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Two MLS's, Metrolist and Santa Barbara, Boot Diverse Solutions/Zillow

It happened — Metrolist and Santa Barbara booted Diverse Solutions (now owned by Zillow) from their list of approved IDX vendors. The Metrolist decision was reported by Geek Wire, while Inman picked up on the fact (premium content) that Santa Barbara had also pulled the plug. Eric Stegemann has a good read as well.

Personally, I don’t buy any of the reasons given by Metrolist. As marketing Director Melissa Olson says, “At some point, we have to start taking a look at our current offering and how many vendors really make sense in our marketplace.” Politically correct? Yup. But the truth? I doubt it. They cut ties because Zillow now owns Diverse Solutions, and are worried about the data usage behind the scenes.

At least Laurel Abbott at Santa Barbara was honest about their decision:

The (Diverse Solutions IDX) product is actually a fine product, it’s just that they sold to Zillow…Zillow is not a friend to organized real estate, so we’ve voted not to support (the company). There were concerns of misuse of our data. (The Zillow website) is grossly inaccurate. (The site overinflates) what our (for-sale) numbers are (and) includes information from properties that have sold months ago. It’s not an accurate site

MLS’s around the country are obviously fearful that Zillow will somehow use IDX data to their advantage to make the MLS even more obsolete to their members.

I’ve heard rumblings for a few months that some MLS’s were considering this move (I’ve heard Sacramento may be considering making this move as well), but I didn’t think any would actually go through with it. I’ll admit — I was certainly proven wrong in this case.

To current clients of Diverse Solutions in Colorado and Santa Barbara – this is going to be a huge pain in the a** to have to switch vendors within the allotted time (a month or two I believe). In some cases, those agents could have spent dozens of hours customizing links, pages, email alerts, etc — and an MLS committee decides to wipe all their work out overnight just because they don’t like Zillow as a company? That seems heavy handed to me.

To me, these decisions take me back to the questions “What is the core competency of an MLS?” and “What is the value add they bring to their members?”

If it’s data? If it’s deciding what the best IDX vendors are for their members?

Then they are going to obsolete within a few years.

What do you think? Is this trend going to continue in 2012, or will MLS’ come to their senses?

About Drew Meyers

Founder of Geek Estate Blog. He is a Travel addict & co-founder of Horizon. Social entrepreneurship & microfinance advocate. Fan of Red Hot Chili Peppers and Kiva.

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31 Responses to Two MLS's, Metrolist and Santa Barbara, Boot Diverse Solutions/Zillow

  1. Daniel Beer says:

    All I know is that this is frightening.   Really the worst thing I have heard in a long time.  Imagine having your work, money, time, and efforts just wiped out by your MLS board.  One thing is to take a stand against Zillow if you really feel that strongly against it.  Another is to financially hurt your members.  They didn’t have to do both.  Hard to understand.

  2. Ben Fisher says:

    I can’t even imagine this happening to myself. The amount of time and energy, authority building, and everything else involved just being wiped clean would make me go insane. Saved searches for leads, thousands of internal links, all gone. Scary things are happening for sure!

  3. Until all of the local MLSs can compete with the Zillows and Trulias of the world on the search engines, I think we’ll see more and more associations opting out of Diverse Solutions. It’s the nature of the beast. Real estate associations exist to protect their members and that is their primary responsibility.

    • Drew Meyers says:

      “MLS can compete with the Zillows and Trulias of the world on the search engines”

      Well, they have a long freaking way to go. That’s for sure. They are at least 4 years behind.

      • You are exactly correct and I think that is what these associations are finally opening their eyes to. It’s like they are finally having an awakening they should have had several years ago.

        Again, these MLS associations only exist to serve their membership, which is exclusively the Realtor community. I think they have finally figured out that they really do have control of the information.

    •  I’m not sure the MLSs will ever be able to compete with the money and talent at TruZilia – not as long as they still have all (or most) of the listing data. But Realtor.com could take them on IF they revised their tactics and used all the photos and the listing agent contact info. We should make Realtor.com more if an actual member benefit… just IMHO

      • Drew Meyers says:

        You’re right – I don’t believe any MLS will be able to compete with Z/T in the seo world. SEO is so far from their DNA, it’s not even funny..

