The long road to Austin Board’s decision to sever ties with ListHub

ABoR severs relationship with ListHub

As part of a broader shift in the real estate listing syndication world, Austin Board of Realtors (ABoR) members voted to terminate its agreement with listings syndication provider ListHub as of April 30, 2014 and “intends to cease syndicating members’ listings to non-REALTOR® consumer websites at that time.” In a statement, ABoR said, “This decision was made to protect the integrity of Austin-area property information, address concerns about the business practices of non-REALTOR® consumer websites and to mitigate issues caused by inaccurate listing data in the home buying and selling process.”

Luke Glass, Vice President and General Manager at ListHub tells AGBeat, “We have been working closely with the Austin Board of REALTORS throughout this process, and respect their decision. We agree that accuracy is paramount, and ListHub is unparalleled in providing accurate and timely data. We hope to find a way to continue to work with ABOR and their members to offer a centralized platform for brokers to make their own choices regarding listing advertising.”

ABoR has repeatedly noted that they are not making a statement against syndication, rather asserting that brokers use ListHub directly and make more informed decisions, set up detailed filters for all of their listings, and keep up to date with which sites are added to ListHub, what their scores are, and so forth. Members told us they took the feature being offered by ABoR as an endorsement of the final destination of listings sent through the MLS to anywhere (including ListHub, thereby Zillow, Trulia, HomeFinder and so forth).

The very long history behind this decision

This decision did not come without a long history attached to it, as many years ago, the battle boiled over with Realtors and brokers educated on listing syndication arguing how data should or should not be shared with third party media sites. The debate quiets down for several months at a time, then one entity or another adjusts how they do (or do not) syndicate to third party sites, and the cycle of heated discussion is reignited as the industry feels its way through the convoluted issue.

Toward the end of 2011, Shorewest, a major brokerage in Milwaukee, pulled their listings from all syndication, including Realtor.com, igniting what many suspected would be the end of brokers syndicating listings anywhere but their own site, and while a select few high profile brokerages followed suit across the nation, there was no mass exodus as some feared (or hoped for).

How the committee was formed

Bringing it back to Austin, this particular Board functions through member votes and committees – no executive stands before members and makes an arbitrary decision as is the case in other parts of the nation, so severing ties with ListHub is based on a series of dominoes that have fallen, leading up to this measure being adopted.

Kimbrough Gray, Broker/Owner of Vox Real Estate in Austin and current Austin MLS (ACTRIS) Committee Chair at ABoR is known for being an early adopter in the tech world and not what anyone would call old school or uninformed. He explained the process: “In Austin a syndication committee was formed due to concerns brought forward by members. After reviewing the evidence they decided it was best for the association to not be involved with syndication. Before they submitted a recommendation they spent several weeks surveying the brokers in the market. While there was a diversity of opinion the majority were in favor of abor ending syndication. Then a recommendation was sent to the Actris committee were it was debated and approved by Realtor association members. Then it was sent to the Board of directors (composed of Realtor association members) where it was again debated and approved.”

Gray noted, “I don’t know the feelings in other markets. But in Austin a large number of brokers wanted this change,” adding that if other markets favor syndication, they should stay put, but in a city like Austin where the majority ruled that the Association should not be involved in syndication, the ties should be cut.

Rewind to 2012: luxury brokers revolt

In 2012, Austin was home of another major debate, as several luxury brokers 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, and petitioned for a rule change to allow all photos to be watermarked with their contact information. The petitioners noted confusion in the marketplace, and they threatened to sue ABoR. The dustup involved hundreds, perhaps thousands of agents who felt very strongly for or against the petition – it was extremely heated and polarizing.

It could be construed that ABoR is responding to this a year later, but what really happened was this petition triggered serious consideration by members of how their data is being used and displayed – fast forward to last week and the final result is allowing brokers to feed listings through ListHub to syndicate, but as Austin Broker, Jim Olenbush explains, “The Austin MLS is merely turning off the Auto-Pilot distribution to 60+ websites through ListHub. This is a chance for brokers to revisit syndication and decide if there is any real benefit.”

Olenbush added, “The data feed would be a RETS feed with only the broker’s own listings. If they wanted to provide it to companies like Zillow and Trulia it would be as simple as sending them the link. If they only wanted to syndicate individual listings on a case by case basis they can use a free service such as Postlets.”

The shifting listing syndication relationship

One source opined that brokers are focused on the business of doing their business, not the minutia of hundreds of real estate websites’ detailed data rules – to their detriment and the damage of their clients, in some cases, but not out of stupidity, to be certain.

Jude Galligan, Austin Broker and Co-Founder of VOW (Virtual Office Website) and visual real estate search site, Homespin.com explained how the ListHub relationship came to be in the first place.

“It is historical convenience,” Galligan notes, “not a technological reason, that ABOR via Listhub has handled the syndication of Brokers’ listing data to Zillow or Trulia and other portals. It’s looking like an obsolete relationship, though.”

“Syndication for online publishers was figured out years ago in the form of RSS,” Galligan added. “Brokers, especially smaller regional firms (the national franchises already do it) could truly regain control of their information by publishing their own listing feeds, and MLSs are acting more like quality control rather than gatekeeper.”

Rewind to 2006: Austin brokers opt in to ListHub

Steve Crossland, ABoR committee member and Co-Owner of The Crossland Team in Austin notes that most Austin brokers opted in to ListHub in 2006 when the relationship was new, but have not logged in since, completely missing out all of the new destinations their listings are now sent to. Crossland notes that ABoR’s terminating their relationship with ListHub “returns accountability to Brokers by inviting them to be aware of and actively select where and how their brokerage listings are marketed online.”

