IDX rules challenged in Austin
In recent months, a groundswell has begun of real estate professionals dissenting against major real estate search sites, IDX rules, local associations and even the National Association of Realtors (NAR). Most of the dissension surrounds how real estate listings are syndicated and shared, and reactions of real estate brokers have varied across the nation from pulling listings out of the MLS altogether to simply disallowing their listings to be featured on sites like Trulia or Zillow. The national scene is chaotic, but in Austin, tensions have risen and threats of lawsuits are flying from brokers on opposing sides of the issue of the use of listing data.
Several of Austin’s top luxury brokers have banded together to petition for improved opt-out provisions for their listings, as well as their contact information featured at the bottom of listings shown on other agents’ sites (where it currently says “courtesy of”), and are petitioning for a rule change to allow all photos to be watermarked with their contact information. The petitioners note confusion in the marketplace, as most buyers cannot understand who the listing agent is, and some brokers have already begun opting out of sharing listings through IDX. It was said in a meeting on February 13th that the petitioners may sue if their concerns are not met.
Opposing the petitioners is a group of brokers that say the petition reduces Realtor cooperation, decreases buyer agency and limits the development of new brokerage models, ultimately harming the consumer. According to emails obtained by AGBeat, the opposition may sue if the rules are altered, as they imply it would be favoring one business model over another, which has gotten real estate associations into legal battles in the past.
Months of waiting comes to a head
In an email obtained by AGBeat and confirmed with an executive staff member at the Austin Board of Realtors (ABOR), a letter was sent by lawyer Mitchell J. Savrick, retained by luxury broker Michelle Turnquist in November. The letter requested a meeting with ABOR’s Austin/Central Texas Realty Information Service (ACTRIS) Committee which ABOR’s legal counsel responded to via letter within days, offering to schedule a meeting. No response was received until January when Savrick sent three possible dates, all of which were during the week of February 7th, as that is the week that worked for Turnquist and fellow petitioners Eric Moreland and Cord Shiflet. Several committee members were traveling during the week requested and unable to attend.
In February, ABOR’s legal counsel addressed the concerns in a letter, and on the 8th, in a small conference room at the Board, 30 people showed up to the committee meeting which is typically a small group with closed doors. On February 10th, Cord Shiflet created a petition online and began collecting signatures from local real estate professionals.
On February 13th, Savrick presented their concerns to the committee which include that (1) Sellers must be able to opt out of participation in IDX, (2) Seller should be permitted to participate in sites such as Realtor.com, Austinhomefinder.com and/or other internet marketing and not participate in IDX, (3) an entire brokerage shouldn’t be denied IDX access due to mass opt-outs, (4) “courtesy of” should be replaced with prominent, non-tamperable field listing agent information as it is misleading, (5) Listing Agent should be permitted to ‘brand” all work (particularly through watermarking), (6) sites using IDX must comply with VOW rules, and (7) the committee should “implement a set of rules regarding so-called property “blogs.”
On February 14th, opposition responded with a letter to the Board stating that (1) IDX was never intended to provide access to listing agent information as it would harm cooperation and reduce the incentive for Realtors to use IDX, (2) the petitioners’ requests would encourage direct contact between buyers and listing agents, leading to decreased buyer’s agency which they see as a valuable consumer protection, (3) the changes would reduce competition and harm consumers, (4) listing agents are not required to display their listings on the IDX, as they can select listings to be featured on a case-by-case basis or remove all listings coming from the brokerage, (5) popular sites provide listing agent information already, striking a balance between petitioners and opposition. They also note that these petitioners are among the most successful in the city and after 10 years of using the IDX have not been damaged.
Earlier this year, ABOR underwent rule changes that clarified the IDX field so that sellers may opt out of Internet Display (Zillow, Trulia) but keep listings in the IDX which is set to be implemented in April. Additionally, according to the National Association of Realtors, Article 12 of the Code of Ethics which all Realtors are bound by, no one may alter or modify any information that offers anything other than a “true picture” of a listing or real estate professional. Both of these items answer to some of the petitioners’ requests.
Final resolution on this issue will be voted on in May by the Board of Directors at ABOR, and the date of implementation is unknown, should there be any rule changes.
Protecting market share?
ACTRIS committee member, Cord Shiflet is seen by many as the leader of the petitioners’ movement – he has already pulled his own listings from the IDX, Zillow and Trulia while keeping listings on Realtor.com and AustinHomeSearch.com, noting no impact on his business, positive or negative, and that his listing clients are on board with his decision. In an email obtained by AGBeat, Shiflet said, “I firmly believe my doing IDX does nothing other than allow others to poach on my listings and get leads/buyers. Maybe I’ve finally crossed the bridge from being innovative to being old-school.”
