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May 5, 2017May 5, 2017

Home listing syndication is big business

Your home listing is a hot commodity! Not just to home buyers looking to buy, but to those who buy and sell information on the internet. MLS home listing information syndication is big business.

Much of what you see, hear, and read on TV, radio, and the internet is syndicated and distributed through a broad network of affiliated outlets. The purpose is to have as large of an audience as possible. The larger the audience, the larger the advertising revenue. Syndicating and distributing media content has been around for a very long time, and has been very a lucrative industry for those involved.

Internet syndication is no different and has become sophisticated, such that websites will pay for licensed content. The content attracts visitors and generates revenue via ads and/or pay-per-click. Needless to say, internet syndication has developed to become a multi-billion-dollar industry.

When you think about making money in real estate, you probably think about buying and selling property, not the internet. Most people don’t realize that real estate information generates $billions on the internet. Real estate portals generate revenue by publishing content that attracts home buyers and sellers. The sought after content, of course, is your home’s MLS listing. Websites generate income by selling real estate and other professionals access to consumers who visit their sites to view your MLS listing.

You may not know this, but your home’s listing is copyright-protected by your agent’s Multiple Listing Service. The content is licensed and syndicated to internet real estate portals and other publishers for a fee. How much do websites pay for MLS licensed content? Heck, you’d be hard pressed to find that information, much less acknowledgement that there is a fee paid at all! And I suspect that information is not readily disclosed because consumers would be up in arms if they knew.

However, an article by Natalie Sherman appeared in the Baltimore Sun on January 27, 2015 (MRIS looks to partner with Zillow) gives a hint about the monetary relationship between MLS boards, syndicators and publishers. Ms. Sherman wrote:

“Under the current system, Zillow pays to receive listings from Listhub.com, which has agreements with hundreds of multiple listing services, including MRIS, to provide syndication services to sites such as Zillow. Earlier this month, Zillow and Listhub said their existing deal would not be renewed.

A representative for Zillow, which has been working to establish more direct relationships with brokers and listing services for years, said a new deal would help keep the site more up to date.”

The article refers to the 2015 shakeup of real estate listing feeds to specific websites, such as Zillow. At that time, Zillow sought direct deals with individual MLS boards, such as our local MRIS (now part of Bright MLS), to get MLS home listing feeds.

Chances are that you are unaware that the information about your home that is uploaded to the local MLS (including pictures of your home) become the property of the MLS. Much less, you may not know that the information is licensed to others for a fee to be used on other websites.

Even though the MLS boards charge subscription fees to agents for the privilege of uploading and viewing content, they might argue that the fees generated by licensing and selling your information helps maintain the MLS system. However, not disclosing this aspect of the real estate listing poses some ethical questions that must be addressed.

Of course, there are real estate brokers who have opted-out of syndication of their MLS listings. These brokers want to retain control of home listing information to ensure accuracy and maintain professionalism when presenting your home to the public.

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

July 22, 2016November 23, 2021

Real property disclosure

Finally, there is a new resource to get real property disclosure for home buyers. Home buyers can access property information that is not always readily available or hard to find. A July 19^th RealtyTrac (realtytrac.com) press release introduced Attom Data Solutions, their new parent company. The introduction described what the company offers to the real estate industry and consumers. Attom Data Solutions’ (attomdata.com) self-stated mission is: “to increase real estate transparency by arming businesses and consumers with the property and neighborhood data needed to make wise decisions.”

You may recognize RealtyTrac as being the go-to resource for foreclosed homes. But what you may not realize is, like other real estate websites it is an aggregator of information. RealtyTrac describes itself as “the leading provider of comprehensive housing data and analytics for the real estate and financial services industries…” by providing information on over 125 million properties.

So the idea of aggregating property information is not new. However, until now, there has not been this amount of information available for each property located in one place. The size and scope of Attom Data Solutions’ aggregated information is mindboggling. RealtyTrac’s press release revealed that the new parent company’s database of property information (called “ATTOM Data Warehouse”) holds more than 9 terabytes of information! (One terabyte is 1 trillion bytes). Putting the jargon into perspective, the data represents 99% of the U.S. population. And it features “enhanced and standardized data for more than 150 million U.S. property parcels.”

Before the ATTOM Data Warehouse, you would have to check a number of websites and make inquiries to several local agencies. The aggregated info includes: a property’s historical and current public records, ownership, mortgages, foreclosures, neighborhood information, demographics, environmental issues, natural hazard information, potential health hazards, and property features and neighborhood value information.

Besides being able to help you decide on which home to buy, Attom Data solutions’ reports may also help you decide on price. Additionally, home sellers may find the information useful as a form of disclosure, to answer many of the questions that are often difficult to find. Attom Data Solutions is reportedly offering data licensing to the industry, however the information is also available via their consumer websites RealtyTrac.com, Homefacts.com and HomeDisclosure.com.

The idea of consolidating property information into one location has been trending for several years. There have even been hints of creating a national MLS. Several years ago, the National Association of Realtors® created the Realtors Property Resource® (narrpr.com) to assist Realtors® in providing detailed reports to home buyers and sellers. Besides offering details on neighborhood comps, the generated reports incorporate data from various sources. Buyers and sellers are informed of analytics, trends and other factors. Of course, RPR is exclusive to Realtors®. But if you receive a report from your agent, they can help you with the analysis.

The amount of information about any given property seems to be ever increasing. However, an ongoing issue echoed among professionals and consumers is that the data is not always reliable. Even information that is pulled from public records are not always current. Verify the veracity included in any property report by cross checking several resources.

By Dan Krell
Copyright © 2016

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February 4, 2016July 23, 2019

Evolving real estate scams – vigilance needed

Last year, an old wire transfer scam evolved to target Realtors® and their clients. A December 15^th “Alert” put out by the National Association of Realtors® (realtor.org) reminded NAR members and consumers to be vigilant. “The hackers often send an email that appears to be from an individual legitimately involved in the transaction, informing the recipient, often the buyer, that there has been a last minute change to the wiring instructions. Following the new instructions, the recipient will wire funds directly to the hacker’s account, which will be cleared out in a matter of minutes. The money is almost always lost forever.”

NAR offers guidance and “best practices” to prevent being a victim of scams and cybercrime. Even though your agent should be mindful and exercise caution, you should take the initiative to protect yourself. You should be attentive and alert to the possibility of email scams by: not sending sensitive information via email; never trust unverified email; you should not interact with suspicious emails; clean your email regularly; do not conduct business over free WiFi hotspots; and use strong passwords that are changed regularly.

NAR stipulates that the guidance is “not all-inclusive,” and you should check with your agent about their office’s cybersecurity policy. The warning states that the scammer emails are “extremely convincing,” such that “many sophisticated parties have been duped.” No one is “too small” to target, and don’t be over confident about being tech savvy. “This fraud is pervasive, convincing, and constantly evolving.”

According to an August 28th report issued by the Federal Bureau of Investigation (Business E-Mail Compromise, An Emerging Global Threat; fbi.gov) BEC (Business E-Mail Compromise) is an insidious scam that is not only targeting real estate, but all businesses and consumers. According to FBI Special Agent Maxwell Marker (of the FBI’s Transnational Organized Crime–Eastern Hemisphere Section in the Criminal Investigative Division), “BEC is a serious threat on a global scale…It’s a prime example of organized crime groups engaging in large-scale, computer-enabled fraud, and the losses are staggering.”

BEC statistics compiled by the FBI’s Internet Crime Complaint Center (ic3.gov), from October 2013 to August 2015 reported 8,179 total victims (U.S. and non-U.S.) and $798,897,959.25 combined U.S. and non-U.S. exposed dollar loss. The IC3 has reported that computer intrusions related to BEC are on the rise; and can be initiated via a phishing scam that downloads malware that can access the victim’s data, passwords, and financial information.

Multiple versions of the scam are being implemented, and it’s likely that the tactics will change as cybersecurity catches up with the scammers. The most recent version identified by the IC3 has fraudsters claiming to be a law firm handling confidential information (including real estate transactions). The scammer may use email and/or telephone to contact potential victims, who are pressured to act quickly at the end of the business day.

To learn more about BEC, protection strategies and how file a complaint – visit the Internet Crime Complaint Center (ic3.gov). If you are a victim of BEC, the IC3 recommends that you: contact your financial institution immediately; request that your financial institution contact the corresponding financial institution where the fraudulent transfer was sent; contact your local FBI office (if the wire is recent, the US Department of Treasury Financial Crimes Enforcement Network might be able to help return or freeze the funds); and, regardless of dollar loss, file a complaint with the IC3.

By Dan Krell
Copyright © 2016

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October 7, 2015November 23, 2021

Real estate agents getting back to basics and focus on relationships

Don’t be surprised when you’re getting more real estate agent phone calls, or seeing more agents at your doorstep. You may be surprised to know that in this increasingly tech dependent world, agents are getting back to business basics; which is founded in personal introductions, building relationships, and providing personal service.

You see, many real estate agents (like the rest of the population), are realizing the limitations of the internet. What was once the promise of a new market place for products and services has become a super-saturated arena of information, advice, and “content” clamoring for your attention; and is a growing disappointment for many due to the increasing irrelevance of information, not to mention the surge of fraud and hacking.

The National Association of Realtors® (realtor.org) has reported on the growth of internet use in real estate over the last fifteen years in their annual Profile of Home Buyers and Sellers (the 2014 Profile indicated that 92% of buyers “use the internet in some way in their home search process…”). And although the statistic is astounding, it is becoming clear that is still not wholly understood how home buyers and sellers use the internet.

You may not be surprised to know that home buyers and sellers don’t entirely rely on the internet for choosing their agent. In fact, many choose an agent through friend/family referrals, personal introductions, and even serendipitous meetings (such as visiting an open house). Furthermore, buyers and sellers are increasingly aware of the internet’s limitations as well; as one home buyer’s recent statement of “…this home is not what was advertised on the internet…” illustrates the type of misleading information that is often found.

Although many are just waking up to the fact that “point and click” does not sell homes, “big housing data” knows it generates online revenue by capturing your information and selling it to real estate agents, loan officers, movers, and others. Last year’s acquisition of Trulia by Zillow was thought by many analysts to be an industry game changer by merging two of the most visited real estate portals. However, many did not consider that the move was to increase traffic and revenue for two companies that were reportedly not “yet profitable” on their own, by “grabbing a bigger slice of the advertising market” (Logan, Tim. “Zillow Deal to Buy Trulia Creates Real Estate Digital Ad Juggernaut.” LA Times. 28 July 2014.<latimes.com>).

More recently, HousingWire’s Ben Lane reported on Zillow’s downgrade by Barclays (“Is Zillow in Trouble?” HousingWire. 20 July 2015. <housingwire.com>), referring to a slowdown of traffic due to saturation and competition. Months after the major acquisition, growth of the online real estate portal is “slowing significantly.”

Just as the growth of the internet created markets and changed how real estate agents conduct business; personal needs and attentions are changing how consumers view the internet, as well as producing voids left by agents and brokers who heavily relied on the internet for business.

The NAR’s recent DANGER Report misses the mark by highlighting perceived shortcomings in Realtor® ethics and competency. However, the real issue may be more about the lack of professional intimacy; which is necessary for commitment, integrity, and building trust. While some already know it, others are waking up to the notion that the quality of the professional relationship is vital to the consumer’s satisfaction – and it all begins with an introduction.

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July 30, 2014November 23, 2021

The anonymity of the internet has made real estate more personal

It might not be a revelation that the initial news about Zillow’s acquisition of Trulia reverberated among the analysts as a game changer for the real estate industry. But you might be surprised that some commentaries, such as Brad Stone’s of BloomburgBusinessWeek.com (How a Zillow-Trulia Merger Could Finally Change the Business of Real Estate), expressed that the transaction of buying and selling homes has not really changed since the inception of these internet giants.

Compared to 2013, decreased sales volume has made 2014 a challenging year for many in the real estate industry. And contrary to what some believe, the Trulia acquisition may not necessarily be a sign of strength; but rather, it may be sign of continued weakness in the industry. Tim Logan comments on the acquisition in his July 28^th Los Angeles Times article (Zillow deal to buy Trulia creates real estate digital ad juggernaut), “Neither is yet profitable separately, but they hope to save $100 million a year by joining forces and cutting duplicative costs.”

Regardless of the economics behind the acquisition, the significance of Zillow and Trulia (and other similar websites) cannot be underestimated. And although many believed these sites were to have changed the real estate industry in a manner similar to how the internet changed the travel and retail industries; Zillow and Trulia have been leaders in transforming the home buyer and seller experience. And instead of minimizing the importance of the real estate agent; MLS aggregators have become facilitators and part of the home buying/selling process by packaging syndicated MLS feeds and other related information to consumers in a convenient and eloquent way through the internet, while selling services to real estate professionals vis-à-vis subscriptions and advertising.

The general process of buying and selling a home is still somewhat the same as it has been for decades. Before internet access became prevalent, real estate agents mostly met with their clients in person to review available home listings, discuss financing and other related matters. Although many used the technology of the day (fax machine and telephone), the preferred meeting was face-to-face. As the internet flourished, technology adopters were able to correspond with clients via email, text messages, and Skype. And as the technology evolved, so too did the daily business of real estate. Searching for homes became increasingly streamlined, and the flow of documents became more efficient.

Some have made the argument that the internet and related technologies may have been an enabler of the real estate bubble of the early to mid 2000’s. However, the reality may be that the real estate bubble facilitated the growth of real estate aggregators and the use of internet technologies. The proliferation of information at that time, along with the effective use of new technologies, fed house hungry buyers who wanted to be the first to know about a home for sale before other buyers. Internet and cell phone applications were developed to automatically send listing alerts to buyers’ emails and cell phones (technology that is commonly used today and even useful in hot markets where homes sell quickly).

Buying and selling a home is still a personal business. Instead of eliminating the real estate agent; websites such as Zillow and Trulia may have forced the agent to evolve from the information gate keeper to the local real estate expert who can interpret information for clients into meaningful data that can be used to facilitate the buying and selling of homes.

Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. This article was originally published the week of July 28, 2014 (Montgomery County Sentinel). Using this article without permission is a violation of copyright laws. Copyright © Dan Krell.