Great blog that shows what is at stake in the valuable internet space of real estate listings. should be great to watch how it turns out.
Bravo to Edina Realty in Minnesota, they have put their large foot down and have decided to reign-in the real estate listing aggregation systems that are competing for the home buying and home selling consumer.
Yesterday, the Inman News website reported that Edina announced that "its listings will disappear from the last national portal it was providing listings to, Realtor.com, within 10 days."
As one of the largest independent real estate brokerages in the US, an action against the status quo should be worthy of the attention of Realtors around the country. And to anybody who is trying to understand how the internet has impacted the way that to sell a home today.
The Value Real Estate Listing Aggregation
There is so much more going on with this announcement than Edina or Inman is letting on. This is not really about the accuracy of the information, rather it is about the control of information gathered by the real estate company.
The value of real estate listing aggregation systems is debated on a regular basis, but rarely if ever by companies or organizations that actually measure their impact on home sales in any given market.
What most real estate agents fail to grasp about real estate listing aggregation can best be explained by the law of diminishing returns. Most agents feel that "more is better," so the more real estate listing aggregation sites, the better the exposure of the homes for sale, and the greater likelihood of getting a home sold.
And to an extent, they are right... But not really.
As an extreme example, if I were to but a billboard on top of Mount Everest featuring a home for sale (as in the image above), it would not hurt or diminish my ability to get the home sold. But would it really help?
This is where the law of diminishing returns tells us that "more and more" real estate listing aggregation websites do not really provide a benefit to getting a home sold, enough is enough.
The Future Of Real Estate Listing Aggregation
So if Edina pulled some of its real estate listing aggregation, what was their real motivation?
I think the simple answer is control. Why are we "giving" our hard-earned data to Realtor.com? We know that it won't get homes sold!
Before you start defending the use of large aggregator sites, you have to ask yourself a very important set of questions:
- Are all MLS listings getting sent to Realtor.com? (currently, yes for most US housing markets).
- What percentage of MLS listings are selling? (currently, less than 50% for most markets).
- If more than half the homes that go to Realtor.com are failing to sell, is Realtor.com really the proximate cause for the minority that do sell?
Think about it, real estate listing aggregation already reaches over 94% of the market, more sites that feature properties will not enhance your ability to sell a home. The real secret is understanding the difference between "house viewing sites" versus local real estate websites where ready-buyers congregate.
Joining Edina In The Fight Against Real Estate Listing Aggregation
Just as I have found that more than 70% of the homebuyers in Tallahassee are using one particular property search tool, I suspect that Edina has measured and found that most of the ready buyers in their market are already on their popular regional website. Thus, any real estate aggregation to Realtor.com is going to dilute the market with non-regional players who only plan to add to the cost of buying a home (through fees charged to consumers, Realtors, and lenders for the "traffic" that Realtor.com generates).
And this is not really about Realtor.com, it's about all the no-value-added real estate listing aggregation sites that are trying to pull another buck out of the deal when you choose to buy or sell a home. Most consumers start on these sites, but they end up migrating to regional sites (like manausa.com) to find the content and tools that they need to use to make a local real estate transactional decision.
If more large brokers will join Edina and pull away from real estate listing aggregation, we will see the preservation of the local real estate expert.
But the contrary is true as well, and if the large real estate listing aggregation sites have their way, we will see fewer local real estate experts and the move to Caveat Emptor in the residential real estate industry.