I have been knee-deep in this subject for the past two years. I acknowledge the power of these third party sites, which on the surface are very good tools. There are points which demonstrate value for consumers, and there are counterpoints. Let’s take a moment to examine them.
The more a seller’s property is marketed, the better the odds are for obtaining a buyer for the property. As REALTORS, we are bound by ethics to represent the best interests of our clients. It appears to be in everyone’s best interest to syndicate to as many platforms as possible. REALTORS® can purchase a zip code, get leads, and close deals. Seems simple, right? As an entrepreneur, I respect what they have done. There was a shift in our industry and these third party entities recognized a consumer need and capitalized on that opportunity. The question is: How does this affect us, as REALTORS?
I’ve been on the syndication page and have spoken to many fellow brokers about this subject. When I finally grasped the importance of syndication, my initial thought was, this is a re-enactment of the ouster of Blockbuster Video, Virgin Records and the likes. I was alarmed. How did we as REALTORS, allow this to happen to our industry? I felt we had opened the door for our own professional destruction, and I wanted to go in, guns blazing, to protect our trade at all costs. After more discussion with other brokers and REALTORS, I developed a clearer understanding for the need of these services. One must fully grasp the intricacies of our real estate industry, its REALTORS, brokers and its politics. The choice to syndicate, not to syndicate, or regulate isn’t a simple decision to make. This affects our buyers, sellers, REALTORS, brokers and lenders.
For example, a larger brokerage of 200-plus agents with roughly a quarter of them advertising with third party sites may approach the situation completely different than a smaller brokerage of say, 20 agents. A few months back, while on the syndication page, a survey was sent out to all brokers. Based on the info that was gathered, brokers still felt the choice to syndicate should be left to the broker. Another conclusion derived from the survey was that education on the subject is sorely lacking.
To fully comprehend syndication, you must have a basic understanding of search engine optimization (SEO). Google is one of the largest search engines; an online phone book if you will. Instead of flipping through pages in a delimited order, you simply type a description of what you are looking for and press search. The words you use to describe what you’re looking for are broken up into “keywords.” Now, if you went to Google or Yahoo and searched for movies and the results of your search yielded a list of ice creameries, Google and Yahoo wouldn’t be the conglomerates they are today. Search engines find the best and most relevant websites and public documents that reflect the keywords or description you entered in your search. Search engines have complex algorithms, each unique, that are constantly searching for the most relevant information, and constantly evolving with technology and development techniques. A few components of the algorithms may include: content/data, the time a user spends on a site, social media presence, and authentic, verified backlinks.
Another very important question posed here is why third party sites are popular, and what are the reasons they outrank REALTOR websites? Is it because they advertise on social media and spend millions of dollars on television ads? No, not exactly. It has everything to do with data they acquire – the same data brokers supply when listings are published to our local board multiple listing service (MLS). Again, the choice to syndicate that information is a broker decision. When a broker decides to syndicate, they actually pay to distribute data to Listhub.com, which is owned by Move.inc, which additionally owns Realtor.com.
Let’s discuss the inaccuracies and touch again on the best interest of the potential client. Have you ever been in a large room with a large number of people, told one person a message, and by the time that the message was relayed back to you, it wasn’t even close to what was originally said? That’s the regurgitation of data published by third party sites utilizing REALTOR data. How many times do we hear of REALTORS® getting calls on a property that is being marketed on a 3rd party site, long after it has been sold. It is not uncommon to find this even a year after it’s sold. Why do these 3rd party sites keep these listings on there? More data on a website boost that site’s internet ranking, so it behooves them to let the information double as fresh data. Moreover, third party sites are not bound by rules set forth by the National Association of REALTORS, so they can choose to display inaccurate or archived data.
Another hot button issue is the third party sites’ automated valuation model (AVM). Zillow recently released stats on the accuracy of their Zestimate. The data show that over 86% of their Zestimates for Las Vegas are within 20% of the actual sale price. That is a huge margin. They also gave the Zestimate two out of four stars for accuracy for Las Vegas. Zillow even states on their site that the Zestimate “should not be used for pricing a home.”
In summation, Brokers pay to give their published data to these sites to provide a better presence for the client, but in some cases, it is misused. What this has caused is a perceived decrease of relevancy of the REALTOR to consumers in a real estate transaction. Additionally, third party sites are pushing REALTOR sites further away from top placement on search engines with incorrect or archived data. Because these sites are not held to regulations and standards placed upon REALTORS – a standard where timely, accurate information must be maintained for the benefit of the consumer – the result is a feeding ground of inaccurate information consumed by the masses. The constant consumer guidance provided by REALTORS to correct these inaccuracies has become a nuisance. Furthermore, when a REALTOR makes the decision to purchase a third party site’s zip code for the purpose of lead generation, it perpetuates the cycle. We have identified the problems, now let’s go over some possible solutions. To simply cut off the feed, we will need two things: Quality, unbiased education for our REALTORS®, and a replacement website that’s more informative, accurate and easy to navigate. We control the data. The public has expressed a need for quality, up to date information and we, as professional REALTORS®, should be the ones presenting it.
That being said, I propose we do a massive overhaul of our consumer facing website – one that is built for REALTORS®, by REALTORS®, that is accurate and supports us! Our association can sell us zip codes for a fraction of what is paid to 3rd party sites and the money earned can go back to our association. Once that is successfully accomplished, we can stop syndicating. If a seller does insist that their listing should be on a 3rd party site, we, as REALTORS®, can upload the listing to the site manually.
I am a fan of evolution, not our extinction. Let’s make our data work for us; not against us!