Inman News is reporting on an upcoming issue with IDX: whether IDX should be distributed “via RSS”. [Since I’m on an iPad, I won’t be copying and pasting text from the story. Go read it in full, though.]
Basically, the issue is that some people want to put IDX listings on Facebook, Twitter, and various mobile apps. The proponents say, “What’s the big deal anyhow? It’s not like listings aren’t everywhere anyhow.” The opponents, the most prominent of which is quoted in the story as being Realty Alliance, say that this would lead to chaos, the listing agents violating their duties to clients, as well as MLS IDX rules.
All of this, of course, is very interesting — and should make NAR Mid-Year even more interesting than usual. But coming on the heels of the syndication debate, the Franchise IDX debate, this makes me wonder, “Why IDX at all?”
A couple of years ago, at Inman NY, I remember speaking with a bunch of really smart real estate tech guys and suggesting that IDX might have outlived its usefulness with how dominant Google has become. And IDX blew up to be a mainstay of real estate tech. But the central issue I was worried about then has not been resolved. If anything, these conflicts suggest to me that we’re headed towards a showdown.
Asymmetry of Value, or The Freeloader Problem
The central issue with IDX is that it creates significant asymmetry of value, and as technology advances, the asymmetry grows.
We might ask, why would a listing broker allow competitors to put his listing on their websites at all? The argument is that such additional exposure brings more buyers to the listing, thereby helping the listing broker fulfill his responsibility to the seller client. Plus, by participating in IDX, the listing broker can put the listings of competitors on his website as well, and hope to capture buyer leads.
Trouble with this theory is that in practice, every consumer (or nearly every consumer) begins a real estate search on Google. And if it is the case that your competitors all have better search engine rankings than you do, then putting your listings on IDX to be exposed has value. Of course, if all of your competitors have better SERPS than you do, you probably have bigger problems to address than whether you should do IDX or not.
In reality, between the major real estate portals — Realtor.com, Zillow, etc. — not to mention the major franchise sites, public-facing MLS websites, and never-you-mind the hundreds of thousands if not millions of dollars that major brokerage companies pour into their websites and mobile apps (anyone ever see the Corcoran iPhone App?), in the Year of Our Lord 2011, I’m having trouble imagining a situation where allowing some agent to put your listings on her Facebook profile is going to move the needle much in terms of exposing your listing to the public.
The value asymmetry, then, essentially amounts to large brokerages and strong listing agents transferring value to smaller brokerages and weak listing agents to help their competitors build a better online presence, better SERPS, and generate more leads from the Web. Why this is in the interest of a company like, say, Home Services of America, NRT, or Long & Foster has not yet been adequately explained to me.
QR Codes and IDX: Similar, Yet Dissimilar
One argument against the no-IDX position is that pulling out of IDX means a disadvantage in getting listings. Your competitors will tell the seller that they’ll happily put the home in IDX, while you would not — so “you’re losing exposure” by going with the no-IDX company.
The same thing could be said for any marketing gimmick. QR Codes come to mind. “We use QR codes, while such-and-such does not, so your home will be marketed better if you give it to us!” The same argument could be made for bus bench ads, singing telegrams, and giant gorilla balloons: we do X, which could theoretically result in more marketing for your house, whereas our competitors do not do X. Seems to me that strong listers get the listing despite not doing every tiny little thing that one could do to market a house, because they seem like experts who can be trusted.
That’s the similarity between QR Codes and IDX. They’re dissimilar in that your using QR Codes does not hurt your business (except for any money wasted on doing QR Codes). But your allowing competitors to use your listings via IDX to improve their web or mobile presence does in fact harm you.
No-IDX Does Not Mean No-MLS
Final thought: just because you don’t put your listings into IDX does not mean you don’t put them into the MLS. The MLS is a private, password-protected, business-to-business tool informing other real estate brokers and agents of properties for sale. Unless your MLS rule is such that putting a listing into the MLS automatically means it’s in the IDX (and as far as I’m aware, no MLS has that actual rule), you are free to put the listing into the MLS, free to allow it to be syndicated to sites you approve, while not having it in the IDX.