Crossland notes, “Those Brokers who decide that syndication is a benefit to their agents and clients will at least be able to articulate how they came to that viewpoint because they must now educate themselves about the pros and cons and make a decision instead of having everything happen on auto-pilot. Taking away the Easy Button, which only ever had to pressed once, 7 years ago when the internet was a completely different place and competing agents were not advertised alongside syndicated listings labeled with false valuations and no indication of whose listing it is, is a responsible and prudent decision by the Austin Board of Directors.”

“Many Brokers,” Crossland concludes, “after they educate themselves, will come to the conclusion that syndication provides absolutely no value to their Brokerage business or their listing clients whatsoever. None at all. Those who disagree are free to continue the practice, but the local Board has no obligation to to aide in their marketing choices. Same as the Board not offering a service to call in newspaper ads for Brokers. Advertising is a Broker/Agent responsibility.”

Fast forward to 2013: massive Austin brokerage stops syndicating

Jonathan Boatwright, co-owner of Realty Austin, the second largest brokerage in Austin, announced shortly after the ABoR decision that they would be pulling their listings out of syndication altogether, citing a 2012 WAV Group study revealing inaccuracies in third party syndication data.

Boatwright notes the study showed that “as many as 36% of the homes listed for sale on Trulia and Zillow are no longer on the market. The study also found that approximately 20% of homes actively listed on the MLS are never posted for sale on these websites. Buyers who rely on these sites to find a home for sale are unaware that they are missing out on as many as 1 in 5 homes that hit the market. They get frustrated by the outdated inventory, and they tend to blame their agent for the outdated listing data they find on these sites.”

Further, Boatwright notes that “Because Texas is a non-disclosure state and home sale prices are not recorded with the County, our tax assessments are not a reliable indication of property values. Many of these sites use tax assessments, and limited information gathered from realtors as the basis to ‘estimate’ home prices. Unfortunately, their inaccurate estimates are causing sellers to mis-price their homes, causing buyers to make inappropriate offers, and causing both to second guess the more reliable information that is provided by their agent through the MLS data.”

Austin Broker, Eric Bramlett believes other local brokers will follow Realty Austin in pulling listings from third party syndication sites altogether. “Syndicators promised us a lot of value, and Austin was one of the first markets to embrace syndication. This is a market that can look at 6+ years of syndication data & experience, and a lot of brokers here are deciding that it’s just not worth it. Realty Austin’s decision was a smart, easy decision to make and I think you’ll see more brokers and agents follow suit.”

MRED CEO asks if this actually fixes the problem

Russ Bergeron, Chief Executive Officer at Midwest Real Estate Data LLC commented, “In our area the vast majority of complaints comes from sources other than ListHub or Point2. They come from sources like Postlets, virtual tour companies, real estate magazines, IDX vendors, etc. And who initiates the dissemination of these listings through these entities – the agent, not the broker. And of course the result is that the listings never get updated because they are not part of any kind of updated feed so they remain on these sites forever.”

Bergeron opines, “Is [ABoR’s] action going to fix that? I think not. I know you will say it is the MLSs job to educate the agents along with the brokers. If a broker has not cared to see where their listings are going after 7 years, you are going to need a lot of education.”

Brokers, Associations reacting to ABoR’s decision

Nonetheless, ABoR is not alone – several brokers and association executives have told us that they are reacting to ABoR’s decision by considering their own role in the transaction.

Rhonda Ricketts, MLS Director at the Huntsville Area Association of Realtors told AGBeat that they too have recently pulled out of ListHub, opting for “MLS Direct Syndication,” using Bridge Interactive Group to facilitate direct syndication, saying they have been “very pleased” with the decision. While pre-dating the ABoR decision, it is an indication that Realtor groups are widely considering their role in syndication.

Kent Wolfe, member of the Englewood Area Board of REALTORS®, praised ABoR members’ decision and said, “It will certainly open up conversations within many boards, mine included. In fact, it already began this morning.”

The shining exception: Realtor.com

So what is the caveat to the shifting relationships? They’re almost all still syndicating to Realtor.com, in fact, Boatwright notes, “We actually pay them to feature our info on our listings, too.”

Additionally, while the option to syndicate directly to ListHub from the MLS will disappear next year, ABoR members will still see a “syndicate to Realtor.com” option when uploading listings.

Brokers and boards will continue to syndicate to Realtor.com because of the company’s relationship with the National Association of Realtors (NAR), and their operating within the confines of the Realtors’ Code of Ethics, which third party sites are not bound by. Most importantly in the context of this current ruling, Realtor.com does not suffer data inaccuracies as other real estate sites do.

Sources hint that a large number of Austin brokers will shortly reveal that they intend to pull out of third party syndication altogether.

Simultaneously, there are rumors that The Realty Alliance who wants to secede from the MLS and form their own feed (forever parting ways with Realtor.com, Zillow, Trulia, and all others) is on the verge of a major announcement, but given their very slight presence in Austin, we do not believe the two to be related.

What’s really next?

The reason ABoR’s decision is so fascinating is that it puts the onus back on the broker rather than the syndication sites, agents, the MLS, or the Association itself. Some argue that is exactly where it belongs. ListHub has long offered extremely detailed filters for brokers, scorecards, and a massive database of easy to understand comparisons between listing sites, so brokers spending more time within the ListHub system could actually do a lot of good for data accuracy, and of course, their clients.

Watch for other boards and brokers to react as this most recent wave of listing syndication discussions heats up. As with Shorewest, there will be those that follow, but don’t expect a national mass exodus from third party listing sites, rather the next step in the evolution of the industry as discussions spark creative solutions to local and national issues.