Of course, there’s an “opt out” check box on the listing sheet and all a property owner would have to do is NOT want their home displayed all over and they can opt out.

Zillow et al came on the scene at the same time the DOJ opened up this Pandora’s Box in the guise of making the listing information avaiable to the “consumer”.

Zillow, Trulia and any other site that has a VOW, AVM and/or IDX DO pay a fee . . . it’s to the MLS’ that they obtain their information from. The MLS’ are pimping out their members to these sites. We’re the ones supplying the data to them, whether as a listing agent, or the selling agent . . . the REALTOR(r) has worked in their professional capacities to generate the “data” that is used.

And you’re absolutely right, IMHO, Zillow, Trulia, etc. make a lot of money off the backs of agents and supply the “daate”, but it all stems from the home owners who want to sell their property and advertise it using tha licensed real estate agent. The minute the property owner engages the services of a listing agent . . . the information about their property is broadcast (unless they opt out). The MAJORITY of home owners don’t know how ZiLlow, Trulia, etc. etc. are using THEIR homes’ information to pimp out the information so this revenue generating third-parties. These sites are not under ANY control of a MLS membership and they pretty much do what they want. I’ve been saying this for years . . . if the property owner only knew how their information was amalgamated into fun and profit for this sites.

Real estate was bought and sold for MANY, MANY, MANY years . . . long before any of these aggrevators, err, aggregators came on the scene pronouncing themselves to be GOD. All they want is to make money, and they do it on the backs of real etates agenets’ data supplied by the property owner.

Humoring the idea of agents/brokers charging royalties, however…seems would expose you to financial liability even further when the owner isn’t happy with your services or if the property doesn’t sell to their satisfaction. Just a side thought really not a major point.

Every business has “sunk costs”. A successful business has enough profit to offset and make those costs worth it. The internet has brought great change to many industries. Those who can adapt, especially during tough economic times, are those that will survive. We no longer live in a time where a certain degree or a certain license guarantees a certain job at a certain pay rate.

I feel you completely on the costs a typical agent incurs out of pocket before any sale happens and it truly sucks when no sale happens. I’m glad you took the time to outline them all because I don’t think most people are aware of that.

During the hey-day of the housing boom, we had a marketing budget alone of $5,000 per month. Today, we have adapted our business tremendously (if we had stayed the same we’d be out of business right now) and thanks to the internet our advertising is less than $100/mo when we don’t need to do a mail campaign which would take our budget up to $250/mo. We haven’t done a mail campaign in close to 2 years as the majority of our business is referral based now.

Feeling the pain of lost income or tougher competition forces you to reTHINK about your business/profession and figure out how to expand your profit centers with what you are already doing. The internet provides so much opportunity for this. We’ve discovered many ways where previous “sunk costs” (mainly our time) can be turned into a profit center.

We’ve lost many listings for whatever reason, but many times our marketing efforts for that property brought us clients that took on our next listing before we could even get it loaded to the internet. It’s a numbers game and harnessing the internet is certainly a cost effective way to get your business out there.

I enjoyed your article but as an investor (small business owner)the cost of doing business is unavoidable whether you’re a realtor or an investor.
I’m an investor and I have grown my business by
working only with “transactional brokers” and cost effectively market my properties online via the MLS
and the other relevant websites. I recently sold a $650K property
in ONLY 68 days in this manner with NO concessions
under 1% of list price for $639K! It appears you are more a realtor and feeling the effects of a difficult market and the downward spiral of the ancient realtor “business model”.

In my opinion, adding ANY costs to an already expensive process is counter productive and exposure is beneficial and to compare a listing to a song is somewhat comical in that realtors are “agents” and the homeowner’s investment far exceeds the agent’s investment and creates the finished product.

But as a successful investor I work to eliminate “transaction costs” and the 2.8% to 3.2% listing fees
and in this tight market are a deal breaker.

Love to hear your thoughts,

Bradley Odom
RG LLC
Morrison, CO

“If third party syndicators were not deliberately blocking access to the listing agent who posted the listing, that would be enough to help justify the “exposure” argument.”

I can only speak for Zillow here, but every listing on our site shows the listing agent, and the source that feeds the listing to Zillow. We are not deliberately blocking any agent from any listing. There is no cost for agents and brokers to syndicate listings on Zillow, and our member profile and setup is FREE.

I could leave a really long comment to address some other incorrect areas (Zillow specific) but it would be easier and probably more appreciated by readers if I just provide a link instead.

Please read: http://www.zillow.com/blog/category/professionals/

This should help as you said in your words, “justify the exposure argument”, not to mention that 100 million other homes NOT FOR SALE are also available on Zillow making an agents profile and presence even more significant.

I appreciate your lengthy response. You clearly have a good understanding
of the technical and business side of the issue.
Correct me if I’m wrong, but from what I can ascertain, you are also
a listing syndicator.

