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75 big brokers to refuse adding listings to MLS, forming alternative MLS?

October 26, 2011
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real estate signs zillow report 75 big brokers to refuse adding listings to MLS, forming alternative MLS?

Data remains a contentious topic

Recently, the invitation-only Realty Alliance bi-annual conference took place with no members of the press in sight. The Realty Alliance network of elite real estate firms is comprised of top brokers across America and Canada and accounts for a large share of the real estate industry. Although press was not invited, various sources have told AGBeat that the destination of Realty Alliance member data continues to be highly contentious. This spring, Realty Alliance was influential in the shaping of IDX rules and sources tell AGBeat that the group came together on the topic of data use at the most recent conference, with roughly 75 top brokers allegedly discussing seceding from their MLS, and banding together to build a national MLS run by brokers to exclude Zillow, Trulia and other media companies like Realtor-backed Realtor.com.

“There was no banding together,” The Realty Alliance President and CEO, Craig Cheatham told AGBeat. “Our members are fiercely independent and make independent business decisions based upon their business model and local/regional market factors. There certainly was no decision to band together and no effort even to try to encourage collective action of any kind. Our member firms make decisions with their MLSs and various vendors that fall all across the spectrum and they reevaluate those periodically based on local factors. If you see any trend among real estate brokerages in the coming months it should be traced to predictable industry reaction to overall trends in the offerings and business rules of MLSs and outside vendors.”



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Seceding from the Union?

Cheatham may be right that there is no public or official move to band together, but our sources note that there is certainly a strong conversation about seceding from the union, if you will, which makes one wonder what would happen if this actually came to fruition. It is an admirable thought, but it might be a decade too late and could create massive backlash against brokers that pull out of the MLS. Our sources note that some brokers in the group are sedate on the topic while others have strong intentions to move forward with the conversation, and it brings up the age old subjective question – who does real estate data belong to? Does it belong to the MLS, the association, the brokers, the agents, the aggregators or the consumers?

Advantages and disadvantages

Unfortunately, the cat (data) is already out of the bag and seceding now may be too little too late. Consumers wouldn’t even know that listings are missing from Zillow/Realtor.com/Trulia despite broker secession and the true value of data is only when it is in full, so the Realty Alliance national MLS site would be at the biggest disadvantage. All aggregators (like Zillow or HotPads) would have to do is run a campaign in those local markets inviting consumers to add or tweak their own listings if their broker won’t.

It would give aggregators something to rally against and playing the victim card would tap into the existing generic distrust of the traditional real estate industry. Also, consumers and agents alike could buck a broker-centric system altogether, which is what gave birth to the aggregators in the first place as the industry moved away from broker power toward empowering local agents and consumers.

Another problem with any group of brokers thinking about restricting their listings to only being featured on their own national site is that the Trulias of the world have a massive head start on recruiting the best and brightest technology talent in the business. They recruit from Google and Apple which are in their back yards. With The Realty Alliance based in Dallas, is it really possible to hire hundreds of highly expensive experts to create this national MLS that could even come close to comparing to Trulia? There is much more to running a listings site than following IDX rules, there is a culture of search and a fine science to it that is still barely understood, even by those specializing in it for the last ten years.

The takeaway:

Whether it’s true that the discussion happened or will come to fruition or not, the idea of real estate data being owned and operated by the very practitioners that brought them to market makes sense and is admirable, but seceding from the union is probably a decade too late and could not only end up boosting aggregators and giving them a platform to rally against, it could come across as greedy and uninformed as consumers believe it is their data, not the broker’s, and no matter how well-meaning the conversation is, it might be too late and could ultimately further harm the industry and consumer sentiment toward the industry.

The Realty Alliance has been fairly tight lipped as no one wants to go on the record, which makes sense, however, meaningful discussion cannot happen behind closed doors because the bigger picture cannot be seen without a diversity of entities being part of the discussion.

AGBeat Chief Operating Officer: Lani, named 100 Most Influential, as well as 12 Most Influential Women in Blogging, Bashh Founder, Out and about in Austin A Lister, is a business and tech writer and startup consultant hailing from the great state of Texas in the city of Austin. As a digital native, Lani is immersed not only in advanced technologies and new media, but is also a stats nerd often buried in piles of reports. Lani is a proven leader, thoughtful speaker, and vested partner at AGBeat.


  • Jody Cowdrey

    Regardless of their goals or intentions, I'd love to see them honestly explain to a client how, in the vast majority of situations, limiting their listing data to anything less than the maximum amount of exposure possible is somehow more helpful to them.

    • Bill Rovillo

      Jody, I think the point Realty Alliance is making is that with syndication, Brokers make less money and receive less leads.
      As a husband of a Broker/Owner, I agree. I've seen it with my own eyes over the past 17 years. Please see my post on Listing Sin-dication to see where you may be leaving money on the table..
      http://imapp.com/blog/2011/04/listing-sin-dication/

  • http://www.LaMarRealEstate.org Rachel LaMar, J.D.

