Powered by data from multiple listing services and other statistics that can be used to gauge agent performance, realtor.com’s experimental new agent rating service for consumers, AgentMatch, is a bold move that could help the site differentiate itself from competitors like Zillow and Trulia.
But AgentMatch, currently being beta tested in two markets, has also raised the ire of agents, many of whom are concerned about the validity of statistics-based rankings.
Some agents are also expressing dismay that the National Association of Realtors is allowing realtor.com to move forward on an initiative that some feel is not in their best interests.
NAR, which holds a minority stake in realtor.com operator Move Inc., allows the company to operate realtor.com under the terms of a 17-year-old operating agreement. Thanks in large part to its ties to NAR, Move gets data feeds of “active” listings from more than 800 MLSs across the U.S., representing 98 percent of all MLS-listed properties for sale nationwide.
Some, but not all, of those MLSs also provide realtor.com with sold listings data that can shed light on agent performance. Although the realtor.com operating agreement was amended in 2010 to allow for the display of productivity statistics such as active listing counts and sold transaction data with approval from listing brokers, NAR reserved the right to sign off some aspects of implementation.
Move says it’s using only sold data from MLSs to power AgentMatch in markets where the MLSs have agreed to participate in testing.
AgentMatch, currently aimed at sellers and available only in Las Vegas and Boulder, Colo., is designed to identify top agents in a consumer’s search area through an algorithm based on recent sales, list-to-sale-price ratio, average days on market of homes listed, recommendations and other information.
Consumers can also see that information dating back six months in agent profiles on the site when they search by city, ZIP code or neighborhood.
The reaction to AgentMatch from real estate brokers and agents has been overwhelmingly negative, both in the comment section of an Inman News story about the launch of the service, and on social media channels, including several Facebook groups.
“I don’t think NAR should do this at all,” said David Hanna, a broker-owner in Chicago. The association should “create and maintain a business environment that we could all work with.”
Hanna, who served as president of the Chicago Association of Realtors from 2006 to 2010, knows that NAR does not operate realtor.com, but feels that its close relationship with the site makes it complicit in steps realtor.com takes.
Hanna said he thinks that providing quantitative MLS data to consumers presents a restricted picture of an agent’s performance.
Paul Scheufler, a managing broker with Expert Realty Services Inc. in the Chicago suburbs, said AgentMatch’s emphasis on agents’ production puts newer agents at an unfair disadvantage, and favors business models such as agent teams, where several agents feed listings to a team lead.
Scheufler and Hanna said qualitative data can present a more accurate picture of an agent’s value.
Hanna, Scheufler and other agents have expressed frustration with NAR for letting the controversial tool see the light of day.
“It is tough enough earning a living as a Realtor,” Scheufler said. “Why would the association that represents us want to make it tougher?”
Negative reaction no surprise
The Houston Association of Realtors, which operates one of the nation’s largest MLSs, and Seattle-based brokerage Redfin have each experimented with MLS-powered agent ranking platforms. Both were met with loud protests from agents, and were short-lived.
In abandoning its 2011 attempt at surfacing agent productivity statistics, Redfin cited inaccuracies in MLS data and concerns that rating agents solely on MLS data created an incomplete picture — especially in the case of agents who work in teams.
After HAR pulled the plug on its attempt to serve up agent productivity statistics in the spring of 2010, CEO Bob Hale predicted that consumers would eventually get access to agents’ transaction histories, but that it would “happen outside of the industry, and everybody will be mad.”
As Hale predicted, some companies that operate third-party websites not affiliated with NAR have in fact made moves in that direction. But they’ve encountered opposition when attempting to provide consumers with agent productivity statistics that may include information derived from MLS data.
American Home Realty Network Inc., which operates real estate listing portal and agent ratings website NeighborCity.com, was sued by two MLSs not long after launching its “Agent Match” tool. The company remains embroiled with NAR in long-running copyright infringement and antitrust lawsuits.
In the latest twist, American Home Realty Network this week sent realtor.com operator Move Inc. a cease-and-desist letter alleging Move’s “AgentMatch” tool infringes on NeighborCity’s trademark registration of the term “Agent Match.”
The largely hostile reaction from agents to previous attempts to surface agent productivity statistics — even by groups with strong industry ties, like HAR and Redfin — was no secret to realtor.com executives.
So it was not a surprise when the tide of agent opinion quickly turned against AgentMatch, Realtor.com President Errol Samuelson told Inman News.
Realtor.com conducted consumer surveys and polled members of Realtor associations in Las Vegas and Boulder before launching the service in those markets in August, he said. The company also maintains separate 20-member MLS and broker AgentMatch advisory boards in each market, he said.
“As people start to understand what we’re doing, their fears will go away,” Samuelson said.
He compared the frosty reception to AgentMatch to the anxiety surrounding the era of listings just coming online in the mid-’90s.
“If this goes well, agents and Realtors will say that this was a good thing for the industry,” he said.
As realtor.com shifts its focus to catering to consumers’ needs in an effort to stay relevant and regain its status as the leading listing portal, unhappy agents may be a fact of life — at least until they see the pluses outweighing the minuses.
