MLS & Associations

Deal or no deal: MLSs disclose terms with Zillow Group

Legal indemnity was the biggest of several sticking points for one MLS

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As Zillow Group and multiple listing services (MLSs) have been scrambling to come to terms over direct feed agreements ahead of today’s deadline, a couple of deals — one successful and one unsuccessful — show what’s at stake for brokers and MLSs.

Inman spoke to the CEOs of two large MLSs — Lisle, Illinois-based Midwest Real Estate Data (MRED) and San Diego-based Sandicor — to discover the terms that were and were not sticking points in negotiations with the portal behemoth.

In the past few days, Zillow Group has announced that 46 MLSs, including some of the nation’s largest, have signed deals to send their listings to the nation’s two most-popular portals directly.

The agreements bolster the company’s claim that Zillow and Trulia will have a greater percentage of all active listings on April 8 — the day after their deals with the ListHub listing syndication platform end — than the two sites had on Jan. 1, before news first broke that Zillow and ListHub would not be renewing their contract.

It is still not clear whether Zillow and Trulia will be in better shape as stand-alone sites when their dependence on ListHub for a chunk of their listings ends. ListHub is owned by Move Inc., a News Corp. subsidiary and operator of Zillow and Trulia rival realtor.com.

Regardless, the signed direct-feed agreements cover more than 100,000 agents and brokers from three MLSs alone: MRED; Rockville, Maryland-based Metropolitan Regional Information Systems (MRIS); and Atlanta-based First Multiple Listing Service.

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At least a couple of MLSs have not come to terms with Zillow Group, however: Sandicor, which has around 18,000 members, and Cary, North Carolina-based Triangle MLS, which has more than 8,000 members.

No deal

On Friday, Sandicor notified its broker members that it had not reached an “acceptable” agreement with Zillow Group on terms developed by a 15-member broker group representing brokerages of all sizes.

“Unfortunately Zillow was not agreeable to those terms and appeared to be unwilling to consider much beyond their terms. We revised the agreement such that we felt we addressed some of Zillow’s issues, at which point we were told they didn’t have the legal resources available to discuss it any further,” Sandicor said in an email.

“We then tried to negotiate an interim agreement, which also was not successful. While Zillow does not have the resources to negotiate with us at this time, we have not given up and will endeavor to work on an agreement that is acceptable to all parties.”

Zillow Group declined to comment on specific terms of its agreements with MLSs. In a statement, the company said, “We don’t discuss specifics as we negotiate with partners, but we do hope to quickly reach an agreement that meets the desires of Sandicor’s board. We’ve successfully come to terms with more than 130 MLSs in recent weeks and have a large technical and legal team in place to meet the demand.”

According to Sandicor President and CEO Ray Ewing, some of the sticking points in the negotiations included these items:

  • Zillow Group wanted the MLS to indemnify Zillow Group against claims related to Sandicor’s listing data (a term included in its generic listing feed terms.) Ewing said that was not something that was typically included in its agreements with other vendors. “They were pushing the liability back to us,” he said.
  • Sandicor wanted to use ListTrac as a third-party verifier of listing performance. Zillow balked at implementing ListTrac’s monitoring code on its website, Ewing said. Zillow added ListTrac to its Tech Connect program a month ago, but Zillow is feeding its own listing performance information to ListTrac as part of that program, he said.
  • Sandicor, whose members include anti-syndication broker Jim Abbott, did not want homes marked as “not for sale” if they were not included in the direct feed. “If they don’t know it’s for sale it shouldn’t be marked as anything,” Ewing said.
  • In 2012, Sandicor added a data field where listing agents and brokers could enter contact details that would appear in property descriptions on third-party real estate sites, but not Internet Data Exchange (IDX) sites. Zillow Group did not want to allow that, Ewing said.
  • California’s Bureau of Real Estate requires that advertising intended to be the first point of contact with consumers must include the individual’s BRE license number. Zillow Group was “hesitant” to allow this and said no other MLS had asked for such a term, Ewing said.
  • Sandicor wants the agreement to spell out which derivative works Zillow Group would produce with the data and to get Sandicor’s permission if it wants to add to the list. “If they want to create a lot of derivatives we want to know what they are. They just don’t have carte blanche to do with the data whatever they want to do with it,” Ewing said.
  • Sandicor wanted to offer Zillow Group a subset of the data it provides to realtor.com — per their brokers’ request — but the company would not take less than what was offered to realtor.com, Ewing said. He said he was surprised at the positive things brokers said about realtor.com during discussions about a Zillow Group agreement, lauding realtor.com’s lack of competing agent information next to listings, accuracy, and lower likelihood of encountering scams.

