is what’s best for the consumer. There’s no way we could honestly tell our listing clients that we are doing all we can to move their home if we opted out of the IDX. You’re absolutely right that this ‘Civil War’ needs to be broken into the two sides you outlined.