        • Exactly. So the MLSs have realized that they cannot compete, BUT they control the data. So what is the next logical step? Clearly, it is to restrict what you send to what has become your competition instead of your partner.

    • Jim Duncan says:

      Grant – MLSs also exist to help their members be more successful and profitable; removing DS as an option is completely counter to that goal.

  4. Grant, just so you have an actual idea of what would be involved for the 47 members of Metrolist (and I’m not sure how many members in Santa Barbara) to just switch to a “better” provider, or any other provider for that matter.

    Drew – hope you don’t mind: 
    http://teamhardison.com/wordpress-real-estate-site-design/open-letter-metrolist-mls-re-diverse-solutions-idx-fiasco/

  5. Jorbet SB says:

    I find it interesting that so many people jump into the discussion about listing syndication, aggregation, MLS, etc., with so little knowledge of the facts and details surrounding the past and present of these companies and issues.  It seems to be more of an emotional/ideological debate than one based on fact and logic. 
    First of all MLS’s have two primary purposes :  1. – To help MLS members market their properties to other MLS members, and 2.  – to enable the blanket offer of compensation from the listing broker to cooperating brokers and agents.  When the industry/MLS’s expanded their rules to allow agents to display limited MLS information on their websites, it created some benefits (exposure) as well as some very real problems.  Remember, none of this information was available to the public for many decades and only became readily available in the last 10 – 15 years.  It also opened the door for a myriad of third party (not agents or MLS’s) companies to move in and try to capitalize on the data that the MLS owns and that is used by agents to market properties for sellers, find properties for buyers, and do market analysis for many reasons including property valuations.
    Zillow, Trulia, and others are examples of these third party opportunists who saw a chance to make money on the real estate industry by using this newly available data and pushing it in large quantities to the public.  REALTOR.com was the first to do so.  These companies raised large sums of money, went on massive advertising campaigns, and created sites that introduced new toys to the consumer ( i.e. zestimates) figuring they could profit by selling advertising on their sites, and ultimately selling leads back to the agents whose data they were using in the first place.  Go figure.  All this time the only true value in those sites was the MLS data that had been so precious and guarded for decades, but suddenly had been made readily available through technology.  Good for them for being entrepreneurial and capitalistic, but is it a good thing for the industry and ultimately for the consumer?
    Santa Barbara’s MLS and Colorado’s Metrolist are saying no.  The data that is being pushed by these companies is often out of date, inaccurate, and the valuations are often way out of line with the local market within which the property is located.   These sites report data that is hugely inflated with regards to properties for sale, actual sales, and a number of other statistics that could and should be used for making decisions in a market.  Bad data, bad decisions.  That is not good.
    But now let’s get down to the specific issue at hand, and Santa Barbara’s decision to discontinue their relationship with Diverse Solutions.  Diverse Solutions is a fabulous IDX platform.  Probably one of the best.  That’s why Zillow bought them.  In spite of how good Diverse Solutions is, and how much some of our members want to use them, our MLS appears to be one of the few that said “no we will not allow the transfer of our contracts from Diverse Solutions to Zillow” and we are essentially “breaking up” with Diverse Solutions.  Why?
    In case you don’t believe it yet, Zillow is no friend to organized real estate.  Zillow has been, and is continuing to position itself to do to the Real Estate industry what Expedia and Travelocity did to the travel agency business.  The friend of my enemy is my enemy.  Any actions that Real Estate Professionals take that promote, enhance, or expand Zillow’s footprint or influence in the industry (like giving data to an affiliated company – Diverse Solutions) are self defeating.  It is similar to the whole listing syndication business but that’s another story.
    So why are all the other MLS’s going along with it?  Simple.  They are afraid to say no.  You see there is now a lot of competition between Associations and MLS’s which has been exacerbated by NAR’s refusal to provide any kind of territorial  or boundary protection (even though most/all other franchisor’s do)  and it has created an environment of fear.  MLS’s and Associations (and agents and brokers too) are afraid to say no to anything for fear that their neighbor or competitor will say yes and take members or business (aka: money) away from them.   So despite the wisdom or NOT, of giving away information to syndicators, allowing Zillow to use Diverse Solutions to expand their footprint, or any number of things that have taken place in the last 5-10 years, most of the industry is just being swept along with the tide. 