“We all agreed in July that to be relevant and to be competitive, we need to stop serving ourselves, and start serving consumers,” wrote Ernie Graham, AgentMatch’s project manager at Move, in a post reacting to the site’s backlash.
“That was a bold step. We need to continue together to keep taking these steps, and not get left behind like we did” with automated valuation models (AVMs), Graham wrote. “This AgentMatch experiment is another step.”
Samuelson said realtor.com missed the boat with home valuations, which have helped Zillow and Trulia attract visitors. Move mulled putting valuations next to listings in the early 2000s, Samuelson said, but scrapped those plans because of negative feedback from Realtors.
Zillow and Trulia allow agents to manage profiles on the site that can display information on past sales and current listings inputted by agents. Zillow users can rate and review agents, and Trulia users can post recommendations. On realtor.com, agents may add client recommendations they receive through RealSatisfied, a service that surveys clients on customer satisfaction, to their Find-a-Realtor profiles.
NAR’s latest survey of homebuyers and sellers showed that 89 percent of homebuyers used the Internet to search for a home, but only 9 percent said they found their agent online. That discrepancy will not hold, Samuelson said. Consumers will demand more info they can use to evaluate agents on the Web.
It’s only a matter of time before transaction-based agent information becomes widespread, Samuelson said. Consumers will demand the data, he said, and Realtors can get ahead of the curve with AgentMatch.
“Let’s do it in a way that’s accurate, unbiased and fair,” he said.
AgentMatch’s agent-ranking algorithm incorporates more than just MLS stats, he said. The rating system also factors in agents’ recommendations and certifications.
Agent rankings are not based only on the volume of active listings or the number of home sales, Samuelson said, addressing a perception voiced by many agents.
For example, the top agent in Boulder on AgentMatch has only two homes actively for sale and eight sold in the last six months in the city, but has a high list-to-sale-price ratio and low number of average days on market. The No. 2 agent had 33 homes for sale and sold 42 homes in the last six months, but had less attractive stats on the other two visible metrics.
Samuelson also emphasized that realtor.com is working hard to address how to make AgentMatch more accurate by accounting for agents who work with teams that feed them listings, potentially skewing the results.
Realtor.com said in a statement that “everything from the algorithm to the data to the presentation all the way to the copy are being tested and then redeveloped — based on response from consumers and feedback from local board memberships.
Realtor.com updates the AgentMatch algorithm about once a week and soon will begin making additional metrics visible to consumers, he said. For example, the site will soon include a mapping interface that shows where an agent has sold homes in an area.
Samuelson said that AgentMatch is intended to supplement research that consumers already do offline. Agents will still get referrals the old-fashioned way, but now consumers will also have new information at their fingertips to verify facts about agents who have been recommended to them.
Move is also considering a broker-focused version of AgentMatch, where consumers can search for brokerages based on their performance stats.
Other possibilities include allowing consumers to filter results based on factors that are important to them, such as productivity stats or recommendations.
“The whole point here is that this is an experiment,” Samuelson said.
He said realtor.com will consider the service a success if consumers use it, and if agents who are familiar with the work done by their colleagues look at AgentMatch’s results and say, “I can’t argue with the names on this list.”
Plans to expand
Samuelson said that realtor.com will continue to test and make improvements to the service in its two test markets. Then, if things go well, it will expand AgentMatch to an additional five or six markets in partnership with local MLSs and associations.
Realtor.com can bring AgentMatch only to markets where it has sold data. While it gets listing data from more than 800 MLSs across the U.S., it needs an expanded feed to run AgentMatch. It doesn’t reveal how many MLSs currently supply sold data.
Move says five more MLSs will soon begin feeding sold data to realtor.com, and a dozen more are preparing to do the same.
“Our plan is only to enable AgentMatch in a market if the MLS or local Realtor association is supportive of the feature,” Move said. “We are doing this in collaboration with our MLS partners.”
Move began laying the groundwork for AgentMatch by obtaining sold listing data from MLSs, in exchange for access to Move’s “Find” tool — a “natural language” search tool that allows users to comb through listings and also see details like school and demographic information, airport flight paths, flood plains, earthquake fault lines, and past tornadoes and hurricanes.
By the time the realtor.com operating agreement was amended in 2010, Move was already providing consumers with access to sold listings and off-market property data that it was receiving from MLSs in more than 50 markets. The company was also beta-testing new capabilities that allowed consumers to see the selling price of properties, and who represented both the buyer and seller.
When realtor.com secured sold listings data from three large MLSs this summer — Midwest Real Estate Data (MRED) in Chicago, MLS Property Information Network Inc. (MLS PIN) in Boston, and the San Francisco Association of Realtors — Move said the Find tool was providing access to between 5 million and 6 million sold records per year, including more than 3 million provided by MLSs. The Find tool also provides users with access to 113 million property records from various public record providers, the company said.
In a statement, Move said that while “Find” agreements with MLSs provide sold data to realtor.com, “this data is being used by AgentMatch only when the MLS has agreed to participate in an AgentMatch pilot.”
