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Syndicated Listings: Good Investment or Misleading?

by Chicago Agent

By Peter Ricci

The announcement that San Diego-based real estate firm Abbot Realty Group (ARG) would pull all its listings off third-party MLS websites and cease all future syndication was not, historically speaking, an unprecedented development; Edina Realty Inc., a Minnesota-based Home Services of America subsidy, announced in November that its 2,100-agent operation would no longer utilize Zillow, Trulia or even Realtor.com.

What made the ARG defection unique, though, was the manner in which the company’s president, Jim Abbott, went about explaining his brokerage’s new company policy. Along with posting a “Never Syndicated” logo on the group’s website, Abbot took his message to the cyber airwaves, posting a nearly eight-minute video on YouTube that offered not only elaboration, but a full-out manifesto on why he disagreed with third-party MLS sites as much as he did.

Especially pronounced among Abbott’s grievances were: how third-party sites deliberately place listings next to the photos of agents from competing brokerages because those agents bought the ad space; how the sites operate as “slick advertising platforms,” in his words, that use peer pressure to coerce agents into taking out long-term lead generation contracts; and finally, how the sites frequently misstate inventories and appraised values without any of the state, local or federal oversight that professional real estate companies must manage. Abbott was particularly pointed in the last remark, calling it an “outright deception of the public (that mislead) homebuyers into the false belief that the market is flooded with available homes, while telling home sellers their sites swarm with action-ready buyers.”

Since uploading the video on Jan. 26, Abbot’s announcement has already garnered more than 18,000 views, 280 likes and 170 comments at press time, and, in the process, has reinvigorated a debate on the value of third-party MLS sites.

In an interview with Chicago Agent, Zillow spokeswoman Cynthia Nowak said the site’s inventories only appear larger because it features more kinds of properties than the basic MLS.

“Zillow has increased the amount of inventory in a market versus an MLS due to the fact that we also display: for sale by owner, auction, REO, rental, new construction and other types of inventory not typically displayed in MLS databases,” Nowak said. “These are things our consumers have told us they want.”

Nowak also said that in the end, home sellers suffer the biggest drawback when agents pull their listings from the MLS.

“Sellers hire a brokerage to market and sell their homes, a big part of which is marketing the homes to the broadest audience possible,” Nowak said. “The real losers in this situation are home sellers, and the agents who represent them. If a brokerage isn’t marketing a listing on Zillow, it isn’t seen across the largest real estate network in the country, or across the most popular platform of mobile real estate apps.”

Exposure, it turns out, was the main point of an extensive essay that Jay Thompson, the designated broker and co-owner of Thompson’s Realty in Phoenix, Ariz., wrote on the third-party MLS controversy. Originally appearing on his blog, “The Phoenix Real Estate Guy,” in response to Edina’s third-party abandonment, Thompson argued that exposure continues to be the main draw of third-party sites.

“At Thompson’s Realty, we syndicate our listings to multiple third party (sic) real estate sites (including
Realtor.com and Trulia),” Thompson wrote. “Why? Simply put, for exposure. Home buyers (sic) are looking for homes on the Internet. Of course I’d rather them search for homes right on the site you are looking at now, but the simple fact is these large national sites are out there, and they draw a LOT of home buyer (sic) eyeballs. It only seems appropriate to put our clients home sale information on the highest traffic real estate sites. Not to do so would be a disservice, in my opinion.”

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