The no-IDX listing would still show up in VOW feeds, show up in MLS-managed emails (which requires registration, a pre-requisite for VOW), and the like. And you can do whatever you want with it on your own website, on your own mobile app, and the like.
What Will It Take for Big Players to Withdraw from IDX?
So given the above, and given the brouhaha over Franchise IDX, what I wonder about is what it would take for some of the biggest players in the industry to decide that continuing to participate in IDX is not in their best interest. The squawking from a few real estate bloggers may or may not hurt their business much. The accusation of “you’re against innovation!” falls flat if these big players actually, y’know, innovate. How hard is to develop an iPhone/iPad app after all? How hard is it to do better email marketing? How hard is it to leverage social networks using their own listings, instead of relying on IDX?
So I return to the original question, which is the title of this post: Why do IDX At All?
Opinions welcome, as always.
-rsh
Posted from my iPad: a great content-consumption device, not so great at content-creation.
27 thoughts on “Why IDX At All?”
Rob,
The value to my clients is I can direct them to my site with the virtually all the listings. In the Chicagoland area, the major listing portals, other than Realtor.com, still do not have all the inventory that my site does. The information on my site is accurate unlike some of the portal sites that have the same listing on their sites 3 times. I understand that I can not typically compete with the likes of the big guys on seo, but for my clients, idx does have value.
Sure, John – I can see how IDX is good for you. But can you explain how it’s good for the broker whose listing you are using?
Robert Hahn
7DS Associates
rhahn@7dsassociates.com
@robhahn
973.869.9357
Simple. It exposes it to John’s buyer.
Wouldn’t John’s buyer have been exposed to it by John showing the property to him, since he found the property in the MLS when he ran a search for his buyer?
Or do buyer agents no longer look for properties for their buyers?
We’ve sold an awful lot of other brokerage’s listings from people finding them on our site…
Rob,
Similar to a question posed on our blog earlier this month: Why syndicate at all?
Perhaps it’s time for brokers to tighten up, rather than flood the web with hundreds of versions of the same listing.
I’ve demonstrated this ad nauseam by taking any listing, right clicking on the address and selecting search Google for XYZ address. Depending on the city, there’s hundreds or thousands of results, none of which go back to the listing broker’s site (well, one maybe).
This results in customer confusion since none of them have a clue about IDX. See Jay Thompson’s posts about “I’m calling about your listing….” http://www.phoenixrealestateguy.com/calling-about-your-phoenix-home-listing/
It would be great to see this take hold but will it ever happen? I’d like to see what would happen to Zillow’s IPO if it did.
Robert Drummer
iMapp
Link to Sin-dication post: http://imapp.com/blog/2011/04/listing-sin-dication/
Where does the consumer come into all of this. Is it really in the best interest of the buyer to call the listing agent (who’s working for the seller)? Then from the seller’s standpoint, they don’t care what website the potential buyer used to find their home. The listings agent’s number one concern should be all about getting the listing sold – not both sites of the commission. I understand what you are saying about big brokerages spending tons of money on SEO. So theoretically it doesn’t matter that the individual agent has those listings. But larger brokerages and firms typically focus on head keywords. It’s the individual agents who are targeted enough to be able to focus on the low hanging “longtail” fruit like neighborhood and street level optimization.
Believe it or not, Brad, there are differences of opinion on whether it is or is not in the best interest of the buyer to call the listing agent. I wouldn’t assume from the louder voices in the RE.net advocating for Data Should Be Free To Everyone that everyone feels the same. In fact, many of the strong listing agents feel exactly the opposite, because they feel that they know the property best.
In a sense, of course, none of that matters. What matters is that SEO is a battleground for competition; the Big Brokerages are currently handing ammunition to their smaller competitors. Will they continue to do that? Who knows. I am speculating and wondering, however.