Seeking to “keep leads within [his] company,” Shiflet added, “I do expect my showings to drop as the internet flakes won’t find my stuff as easily and agents I’ve never heard of who are working on an internet lead they’ve never met won’t be landing on my properties. And that’s okay with me. I think we all agree that we want fewer, better qualified showings.”
One agent in opposition told AGBeat that petitioners Turnquist and Moreland account for 58 percent of all listings in Austin over $1M, according to RETS and IDX – a sizable market share to protect, which several note is what is truly at stake here, with Turnquist allegedly hiring Savrick to file an amicus brief supporting the Texas Real Estate Commission many years ago when Texas Discount Realty filed against TREC over new minimum services rules that limited discounters, with rumors of a fear of Turnquist’s losing market share. On the other hand, opposition could be seen by petitioners as lower producing agents that do not have the same marketing expenses or market share at stake, or as buyer’s agents that some see as unnecessary to the transaction.
Confusions, boycotts and elitism
Perhaps making the case for the petitioners is the fact that numerous agents that signed the petition were unable to offer any relevant comment to the story. AGBeat received several comments but they did not pertain to the actual petition, with one Realtor commenting on their dislike of the current MLS vendor, another saying that they should be able to watermark anything they want and did not understand that the petition was about more than watermarking, and yet another stating they believe ABOR should not allow any listings to be shared on Zillow, Trulia or Realtor.com.
Opposition was more clear, yet mostly fear retribution for coming forward, as several claim they are being “silently boycotted” by the luxury brokers who have launched the petition who are aware that they have signed in opposition. Allegedly, the “silent boycott” includes entrapment calls over the phone, cancelling of fake appointments, slow paying offers and repeated scheduling mistakes, but we have been unable to independently verify any boycott.
One broker told us they felt this situation was very similar to the Indianapolis Metropolitan Board of Realtors (MIBOR) cutting IDX feeds in 2009, calling Google a scraper due to indexing. The MIBOR situation was “effectively one broker who was mad about losing market share and tried to use MLS rules to hurt his competitors. This effectively established agents trying to change MLS rules to squash emerging competitors.”
Another broker notes the situation reeks of “elitism” and claims there is an “influence of the ‘old guard’ at ABOR/ACTRIS.”
Austin Realtor, Ralph Bell said, “All the changes they are requesting violates NAR IDX Policy and go against the intended spirit of the IDX. They are trying to punish Brokers who have high traffic sites and who bring qualified buyers to the sellers. I’m appalled by many of the unethical comments listed on the petition web page. It appears many of them would just assume do away with buyer agency altogether. The people signing this petition seem to have lost sight of the fact that their duty is to represent their seller…not their own interests.”
Sam Chapman, also a Realtor in Austin said, “Regarding the petition to have listing agent information on other agent sites, that is more than ridiculous. If a buyer is looking at a listing, the listing agent by definition can not have that buyer’s best interests at heart. So why in the world would the Board want that listing agent’s information to show on other agent’s sites? The whole reason, in my opinion, the IDX stream displays my contact information with listings on my website is because I can actually represent that buyer.”
Broker Jason Crouch said, “The proposed changes would likely harm buyers and sellers alike. Online buyers would be channeled directly to listing agents, which could result in less (or no) representation for them. Sellers would end up getting much less exposure for their properties online, which could translate to longer market times and potentially lower sales prices. Lastly, the changes would inhibit competition among agents, which strikes me as a very dangerous path. I think we should focus on working together to help the consumer.”
In another email obtained by AGBeat, a committee member writes, “ABOR has fantastic legal council. We will be advised as to what we can legally do, which isn’t much because NAR has pretty strict or loose guidelines, depending on how you want to interpret NAR. ABOR has already been taking a look at what other Boards across Texas and the country are doing.”
Next steps – meetings and lawsuits
Currently, opposition is requesting that more than 10 representatives from each side be allowed at the next meeting on March 21, as they say the issue is too big to be decided by so few people, and many tell AGBeat that the issue has national implications as many look to Austin as trendsetters. In May, the Board of Directors will vote on any potential changes they are allowed to make which is limited to what NAR has agreed to in their final settlement with the U.S. Department of Justice.
This is not the last issue we will see with brokers pulling out of Trulia and Zillow or out of the IDX, and there are many moving pieces on the chess board, leaving agents in the field struggling to understand what each piece means and how it will impact their business. Petitioners see confusion in the marketplace while opposition sees the ability to compete being threatened, and both have said off record that they will pursue legal action against ABOR and subsequently the National Association of Realtors, who will be named pursuant to their settling with the DOJ.
Similar dissension is spreading across the nation in various forms as agents in the field become more aware of what happens to their listings, and what the consequences of syndication and sharing are, particularly regarding who is (and is not) making money on the data.