Accuracy in real estate listings: Data errors raise concerns over legal damages, responsibility

Are third-party portals a fad or here to stay?

The Combined Los Angeles/Westside Multiple Listing Service (CLAW) recently decided to delay syndicating its listings to portals such as Trulia and Zillow by 48 hours.

The Austin Board of Realtors (ABOR) took the bolder move to stop syndicating to non-Realtor-affiliated consumer websites altogether after April 30, 2014.

Homes image via Shutterstock.
Homes image via Shutterstock.

Are these moves shoveling sand against the tide, or harbingers of a tsunami that could wash away the listing portals as we know them?

Do you know the difference between a “listing portal” and a “syndicator”?

The term “listing portal” refers to sites such as realtor.com, Trulia and Zillow. The term “syndication” applies to companies such as ListHub, Postlets and Yardi’s Point2Agent that send listings to multiple portal sites. (To understand how massive the reach is for each of these companies, see the syndication partners of ListHub, Postlets and Point2.)

Agents and companies can also syndicate their listings themselves by posting them on other sites such as Craigslist, Facebook, Pinterest, Twitter or YouTube.

Zillow’s goal in 2007

If the courts were to hold that brokers were responsible for the errors because they chose to syndicate, that could greatly hasten the number of multiple listing services and companies pulling out of posting on the non-Realtor portals."

In 2007 I sat down with then-CEO Rich Barton for a one-on-one conversation about Zillow’s business model. At that time, Zillow was generating about two-thirds as much traffic as realtor.com. Today, Zillow is at the top of the heap with 70 million unique visitors per month.

“Like many other Web 2.0 companies, Zillow is looking towards its advertising platform as its primary source of revenue. The concerns that Zillow is competing with brokers are unfounded. Instead, [Barton said] Zillow wants to work as a partner to real estate companies.” — Inman News story published Sept. 28, 2007

Zillow has certainly delivered on Barton’s vision of becoming a powerful advertising tool, as well as partnering with a number of major companies. What Barton didn’t promise was that Zillow was going to partner with associations and multiple listing services.

Realtors are bound by the code of ethics — consumer sites are not

In the Austin Board of Realtors’ press release announcing its decision to “cease syndicating members’ listings to non-Realtor consumer websites,” it drew the distinction between Realtor consumer sites that honor the Realtor code of ethics vs. consumer sites that are not bound by the same code.

Major sticking point No. 1: data accuracy

In addition to the code of ethics concerns, another concern is data accuracy. As an agent or broker-owner, the phrase “data accuracy” seems like a geek term that the IT or MLS folks should be worrying about, not you. In truth, you absolutely must be concerned about this. Here’s why:

James Dwiggins, the vice president of Realty World Northern California, articulated this issue in a recent Facebook post where he argues why the industry must adopt data display standards:

“One of my agents has a listing in Dublin, Calif., which has four full baths and one half-bath. On Zillow it’s displayed as five bathrooms. On Trulia it’s displayed as four bathrooms, one partial. On realtor.com it’s displayed as four full bathrooms, one half-bath — (correctly displayed).

“We sent everyone the data as four full bathrooms and one half-bathroom. Anyone else think this is a big problem or is it just me? FYI, I’ve brought this up to senior management at the major portals before and it falls on deaf ears.”

Before you say, “What’s the big deal?” consider this: On Zillow, this property is represented as having five bathrooms. While this may be different in your area, for the 20-plus years I belonged to CLAW, “full bathroom” meant that you had a sink, toilet, shower and bathtub. If you had only a shower but no tub, it was a 3/4 bath. A toilet and a sink was a half-bath.

The Trulia listing that reads “four bathrooms, one partial” has a similar issue. Does that mean that you have four bathrooms but one of them is partial so you have only three full baths? Or do you have four bathrooms plus one “partial bath,” but what does that mean? I once stayed in a beautiful older home that had a bathtub and a sink, but no toilet. It literally was a “bathroom.” The only toilet was on the other side of the house.

If you misrepresented the bedroom-bath count anywhere in your marketing, the attorney representing the buyers would have a field day with you in court. By the way, just the cost of getting to court in California is about $100,000, not to mention the trial costs and any judgment.

Let’s face it, data errors are going to occur no matter how careful everyone is. The challenge becomes if you submitted the listing information correctly and it displays differently on a portal from what you have submitted, who is responsible for any legal damages? Is it the seller, the agent, the brokerage, the syndicator, the portal, or everyone?

Unfortunately, these issues are still so new that there are virtually no legal precedents on which to rely. If the courts were to hold that brokers were responsible for the errors because they chose to syndicate, that could greatly hasten the number of multiple listing services and companies pulling out of posting on the non-Realtor portals.

The second major sticking point for agents and brokerages is what has become is known as “the three-headed monster.” See Part 2 of this series to learn more.

Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, trainer and author of the National Association of Realtors’ No. 1 best-seller, “Real Estate Dough: Your Recipe for Real Estate Success.” Hear Bernice’s five-minute daily real estate show, just named “new and notable” by iTunes, at www.RealEstateCoachRadio.com.


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