I really wanted to stoke the conversation, and since I was in
the music industry for years prior to real estate, the songwriter analogy
came easy for me. And while I did not mention the home owners in the
article, because that was beyond my intended scope, you are correct, they
are essentially the owners of their content. I think your general
point about them is accurate, but they too have lost control of their
privacy if you want to look at it from their point of view. I doubt most
of them realize the extent to which their home is spread around on the
web. And even if they do cancel their listing, to some extent, their
property info is still floating around the web for some period of time. So
they might indeed have some real concerns about this if they really knew
what is going on.

I hope that what this article accomplishes is a real conversation in the
industry about what is happening, and new ways of thinking of solutions. As
a former agent, and one who was involved in internet marketing before
Realtor.com came along, I’ve seen both sides of it, and have always felt
that agents and brokers were taken advantage of.

If third party syndicators were not deliberately blocking access to the
listing agent who posted the listing, that would be enough to help justify
the “exposure” argument. But in essence they are blocking the very info
that the agents need to be included. And this is being done so that the
syndicator can sell ads to other agents who are then seen on someone
else’s listing. That is the part that I feel is really a bad practice. If
a website published my articles, and then accepted money to put someone
else’s name on it, I would not be very happy about that at all. Perhaps
a listing syndicator should to be required to include the listing agent’s
name. I think that is only fair.

Donna Robinson

Its a rather interesting take on a situation which lost control years ago. I am very “Pro” Agent in my views and what LX3 is creating, however, the very notion that Agents should charge royalties seems to omit one very vital element and that is the Homeowner who actually owns the intellectual property rights, including the evasive pictures taken of their property, the use of the address and the details of their property. I like your analogy of the music industry but lets put it into perspective: The homeowner is the recording artist, the Real Estate Agent is the Agent / Manager promoting the artist and the record labels are exposing the content (Technology).

Data is and was for that matter a partial key to a successful real estate agent. Trulia, Zillow and Realtor.com found a way to give some benefit to the world by allowing the consumer to view what is available but in all cases they have not disrupted the industry. They seized on a tiny fraction of the industry in exchange for some advertising dollars from Agents and third parties. Its short lived once a group develops what MLS was about in the first place. The only different is Agents need tools and control over the detail information and the consumer needs to know what is available and that its property is given the very best chance to sale. All this at an affordable expense. Agents are paid by selling a property. If you are now saying they deserve more than the 4%-7% fees and a slice of running an internet company then they may as well stop all their listings and build an internet company. It is not easy building a sustainable internet company. It is harder then most of you would believe. Its not some group of young kids who dream up something and spit it out over night. Trulia has blown through $38 million of investor capital and is in 4th place but only gets 4% of the market share. Zillow is 8+ years of hard work, well over 70m of investment capital prior to going public and yet barely makes a profit and Realtor.com is 10+ years, owned by Move, Inc has the full backing of NAR with a market cap of 350+m and does not make that much money despite owning Listhub, the majority of the rental markets and of course the #1 or #2 hits per month website called Realtor.com. Lets not forget, most every agent is a NAR member and NAR only backs Realtor.com so the issue is not about loosing money to these aggregators sites as they are not making that much money, its about how to improve the real estate industry, preserve the reputation of the real estate agent and provide transparent / outstanding service to the “Homeowners” around the world. I think people see the fact of Zillow being a public company being worth 900m as a market cap but fail to look at the profit of the company. Ask yourself this, “Do you really want to be a Tech company or a Real Estate Agent” Lets not forget who Agents serve at the end of the day, “homeowners, sellers, and buyers. Without their money and their homes there is no $$$ to be made. I am not for “FSBO” as I believe a professional should always be used for things people are not qualified for such as a doctor, lawyer, real estate agent, a pilot or a tech guru. The industry is a simple fix yet no one has done it as the “Real Estate Industry Veterans” wants to remain in an old system and complain, yet even with NAR nothing is really getting done. Greed seems to be taking over but I would argue that we all do one thing great and less than stellar at everything else which is why we hire experts. The industry needs another product, a product for the agent and something which gives the homeowners value. I believe LX3 is on that track and its a very “crowded tech space” to say the least. Real Estate is a global business yet this has been overlooked for too long given how technology has connected the world. Aggregation will be a dying business, its not the answer the Real Estate Industry needed but then again, just look at “who” the aggregators hired to advise them. There are many agents sitting on the advisory boards of these companies when in fact these agents do one thing incredibly well, the know how to sell real estate and protect their clients. Their impute needs to be taken into consideration but they are not the expert in technology are they? How many agents know how to code? How many agents understand the concept of SEO? How many agents have hired an expert to create a website? So far, not one Real Estate Aggregator has solved the problem, they took the listing information, displayed it for the world to see and wrapped an advertising model around it. Fantastic but not the answer! So I agree with you on one thing, Aggregators provide a service and a platform and if you want to be at the top of their list you must pay for it. Fair? Value for money? Profitable? What are the other alternatives today to the agent? Is it not time to solve the problem? Its very expensive to be a good agent these days and it does not have to be.

Love to have your feed back.