Recent controversy over who gets to display real estate listings on their websites suggests that some brokers are beginning to re-think the value of listing syndication – in ways which could shake up the real estate world.

During the National Association of Realtors’ (NAR) annual mid-year meetings last week, a coalition of independent brokers and MLSs pushed to repeal a rule passed less than a year ago which allows the websites of large national franchisors to display their franchisees’ IDX feeds. Internet data exchange (IDX) feeds allow participating brokers in an MLS to display each other’s listings. Because so many of their franchisees belong to so many different regional MLSs, the rule effectively allowed large national brands to display a large proportion of U.S. listings, improving the parent company’s website ranking on internet search engines.

While the NAR board didn’t fully repeal the rule, they did modify it so that individual brokers are now required to authorize franchisors to receive their IDX listings – creating significant practical obstacles for the franchisors. Fears that having a multitude of IDX feeds could provide an advantage to large franchisors prompted Robert Moline, CEO of Home Services of America – one of the largest independent brokerages in the country – to suggest at the meeting that if the rule were not repealed, he might seek to withdraw his firm from NAR and start his own MLS.

Competitive Imbalance

The moves to assert more control over listings reflect an increasing awareness by brokers of the value of their data. Displaying a listing serves two functions for brokers: Advertising a particular home for sale; and helping to attract interested home buyers to the brokerage – that is, generating sales leads. The more popular a website, the more leads it generates. Agents often complain that popular third-party sites like Zillow and Trulia ask agents to submit listings for free, but use the interest generated by those listings to collect leads which they then sell back to agents.

“The listings are the property of the broker. We put a lot of money and effort and resources into both procuring the listings and marketing them for sale,” said Peter Ruffini, regional manager for Norwell-based Jack Conway Realtor. “The listings drive the industry. One of the issues that’s been debated since the internet’s come around is the issue of leads being sold back to the folks who generate the listings.”

But Zillow and Trulia do not sell homes themselves – brokerages do. And inasmuch as having more listings improves their search engine rank, it also helps them to generate and capture more leads.

Embracing the technological revolution may be important and necessary for the real estate industry, said Jacob Clayton, executive director of business development for Concord-based Barrett & Co., but it comes with drawbacks.

“Where does it leave, then, smaller folks – individual realtors? How am I, Jacob Clayton, supposed to compete with Zillow? I couldn’t possibly. How can I, Barrett & Co., compete with Zillow? We can’t….we [as an industry] need to figure out, ‘do we all get the data? Do you just opt-in, period?’”

An independent brokerage which has listings only from its local area may come up high on Google ratings for more specific searches, but it’s tough for a smaller brokerage to come up trumps on more generic search queries.

Taking Responsibility

Other developments suggest that other brokers may also be looking to assert more control over where and how their listings are displayed. Two large, national real estate consulting and technology vendors, Onboard Informatics and Clareity Security announced new products just before the meeting intended to help MLSs better track listings and enforce rules for their display on third-party sites. Onboard’s product has already been adopted by MRED, an MLS covering several midwestern states, with Clareity’s system adopted by Move, the company behind Realtor.com.

But it’s not clear how many local brokers may want such changes. MLS PIN – Massachusetts’ largest MLS – adopted a rule permitting franchisor display last year, following NAR’s lead, said President and CEO Kathy Condon.

“We haven’t had any pushback here, and I’m not sure that we’ll make any changes,” she said. “Some of the brokers do want to take that control back, and if they want to they can certainly go and make their own deals and not go through PIN.”

But sometimes broker fears and anger about listings popping up on third party sites are driven by things an MLS can’t control – sites like Postlets.com allow individual agents to upload listings information themselves, circumventing the MLS process.

“I don’t send data to Postlets, so I have no way to update it,” Condon said. “If you’re putting [listings] on an additional site then it’s up to you, the broker, to keep up with it, because there could be problems.”

Some said these early moves may be the beginning of a necessary shift in the industry.

“What it boils down to is that there’s going to have to be technology for brokers to send their listing to all these advertising sites that they want them to go to, but where I think most MLSs fall down is saying, ‘All right, we’ve signed all these syndication deals and we’ve solved the syndication problem, we don’t have to think about it anymore,’” said Brian Larson, a principal at Minnesota-based MLS consultancy firm Larson/Sobotka Business Advisors, who had a hand in helping to create the first IDX when he worked at an MLS in Minnesota in the late 90s.