    I second what Jody says above…this is just going to make our industry look ridiculous and seem less trustworthy – not a good thing.

    • http://realhonestrealsimplerealestate.com Jake

      I'm baffled at how this makes our industry look any MORE ridiculous and LESS trustworthy than it does now. We feed them erroneous data to millions and millions of websites and mislead them into thinking folks that paid top dollar for advertising are actually the listing agent or actually top buyer agents in the area. They don't know what an MLS is, they don't know what VOW is, they don't know what an IDX is they don't understand syndication, they don't even know what the word Realtor even means. The consumer couldn't distrust us anymore and they have every reason not to.

  • Robert Drummer

    Joe Horning from Shorewest REALTORS® (WI) gave an interesting presentation at MLS Cloud in Houston:

    "MLSs are guilty as an accomplice to the Syndication Crime"

    http://www.slideshare.net/secret/Enclqx9WdIHylH

    It gives insight into the mind of the large broker, or at least Shorewest.

  • Bill Rovillo

    The author mentions twice that Realty Alliance is "too late" with their ideas.
    I couldn't disagree more with this and many other points she makes.
    And if someone wants to turn a "wrong" into a "right", what difference does it make when it happens? a year, 5 or 10 years down the road?
    Doing nothing is what is wrong.

  • http://www.LessBlahBlah.com Ken Brand

    Compelling Arguments both ways are possible.

    To me the take away is that everything about the real estate business is warping, shifting and morphing, at a speed we've never seen before. Adventurous times, unless you're standing still, then it's a steamroller.

    Great article Lani, thanks.

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  • Demetri Koutsokostas

    As a broker whose office does both commercial and residential transactions, I see both sides of the spectrum. Most commercial real estate never makes it to an MLS and somehow that part of our business is the strongest and provides a more loyal and satisfied client base. On the residential side, we pay fees to put our listings on the mls, other companies make money off our listings, and if that's not enough, they turn around and charge us for services which they couldn't provide if it weren't for our listings. Residential real estate took a wrong turn a long time ago and I don't see it making a u-turn.

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  • http://blog.comfree.com Rosy at ComFree

    This is not going to be an easy battle to take on. The MLS is one of the most well-known real estate websites in North America, however, the way real estate is sold nowadays is ever-changing and perhaps it's time to revisit the way business is being conducted.

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  • http://realhonestrealsimplerealestate.com/author/ruby/ Jacob Clayton

    This is by far some of the most encouraging news I've read about this industry since I entered it 6 years ago. I always thought I was alone in feeling this way but it's incredibly wonderful to see that others are interested in righting this incredible wrong. It hasn't been an easy fight for me the last few years but nothing worth having is easily attained and fighting the tide against years of brainwashing and bad behavior is always difficult but if it weren't for those willing to step out and make a difference….what a sad and pathetic world we would live in.

  • Russ Bergeron

    At MRED we don't send data to Zillow, Trulia, ListHub, etc. – the brokers do, including the Realty Alliance members. In markets where a firm, or a couple firms have more than 50-60% market share they can probably take a stand and refrain from syndication. But until that happens it is hard to turn your back on 90 plus percent of the real estate internet traffic.

    Russ Bergeron
    MRED

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  • http://yochicago.com Joe Zekas

    Curious that no one has mentioned the very serious antitrust issues involved in brokers discussing anything of this sort at a forum like the Realty Alliance.

    In my long-ago days as an attorney representing trade associations I would have put an immediate and forceful end to the discussion within seconds of its having begun.

    • Robert Drummer

      The headline ends with a question mark and the CEO stated "There certainly was no decision to band together and no effort even to try to encourage collective action of any kind."

      The rest of the article is speculation and "what if".

      It's a great topic but people are drawing conclusions about this group based on speculation.

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  • http://Www.jimmywelch.com Jimmy welch

    Because the MLS has such a recognized name, I think it would be highly difficult to spin off and have a different site. Neither sites would be fully reliable because they would be incomplete. Interesting though…

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  • Joe Rivera

    "What matters most" to consumers? It certainly is not one more MLS Website. What matters most to consumers is receiving real (no pun intended) professional "fiduciary" counseling, in regards to all the "data" that consumers are reading on the Internet everyday. The "data" can not provide fiduciary counseling, only a professional real estate agent can provide it. Take a minute and read what Mollie Wasserman, of "ACRE" (Accredited Consultant in Real Estate) has to say about this. The "ACRE" Agent is going to be the future of real estate bokerage. It's about fiduciary counseling not "selling".

  • http://GreaterRaleighRealEstate.com Venita Peyton

    As a smaller business, I'm weary from paying higher and higher MLS fees – for little value. I now mostly represent Buyers who don't mind the lesser drama of working with FSBOs. When the big youngins' play, it's US little youngins' who pay.

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