Boulder CO Listings and Syndication – Wait… Let me get on my soap box!
What is listing syndication?
Let’s start from the beginning. A Boulder CO Realtor attends a listing consultation with a Seller. That seller agrees they would like the Agent to represent the property. To value it, market it and do their darnedest to find a buyer for it. The agent and seller sign a listing agreement and the agent proceeds to “put the property on the MLS”. That is, the details of the property, carefully crafted descriptive language and photography the agent has organized, is uploaded to a website shared by (and paid for by) other agents in the area. Part of the agreement to use the MLS is a commitment by the listing agent to pay a commission to the buyer’s agent, at closing.
At the time the data is uploaded to the MLS the listing agent chooses whether or not to allow the data to be pulled and used by syndication websites. That would be your Zillow, Trulia, Realtor.com crowd. These websites are “given” the information for free.
What are the upsides of a syndication website for an agent?
1. The “set it and forget it type” agent likes the idea of telling their seller how many “hits” the listing gets without any further effort on the part of the agent.
2. The agent owns a brokerage and each time an inquiry call comes in to the office, they sell that lead to an agent in the office.
3. The agent is the “poser” type and he/she has paid Zillow $500 this month to have their photograph and contact number parked next to listings that are not theirs (not that the website visitor can tell that!)
What are the downsides for the agents/sellers and buyers?
1. “Hits” on a website are not the same as outcome or success. (A Zillow agent has 0.04% chance of getting a call… not a transaction… a CALL.)
2. By selling leads back to an agent, the brokerage (who is in fact on the listing agreement) could be seen as coming between the listing agent and their seller client – interfering in the relationship. After all, the seller has asked the listing agent to represent the property and which agent knows the property better than the listing agent? So by selling the potential buyer inquiry call to another agent, who doesn’t know the property, you are doing the seller a disservice.
3. When a buyer calls the agent listed next to the property data on the syndication website, they are getting an agent who, in all likelihood, has never even seen the property. IE: Knows the property about as well as the buyer does! The agent however, can trash talk the property in question and begin pushing his or her own listing. The seller is getting robbed. Not only is there no advantage to getting these calls… The seller is now disadvantaged. Had the call gone to the listing agent, the seller would have a much higher chance of getting a showing or a contract out of the buyer in question. By allowing the listing to be published on a syndication site, the listing agent has not only sacrificed the potential to sell that listing, but also the chance to build a new client relationship with the buyer/seller that is on the phone.
Interesting Boulder CO listing syndication thoughts to ponder…
Realogy Franchise Group, owner of such real estate brand names as Coldwell Banker, recognized the downside to syndication listing sites and went about stop-gapping that problem in a creative way. They contacted Zillow and negotiated a monthly payment in return for Zillow only parking Coldwell Banker agent names next to their own listings. Smart right? Yes, considering they have now bought space near their own listings and can still buy other peoples space, but no-one else can buy advertising space next to their listings! (Realtors, you should be taking this in!) Then why do I call it a stop-gap measure only? Because even Realogy knows that sooner or later all the other big brands and even smaller brokerages will get tired of paying for leads on the data that they provide for free to syndication sites. At which time, brokerages will depart syndication sites… and take all their data with them, leaving Trulia etc with inadequate data to attract visitors and compile stats with. Coldwell Banker has their own website in the works. Once up and running, watch them jump ship! Oh, and in case you are wondering how much it costs to buy back space for the agents name next to their own listing: $200/agent for CB and around $35,000/agent for the smaller brokerages – Yeah, Zillow doesn’t want anyone else really doing it, it destroys their game plan and has decreased their advertising revenue. Was this decrease in revenue disclosed to shareholders? They are a publicly traded company, no?
Real estate brokers, have you read the Zillow terms of agreement? Did you know that once your creative descriptions and photos are uploaded to Zillow they are there forever and you have lost control of it? Even worse, if there is a law suit over the data, you are liable, not Zillow!
