Editor’s note: This is the second of a three-part series. See Part 1.
The debate about listing data, syndication and who has the right to make the decisions about that data is getting hotter by the minute. Millions of dollars and the success of entire companies and organizations are at stake. The question is: How will the industry find a resolution to this very thorny issue?
As the consumer demand for online real estate information soared over the last few years, Realtor.com, Trulia and Zillow built slick interfaces and mobile apps that trumped the experience that consumers had on most brokerage and MLS websites. Since these models were new, the brokerage community really had no idea about the consequences of using these new sites or how they would influence their business.
The new revenue model was simple: Make money from online ads. The ads allowed brokerages to post their listings at little or no charge. After decades of paying for expensive print advertising, being able to advertise online at no charge seemed too good to be true. Today, many brokers and agents are now wondering if that is indeed the case.
Victor Lund, the co-founder of the WAV Group, described the current situation like this:
"Every broker and every MLS is constantly fielding calls from consumers asking why their property is on a website over which they have no control. It used to be that when you advertised a listing in the paper, it was time-stamped. It wasn’t available after the listing was sold.
"Furthermore, how does this impact the new buyers? What about their privacy? Do they want all the information about their home online after they have completed the purchase?"
1. How do consumers actually search for property online?
Research from Oodle, the company that powers the Real Estate Marketplace portal on Facebook, shows that consumers search for homes using three primary factors: city, street and ZIP code.
Consumers at the Hear It Direct real estate conference echoed that they often search by property address and then use maps to pull up what other properties are in the neighborhood. In many cases, they revert to the tried and true pattern of driving by the house and then driving through the neighborhood to locate other properties in the same area.
2. How consumers view Realtor.com vs. other third-party sites
The Hear It Direct research, as well as research from the Howard Hanna Company, reports that consumers treat Realtor.com as a national listing portal. If they are moving to a new area, many consumers begin their research by visiting Realtor.com since they are often unfamiliar with local brokerage sites.
Lund elaborated on the difference between Realtor.com and other third-party sites in a recent article:
"Realtor.com is very different from other advertising websites. Realtor.com is governed by many principles and covenants that other publishers are not … Realtor.com is not infected with bad data. They display a facsimile of the same data that is displayed on a broker website, and nothing more. They do not display FSBO data. They do not display preforeclosure data that aims to entrap revenue from unknowing consumers. They do not put a competitors’ advertisement on a broker’s listings. Realtor.com will sell inquiries from a broker listing to a competitor unless the broker opts out."
3. The challenge for Zillow
While Zillow’s intention is to be an advertising company, its Zestimate tool provides consumers with an estimate of the price of their home. It seems that Zillow is not viewed so much as a search portal, but as a place to find out how much a house is worth. Howard Hanna Ohio President Hoby Hanna’s comments regarding Zillow Zestimates are telling:
"Some of the best polling I’ve done has been at Little League games and cocktail parties," Hanna told Inman News in February. "You wouldn’t believe the number of people who would tell me, ‘I’m not in the market, but I downloaded the (Zillow mobile) app to see the value of a house.’"
(Editor’s note: Hanna was discussing Howard Hanna’s decision to promote its listings on Realtor.com and Zillow as a complement to the brokerage’s own website and other marketing efforts, a strategy that will be explored in the final installment of this three-part series.)
If and where to syndicate
According to Lund, both agents and brokers alike can no longer afford to "throw data to the wind." Instead, he suggests that you ask the following questions to determine if and where you syndicate.
1. How does syndication fit into your business plan?
Do you want to have more exposure on national sites in exchange for a drop in the number of visitors to your company or personal website? If the answer is "yes," then syndication to a major portal makes sense. If the answer is "no," you may want to avoid syndication.
2. What is the ROI (return on investment)?
Are you syndicating to 50 or more sites? If so, how many of them are actually generating leads for your business? Syndication sites such as Point2 and ListHub allow you to see how many page views various sites generate for each of your listings. They also provide you with a tool that lets you individually opt in or opt out to the various syndication sites they serve. If a site is not generating traffic, stop sending your listings there, especially if they have the right to reproductize, resell or take control of your copyright.
The second issue is whether the site is generating leads that close transactions as opposed to generating traffic that doesn’t convert into actual leads. If you’re not converting leads from a specific site, don’t syndicate there. The only way to determine this is to track where each of your closed transactions originated. Get in the habit of asking your clients how and where they found the listing they purchased as well as how they located the agent they hired.
Is syndication right for you and your business? To answer this important question, see Part 3, which compares two major companies who are succeeding using two diametrically opposed approaches to syndication.