Let’s start with the foundation and hierarchy of Move.com (parent company). Move.com manages realtor.com (child company) which is owned by the National Association of Realtors. Move.com (parent company) also owns ListHub (child company) which is a platform that supports MLS’s, franchises, brokers and agents with tools to advertise the listing data. ListHub syndicates data to many real estate partners (known as third party sites) such as zillow, trulia, hotpads, homes.com ... See flowchart below for a visual.
Rupert Murdoch owner of News Corp acquired Move.com in September 2014, since then Zillow’s stock prices have dropped in half. Zillow’s chief revenue officer, Greg Schwartz, announced, “We’ve not been able to come to terms with News Corp.” Referring to the long term syndication agreement between ListHub and Zillow, and also stated that “the ListHub agreement will most definitely expire” in April.
How did this happen?
Zillow, Trulia, HotPads ... were all founded in 2005. When syndication began, Realtor organizations/associations gave third-party sites listing information and they in return gave back buyer leads. This original trade now flows in one direction; data to the third party sites and those sites now sell the leads back to the Realtors/members who gave them the listing data. A North Carolina based association WRAR claimed, “Concerns of unethical business practices and inaccurate listing data on third-party consumer websites” and that the third party sites were “Were not in the best interest of members or clients.” Frustrations resulted from inaccurate and old data, overstating of inventory, buyers getting misrepresented and ‘sold’ to agents who had little to no knowledge of the property. This in turn hurts the Realtor representation as a lack in experience, knowledge and professionalism. Below is an example where our Reno-Sparks Association of Realtors RSAR MLS’s snapshot and www.RenoSparksTahoeHomes.com shapshot both show a bathroom count of 10 and Zillow shows a bathroom count as 15 on the same listing.
What does this mean?
When the data feed is pulled in April approximately 60%-70% of the data seen on third party sites will be gone, leaving the sites with data they have received only from real estate brokers/partners in the market. Note this percentage is on a national level and not represented on a community level. Hundreds of thousands of listings from the most highly trafficked real estate portal on the web will now only exist on Realtor.com or your local broker’s website. Looking at Zillow they currently show 3.2M listings, of that 1.2M are ‘Not for Sale’ listings meaning they’re either a rental or a notice of default has been filed against that home. The other 2M is comprised of the ListHub’s data and data from broker partners with Zillow. Below is a small representation of the third party vendors ListHub syndicates data to.
Will third party sites really go away?
Inman.com a leader in real estate news has come up with a few options that can happen to these third party sites. There may be other options, these just happen to top the list when in discussions.
- FSBO Site – 'For Sale By Owner' Here they’ll focus on sellers who want to sell without an agent. This has been tried before but not from a website with so much traffic.
- Sold/FadeAway – This is pretty explainatory
- Innovate: Paying brokers for listings – This seems like the most logical idea. These third party sites can create partners with local brokerages for their listing data while paying a fee to the brokerage. This way the third party sites can still make money selling to buyer agents who want the leads that come from the listings. This will take some time, money and will not be 100% of the data available.
How does this effect Realtors? How does this effect Consumers?
Realtors who are primary a Buyer’s Agent and those who buy their leads will have to adapt. This also goes for team environments where pressure will be put on listing agents to get more listings which results in approximately 2 buyer deals per listing. 7-8 years ago, paying for buyers leads was never a concept and now we’ll have to go back to the same ‘old school’ –type lead generation. Unless you can come up with a NEW idea, reinvent the wheel or expand the wheel. Agents with skills are projected the flourish and those brokerages with a large online presence (RST Homes) are projected to do very well as the consumers will be moving back to the great experience website with lots of accurate data on it. Agents, if you’re buying your leads you have until about April 7th to do something about it. Go brand yourself, get coaching, or partner with a listing agent. Do something now!!
Lastly to end on a great note, the best news is Inman.com is predicting that we are at the beginning of a 10 year real estate boom!! That’s right, we’re on the upswing!!
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