Brokers pull listings from syndication
Recently, the Austin Board of Realtors (ABoR) severed their relationship with ListHub, effective April 30, 2014, putting the onus of responsibility of listing syndication on brokers in the city, who may directly manage their listings through Move, Inc. owned ListHub, or choose not to syndicate listings.
The latter is the choice that eight Austin real estate firms comprised of roughly 450 agents, have chosen, with Sky Realty, Reilly Realtors, Vox Real Estate, Crossland Real Estate, Regent Property Group, Bramlett Residential, Cantera Real Estate, and Austin Referral Realty, Inc. jointly announcing today they are ending syndication of their real estate listings to several well known third party advertising websites that are not REALTOR-affiliated sites.
Sources tell us that participants will continue to syndicate to Realtor.com, but the ultimate decision may be to pull out of all sites in the long run.
On the heels of ABoR’s announcement, Realty Austin cut terminated listing syndication, representing the second largest brokerage in the city, with others telling us behind the scenes they would soon follow. Enter today’s announcement.
Citing data inaccuracies
These brokers, along with Realty Austin, repeatedly cite the October 2012 WAV Group study indicating that as many as 36 percent of the homes listed for sale on the largest of these websites are no longer on the market.
The study also found that approximately 20 percent of homes actively listed on the Multiple Listing Service (MLS) are never posted for sale on these websites.
Curtis Reddehase, President of Sky Realty said, “It is our belief that REALTORS® have established a great system for presenting accurate real estate listings, and syndication to unregulated websites has caused more harm than good. We do not subscribe to the idea that mixing our good information with their bad information is best for our buyers, or our sellers. Nearly every day, one of our clients gets frustrated when they find the wrong information on these websites that seem more concerned with selling ads than controlling the quality and accuracy of their listings.”
Turning off the direct feed
Most broker and agent owned websites are powered by the ABoR MLS feed directly. Jonathan Boatwright, co-owner of Realty Austin said, “Our 220 agents are excited to regain control over where their listings are advertised online. We turned off our direct feed to all unregulated third party websites because we believe they cause distrust between consumers and REALTORS® by posting inaccurate and outdated listing information. From now on, our sellers will make an informed decision for their listing and our buyers will learn why it makes sense to use a website powered by the MLS.”
A playing field that isn’t even
A strong sticking point for this group and others is that third party consumer portals are not required to comply with the same rules, regulations and Code of Ethics that REALTORS® and their websites are required to follow. Michael Reilly, Owner/Broker of Reilly Realtors said, “We’ve finally had enough, and decided the benefits of syndication were not worth the risks. Because the syndication websites are not overseen by a local board of REALTORS® like the MLS, these non-REALTOR® websites allow anyone to post listings.”
Reilly added, “There is a very high risk that some of the properties are fraudulent and placed there in an effort to scam the public. Recently one of our listings was copied and resubmitted as a ‘home for lease’ on a syndication website at far below market rates. Interested individuals who inquired about the property were told by the criminals who posted the listing, to drive by the property and submit an application of sensitive personal information. This act was a huge risk to our clients, the public, and our company.”
A simple business decision
Eric Bramlett, Broker of Bramlett Residential said, “The decision was a simple cost/benefit analysis. Buyers ultimately search many websites when choosing a home, and our clients’ listings are presented in a worse light on the syndication sites, where they are merged with poorly verified listing information. Moving forward, we will show our clients the positives and negatives of syndication, recommend against it, and let each seller decide.”
Valuations, time on the market
Because Texas is a non-disclosure state, home sale prices are not recorded with the County Tax Assessor, so automated home values cannot be guaranteed as accurate, which brokers note leads people to have unrealistic expectations, making the job of listing agents more difficult, leading to overpriced listings and lost sales opportunities.
Steve Crossland, Associate Broker, Owner of Crossland Real Estate said, “Sellers want their homes to sell quickly, for the best price, with the least amount of hassle. Posting a listing to third party websites does not cause the home to sell a day faster or for a dollar more, so there is no business reason to do so.”
Consumers unaware of the rules
Kimbrough Gray, Broker/Owner of Vox Real Estate said, “There are a lot of good reasons for agents and brokers to rethink their policy on listing syndication. If a REALTOR® has a listing with features that warrant pricing above the average of the neighborhood, it might not be a good idea to list it on a site which shows an automated value estimate lower than the listing price, next to the listing.”
Gray adds, “Our decision was also based on complaints from consumers. Many clients were upset with how their listings were displayed on these sites. Not only were there safety concerns when listings and photos were not taken down in a timely manner, but also complaints about sold data showing up on these sites. Usually they blamed the listing agent, not realizing these third party sites operate outside of REALTOR® guidelines and rules.”
So what’s next? What does this really mean?
So with less than 10 percent of ABoR members joining forces to pull out of third party listing syndication, what does this really mean for syndication? First, this group is a very well organized force that has long been involved in listing syndication, and their megaphone is larger than most groups of their size, so this decision could definitely influence other local brokerages to follow suit, but we suspect it won’t be until April when the ListHub direct feed is terminated, and many may simply opt out because local industry leaders have done so, or simply by default.
Bramlett notes, “Austin brokers have always been industry leaders. We were one of the first markets to provide public access to MLS listings through IDX (actually a predecessor to IDX) and one of the first markets to embrace syndication. With that experience and data, you’re now seeing Austin brokers remove from syndication, and I think you’ll see brokers in other markets follow suit.”
Will Zillow, Trulia, Homes.com and dozens of others struggle after this decision? There will be some dark spots on the map, especially because the number of agents in this group represents a substantial portion of listings in the market, and consumers may not ever realize the impact of this decision, but what this truly indicates is that when listing syndication is really put in the laps of informed brokers, they may opt out altogether.
But will this cause the industry to overnight dump syndication? No. Not at all. And off-record and on-record comments made to AGBeat confirm that these brokers aren’t pushing for that – they’re echoing the Austin Board by pushing the idea that brokers should be aware of what happens to a listing once it’s syndicated.