    If you look at the people pushing these new “trends” it is interesting to note that most are not the typical realtor that serves clients in the purchase and sale of properties regularly.  I mean Drew, you are making value judgments in your post, but I don’t think your knowledge of the big picture in all this warrants your doing so.  What’s really happening here is the people pushing the industry away from the “guy on the street real estate agent” are folks with vested interests in the peripheral businesses, huge Corporate Brokerages whose main concern is shareholder return, and certain people in the industry (and outside the industry) who have found this to be an easier way to make money than actually selling real estate.  Interestingly even some of these folks are beginning to question the wisdom of giving the data to the likes of Zillow and the rest of the third party vendors out there.
    The Santa Barbara Association and MLS are in a rather unique position geographically so we do not have the same pressure from neighboring Association or MLS’s regarding our members.  We are admittedly lucky that way.  Therefore we can take a more objective look at these things and really try to make the decision that is best for our members and their futures (long term), not be forced to make decisions based on what is going to protect (or not threaten) our membership numbers and revenue stream.   The often cited argument that “we need to get the info out there in as many places as possible” is baloney.  How many websites can someone look at in one day?  If I type any city’s name and real estate for sale in the google search bar, I will get hundreds or thousands of sites that all have the entire MLS to search from.  And they are agent sites  – Hooray!!!!!  MLS’s should be trying to push consumers to their members/agents’ sites not to Zillow et al.  The information is out there just fine thank you.
    It is my humble opinion that the rush to do anything and everything that comes along regarding putting (what at least was at one time) valuable data out to anyone and everyone who wants it for free, is going to eventually (maybe sooner than some people think) suck the value right out of the real estate world as we know it.  Some may say it is inevitable but others don’t believe that and don’t want to help it along?  It seems like there are some brave souls that are actually rising up and saying “Whoa folks we’re blowing it here”.  Interestingly enough however, anyone who stands in the way of the tide seems to be labeled with assertions of (I’m sure I will be the recipient of this) unaware, uninformed, afraid of change, lack of vision, etc.  However, it may just be the people who are blindly following the trends, and allowing all the third party ventures like Zillow, Trulia, List Hub, Point 2, and a host of others to use their data for free, diminish the perceived value of the MLS data by making it “common”, and who thereby the cheapen the role of the real estate professional, who are unaware at best and downright disingenuous at worst.  The rest of the “typical agents” are being led like lambs to the slaughter by those new third party firms with vested interests in capitalizing on the foundation that organized real estate built over the past 100 years.
    If the role of the Association and MLS is to serve and protect the members, then perhaps severing ties with Zillow and others like them will help preserve the integrity of the data and the value of the professional real estate agent, and ultimately be in the best interest of the majority of the members after all.  We’ll see.

  6. Alex says:

    It seems like a counter-intuitive move to make. In their eyes, they are hurting the ‘Zillows’ of the world, yet in actuality it’s the members who suffer. For some of these people, it took them hundreds of hours of work to save searches, etc. and to have that gone due to some bureaucrat’s decision would be hard to swallow.

  7. Let’s not confuse the issue here. Zillow is a competitor to real estate professionals. Zillow now owns Diverse Solutions. Zillow now has access to MLS membership data (in select regions) which they did NOT have before. Drew Meyers… please tell me which competitors you let access your database at the end of the work day? Were you not employed by Zillow for several years, until you recently branched out on your own? Do you have stock options in Zillow? Questions. questions, but you certainly seem biased.

    • Drew Meyers says:

      I worked there 5 years and am a shareholder in Zillow. That’s listed on the about page of this blog.