On the “long-tail” issue… I don’t see that as an issue. After all, the Big Brokerage can always let its own agents use the listings for any long-tail keywords.
“In fact, many of the strong listing agents feel exactly the opposite, because they feel that they know the property best.”
Many of the strong listing agents feel exactly the opposite, because they want to double-side the transaction. How much more than any other agent can the lister know about the vast majority of homes? High-end, custom built homes aside, there isn’t a whole heck of a lot to “know” about a tract home. Take a look in the Phoenix MLS and see how many listing agents even know who the builder is…
Rob, Dual Agency really has to be revised. Attorneys cannot represent plaintiff and defendant.
Even though Real Estate Agents are not on the same level as an attorney, it still creates it’s own set of issues. I think the problem is that I work in a larger brokerage. If one of the other sales people in my office bring an offer on my listing, that is considered dual agency. That type of dual agency can function quite well. The Buyer and Seller are represented by different sales people and the transaction can move forward quite well under those circumstances.
When the Listing agent represents both sides, that can be an interesting position to be in.
I think that the brokers are afraid that they will lose all dual agency if the topic comes up, so dual agency never gets the overhaul it needs. If the California DRE said that I could not represent my Seller and Buyer on the same piece of property, I can work with that, but if the DRE said that no agent in my Brokerage could represent a buyer on my listing, that would be bad for everyone.
Rob,
It allows my clients to find the information easier. While I still send listings via email, the idx feature allows potential buyers to find propeties that they may have otherwised missed or overlooked. The goal of the listing agent is to find a buyer for their property. The idx allows this to happen faster and easier.
Rob, Great Article. I think my industry has lost it’s mind and will essentially de-value itself further in the future as the newer people understand and care less and less as to why an MLS exists in the first place.
#1 The MLS makes the market. The sales conducted through the MLS set the value ranges for neighborhoods all across the country. The data integrity standards set through MLSs may be one of the most important things to Homeowners reliance on a Market.
#2 The MLS is a Broker to Broker Compensation Cooperation Agreement, it is not a database. The Database merely exists so we (Brokers) can see and cooperate in the other Broker’s listing inventory.
#3 The Current IDX mess we have creates no added value to agents like John as the listing are syndicated everywhere and thus only creates more distraction away from John’s site.
We as an industry gave away the store when we created Realtor.com. That resource should have been kept in house and the fees fixed to pay for the system as a benefit to our members. We as an industry let the Zillows and everyone else beat us to the punch with our own data. While I know how to use IDX to my benefit, I also know how as an industry we could have done this in a way that would not have diluted the value of our brokerages.
Hey Rob — You’ve become my favorite RE pot stirrer.
Allow me some points here, as I’ve seen this develop since 1969.
1. The MLS is for my convenience as a broker. The consumer? They’re selling their homes now, in HiTechLand just as well as when MLS ‘books’ were dropped off at offices 40 years ago.
2. This is nothing but a power play. I don’t give a #$^% between who, but it’s about power and control.
3. All I want is the choice of whether or not to put IDX on my site or not. If it’s an impotent marketing ploy, I’m the only one hurt by it. MInd your own damn business.
4. It’s bad enough the so-called leadership of NAR etc. find ways to screw up a one man picnic. But when the intellectually challenged keep wanting to tell me what’s best for my operation, well, enough is enough. You do your thing, I’ll do mine. Frankly, I pay more in taxes than most agents make. I know that’s ugly, but do what I’ve done then ASK me if you might tell me about a better way.
Frankly, Rob, I hold much respect for most of your ideas. What I like most is how you make them known, than ask those of us in the industry our opinions. Kudos. The MLS is none of the public’s business. It’s proprietary information. This whole trend is beginning to look more and more like 1984.
