I enjoy going to the Inman Real Estate Connect conferences.
They are wonderful networking opportunities, and they form a wonderful stage for the stories in Inman news that week. Sadly, for the first time in many years, doe to the press of business and my speaking and teaching schedule, I had to miss the San Francisco Connect event, so I’ve been following it online through Inman news and various social streams.
The headline of one late breaking story from Connect was”Zillow: Seriously, we don’t want to be an MLS or broker“. On the stage at Connect, Chief revenue officer Greg Schwartzbeing interviewed by Brad Inman said he (Schwartz) wanted to state “unequivocally” that Zillow doesn’t want to be an MLS, or, for that matter, a broker.
In other news; The sun is still very,very, hot, and water is still very,very, wet.
Teke Wiggin, the writer of the article goes on to say “Schwartz’s statement comes amid renewed discussion of Zillow’s arguable potential to undermine the MLS. The debate has stemmed from the listing portal’s introduction of “coming soon,” a feature that allows agents, brokers and MLSs to market homes on Zillow for up to 30 days before listing them on the MLS”
Teke is right on the money, – there has been substantial conversation online about that very topic, and Brad was right to ask Schwartz the question in that very public venue. But the conversation only exists because there is a huge amount of confusion in the real estate industry about the roles of publishers of listings and the real estate cooperatives known as Multiple Listing Services.
Zillow, Trulia, and Realtor.com are all media companies, or publishers, or advertising companies – take your pick of titles – but whatever you call them, they are for profit commercial ventures driven by IPOs, shareholder requirements and profitability. And all of them make huge amounts of money because real estate agents pay them to advertise.
Multiple Listing Services are, for the most part, non-profit cooperatives operated by real estate professionals to provide efficiency in a chaotic and fractured marketplace and to ensure cooperation and compensation between its members. Generally the cost to their members is minis clue compared to the cost of advertising on any of the media sites we mentioned, and they do not make money comparable to the aforementioned media companies. However they do their job so well that its importance is lost in the glare of the aggregated data product that is the by product of their primary purposes.
Why would the former, profitable, business entities want to take on the onerous and thankless jobs of aggregation, organization and regulation that are the mainstay of the latter?
Real estate professionals and consumers are so accustomed to a world where cooperation is facilitated, competitors work closely with one another, and the conversation about compensation is much more “How much” than “Can I have some” – and all of that could easily go away if there is no regulated cooperative marketplace operated for the benefit of the participant.
Of course the deterioration of cooperation would take a little time, but judging from the haste that people employ in applying short term fixes to their business , combined with the law of unintended consequences, leads me to believe that in relatively short time, chaos would arise out of order.
But imagine a world where, every time you call a listing agent to show a property, instead of asking “Is your listing at a1234 Anywhere Street still available ?” you need to ask “Will you cooperate on the sale of the property at 1234 Anywhere Street?” followed by a conversation about the compensation that will be paid, followed by obtaining a written confirmation of your agreement – which leads to contemplation of the various forms that would be written in lieu of having uniform agreements. And if you didn’t do that for every showing, you would run the risk of not being compensated if you finally made a sale.
From the perspective of the listing agent, the effective marketing of real property becomes a Byzantine nightmare of email campaigns , spam filters, syndication, and countless hone calls with buyer agents trying to determine the way the agreement between you and them to facilitate exposure of the property.
Cooperation and compensation are like air and clean water – we don’t notice them until we don’t have them – at which time we are gasping for life wondering how we ever took such an important thing for granted – just because we hadn’t experienced a world in which it was not plentiful.
The conversations about the end of the MLS as a part of the real estate marketplace seem filled with both a lack of understanding of the core of the mater (the need for cooperation and compensation), and a lack of appreciation for just how much of what we do is simplified and facilitated by the MLS in your marketplace.
These conversations are the very epitome of “first world problems”. Problems that are not real problems, but are inconveniences or annoyances enlarged in the minds of the privileged. And we are all truly privileged to work in a time where the industry has NAR as a forum to discuss and craft policies and procedures for MLSs designed to keep them put of court and out of trouble while reflecting their desire to be the engine of efficiency for the real estate professional , and member operated MLSs that make the search for property and the operation of a cooperative business model function as efficiently as it does.
Zillow (or Trulia or R.com) replace the MLS or become a brokerage? Not a chance. They didn’t get where they are by being stupid, and barring a rapid, unanticipated and unexplained loss of IQ points among their C level executives, that isn’t about to change.
REALTORS taking the MLS for granted and chattering about its possible demise? Yeah, that’s a thing, and it’ll probably continue to one until we clearly understand the value of what the industry has built for the benefit of the realestate professional. In the meantime, MLS and Association executives all over the country keep the engine of efficiency chugging along as best they can, and consumers and real estate professionals will benefit from that.
(NOTE; Thanks to Jay Thompson for pointing out to me that Greg Schwartz is Zillow’s CRO, not Greg Robertson, a fact I knew and a mistake I made in the original post for which I apologize- the moral of the story being you shouldn’t hurry when you’re writing and you should fact check before you publish!)