      Everyone is biased. And I’ll be the first to admit I’m biased on this. But, regardless of whether I owned Zillow stock, I’d still voice my true opinions. I think it’s a mistake for MLS’s to dictate which IDX solutions agents can/cannot use — particularly for making agents who are already using one particular system switch to another (that’s likely worse). How is that good for the agent?

      •  Drew – You never answered the question. How many of your competitors do you let access YOUR database at the end of the day?

        Then how can you sit there, and suggest it is OK for the various MLS boards to keep Diverse Solutions/Zillow, which gives Zillow a DIRECT access to their Realtors database? Is it because you don’t want to see your Zillow stock portfolio dip?

        I’ll tell you what… when Zillow gives Trulia or Realtor.com access to their entire database, and when you personally give YOUR competitors complete access to your database, then I will feel more comfortable about having the “Wolf in sheep’s clothing” (oops… I mean Diverse Solutions/Zillow) access all the various MLS databases around the country. Deal?

        P.s. I enjoy the spirited debate. It’s what makes each and every one of us better at what we do. I respect you as a professional, and every other person who makes a contribution on this or any other blog, whether I agree with your opinion or not.

    • Hey Greg – Brad from Zillow.  The tools and services we provide to consumers from Zillow don’t make us your competitor.  On the contrary, we provide a wide variety of value-added tools and services for agents and lenders as well.

      Zillow has both the consumer and the real estate professional’s best interests at heart.  Thousands of consumers connect with agents and lenders on our site and many of them started their search for information or data that has nothing to do with MLS or DS.  Some are just looking for market information, or local demographics or just a good local expert from our directory to assist them. 

      Zillow is not just a site that’s helping to expose agents listings, we’re also trying to help connect consumers with willing and able real estate professionals in a multitude of ways…  we are not your competition, we are on your side and want to help but all great relationships take a little work, and are a two-way street.

      • Zillow is a TROJAN HORSE. Fact: Zillow wants traffic from my real estate site (and every other Realtors site) so they can SELL these same clients back to me through the Zillow Agent advertising program. If Zillow doesn’t generate ad revenue, they are out of business! What is one of their methods?

        ZILLOW WIDGETS! Brad, If Zillow is on my side – why does EVERY Zillow widget ever created LINK back to Zillow? Zillow wants my clients!!! If I am DUMB ENOUGH to put a Zillow link/widget (same thing) on my site: 1) I am really telling the Google algorithm that Zillow is more of an authority on real estate in my local area then I am, and 2) I have just lost my hard earned traffic from MY personal website, and directed this potential buyer/seller to Zillow, so Zillow can SELL this same client back to me, or any other agent through the ad program.

        Zillow purchased Diverse Solutions so they could intentionally access the Realtors database, while extending their reach into thousands of Realtors personal websites. It was a calculated, strategic move to access MLS data by Zillow. Diverse Solutions is a Wolf in sheep clothing. DIVERSE SOLUTIONS IS ZILLOW, AND ZILLOW IS DIVERSE SOLUTIONS. What a brilliant move on Zillow’s behalf! Absolutely brilliant.

        Zillow’s Data is BAD, but Zillow’s data is GREAT… once they obtain direct access to a local MLS feed. Diverse Solutions provides this bridge. Diverse Solutions is vitally important to Zillow if they are to have access to accurate, timely MLS data – in order to gain consumer confidence.

        Agents, make no mistake. Zillow needs the traffic, and they need to generate ad revenue to survive on Wall street. Zillow is concerned about THEIR survival, not yours, and they will give you every widget under the sun on the Diverse Solutions platform to help them capture your hard earned traffic. “Oh, but you can turn this feature off” you say? Sure, but how many agents are tech Savvy enough to know how much these widgets actually hurt them?

        Brad… I have an idea. can I make a really cool real estate widget, give it to you (Zillow) for FREE, and have you put it on your Zillow website? It will be really beneficial to your clients, and if it is good for your clients, it’s good for Zillow, right? Oh, don’t worry that it has a “do-follow” link back to my personal real estate! It’s FREE, so you have nothing to lose. Now, when can we get started?