In essence, leave me and my business operations the hell alone. 🙂
There’s absolutely nothing wrong with a zillion sites that present accurate, MLS-controlled listings to consumers. IDX makes that possible. With IDX, brokers and agents are able to innovate and create specialized presentation of listings by neighborhood, condo building, home type, etc. This is good for consumers, good for brokers and good for agents. If an agent can create an effective way to present targeted IDX listings via Twitter or Facebook, then what’s the problem?
QR codes and IDX are similar? I guess you can say anything is related to anything else if you abstract enough. From a practical business perspective, they have nothing in common.
Allowing sites to present consumers with poor quality and uncontrolled syndicated listings sourced from MLS — now that’s a problem that’s bad for consumers and bad for RE.
Let’s be clear, Bruce: I’m not saying there’s something “wrong” with a zillion sites with accurate info. I am saying, however, that I can’t see how the benefits outweigh the costs to the Big Brokerages that generate a ton of listings. People respond to incentives, and the incentives right now are a little bit skewed, IMHO.
From a practical business perspective, QR Codes and IDX share one thing: they’re both used in listing presentations to win listings. That’s the context in which I brought it up. More doodads you throw in front of a seller, the more likely you are to win that listing, whether said doodad is or is not effective. Agents/brokers who have used QR Codes tell me they haven’t seen a single inquiry come off of a QR Code; but they win listings because it makes their company look “advanced” and “tech-savvy”. IDX may be the same thing; a shiny that makes you look good, but doesn’t actually generate much.
One data point that would be salient. Take an agent who has strong listings, and a strong web presence/marketing portfolio. Is there a measurable difference in inquiries between listings that are put into the IDX and listings that are held out of the IDX? I don’t know if anyone has done such A/B testing, but I’d want to know the results.
Hey Rob, Any broker that withheld listings to IDX would be pummeled on two fronts. #1 competitors would use this as the #1 reason why a listing prospect should avoid the broker — why would any seller limit their exposure to the just the broker’s website? #2, A broker’s site with only their own listings would not attract and keep consumers (since they aren’t sharing their listings, it’s safe to assume that no other brokers would share theirs). In my market, L&F is by far the largest broker with ~25% of the market. That’s huge, but not huge enough not to play nice and share listings with other brokers’ websites. Still, a broker could have 50%+ market share, share listings, and still dominate their market
The broker that survives and thrives will do everything it can to meet the needs of their buyers and sellers. Hoarding/restricting listings to other broker websites is completely counterproductive to that purpose. I really think it’s as simple as that. The market would punish any company that works to its own perceived benefit at the expense of the consumer.
IDX isn’t a shiny, tech-savvy bauble – it’s an essential part of getting accurate listing data to consumers which is really, really important to a working RE marketplace. QR Codes….. groan. 1% of home sellers even know what these are. They don’t care about QR codes. And for that matter, they don’t know what IDX is — or care. However, they absolutely do care about the benefits of IDX which put their homes online in lots of places.
“In my market, L&F is by far the largest broker with ~25% of the market. That’s huge, but not huge enough not to play nice and share listings with other brokers’ websites. Still, a broker could have 50%+ market share, share listings, and still dominate their market.”
This is an interesting point. I’m not sure that’s Rob’s entirely right about IDX sharing simply amounting to bigger brokers giving away the store — because of Market share. Imagine, for example, a market where the largest brokerage has 25% of the listings whereas everyone else has >5% — if Big Broker shares, they get 100% of listings and so does everyone else; if they don’t share and the others do, they have 25% of listings….and everyone else has 75%. So as a consumer, the website of any one of the smaller brokerages then becomes more valuable to me, because I can go to any one of them and see 75% of what there is to see and waste less of my time trudging through broker websites.
Of course, in my hypothetical market I’d _probably_ still go to big broker’s site eventually and check out the other 25% of listings. But if there were two big brokers, or three, each of them with 10% of the market, and a couple dozen brokers with the other 70% or 80%, then maybe I don’t ever make it to the website of Big Broker B, or Big Broker C.
