Battle for Listings Between Realtors and Zillow Group Set to Intensify

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There appears to be a battle in the making between
Realtor.com, which has provided on-line nationwide residential listing
information since the Internet was only a novelty and upstarts Zillow and
Trulia.  Both companies have made their
own radical changes in the last six months with Realtor.com operator Move Inc.
being sold and Trulia merging into Zillow.

Realtor.com’s relationship with the National Association of
Realtors
has always been a bit opaque. 
Starting in the mid-1990s Move Inc., then called RealSelect but operating
principally as Homestore (remember those glass boxes with home listings
scattered through airport concourses?) began managing listings of Realtors
nationwide. 

In 1999 the company went public, raising $140 million with
NAR holding a significant position and Homestore negotiated agreements with
hundreds of MLSs and brokerages to secure direct feeds of listings.  In 2010, now named Move Inc., it acquired ListHub
which provides MLS and real estate agents with a listing syndication platform.

When Rupert Murdoch’s News Corporation announced its
acquisition of Move Inc. last September, closing the transaction in November, it
was unclear whether NAR was still a stockholder.  It owns the Realtor.com domain, however the
site accepts listings from non-Realtor agents and Move Inc. appears to have
operated it independently through an agreement with
the REALTORS® Information Network, a NAR subsidiary.  NAR did have to sign off on the News Corp
acquisition and said at the time that its two seats of the company’s board of
directors would continue under the new ownership.   

Meanwhile, the sale of Trulia to Zillow, a $2.5 billion
stock-for-stock acquisition, is scheduled to close on February 24.  Last week things started to get a little
ugly. 

REALTOR magazine, which is owned and
operated by NAR, said that ListHub (the Move Inc. /News Corps subsidiary that
provides list syndication services to Realtors) would no longer send listings
to Trulia
effective February 26 and Trulia will be removed from ListHub’s
publisher choices dashboard.)  ListHub
cited the Trulia acquisition as terminating their relationship.   

ListHub also announced that its relationship with Zillow would
expire on April 7 and that Zillow had chosen not to renew it.  For its part, Zillow has filed for a
temporary restraining order to force ListHub to continue serving Trulia under a
contract which does not expire for more than a year.   Apparently Zillow needs the time to complete
transitioning to its own new “Data Dashboard” service through which it hopes to
receive more listings directly from MLS and from brokers.    

While the three soon to be two, aggregators seem to be preparing for battle,
it is going to be waged against a backdrop of growing unrest among the actual
owners of the listings, the Realtors themselves.  Announcement of the New Corp acquisition was
accompanied by a lot of dismayed comments from agents, some were unaware that
NAR had not been owning and operating Realtor.com all along, and others who expressed
displeasure about all three listing portals. 

These fell into several categories:  

  • The money private companies (including Zillow and
    Trulia) were making off their listings which included selling back leads.
  • The manipulation of their data. This included both ways in which it was being
    used such as allowing paid-for listings to pop up first in searches, delaying
    new listings for many hours, permitting another agents face to pop up on a
    listing.
  • A high error rate
  • Allowing non-realtor members to display
    listings, especially on the Realtor.com site.

According to an October 2013 article in Realtor magazine some local
associations are beginning to take action, converting their existing member
sites to public listing portals.  In San
Francisco, for example its Association of Realtors offers only Realtor listings
on a locally focused platform without competing advertising and does not sell
leads
. The site also proves local data such as neighborhood descriptions, crime
states, and school district boundaries and had plans to expand listings to
other Bay Area communities.   Other local portals have recently sprung up in
Charlotte, Houston, and in Tennessee. 
The Houston portal claims to attract more unique monthly visitors than
any of the three major aggregators.

Local associations face a lot of problems in trying to compete with the
aggregators
.  For one thing, establishing
a portal is expensive but two new platforms are making it more cost
effective.  One, from Point2 Technologies,
is cited in the article as making San Francisco’s effort possible.  The second one called Spring, offered by
Solid Earth, makes the private data platform used by members to list properties
into a public facing platform.  Solid Earth
is specifically marketing its product as a challenge to Zillow and Trulia.  

Potential portals don’t always have support from local Realtor association
members either.  Many firms, especially
larger ones, feel they would provide competition to their own sites and level
the field with smaller brokerages. 

Perhaps the acquisition of Move Inc. and Trulia, especially if accompanied
by a battle for control of the market, will finally prompt large numbers of
Realtors as well as the historically fragmented multiple listing organizations,
to realize that their listings have some real value.  Then the situation could indeed get very
interesting.

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