        ZILLOW IS DIVERSE SOLUTIONS. DIVERSE SOLUTIONS IS ZILLOW.

  8. Drew Meyers says:

    “The often cited argument that “we need to get the info out there in as many places as possible” is baloney.  How many websites can someone look at in one day?  If I type any city’s name and real estate for sale in the google search bar, I will get hundreds or thousands of sites that all have the entire MLS to search from.  And they are agent sites  – Hooray!!!!!”

    A couple things. I know there are thousands and thousands of sites out there with the listing data. But it doesn’t matter. If you’re not on the first page of Google, you aren’t going to get found (organically). And those on the front page are not agent sites (for the most part) — they are media sites like Z/T in most cases. Whether the industry likes it or not, they have to compete with Z/T on SEO. I’ve said this a couple times in comments in various places on the web, but pulling listings from them is not going to help a broker/agent outrank Zillow…and I think SEO is a big reason brokers/MLS’s are making these decisions — and their decisions tell me they don’t understand how SEO works.

    • TheSEOWolf says:

      Drew with all due respect “I think SEO is a big reason brokers/MLS’s are making these decisions — and their decisions tell me they don’t understand how SEO works”.  Really??

      Check almost any major market in Google and you will find sites such as Realtor.com, Zillow and Trulia populate the majority of the Top 10 slots for all major real estate search phrases.

      Many Realtors that are competing for these search engine rankings are unwillingly (or unknowingly) feeding these mega sites they compete with by furnishing them listings and populating them with more content and the Realtors have absolutely NO say about it.

      Let’s keep it real please.  “Content is King” and it is difficult for a local Brokerage to compete with National Real Estate sites. As part of the major Search Engine algorithms are; visitors, pages viewed and time on the website. So it is almost impossible for “Mom/Pop” Brokerages to compete with National websites with hundreds of thousands of pages and collective SEO scores from all markets of page views, visits and time on site.

      The truth is Realtors are acting as busy little Bees for these gigantic aggregators for very little in return. It really is time to rethink syndication and just leave “failure to assimilate is not an option” to the Borg shall we.

  9. Drew Meyers says:

    I think the short of it is that consumers are driving the web these days. The best user experience will win over time. The industry wasn’t delivering a great search experience, so others stepped up to the plate and did. Doing so costs LOTS of development and design time/$$/resources. Z/T invested it…brokers/MLS’s didn’t.

  10. Drew Meyers says:

    Greg-
    Did you know that Zillow uses Google Analytics throughout their entire site (at least last I checked)? That means Google (which can be a competitor to everyone) has access to their entire traffic patterns, time on site, traffic sources, etc. Most websites view that as extremely valuable and strategic data. But the alternative, a service like Omniture, is thousands upon thousands of dollars a month.

    My point is that this is business. Whether or not an agent WANTS zillow to have access to their database, price is also a factor. If they don’t like it, they can just pay a different IDX provider or get someone to build them their own IDX. Diverse happens to be one of the best IDX providers out there, but it’s not the only option. Agents should vote with their feet and WILLINGLY switch to someone else if they are that worried about it. But an agent choosing to switch IDX on their own is different than an MLS choosing for agents.

    As far as me personally? What data set are you referring to? Google has access to ALL my analytics on every website I own. They are competitors. Would I prefer if they didn’t? Sure. But am I willing to PAY the cost for a better analytics program? Nope.

  11. When my kids were a little younger, I used to read them a story about Little Red Riding Hood. Maybe you’re familiar with it? My favorite excerpt of the story goes something like this: “Grandma, my… what big ears you have”; “Grandma, my… what big eyes you have”; and finally “Grandma, my what big teeth you have”. Grandma, of course, in this analogy is Diverse Solutions/Zillow. You get the idea.

