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What Would Happen If the Industry Yanked All Their Listings?

There are some proponents for the entire industry ceasing syndication entirely (specifically to Zillow). The thinking is generally “with no listings, Zillow would become irrelevant and lose all their traffic, all that traffic would frequent agent/broker websites, and the result would be cheaper leads/clients”.

So, what would happen if the industry as a whole stopped syndicating listings?

In short, absolutely nothing when it comes to the cost to acquire/reach buyer and seller leads/clients.

If buyers went to Zillow, and realized not all listings were represented – they would turn to…Google. Those with great content/SEO already would benefit more than most initially. But competition, which is already fierce, would increase. A multitude of new paper brokers would pop up and compete using IDX data. Brokers and agents would spend more money on SEO and their own websites to compete against one another (remember, the number of yearly transactions is not increasing). The money agents and brokers now direct toward Zillow for advertising, would instead be directed at the likes of Google and Facebook or other paid traffic acquisition channels. One way or another, agents/brokers would be spending money for leads and clients.

Zillow’s traffic would go down without critical mass of listings, sure — but most definitely would NOT become irrelevant. They are the only place buyers and sellers can get Zestimates, for which demand is proven. Their SEO power would not disappear (a topic previously written about here and here) – meaning they would still be a very formidable SEO competitor even without listings.

And there you go, nothing would actually change from an agent/broker perspective if the entire industry stopped syndicating listings to Zillow.

Agree, or disagree?

About Drew Meyers

Founder of Geek Estate Blog / Geek Estate Labs. Zillow Alum. Travel addict & co-founder of Horizon. Social entrepreneurship & microfinance advocate. Fan of Red Hot Chili Peppers and Kiva.

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  • You said, “In short, absolutely nothing when it comes to the cost to acquire/reach buyer and seller leads/clients.”

    Actually, the costs would change. For someone like myself that has a good website and good search engine visibility, I would get more people using my website and more leads. Competing with a company that can continually lose money marketing to my customer base is not easy. So if I am spending the same amount monthly but my leads increased then my cost per lead went down.

    Other good websites would see a similar increase in traffic and leads. For example, in my market the major company spends millions on their website. All their agents for this large Broker would possible see a boost in leads from their listings, because buyers would be using their Brokers website and their Broker won’t allow other agents to advertise on their listing.

    If it is their listing, it would be their lead.

    For those spending money on Zillow to get leads, you are correct that money would need to be spent with Google and Bing. However, to assume it will be the exact same amount of money they spend with Zillow is not really accurate.

    Zillow, as far as I know, does not offer Pay-per-Click. With Zillow, you pay even if you don’t get the clicks. So really unless someone has tried both forms of ads and lets us know the results, we can’t presume that PPC ads will be the same cost. PPC normally is less than other forms of advertising, which is why it is so popular.

    ” but most definitely would NOT become irrelevant.”

    Maybe irrelevant is too strong a word, but if they have no active listings, buyers are not going to spend much time on their site. Active listings is what they want to see.

    From a consumer perspective buyers would still get to see all the listings, and now they would always have accurate information. My CEO mentioned Zillow is still working on getting the listing status right for our listings. They show it as Active when it is not, and that is not helping anyone. Nor is the fact that listings are missing from Zillow, and Zillow does not let anyone know.

    Consumers would be using websites with accurate listing information, accurate status information, and because Broker’s can’t remove their listings from our websites, they would see all listings. All these things are nice benefits for consumers.

    So I do things would change significantly for all Realtors.

    • For us, as small independent brokerage with a good website, it would be great if Zillow was deprived of listings. We can compete with any franchise website and local websites and be confident that consumers would choose to use our site. We work on our SEO everyday! Competing against Zillow can be daunting, but interestingly people have told us recently that they are fed up with Zillow and are beginning to realize that their site is not the panacia that many in the RE media make it out to be.

      Agents and brokers without a strong web presence would probably suffer in some way, but the strong companies would thrive.

      What I really don’t understand is why large franchise companies or indies “allow” Zillow to exist. Zillow competes directly against there websites for clients and web space. They have essentially given up online client acquisition. I can’t think of a single person who told us they used to national brand website to find a property. It is either a local company (like ours) or Zillow.

      In what other industry would the major companies forfeit their online brand presence so easily? I cannot think of any.

      Zillow without listings would not change the dynamics of online marketing – it would still be fierce, but for those smart enough the chance of success would be greater.

      • Zillow knows SEO very well, and due to it they receive a TON of traffic that anyone else who wants a share of the audience would have to pay for. By providing zillow with listings, not just IDX but realtor listings, etc zillows site has value, it can then create widgets and tools to provide realtors so they get links, links = seo value.

  • Brenden S Rendo

    There is a demand for Zestimates…really…..all I do is explain why there worth what you pay for them nothing….you obviously have not idea how Zestimates are calculated or have ever done a valuation yourself..