Russ Bergeron, CEO of MRED, which also supplies sold data to realtor.com through “Find,” thinks AgentMatch could face challenges related to accuracy, such as tracking agent production when agents switch firms — a problem also encountered by Redfin when it tried to serve up MLS-derived agent productivity stats.
“The third-party vendors, even the MLSs, do not have the ability to accurately track the transaction history of agents who have changed offices over the years,” Bergeron said. “The result will be that many top producers will be shortchanged in their numbers because of past firm affiliations.”
Regardless of how well the tool works, MRED brokers’ data is not displayed or used under any circumstance unless they want it to be, according to MRED spokesman Jeff Lasky.
“MRED brokers always have the option of not having their listings repurposed,” Bergeron said.
NAR’s relationship to realtor.com
Some Realtors have questioned NAR’s willingness to allow realtor.com to field a tool that does not treat all members equally.
In promoting some members over others, NAR appears to be going beyond its mission statement — to help all of its members be more profitable and successful, not just those who already do the most business, Washington, D.C.-based real estate agent Patricia Kennedy wrote in a blog post on ActiveRain.
Even if it’s true, as is often said, that 10 percent of the agents do 90 percent of the business, Kennedy wrote, “I think NAR owes a lot to the 90 percent who provide a good chunk of the NAR operating budget. At a minimum, they should stay out of the way of that part of the 90 percent who are on their way to becoming highly productive members of the real estate community.”
NAR declined to make anyone available to Inman News to discuss member complaints, and directed all questions about the AgentMatch tool to Move “because it’s their tool.”
“NAR always appreciates hearing feedback from our members and will ensure that it’s shared with the appropriate source at Move,” said NAR spokeswoman Sara Wiskerchen.
In a statement, Move said, “We believe that NAR supports our efforts to identify and create great new consumer experiences. We have identified the AgentMatch concept as having potential. If we were to move forward with a formal product, we also believe it is our commitment to NAR to represent the Realtor brand and the professionals behind that brand in a fair and responsible way.”
Brokers and agents are often quick to blame NAR when they have issues with realtor.com.
NAR owns the realtor.com website and “Realtor” trademark, and licenses both exclusively to Move under the terms of an operating agreement that dates to 1996.
The trade group also holds a relatively small ownership stake in Move. As of April 1, NAR owned 2.28 percent of Move’s outstanding common stock, or a little more than 900,000 shares currently valued at about $15 million.
Under the terms of the realtor.com operating agreement, Move also pays royalties to NAR, in amounts that have held steady at about $2 million a year for the last three years. Although those royalties are not insignificant, they pale in comparison to the roughly $120 million in dues that NAR collects each year from its 1 million members.
NAR also has a seat on Move’s six-member board of directors, and two seats on the eight-member board of directors of Move subsidiary RealSelect, which operates realtor.com. As Move put it in its 2012 annual report, NAR “has significant influence over our corporate governance.”
While not involved with the day-to-day operation of realtor.com, NAR has considerable say in how the site is run through the operating agreement with Move. The limitations imposed by NAR have been a source of some frustration for Move over the years, as rivals Zillow and Trulia have overtaken realtor.com in popularity by offering new tools and information to homebuyers.
“The market, the competitive environment and the Internet has evolved, providing consumers and Realtors with access to more information than ever before,” Move CEO Steve Berkowitz said in 2010, after Move initiated negotiations to amend the operating agreement. “The information is out there. Not just from us, but from a number of other competitive websites. We believe we have to have the most comprehensive and most reliable information available, and provide outstanding consumer and real estate professional experiences.”
After negotiations that involved a mediator, the realtor.com operating agreement was amended in 2010 to give Move more freedom to change some features of the site and its design, layout and user interface without obtaining prior approval from NAR.
The 2010 amendment to the realtor.com operating agreement, which required NAR to respond within 10 days to requests for changes requiring its approval, included wording allowing Move to display Realtor productivity statistics such as active listing counts and sold transactions. But the amendment stipulated that listing brokers would have to sign off on that capability, and that NAR would need to grant final approval before realtor.com could use productivity statistics to search for agents using the “Find a Realtor” tool. NAR also reserved the right of final approval over the display of consumer evaluations or ratings of Realtors.
While it was not clear at the time, the 2010 amendment also cleared the way for realtor.com to begin displaying unbranded lead forms next to listings — a feature of third-party sites like Zillow and Trulia that’s controversial with brokers and agents. Although realtor.com allows brokers to opt out of having “Connection for Co-Brokerage” lead forms appear next to their listings, two brokerages started withholding listings from the site after their rollout.
This summer, NAR agreed to amend the realtor.com operating agreement again, giving Move more flexibility to publicize new homes and rental properties on the site. Although realtor.com now carries listings provided by sources other than Realtors, “for sale by owner” (FSBO) properties are still banned.
Samuelson said that the latest realtor.com amendment had little to do with AgentMatch. That project was already in the works, and NAR was aware of it, Samuelson said.
Additional reporting contributed by Inman News Associate Editor Andrea V. Brambila.