If you are like me, you get weekly calls from buyers who are shopping Zillow for their new home. It’s so sad when I get calls and emails inquiring about properties that are “just perfect” for them and then I have to tell them that the house sold 2 years ago and is no longer for sale. What exactly does Zillow get out of this ridiculously inaccurate data? Well, they get to say they have more listings than any other site… That attracts more visitors. More “hits” is their justification to sell advertising to Realtors at higher prices and of course have those same Realtors convince their sellers that they can give the listing the most exposure. It’s all so misguided I’m not sure whether to laugh or vomit. (I’m tending toward vomit, FYI.)
How many listings are on Zillow right now in Boulder? How many are on the local MLS? According to my search (the same search on both sites within 10 seconds of each other) there are 397 houses, townhomes and condos for sale on Zillow, for Boulder CO right now. How many are on the MLS? 264.
That is 66% of the Zillow number. Or in other words, Zillow is claiming 50% more listings than what is for sale on the MLS. How could it be? Well, let me tell you: Zillow doesn’t know if a property is under contract or not. Zillow doesn’t even care if it sold last year! Zillow might have a few “for sale by owners” but not 50% more, so let’s not try to back pedal with rational that simply isn’t there. Who is this serving? Zillow, of course. The buyers and sellers that think they are using up-to-date, accurate info to price their homes or find a home are being mislead. I’ll even go a step further and say that a market (any market) is influenced by Supply and Demand. By messing with perceived supply, these syndication sites are actually influencing the market. Telling the buyers/sellers there is more supply than there really is might actually be slowing the market.
Consider this…
- Realtor.com (not owned by Realtors!) sued Zillow
- The FTC has received complaints filed against Zillow and Trulia
- The National Association of Realtors has asked the government to block the merger of Zillow and Trulia
- Zillow and Trulia have never posted a profit, ever! (Yes, their CEO’s and what-not are earning big bucks, but what about their shareholders?)
The Myth:
If you list your home on a well-trafficked website, it will get seen by a lot of people and therefore generate real showings and lead to honest to goodness contracts to buy.
The Reality:
480,000 homes sell in the U.S each month.
Trulia and Zillow claim 82 million unique visits each month between them.
Therefore: 99.4% of those visitors didn’t buy a home (That’s even giving them credit for ALL those home buyers having visited their sites!)
Most people who visit real estate are DREAMERS! While there is nothing wrong with day-dreaming (I do it myself) I think we can safely say
Hits –> Outcomes/success in buying and selling, is wholly unrelated!
So, having given it a LOT of consideration for a long time, here is what I can tell my clients:
My intent is to ensure your experience from start to finish. At the end, I’ll ask for your referrals… But in order to get them, I need to give you the best possible service I can. Involving listing syndication websites actually decreases the level of service I can offer you. I cannot ensure the service you get from a random Realtor online.
Colorado Sellers, I don’t believe that parking your listing on Zillow, Trulia, Realtor.com or other syndication websites, is doing the best thing by you. I believe that if a buyer or their agent can all me directly, instead of calling the stranger who paid to put their name beside my listing, I can sell them your property. I can help them understand the features and benefits of the home as well as the comparable sold real estate that we used to price it. When I talk from a place of knowing your property I can engage them and pass on my enthusiasm for it and for working with you. I will not be trying to sell someone else’s “property B” to a buyer who called about your “property A”!
Colorado Buyers, when I tell you that the best choice for late night property shopping is not Zillow, but in fact it’s ColoProperty.com, I say it because I care. I care that you get up-to-date information that is accurate. I don’t want to see your face fall when I tell you that the property you fell in love with is not even for sale. Your sad voice on the phone is depressing for both of us! Trust me when I tell you that Coloproperty.com gets more traffic than Zillow or Trulia and please, take advantage of my offer to set you up to receive instant alerts for new listings directly from the MLS. Yes… I can send you information on properties that are actually for sale (not under contract), at a price that is current, the minute they hit the market!
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And just for the record, the Berkshire Hathaway affiliate, Edina Realty (huge in Minnesota and Wisconsin) pulled out of all listing syndication websites for the reasons above too. They are among the leaders, but far from the only ones taking a stand. I would follow Warren Buffet blindfolded, long before I would follow Spencer Rascoff with my eyes wide open. Nothing personal, but the proof is in the pudding and Buffet’s shareholders are better off!