The IDX usage debate is, for Realtors, a matter of perspective. That is, it depends on how you as an agent make your living.
Sandicor should be lauded for it’s efforts in getting a measure of control back from 3rd party websites who re-publish listing information on their websites. But the decision to give listing broker contact information to syndicators and therefore the public at large is not in the best interests of ALL San Diego agents. It also marks a change in this industry that is probably inevitable.
Listing Brokers Only Benefit From Ruling
Our MLS service will no doubt say they’re fighting back for their brokers…yes, their listing brokers. It would have benefitted everyone however if Sandicor had recommended to its membership not to give ANY listing data to 3rd party sites. Doing that would mean taking back control of broker’s information and images, saying no to listings that stay on sites 2 weeks after they’ve left the market, and not allowing a buyer’s agent to masquerade as the creator of the listing, now that might get these folks attention. Instead what has Sandicor accomplished by giving syndicators listing broker’s contact information? Have they interrupted or diminished Trulia – Zillow’s ability to do business in any way? Absolutely not! If anything, more home searchers will visit these sites now with the prospect of "dealing direct" and all that that perception gives to an unsuspecting buyer. Never mind for the moment that this brings up the problem of "dual agency," a situation in which, if there ever is a conflict, can end badly for the buyer since the listing agent is representing both the buyer and the seller.
The Future of Buyer’s Agents?
This decision by Sandicor will serve listing agents well…Do you hear the bell tolling buyers agents?…It does not toll for thee. Getting a listing now trumps all other endeavors in residential real estate. Period. Buyers will be able to find the home you once showed them in your gateway search – on Zillow or Trulia – and will see that they can deal directly with the listing agent. Many buyers will perceive this, rightly or wrongly, as an advantage and it promises to reduce the pool of buyers represented by buyer’s agents. Conversely it will greatly increase the number of "both sides" transactions garnered by listing agents.
The MLS is on it’s way to making itself irrelevant. Perhaps with the ubiquitousness of the internet it was inevitable but this move surely sounds the death knell. One of the core features of the MLS has been the protection it affords buyer’s agents. The MLS has historically withheld listing agent information from potential buyers that would undermine the buyer’s agent’s bargaining power as a middleman because the listing agent needed buyer’s agents to bring him buyers. If listing agents can place their inventory on well positioned, well known, 3rd party web sites that everyone can see and get buyers to come directly to them for their listings, what need now exists for a Multiple Listing Service? More importantly: the need for a buyer’s agent is diminished.
The National Association of Realtors states this about the MLS: "The MLS is a tool to help listing brokers find cooperative brokers working with buyers (my emphasis) to help sell their clients’ homes. Without the collaborative incentive of the existing MLS, brokers would create their own separate systems of cooperation (again my emphasis), fragmenting rather than consolidating property information." (from the National Association of Realtor’s website).
It appears to me that a separate system of cooperation has been created by Sandicor’s announcement. And it looks like Zillow and the other 3rd party sites have what they’ve always wanted, direct access to listing agents for their viewers. The move by Sandicor, perhaps well intentioned, perhaps done at the prodding of influential real estate establishments who see their business profit centers primarily from the "listing" side of the business, helps move the buyer’s agent out of the way for a pool of buyers who feel they can rely on themselves to get the deal done – or trust the listing agent to get it done.
For Trulia, Zillow et al, yes, Sandicor’s announcement will adversely affect buyer’s agents who pay fees for preferred positioning on those pages. Agents may find that it no longer pays to advertise on these sites in the San Diego market. It is my feeling however that the negative impact in revenue for these syndicators will surely be more than offset by increased advertising from vendors who see the increased traffic to these sites from potential buyers.
Perhaps, for our industry, this is the ultimate end game played out on the internet…the elimination of the buyer’s agent altogether. Perhaps new laws will be put in place to limit what a listing agent can and cannot do – further eroding the need for the buyer’s agent. Of course there will always be buyers who decide that they need representation in the transaction process but the pool of buyers who opt for a buyer’s agent will diminish.
And what will this event do to buyer side marketing? Agents who specialize in representing buyers either because that’s the market they prefer, or because they are newer entrants to the real estate field and simply can’t survive on their listings, will now find that locating customers will become more difficult, especially if that same agent uses the internet to build a website to find his/her potential clients (buyers). Buyers, overlooking the dual agency problem, which buyers most certainly will do, think it makes sense to deal direct. There are many buyers out there who will feel that they have a better chance of getting the property if they deal with the listing agent because the listing agent will be motivated to push the sale to the buyer that gives him the "double end" commission – and they are correct. On larger dollar home purchases it really does makes sense to deal direct. If you as a buyer are aware that there is room to negotiate with a listing agent for part of his "both sides" commission you will ‘throw down’ with the listing agent. Are you listening California?
This move by Sandicor makes me wonder if the large existing "brick and mortar" real estate establishment threatened by the ease of entry of small independents into the real estate business – especially on the buy side, have got Sandicor’s ear on this. It brings control and consolidation back to the larger operations that focus on the listing side of the business and as a huge bonus from the internet, buyers will now come directly to them.
This move was perhaps inevitable. The internet moves inexorably to disseminate information to all who want it. That’s what the internet does best. This decision by Sandicor will be followed by other MLSs as a groundswell of demand clamors for the right to contact the seller’s agent directly. Most importantly it’s here to stay because the public will benefit from the elimination of the buyer’s agent on many deals. Real estate commissions will fall as listing brokers take both ends of the deal. Buyers and sellers win.
For you agents out there making your living primarily on the buy side of the deal…..you need to change your business plan. Listings are king! And I believe that this arrangement with syndicators clouds the future of the MLS itself going forward.