Sandicor asked for another key term — that the MLS’s 8,000 or so active residential listings not be automatically included in the feed, but only when brokers expressly chose to opt in — but that was not a point of contention with Zillow, Ewing said.

Both sides say they still hope to come to an agreement. In the meantime, Zillow Group said it has agreements with many brokers in San Diego, including NRT, Berkshire Hathaway California Property and Windermere San Diego Properties.

“However, it is incredibly important for area brokers of all sizes — and for their agents and the home sellers they represent – to be able to market their listings to San Diego’s largest audience of home shoppers, and we are working hard to help the MLS realize that opportunity,” the company said.

Sandicor has provided its members with options for posting their listings to Zillow, including via Zillow Group’s listing syndicator Postlets, manually, or with an XML file.

Sandicor is not currently offering its brokers a direct feed of their own listings to share with Zillow because that would be “a huge thing to manage” and Sandicor does not quite trust the agreement Zillow asks brokers to sign, though the MLS might offer that option if there were “extenuating circumstances,” Ewing said.

Triangle MLS President and CEO Tessa Hultz declined to comment while the MLS was still in good-faith negotiations with Zillow, but said the MLS is providing brokers with the information they need to set up direct feeds of their own listings while negotiations are ongoing.

Done deal

On the other side of the coin, Chicagoland’s MRED offers up what a successful deal can look like.

MRED, which has about 40,000 members and 80,000 active residential listings, negotiated a two-year direct feed agreement that some of its brokers noted was even better than what they had negotiated with Zillow, said MRED CEO Rebecca Jensen.

She wouldn’t be surprised if some brokers with direct-feed deals chose to use MRED’s feed instead “because we do have better terms than we had before,” Jensen said.

While some MLSs have decided not to negotiate direct-feed agreements with Zillow Group at all, MRED felt that not replacing the ListHub option “would actually be removing services that we have provided for years and that would create fewer options for our brokerages,” Jensen said.

Instead, of leaving the MLS’s brokerages on their own to figure out terms and technology, MRED decided to “improve the status quo,” she said.

Here are some of the terms MRED negotiated:

  • A hybrid opt-in. The 20,000 or so listings previously sent to Zillow through ListHub will be automatically sent to Zillow through a direct feed — but only for 90 days. If at the end of 90 days brokers have not affirmatively opted in to the feed, their listings would no longer be sent automatically. MRED is currently sending 28,000 or so listings to Trulia through a direct feed agreement.
  • Brokerage logos will appear relatively high on listing detail pages, next to listing descriptions. Listing brokerages will be able to upload their logo through Zillow’s Data Dashboard, which is incorporated into the MLS via a single sign-on interface. Listing agents will not have to claim their Zillow profiles in order to include their brokerage logo or to be labeled as the listing agent. Listing agents will also appear first among the agents advertised on listing pages. More detail available here.

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  • Zillow agreed not to place a “nofollow” tag on linkbacks to brokerage websites. Such tags tell search engines not to crawl certain links. Jensen was not sure how linkbacks would work on Trulia, however.
  • As in its deal with the nation’s largest MLS, California Regional MLS, MRED’s deal with Zillow Group stipulates that the company will not compete with the MLS as either a brokerage or a listing service.
  • MLS data will trump every other source of data except brokerages. Brokerages will be the no. 1 source of listing information except for the price and status, Jensen said.
  • If the agreement with Zillow Group should end, the company would be able to keep some general facts about the property, such as number of bedrooms, Jensen said. But Zillow cannot keep anything MRED’s members have created, such as photos and remarks.
  • Zillow Group cannot use MRED’s roster information for marketing purposes or resell it.
  • Zillow Group is allowed to use MRED data for specific derivative works, including Zestimates, statistics, and market analysis. But the company cannot use MRED’s data for derivative works that are not included in the agreement without MRED’s permission.

While Zillow Group covers the cost of feeding the company data for some MLSs, Jensen said “there’s no money changing hands with respect to this agreement.”

Email Andrea V. Brambila.