Obviously there’s probably a tipping point here — if I dominate my market so throughly I have the majority of listings, then it seems to me it might be more to my advantage to not share. But at any point below that it seems possible that not sharing would do more to erode my dominance than strengthen it….
You’re probably right in many respects, Colleen. All that I wonder about is that all this discussion of IDX usually leaves out Google, which I personally consider to be the most important real estate search site in the world. If a listing shows up on some agent’s website buried on page 9 of Google, does the homeowner care at all?
So the question is, for a Big Broker, does IDX benefit them more in the SERPS wars than hurt them? I know there’s evidence to suggest that smart use of IDX — some of which, incidentally, led to brouhaha’s over IDX-scraping a couple of years back — does benefit SEO. But the Big Brokers end up on the same level playing field as small guys or individual agents, and often lose. Or does having unique content unavailable elsewhere benefit SERPS more than not having 75% of listings everyone else hurts SERPS?
These strike me as factual questions, likely with answers. I just don’t know what those answers are at the moment, but would love to hear from marketing directors who might know.
I guess I’m far more sanguine about what the consumer knows and doesn’t know about the process. For that matter, I’m not sure that as a consumer, I should care about IDX at all. When I listed my house recently, I confess that I did not consider whether my agent/broker would or would not put the listing into the IDX to be displayed on someone else’s website or not. I did consider the “overall marketing program” of course, which includes syndication to the top sites, but I’m not sure it would have affected me one way or the other if some random agent’s website did or did not have my listing on it or not.
In fact, what was far more important to me was that my agent’s own website ranked #1 for Google in my town for a bunch of important keywords. I’d rather know that she dominates Google than than she sends my listing to a whole mess o’ sites that do not.
But when you say that homeowners “absolutely do care about the benefits of IDX”… are you sure? Do consumers even know what IDX is? Do listing agents routinely mention IDX as part of their listing program?
Like I said, home sellers don’t know what IDX is, nor do they care. Talk about IDX, QR Codes, SEO and this ilk, and watch your prospects’ eyes glaze over. Talking about this stuff does not win listings. Home sellers definitely understand that “your listing will be online on RE/MAX’s site plus every broker’s web site in our market”. They absolutely, positively care about this – and IDX makes it happen.
It’s great when an agent’s website has great SEO. Still, any single agent website can only aspire to get a very small % of buyer searches in a given market. No agent can beat the combined weight of the big guys. For a home seller, it’s far more important to be on all of these sites (even the crappy syndicated sites that I loath so much) than any single agent or broker site.
I can see your point here. Listings are often “hidden in plain sight.” Great that an agent is going to syndicate your listing to Trulia, Zillow, Realtor.com and other sites. But the problem is that listing is simply one in a million. If I want to make sure someone doesn’t find me, my best strategy is not to go hide in a corner but to sit down in a crowded stadium. I’d be simply one of many and almost impossible to find. It’s the same way with listings.
Regarding Google – I tell agents who want to build seller focused sites that the best seller targeted site is a buyer centric one. Why? Because a sellers understand the importance of Google and will first search for keyphrases (both longtail and head) to see what site shows up #1. They think “this is where all the buyers are going to go so I want to make sure my listing is on that site.” So you are right in that they don’t understand IDX. Ultimately, they just want to be where the buyers are.
And that, Brad, is why I’d like to get some idea of what sort of improvement putting a listing on IDX actually provides.
For example, does a non-IDX listing only get 100 views and 5 inquiries, while an IDX listing get 150 views and 8 inquiries? That’s substantial, if other variables can be held the same (let’s say same house, or same floorplan in same development on same street, etc.). Or if the lift holds over large sample sizes.
“From a practical business perspective, QR Codes and IDX share one thing: they’re both used in listing presentations to win listings.”
Then you may as well say that commission rebates are like IDX because they are both used to win listings.
