Five Ways to Make a Thoughtful Decision about Direct Feeds

by Marilyn Wilson on March 16, 2015

boardroomwithblueskyI had the honor of working with the Greater Albuquerque Association of REALTORS® today. They hosted a Town Hall asking for input on whether or not their brokers would like them to negotiate a Direct Feed from the Zillow Group on their behalf.  Michael Bustamante did a great job of framing the issues that need to be discussed and ultimately decided upon.

While the issue is anything, but clear cut, there were interesting questions posed that may be helpful for you to use in your market as you try to think your way through your market’s decision about direct feeds.

1.     Potential Need/Impact – What percentage of your market’s listings are already being syndicated through franchises?  In this market, more than half of the listings were being syndicated through about 7 franchises.  You may want to check and see how many of your franchises already have a direct feed in place. This will help you understand what percentage of your listings are actually affected by a direct feed coming from the MLS.

2.     How many are participating?  If you currently have Listhub in your marketplace, you can get a sense of how many of your listings are currently being syndicated to Zillow and Trulia.

3.     What are the trade-offs?   The Zillow Group is offering priority placement for Listing Agents, prominent MLS attribution and a few other goodies.  Ask your members how important these trade-offs are for them.    Each MLS will likely negotiate their own terms, but you can begin with the program that has been outlined publicly.

4.     How committed are your brokers?  How important is Zillow and Trulia to your broker’s success?  There are a lot of schools of thought are the role and importance of third party sites in broker success.  Poll your brokers and find out where they come out on this topic.  If they believe these sites are an important part of their marketing mix then the next question is whether they want the MLS to negotiate a program on their behalf or if they would prefer to go it alone.

5.     Longer Term implications – While many brokers believe that Zillow and Trulia help them secure listings, some are worried about the long-term impact of such a fundamental partnership.  Ask them what their longer-term concerns are. What happens when third party sites have data that is high quality as broker sites?  What could happen to pricing if third party sites continue to increase traffic?  What other products/services could they offer and would they be competitive with your brokers?  There may be ways to address some of these longer-term implications in your contract while still enabling your brokers to take advantage of the marketing support from third party sites.

{ 3 comments… read them below or add one }

Paul Wilson March 17, 2015 at 7:16 am

Thank you, Marilyn, for bringing some real thought-provoking ideas to the table as we grapple as an Association with this issue of syndication, partnerships, data protection, etc. Truly this entire issue is a moving target; we so appreciate your 30,000 foot view of the terrain as we deal with the issues “in the weeds”. Way to go, Marilyn. YOU ARE THE BEST!!!

Reply

Brian Talley March 17, 2015 at 7:21 am

Thanks for the article Marilyn. We met when I was on the MLS (ACTRIS) committee in Austin TX. At the time – if I remember correctly – you were advocating that local boards facilitate syndication to third-party portals to stay relevant. Of course Austin decided to stop facilitating syndication by dropping ListHub. But then they flip flopped and decided to facilitate syndication to Trulia and Homes.com in return for “data standards” – standards that Zillow would not and will not agree upon.

The Austin board was always conflicted on what to do but the majority did not want ABOR to facilitate syndication. There were some brokers on ACTRIS and at ABOR that did want ABOR to facilitate syndication. I suppose the board’s ultimate decision was an attempt at a compromise. After the decision to stop using ListHub the big franchise brokerages continued to syndicate directly to Z,T&R having negotiated favorable deals with Z & T for exclusive listing agent exposure & links back to their website. A large Austin based brokerage followed suit and was able to negotiate these favorable syndication terms with Z for their brokerage – terms that ABOR has not been able to accomplish for the smaller brokerages. Even the terms that T and Homes.com agreed to with ABOR are not as favorable as the agreement that some larger brokerages have directly with Z.

Zillow’s strategy of fragmentation of data standards is to their profit and to the benefit of the big brokerages who are able to ink favorable deals for their agents. If Z agrees to provide all agents with premium listing agent exposure and a link back to the listing agent website – for example – then they can’t profit off those that are willing to pay for it. At the same time, brokers are making their own websites less competitive in the search engines by sending their listings to Z, T & R in the first place!

The point is that this is a national issue and it is hard for any local MLS to make a big difference. If any organization should be advocating for our smaller brokerages on this issue then it should come from NAR as a unified effort and policy. Plus NAR should be providing a national member owned and controlled website to compete with Z, T & R. Not sure if that is possible with the current Realtor.com agreement?

Clearly Z,T&R are not going away. Z will continue to cater to the “do it yourself” consumer that loves to find Coming Soons, Make Me Sell, and FSBO’s. R will become more relevant with the new ownership. Who knows what will happen with T but they are somewhat of a white hat for Z. Zillow will probably use Trulia to get listings from MLS’s that want data integrity standards while Z will continue to cater to the segment of the market that would rather not work with a Realtor. Z will get the best of both worlds! And so long as NAR has no member owned and controlled national portal – NAR is allowing non-member organizations to take a big chunk of our member’s potential income – by allowing Z, T & R be the middle man between our members and the consumer. NAR needs to find a way to fix this situation.

Reply

Douglas W. Kenny March 26, 2015 at 7:42 am

This issue is a wonderful example of both greed and risk management. From the syndicator’s standpoint, by having each MLS and brokerage sign a separate contract they spread their business risk by assuring no group is sufficiently powerful to dictate contract terms. As far as I can tell, NAR, the Council of MLS and even the large brokerage consortiums have not even attempted, much less be successful, in negotiating a contract on behalf or their respective memberships. This is like issues that could be fought at either the state or national level. In many cases, the fight is brought and fought at the state level to improve the odds of winning at least some of the time and not risking an “all or none” situation.

And on the other side, somehow large brokerages have convinced themselves that they can each strike a better deal on their own. I would guess that the incremental differences between such contracts are largely trivial and unimportant.

My point is that what everyone wants in a contract with the syndicators is really about the same and yet REALTOR organizations can not come together on a unified front to demand a better deal.

It’s a shame.

Reply

Leave a Comment

{ 1 trackback }

Previous post:

Next post: