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.

November 24, 2015November 23, 2021

Home marketing may be limited due to agents’ personal wealth strategy

From stagingworkstoronto.ca

If you ask a real estate agent about their home sale strategy, you may get a sanctimonious presentation of the best way to sell a house. However, if you question why they advocate specific procedures over others, chances are they will answer “experience.” Even in the face of an abundance of research, many continue to hold on to old and outdated beliefs about how to sell a house. Furthermore, consider that a real estate agent’s strategy to sell your home may not necessarily benefit your bottom line.

The latest study by Allen, Cadena, Rutherford & Rutherford (2015. Effects of real estate brokers’ marketing strategies: Public open houses, broker open houses, MLS virtual tours, and MLS photographs. The Journal of Real Estate Research, 37(3), 343-369) is the most recent extension of home sale strategy research. The study reinforces the outcomes of some strategies, while shedding light on others; and asks a compelling question about agent motives.

The study looked at home sale price, time on market, and the likelihood of a sale in relation to: broker open houses, public open houses, MLS photos, and MLS virtual tours. The results indicated that all four tactics positively influence home sale price. Additionally, conducting public open houses and having MLS photos have a positive influence on time on market. However, there is little evidence that having more than six MLS photos increases that positive effect. Surprisingly, MLS virtual tours and conducting broker open houses have a negative influence on time on market. The authors conclude that as a package all four strategies may be worthwhile to consider when home sale price is the goal, even though the time on market may be slightly extended.

However, if your goal is a successful home sale, you may consider another strategy. The study concluded that the probability of your home sale success increases when you have broker open houses, MLS virtual tours, and eight or more MLS photographs. The study found that public open houses actually decrease the probability of a successful home sale.

In light of these findings about home sale price and success of sale, the authors rhetorically ask: “Why do all sellers/brokers not use these marketing strategies in every transaction effort?” They propose that, “Perhaps the answer is that brokers follow a wealth maximization strategy that may result in an agency problem with sellers.”

It should come as no surprise that there are agents who have a “wealth maximization strategy” for themselves, and place their own needs before their client’s. However, the authors’ suggestion about agent motives could be problematic with respect to the National Association of Realtors® Code of Ethics (realtor.org). For example, Standard of Practice 11-2 indicates that, “The obligations of the Code of Ethics… shall be interpreted and applied in accordance with the standards of competence and practice which clients and the public reasonably require to protect their rights and interests considering the complexity of the transaction, the availability of expert assistance, and, where the Realtor® is an agent or subagent, the obligations of a fiduciary.”

If you’re selling your home, one takeaway you might have from this study is that you should exercise due diligence when choosing your listing agent. Consider discussing the sales strategy, and getting it in writing. Additionally, protect yourself by ensuring that your listing agreement can be terminated without penalty and within a reasonable amount of time.

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May 30, 2015July 6, 2019

Hot regional housing markets change reliance on MLS listings

Good news for home sellers, in most US regions. Tuesday’s news release from S&P/Case-Shiller Home Price Indices indicates a nationwide home price gain. The 10-city and 20-city composites continue to show home price gains, as the composites realized a 4.7% and 5.0% year over year gain respectively (month over month gains were 0.8% and 0.9% respectively). The nearby Washington DC region was not as robust as the other US regions in the composite, however, as home prices gained about 1% year over year and about 0.8% month over month (us.spindices.com).

The S&P/Case-Shiller index seems to be in agreement with the U.S. House Price Index Report issued by the Federal Housing Finance Agency (fhfa.gov), which indicated that national home prices gained 1.3% during the first quarter of 2015. However here in Maryland, home prices did not fare as well with a 0.38% decline year over year.

Hot markets in western regions of the US, such as Washington, are making news besides strong home prices. In one of the hottest markets in the nation, a Seattle Washington broker has decided to drop out of their MLS. Counter intuitive to the idea of maximizing listing exposure, Rob Smith of the Puget Sound Business Journal reported that Quill Realty is dropping out of their local MLS (Here’s why this Seattle realty company just ditched the MLS; bizjournals.com, May 18, 2015).

Instead of MLS placement, Quill intends to place listings on a number of websites, including Zillow, Redfin, and Realtor.com. The rationale is that sellers will save money from the 1% commission that is charged by Quill; while buyers of Quill’s listings “… will become responsible for working out a financial arrangement with their own broker.”

Of course, this is not an entirely new idea. There have been a number of seller oriented business models that have been devised over the years; with new variations popping up during hot markets. Many discount brokers and MLS placement services, which have survived the housing downturn, have continued to market their business model successfully.

Innovative or not, hot markets tend to make brokers become more protective of their listings by seeking ways to make them proprietary. Low housing inventory in some markets, along with increasing home prices and buyer competition can make a home listing a hot commodity. I will remind of the recent report indicating that pocket listings are on the rise. Pocket listings are listings kept out of the MLS and shown only to a select network of contacts and clients. And although pocket listings are often associated with luxury real estate, pocket listings in hot markets can occur across all price ranges because of the increased home buyer competition.

In response to recent trends, several regional Realtor® groups and brokers have been formulating a nationwide consumer MLS to provide the consumer with up to date relevant information (brokerpublicportal.com). Board member of the Broker Public Portal, Robert Moline (Home Services America) stated, “There is a tremendous amount of support and momentum throughout the MLS and brokerage communities to create a new choice for how and where to display their listings…”

And even though many home sellers are taking advantage of a seller’s market in their respective markets, home buyers are becoming increasingly resourceful as well. Many buyers are learning how to find home for sale in places other the MLS. Besides alternative listing websites, many buyers are also relying on neighborhood listservs (internet email lists) and internet groups for home sale notifications.

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By Dan Krell
Copyright © 2015

February 28, 2013November 23, 2021

Real estate integrity on the internet

The internet is brimming with information. And although a lot of information is based in fact, there’s plenty that is not. People often fall prey to internet half-truths because information is often presented convincingly with conviction by websites claiming to be the authority. The internet can be such a quagmire that even some trusted and reliable media outlets have been fooled. How about real estate integrity?

Home buyers and sellers are increasingly depending on the internet for information to assist them in buying and selling real estate. Many real estate websites that are visited not only contain current homes listed for sale as syndicated by the local MLS; they may also post homes for sale by other sources that include homes for sale by owner, fake listings posted by desperate real estate agents, and advertisements from other websites. Unless you know what you’re looking for, you might never know the posting source or how long it has been posted on the site. Real estate integrity may be lacking.

The MLS syndication is usually updated to ensure accuracy, even if it’s not always timely. However, it’s the list of FSBO’s, sham listings, and advertisements that can be out of date and/or used to lure consumers to visit other sites. Some home buyers/sellers can be lured to occasionally spend money for bargain homes for sale and home sales information.

Sometimes, real estate integrity is intentionally substituted for salesmanship. Some real estate websites post advertisements as “teasers.” The teaser may show a home for sale at a great price, but could lead to another website that may charge for the full information about foreclosures or bargain homes. Once on these sites, some consumers misunderstand that all the homes listed are for sale. The reality is that although these sites provide a service of collecting and posting public information about homes that have foreclosure notices and other related information (and sometimes even list MLS listings for sale), not all the homes are for sale. In fact some of the homes listed as distressed properties may never be offered for sale as a foreclosure because the home owners resolve their issues without losing their home.

The internet continues to be a source of real estate related scams. Internet real estate scams continue to prey on susceptible home buyers and sellers, as new and sophisticated cons are devised. Scammers often post fake names and photos to present themselves as being local, when they are not.

Yes, many property websites have taken steps to maintain real estate integrity by monitoring postings, and allowing user feedback to flag problem listings; and some of the leading real estate websites strive to continually improve on the consumer experience. However, if you want up to date and accurate home listing and sales information, talk to a real estate agent. Your agent has access to the local MLS and can not only provide you with timely home listings and contract status; they can also provide you with an up to date home sales analysis.

Just because you found it on the internet, does not necessarily mean it’s accurate. Practice due diligence and check out the source. A lot of real estate related information posted on the internet can be verified through public records. Public information is often readily available on the ‘net, and can be found on public websites maintained by State and local jurisdictions. For more information on protecting yourself on the internet, visit the “scams and safety” link on the FBI website (FBI.gov).

Original located at https://dankrell.com/blog/2013/02/28/real-estate-and-the-internet-its-gotta-be-true/

By Dan Krell
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This article is not intended to provide nor should it be relied upon for legal and financial advice. Using this article without permission is a violation of copyright laws. Copyright © 2012 Dan Krell.