(Article originally posted on Inman Select on March 23, 2015)
In a previous article I wrote, “Zillow Group’s game of ‘chicken,’” and another written by Paul Hagey this past week, “Brokers facing tough choices when portals raise prices for ‘featured’ listings,” we both addressed the future plans Zillow, Trulia and realtor.com are taking to price brokers and franchisors out of featuring their listings on these sites to increase revenue through agent advertising.
First, I’d like to clarify my position: I believe, as an industry, we should be sharing listing information with the consumer in as many places as possible. In fact, we should be sharing all data with them, including sold data. I do not agree with many in this industry who believe the right approach is holding on to the data in order to increase consumer engagement. The common ground is that we both believe we should be the stewards of our sellers’ information. We should make sure it’s shared responsibly and accurately, and we should receive some benefit for providing it. I believe our sellers expect this, and I’ll outline more below.
I’ve now heard from several former Zillow employees that every non-featured listing on their site is valued at $25 to $65 per month in possible revenue depending on the local market. That’s as much as $780 per year on every single non-featured listing. Sadly, only the top 30 percent of agents in the industry can actually afford these “prime advertising spots.”
This large source of possible revenue is also why Zillow does not want brokerages or franchises paying for featured listings placement, which locks out the possibility of selling individual agent space. Zillow makes far more money selling Pro accounts and ZIP code placements to individual agents.
So, the fundamental question every agent or brokerage in the country needs to ask themselves is: If it’s not in your budget to pay for featured listings placement, what are you getting in return for providing these portals your listing data?
Let’s break down each of these portals from three different perspectives: today’s buyers, your sellers and you as a listing agent.
Realtor.com provides little to no benefit for putting your listings on its site unless you pay to showcase them. If you do not pay additional fees, you will be displayed only in fine print under your listing photos with no contact information. In addition, every time a buyer inquires about your listing, it will be sent to another agent who has paid for that inquiry, unless your broker has opted out of the unbranded lead form appearing on your listings. Unfortunately, if your broker does opt out, you are penalized and so is the consumer. Only five or six photos will be allowed on the listing instead of the up to 25 photos that you uploaded in your MLS. What’s more, unless you turn off online syndication, your MLS will automatically send realtor.com your listing data per a long-standing contractual agreement. How is this beneficial to you or your seller? How is reducing the amount of information provided beneficial to today’s “information hungry” buyer?
Zillow.com will allow you to be displayed on your listings and even labeled as the listing agent. Unfortunately, three other agents who have paid additional fees will also be displayed on the contact inquiry form. There is a good chance the consumer won’t really notice who the listing agent is. Consumers typically select the checkbox of who they want to speak with, which, in this Yelp-driven world, will likely be the agent with the highest number of reviews or recent sales. Therefore, all of your buyer inquires are probably being provided to your competition.
Zillow.com also puts a Zestimate, its automated market home value estimate, under your list price. This can be enormously misleading to potential buyers, depending on its accuracy. There have been countless stories of sellers complaining of lowball offers due to the Zestimate that buyers saw online next to their listing. Zillow admits the Zestimate is off by at least 8 percent on a national average. We all know it can be much worse. I can’t see how this is of any benefit to your seller. In addition, the word Zestimate has a hyperlink to a disclaimer about Zestimate accuracy, but it’s not in blue lettering, so the consumer does not know it’s a link to click on like every other hyperlink on their site. Again, is this type of misdirected information beneficial to buyers? Is this seemingly contradictory listing information good for sellers and the agents that represent them?
Trulia.com will not display you as the listing agent unless you claim your listing on its site — period. It will also display three additional agents who pay for ZIP code advertising next to you, all of whom are automatically checked by default when the buyer inquires. Add the words “pro” and “elite” next to some of these other agents, and it would seem unlikely a buyer today would uncheck any agent. In other words, Trulia.com will send the buyer lead inquiries to you and up to three other agents. Is having four different agents call on the same buyer inquiry on your listing something a buyer, seller or you would want?
The portals claim they are advocating for consumers. They say they’re providing the experience consumers want, and from a data perspective, they are correct. However, I am one of those consumers, too. I own my home, and like most people, it is one of my largest financial assets. How is this experience beneficial to me when selling it?
As a company, why would I want our listings on these sites if our buyer leads could potentially go to four competing agents? How is being contacted by four agents what buyers want? Why, as an industry, are we not being compensated for providing this valuable and obviously profitable data?
And the most basic question I have is, why are we not standing up and demanding our MLSs put rules in place for portals to have access to the data through the MLS? Realtor.com already has them, but Zillow and Trulia are aggressively pursuing and receiving direct feeds from MLSs across the country. So let’s at least have conditions placed on it. MLSs could be the hero in this equation if they focus on what is best for their members and our consumers.