Brad,
What is becoming very concerning is that everyone thinks the MLS is a database and that the database has a defacto right to be given to the consumer. While I am not advocating taking away IDX, I do recognize that the primary function of an MLS is about agreeing on rules to cooperate in compensation among Brokers. The divergence from the primary function of the MLS is bad for the housing market in the long run as the Market and Data integrity Standards are a function of Brokers cooperating with each other. The consumer, the home seller will ultimately be hurt as we move away from the primary function of the MLS.
If it was not necessary to have a license to Sell Real Estate then we would see the States remove the requirement. Most State Real Estate Departments are under staffed and underfunded, but because they have a duty to protect the public in these transactions the requirement sticks and these departments will not be dissolved. The database cannot be divorced from the Brokerages.
When I bought my first two properties agents had a published book. The penalty for giving those books to the consumer were serious. If we translated the attitude of today back then, then the MLSs should have published books for the consumer.
Home sellers are not going to pay an up front non refundable retainer/fee to sell their homes, the commission system has worked all these decades, cause it is a risk/reward performance compensated system that suits both side. When it changes to where home sellers pay a fee for service and brokerages can then pay hourly wage to employees then maybe the complete release of listing data will be an option.
This is not about being anti or pro consumer. Commission based sales and State Consumer Protection laws create system that will not always make all parties happy.
Good pont Ted. My Dad still tells stories about the many 3 ring bingers in his trunk (he admits to giving many of those books away to consumer). Concerning the “database” I think the cat’s already out of the bag. If it’s not supplied through MLS (via IDX) another company will jump in and fill the void (Loopnet, Trulia, etc). Of course I’m bias since I’m in the IDX business so It’s easy for me to be pro-IDX on agent sites. 🙂
Brad,
Loopnet may be the greatest example of why when you take the brokers out of the picture you completely screw up a market. The data integrity on Loopnet is pathetic. There is no rhyme or reason to the postings. They have a very poor representation of the data and you cannot run reliable comps on just Loopnet alone. Also for the Licensed sales person, there is no assurance that you will get any cooperation from the listing broker. The wildwest nature of loopnet creates fewer participants, sure it can be used as exposure tool, sure it can move some property, but it is not the defacto vehicle to move commercial properties. Now look at Costar. It’s not open to the public, it very expensive, and they have very very good data (reliable) for commercial properties. Costar functions quite well without kowtowing to the demand of the public. I can also say that the data integrity of Costar is very important to the market for comps and a appraisals. If you are a commercial property owner you need Costar to continue as they are.
It takes a license to advise on and sell Real Estate. Sales cannot happen in a vacuum. The licensing is in place because when people tried to transact real estate on their own, that is when trouble started. Licensing is a consumer protection action so the fantasy that the MLS better march to the drum of the consumer or the MLS will go away is not a very well though out position. I am not saying this is your position but if you look at the people who think that because it’s too late, we gone too far are probably the same people who will tell you the MLS is a database.
Real Estate Sales are commission based, why? Do sellers want to pay a retainer or hourly rate to sell their homes and if the home does not sell still be on the hook for the fee? It’s a catch 22. The consumer wants the data, but they don’t want to pay for the service. So the commission sales system works for the home seller because it is merit reward. The MLS exists because of commission sales.
I am not anti IDX, IDX belongs to the broker, the brokers need to make the rules as to how they want IDX released. It belongs on Broker sites, but outside of broker sites I see no reason for anyone else having access to IDX feeds.
What if somewhere somehow, a group of truly thoughtful, intelligent people met for a couple days to just spitball and what-if different IDX/syndication type scenarios and possible solutions. This s%!t is too complicated and easily misconstrued for anything but face to face, reasoned discussion. Man, I would love to be part of that discussion.
My gut leads me to advocate a very unusual proposal: that an MLS and member brokers that stopped all 3rd party data display and pulled everything in house would benefit greatly.
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