In the Beginning
It was not all that long ago when Real Estate Listings were not online. At least not like they are today. In the beginning, you had large, forward thinking real estate brokers that invested tons of money in websites and technology and figured out how to put their own listings online. Most people don’t remember those days since many people didn’t even have the internet. At that time, there were little, if any rules on displaying of real estate listings on the web and very few people doing it. The web was in its infancy and the building of websites and having the technical savvy to display listings was expensive.
Internet Display of Real Estate Listings Gets Conformed
Today, we have IDX. IDX stands for Internet Data Exchange and the general rules are written by the National Association of REALTORS (NAR) and passed down to the local NAR sponsored REALTOR boards and MLS’s so they can fine tune for their local markets. This entire idea came from the fact that MLS’s coordinate cooperation and a guarantee of commission from broker to broker. That means if one broker brings a buyer for another brokers listing and its listed in the MLS, the broker who brought the buyer would be compensated at the rate disclosed in the MLS.
With all of that being said, IDX is a pool. If a broker participates in the MLS they have the option of opting into IDX. That means they give permission for other brokers to display their listings on their websites—still held by the guarantee of cooperation. With little exception, the broker must have all of their listings in the IDX pool or none at all. Almost 100% of brokers participate in the IDX pool. The MLS keeps the database of all participating brokers listings and gives (actually there usually is a small fee) the participating brokers an IDX feed to access those listings. To display other brokers listings, they must follow a pretty rigid set of rules including what property types and fields they can display, how often they must update their site and certain disclosures. DEAN Knows specializes in IDX and VOW Implementation and Compliance.
Enter In 3rd Party Aggregators
As technology evolved, more brokers had websites and were technically savvy enough to get that raw data feed of real estate listings (an IDX feed) and properly display them on the internet. Then came the 3rd Party Aggregators. These sites were not owned, operated or controlled by brokers but by technical proficient companies that felt they could do a better job of displaying listings online and converting that traffic into leads. These companies were mostly not real estate brokers and did not need to meet all of the state real estate laws on advertising, nor the IDX rules. All they needed were the listings. They quickly realized that the MLS’s had all of the listings and were not willing to turn that data over. Although many did give a multitude of web companies direct feeds, the response was most brokers that had invested all that money in their own websites, barked and barked loudly. The 3rd Party Aggregators then found that they could simply ask the broker or the agent to upload their listings—and low and behold they did. They offered to get more “eye balls” on their listings thus giving them a better chance of selling. 3rd Party Aggregators popped up left and right all touting a different business model. Before you knew it, they had more places to put your listings on the web then there were listings. The challenges, they quickly found out, is they had very little consistency. They didn’t have that all important IDX data feed. They don’t get every listing and when a property goes under contract, many real estate agents don’t take the time to remove it from the site which caused the sites to display listings that were no longer available. What came to be the most popular method, but by no means the only one, was letting each individual real estate broker send their own listings to the Aggregators. This gave the broker some control and had some level of consistency as technically, the broker owns the listings of all of their agents.
Here Come The Syndicators
Syndicators vary all over the spectrum. What a syndicator does is get listings from different sources and feed the 3rd Party Aggregators. Companies came to be like ListHub and Point2 which offered their services to the agent, broker or the MLS and let them choose which Aggregator to send their listing to. Others just blasted the listings everywhere and did a poor job of keeping them updated. The most popular had lists of hundreds or thousands of destination sites for display and you could simply check a box and the listings would be sent there. As many small brokers didn’t have the technical resources to do this themselves, syndicators become popular. This simplified the entire process and let many of the smaller brokers start getting their listings out on the web. Many of the traditional real estate marketing companies got into the game too. With traditional advertising feeling the pain of the internet advertisers, they increased their value proposition by now shooting listings to the Aggregators if you ran an ad in their periodical.
Consolidation Of 3rd Party Aggregators
Over the years, we have seen many new models pop up for marketing real estate listings online as a 3rd Party Aggregator. Most have failed, some have had mediocre success and some have just sold out. Just recently, we have seen it narrowed down to the big 3 — REALTOR.com, Zillow and Trulia. Even more recently Zillow has made plans to purchase Trulia and Move INC. (the operator of REALTOR.com) looks to be bought by News Corp. It is worth mentioning that REALTOR.com does get almost every listing from almost every MLS because of their affiliation with NAR. Zillow and Trulia have found success without even having all of the listings. They have leveraged other technology tools and raw marketing to overcome their lack of true listing inventory. There is a lot to be written about on just this, more to come.
Local Real Estate Broker Websites
I felt compelled to make sure that this was not overlooked. Most local real estate brokers (and sometimes agent) websites still get a full IDX data feed and display almost every single listing that is available for sale through the local MLS. That means you will usually have a substantially MORE listings to view on a local real estate brokers websites. The challenge that many of these sites have is lack of tools, functionality and usability. Even with ALL the listings, many have trouble getting traffic simply because the big Aggregators are much more polished and have many more features. The large Aggregators are publicly traded and have an endless amount of money to spend on advertising to tell you they are the place to go to look for homes. Where you go to search for real estate listings online is up to you.
A Lot Left Out On Listing Syndication And IDX
As I was writing this, I felt compelled to go into much more detail and give many more examples, exceptions and business models. I left quite a bit out. This short article was intended to give some insight on how the system works and the history behind it. I choose to leave out the history of REALTOR.com, RETS, different models like HomeGain, Redfin and Movoto, MLS’s getting in the game, Google getting in, getting out and back in the game, ListHub being purchased by Move INC. as well as what large real estate franchises have done and a lot more.
I personally have some very strong ideas on how this SHOULD work, who is right and who is wrong, and what the future holds— I have chosen to leave all of that out too. Luckily…I can write as many blog posts as I want! Be scared….be very scared.
If you have a specific question or comment, please be sure to leave it below and I will do my best to answer.
If you are looking into a website that will display IDX or VOW data, DEAN Knows has years of experience with compliance, implementation and SEO for IDX and VOW sites. See how DEAN Knows can assist with online listings on your site today!Help Spread The Word...