Jan. 24, 2015
The likely fallout and likely changes coming from Realtor.com cutting off their listing feed.
It was recently announced that the Real Estate Property Listings Feed from recent Rupert Murdoch acquisition Move, Inc.( owner of Realtor.com ) to Zillow would be cut off in the very near future. In response Zillow has accelerated their plans for their own national Listing Syndication Service and are aggressively courting direct feeds from Brokers, Franchisors and some of the larger MLS’s in the country. They have indicated their confidence that a good portion of the listings that will go dark will be available from these direct sources after April 7th. In the short term undoubtedly there will be some areas Zillow loses data & access, but for the most part in the larger markets they will patch together much of the data and access by the cutoff date and have assured buyers and investors they will regain any lost coverage for them….sort of Zillow saying “ There’s nothing to see here “. But this is the first significant challenge to their listing display dominance and will likely result in major changes for consumers and brokers going forward.
Even if Zillow/Trulia manage to gain many of the listings back through direct agreements, they will find many of their partners who now have a direct line to them are not as open to the status quo and their model as they once were. In recent years many MLS’s, Brokers and Franchisors have lamented the way Zillow displays listings and the very essence of how they make their money. Zillow provides a site and interface for consumers to find properties and information with an excellent interface and wide national access. Although there have always been grumblings, as they have grown larger the thought was that brokers would not dare to forego exposure on their site – too large to fail. This works as long as consumers are confident that they can find every listing in one portal and brokers feel the positives of the exposure outweigh the negatives of the 3rd party model. Currently much of the revenue for Zillow, Trulia & Realtor.com is selling advertising space next to property listings with which the advertised agent has no connection other than paid placement. In these models, agents can pay to be placed as a point of contact next to another agent’s listing… as well as the separate option that listing agents can pay to limit that access for other agents…. So somebody is paying for exposure for every listing on their site. They’ve got them coming and going.
Franchisors and Brokers have historically had several issues with this.
- They say Z/T and even Move’s Realtor.com make their money from producing nothing … they merely sell access to their listings to unaffiliated agents who may not be local or unfamiliar with the home, and this model forces them to pay to have access to contacts for their own listings.
- The accuracy of data is poorer – Many brokers feel they have a vested interest in displaying more listings which results in display of homes often under agreement, sold or off market. They now also display data on virtually every home whether it’s for sale or not.
- The “ Zestimate” an automated valuation tool to place an estimated price on a home by public records and their own algorithms. By their own estimates these can very inaccurate and agents often end up trying to reset buyer or seller expectations since it’s an easy and popular tool to reference, regardless of whether the price is accurate or not.
With the new structure, individual MLS’s, Brokers and Franchisors will have significantly more say in just how their data is displayed and will likely make demands of Z/T if they want access to their data which is what their current model is dependent upon. Some will opt out altogether with the thought that the new online reality is that they can gain widespread exposure without relying on one company. Others will demand concessions in their syndication agreements if they are to allow Z/T to display their data. Other MLS’s have discussed a tiered system that may allow partial access for aggregators such as limiting the # of photos and text descriptions. To this point Zillow has refused to accept these modifications – but they no longer have a national contract for the rest of the listing access and their very existence depends on access to broker’s data. It’s high stakes for both sides. Brokers that were hesitant to shake the status quo a few years ago are now signaling a willingness to forego some 3rd party sites and market their homes themselves with what they consider better and more accurate information. Since much of the data in a listing is protected and/or copyrighted … if Z/T does not play ball, they may lose access to the listings themselves and once consumers feel they can no longer trust them to get all the information they will search elsewhere.
The first test case may already be lined up. The Denver, Colorado MLS ( ReColorado) has already announced that after the April 7th divorce, they will no longer send listings to Zillow. Unless a new or revised agreement is reached an entire MLS may turn it’s back on the largest R.E site in the world. What are the other options for them?
A group comprised of Brokers and Multiple Listing Services, has launched an initiative called the “National Broker Portal Project “ One of the goals of this initiative is to create a national database that displays listings differently than the current aggregators do. This would provide a significant change to the current 3rd party sites by allowing buyers to access a site they know will not feature 3rd party ads for agents or competing listings on another brokers listing. Consumers will ultimately decide which model works best for them, but the decentralization of how the national 3rd party sites access data has made this a competitive space again and that’s one thing Zillow, Trulia and even Realtor.com have not had in quite some time. It’s likely that in some cases and markets that Zillow, Trulia and Realtor.com may not have the market dominance they have in the past few years, paving the way for brokers to have more control over their listings and data and via their own sites or apps. More importantly it allows for choice in how an agent can manage their syndication marketing and an opportunity for sellers to discuss with their listing agents how, where and with whom their listings will be shared to give them the best options and results.
Mikel DeFrancesco is a Real Estate Broker with SUCCESS! Real Estate in Massachusetts and can be reached directly at 617.755.8272, firstname.lastname@example.org or via his site www.SouthShoreHomeFinder.com