    • Good point, I have seen discussions about a class action lawsuit from sellers regarding the inaccurate Zestimates. They feel it hurts their value and chances of selling. When consumers are trying to get a class action lawsuit together, it is definitely controversial. Most Realtors I know feel the same.

      • Brenden S Rendo

        They should do a class action law suit, they pass themselves off as experts

    • Well I actually do have a very good idea of how zestimates are calculated, since I worked at Zillow for 5 years and talked to consumers about them everyday.

      • Brenden S Rendo

        Than you should have shown them how to correct it

        • No opinion of value – generated by a human or a computer – will ever be 100% accurate. Something is only worth what a buyer will pay for it, end of story.

          • Colin Crawford

            It’s not that simple – publishing a wildly inaccurate Zestimate is a massive disservice to buyers and sellers. It sets all sorts of wrong expectations and real estate professional waste time explaining to clients why the AVM is inaccurate. I live in a neighborhood where the houses are very individual and I have tracked sales over 4 years comparing the final value to the Zestimate variances of 25-30% are not unusual.

          • If it wasn’t a zestimate, it would be a tax assessment or a comp (that’s maybe not a real comp). Buyers wouldn’t blindly trust the prices and stop using some sort of data to negotiate down with.

          • Colin Crawford

            You are correct – except that the average consumer appears to have more faith in the Zestimate than they should. In theory, everyone knows it’s just an estimate and guide and there are many factors that go to pricing a home that can’t be picked up by an algorithms – still ……..

          • I agree with your statement. I thought about doing my own Zesitmates but don’t want to be subject to the negative feedback it generates.

            Instead I have a best comparables link that brings up what I think are the best comparables for that listing without giving a specific price. I think this works better as users can agree or disagree with the comparables or adjust them slightly as needed. It allows for a bit of adjusting on the users part vs. saying this is the right price.

            I also think it is even more helpful because users have the best comparables in front of them, so they see the proof, vs. just seeing the price and having no idea how or why Zillow came up with that price.

  • I understand Zillow has created new opt-in or opt-out options for MLS and local brokers to syndicate their IDX. For example, our MLS now has an opt-in check box, and our broker asked Zillow directly to flip it to opt-out. Has anyone compiled a list of the options Zillow is offering to local MLS and/or brokers?

    • Brenden S Rendo

      the MLS should allow that down to the agent level, so your broker can give you the option for yourself

  • Good post. Completely agree.

  • Absolutely disagree! How would they continue Zestimates? Why would people go to the Zillow site for a Zestimate if they were looking at other sites for available properties? If Zillow traffic from searches decreased Advertisers would place less value on the site and the whole thing would implode (a great idea). These kids of sites have done nothing but create a level of expense and added cost. They serve NO purpose and deliver NO information that is not available elsewhere.

    • You realize zillow had zestimate for 40+ million homes before a single listing was ever on the site? Listing data makes them better, sure. But not required (in states where sales data is public record).

  • Nina

    Sorry – I have to disagree. The very LAST thing people put any faith in are Zillow Zestimates. They’re notoriously incorrect. A buyer needs but one bad experience using Zestimates as their guide to realize it’s rubbish. I’ve seen these poor, misguided buyers basing offers within the confines of the Zillow Zestimates only to be dumbfounded when their dream house sells to someone else whose offered 100,000 more. Thankfully, after losing one house, they usually start listening to their agent.

  • bh9

    Nina (and many others) are right to say Z estimates and similar methods are unreliable for market valuation of individual properties. Local agent experience is far more reliable for market pricing. (I believe Z declares that warning, as well, but a lot of people simply can’t read.) That said, recorded prices for all sold properties in the public record do offer a reasonable aggregate indicator of broad market directions.

    However, all broker listings aren’t on MLSs and surely not on Realtor.Com. Particularly not rentals in high end markets where competition for housing is fierce and brokers tend to market direct. (Manhattan has never even bothered to set up a local MLS.)

    For example….

    One of our customers is a top-flight broker of exorbitantly expensive, high-end properties in one of the most competitive urban markets in the country. They are an NAR member (thus a Realtor®) but not an MLS member. Realtor.Com won’t accept a feed for any of their exclusive for-sale or for-rent listings. Indeed, they won’t even return email inquiries sent to them directly by the broker.

    The response we received from Realtor.Com just before Christmas said, in pertinent part:

    “Listings cannot be directly uploaded onto realtor.com®. In order for listings to be displayed on our site, the listings must be entered into an MLS and marked to display on the internet.”

    Note: rental apartment rental brokers and apartment management brokers typically don’t post their exclusive listings to an MLS. So it is necessarily impossible their listings could legitimately appear on Realtor.com, based on the policy stated to us in writing, above. For the sake of accuracy, Realtor.com really should be renamed “MLS.com” since they plainly do not serve all Realtors®.

    It’s therefore a bit of a puzzle that anyone might imagine deliberately market-limited Realtor.com might ever have anything like the entire US listings inventory on its database or pose any serious existential threat to its free-market competitors who (in our experience) reliably and readily serve all licensed brokers and their agents without prejudice.

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