Third Parties making money from disorganized real estate

by THE WAV GROUP on July 9, 2010

My Rant –

WAV Group has been pretty outspoken about third party listing websites. They exist because brokers, MLSs, and Associations have not elevated their thinking about listing syndication. I think that it is time for CMLS, NAR, Realty Alliance, or some mutual benefit organization to step up and harness listing distribution and revenues from listing distribution to return revenue to its rightful owner – the brokers.

Here are the problems

1.  Data that appears on third party listing websites is grossly inaccurate – as high as 40% in some markets. Inaccurate data leads to bad leads, irritated home buyers and sellers, and throws egg on the agents and brokers face.

2.  Third party listing websites are deriving significant revenue and (moreover) consumer trust on the backs of broker listings. Without the broker’s listing, they would not have a website.

3.  Terms of Use for third party listing websites extend too many rights. In most cases, the third party listing website has the right to reuse, repurpose, and re-syndicate the listing information in any way they wish.

NAR’s partnership with MOVE is not without its critics, but 14 Million people surf listings that website every month – and that website has accurate data, shares revenues with NAR, and has Terms of Use that protect the broker and the agent with display rules and strict non-redistribution rules.

Today, the number 2 third party listing website and the number 3 third party listing website have teamed up to share listings and revenues – Yahoo and Zillow. In ComCast math, their combined traffic equates to 13.19 Million Visitors.

Did any broker or MLS that provides listings to those companies get asked first? Are they sharing revenues with MLSs and Brokers? Where else does the data go, and who else is buying it?

Don’t get me wrong, I like the people and the products offered by Zillow and Yahoo – and I know that they are good companies for agents and brokers to do business with. My concern is the terms of those business relationships.

Strategically, WAV Group has been supportive of using MLS consumer facing websites to battle against third party listing aggregators. They usually win local traffic wars and become the most visited local area property search website with little effort. Consumers know that the MLS has the most comprehensive and accurate data. All advertising revenues and consumer inquiries are distributed back to the MLS and Broker.

I am sure that greater minds will also conjure up solutions – and I hope they will. If you have an idea for a cure, drop it in the comments section below.

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