    Saying “Yes” to Diverse Solutions (I.e. “The Trojan Horse” http://en.wikipedia.org/wiki/Trojan_Horse ) in any MLS is indeed inviting Zillow into your living room. Zillow is not “one of us”, as Brad from Zillow would like you to believe. Zillow is a publicly held company who’s sole purpose is to generate revenue for their shareholders. Is this bad? NO! But they are not going to do it by stealing traffic from my personal website (through sneaky Zillow widget links and other tactics), funneling accurate, timely MLS data back to Zillow under the guise of Grandma (oops, I mean Diverse Solutions), or by getting me to spend all my efforts blogging on THEIR site and utilizing their “FREE” tools to better assist me (thus generating even more traffic and Google juice to THEIR site). Fellow Realtors… ZILLOW/DIVERSE SOLUTIONS WANTS YOUR TRAFFIC!

    How dumb does Zillow think I am? No Zillow, I don’t want your stupid badge on my site, I don’t want your FREE tools, I don’t want your silly widgets on my site which link back to yours, and I am definitely not going to encourage my visitors, to “get on Zillow”. Why? Because I am not interested in Zillow SELLING these same clients back to me, or worse – my competition, so they can in turn tell their shareholders how profitable the quarter was.

    If you need evidence on how effective the Trojan Horse strategy is, look no further than the Mediterranean, and ask the city of Troy if they would have brought the “Gift” from the Greeks into their city if they could do it all over.

    If this becomes a battle over MLS data, my money is on the National Assoc. of Realtors. (After all, it’s their data, and it’s membership data at that). There are well over 1 Million Realtors who have the right to control this data, and the the last time I checked, Zillow was not one of these members. This is a war Zillow/Diverse Solutions CANNOT win. I believe Zillow paid somewhere in the vicinity of $7 Million for 5000+ Diverse Solution customers. It’s sounds like if the Realtors stand up for themselves, Zillow will be explaining to their shareholders a $7 Million purchase which went awry, for reasons they did not take into consideration.

    Drew – Thank you for allowing me to post my professional opinion on your site, which are in direct conflict with your personal goals.

    Greg Broderick, Bend Oregon

    DIVERSE SOLUTIONS IS ZILLOW. ZILLOW IS DIVERSE SOLUTIONS.

    • Drew Meyers says:

      Greg-
      I think you’re confusing two things here, which I believe should remain separate.

      While Diverse Solutions is owned by zillow, it is a standalone IDX product. I’m not sure why you are bring up the free tools, widgets, badges, etc? That has virtually no connection to Diverse Solutions’ product aside from being offered by the same parent company. If an agent/broker doesn’t want to use them…don’t put them on your site. Simple as that. And I’m with you…I wouldn’t put badges on my site either as an agent. If something isn’t going to help you convert traffic to leads/clients, there’s no reason for it to be on a website.

  12. Drew: I totally agree with all of your points. For the life of me I can’t understand how anyone in their right mind would be so vehement towards the likes of Z/T. They both have stepped up to fill a huge void that has been sorely neglected by the MLS’s of the world and offer tremendous value to our industry and consumers alike. Forcing paying MLS members to drop their preferred IDX providers is wrong, regardless of the rationale. Clearly, these MLS groups feel that their current business model is threatened. Well, guess what, it is and has been for a very long time!

  13. Poor implementation of a controversial strategic move.  The MLS should’ve consulted their agents first, that is their first priority.  Even if the agents decided to go along with it, they could’ve had some sort of real contingency plan for current customers. 

    The rhetoric on both sides is a bit over the top.  DS is probably the same as it was one month ago.  They can be monitored ongoing to assure they’re abiding by MLS rules, but it doesn’t seem that they’ve broken any.  At the same time, the idea that Zillow isn’t a competitor is naive.  They’re both a value-added service and a competitor at the same time.  Anyone who doesn’t see the competition clearly doesn’t have a real estate site that generates income.

  14. Jorbet – I take an even stronger position, but am in general agreement with several of your points. I too, wrote a manifesto: http://www.granthammond.com/2012/featured/great-mls-listing-syndication-war/

  15. Drew Meyers says:

    Listings are not why brokerages are losing the SEO game.

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