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The power of listing portals and inaccurate information are two major issues the industry is facing today.

If there are larger issues in the industry today, we don’t know what they are. The influence of power of listing portal firms and the inaccurate information due, in part, to out of control syndications are two worrisome issues.

The Listing Portals

Let’s discuss the listing portals. The fear is that they will use their housing consumer viewership to resell customers back to the industry and perhaps even enter the brokerage business. They are selling customers back to the industry either on an advertising impressions basis or through a direct lead purchase arrangement. While this is not dissimilar to what prior print media did, (look what happened when agents advertised in newspapers) it is also true that some of their actions (selling ads to one agent on another agent’s listings) are, well, egregious and a bit over the top.

As far as their entry into the brokerage business, they are already in the brokerage business—the advertising and lead generation part of it. Whether they will actually directly employ agents in a brokerage business is unknown, but given the economics of the brokerage business, one would have to wonder why they would get into this business. Both Zip Realty and Redfin have married excellence online to the brokerage business. Thus far, they haven’t destroyed the brokerage industry. Further, given the economics of the advertising segment or even the referral fee segment of the industry, it would seem far more likely that they would leverage their capital and consumer portal to remain and gain share in the eyeball segment of the business. It is more profitable and requires less capital with far less liability.

So long as the vast majority of consumers choose an agent because of a personal relationship or a referred relationship they won’t take over the business. Should the time come when a large share or majority of consumers use online sources to find an agent, or should the portals provide a start to finish transaction management solution (and offer flat-fee brokerage services as a result) they likely won’t become more deeply involved in the home buying or selling transaction. At least as far as the purchase or sale of a home, the great majority of consumers don’t view doing so the same as buying a book on Amazon.com. It is too infrequent, too complex and the cost of making a mistake far too high.

Syndication

The syndication problems appear to be both in the accuracy of the information and out of control distribution to multiple sites without the knowledge or permission of the brokerage provider. As to the first, when the source of the data is either a brokerage firm or an MLS, those providers are in the best position to insure that their data is timely and accurate. They can insist on it. It would seem to be in the portals’ best interest to have accurate information at any given moment in time. Further, unless someone has changed the rules on syndication any brokerage firm at any time can determine which sites will receive its information. Brokerage firms can decide for themselves which listing portal in which to send data.

As to the second issue, it is based on large portals also sharing their data to other web sites. The issue appears to be that there is little to no accountability by either the portal or brokerage firms to ensure that these third-level web sites are keeping the data current and accurate. We have heard stories of homeowners calling brokerage firms and agents to complain about their homes being shown as available when they’ve been sold or withdrawn from the market months before. Ultimately, there is going to be a problem here.

There have been efforts to remedy this but, thus far, it doesn’t seem to be working. Some brokerage firms and agents are just aware of this issue, or they are aware but don’t have an easy way to fix the problem. This needs thoughtful work.