Featured news & tips — posted
September 28, 2004
Homestore, REALTOR.com hear you when you speak up. Do it more often
We have been grateful for the overwhelming response of our customers and well-wishers alike as well as media coverage of our situation with Homestore demanding we disable our Agent XSites REALTOR.com® listings import feature. The issue of ownership and proper use of a broker/agent's data needs to be brought to the fore — Homestore, through its public statements, seems to agree with us on that. Hopefully, the issue is galvanizing enough agents and brokers to go to their boards and find out if they sign their lives away when they deal with MLSs.
What we've tried very hard to make clear — first to Homestore, who doesn't seem to get it, then to you, who do — is that:
- a la mode never used the data, doesn't want the data, can't have it, can't touch it, can't sell it, can't do anything to it. We never could.
- It was the individual broker/agent — whom Homestore, through its REALTOR.com
®
Terms of Use, insisted be the owner of the listing — who was downloading his or her listing information to his or her personal website for his or her business use.
Citing agreements forbidding "third parties" from "scraping" REALTOR.com®, Homestore demanded that you, the individual broker/agent who owns the listing in the first place, not have access to your data from REALTOR.com® on your personal website.
It's your data. We know it, you know it. Homestore has another idea, and claims "copyright." We think they're crazy.
The issue is getting a lot of attention. Inman News ran the first story on the issue — a subscription is required to read it now — and it remains as of this writing one of the most popular links on the
Inman News home page, after spending most of last week at number one. Clearly, this is an issue that resonates with agents and brokers. Our CEO, Dave Biggers, and Homestore's President, Alan Dalton, have been invited by
Inman to produce 7-8 paragraph statements of our positions in this important matter for publication side-by-side in a future
Inman News article. Ours will be done shortly; hopefully, Homestore will participate as well.
Realty Times covered the issue very comprehensively and objectively, in two long stories: Who Has the Right To Publish Your Listing Online? and Website Vendor-Homestore Dispute: Each Misses The Point, Says The Other. In the latter piece, Allan Merrill, EVP Corporate Development of Homestore, told
Realty Times, "Our agreements with the MLSs that provide us with listings don't allow us to do what a la mode wants us to do. We respect the agreements we have with the MLSs, and we will protect their rights."
In its canned response Homestore has been sending out to brokers and agents who have complained about their actions in this case, they, through Mike Long, CEO, say: "Since we are just licensees of the listing content, we are obligated to prevent any 'scraping' of listing content from REALTOR.com®. This is not a choice we can make. It is a contractual obligation. Any third party seeking to obtain listings must seek them directly from local MLSs and brokers just as we do. We legally cannot permit them to obtain these listings from REALTOR.com®."
Read that again. For you, the listing owner, to "obtain" your listing you must do so directly from your local MLS or broker. You are the broker, or the broker's agent. We are, again, prepared to give Homestore the benefit of the doubt and assume they are misunderstanding what's going on here, but it is worth noting that Homestore's Cease and Desist letter did not accuse a la mode of violating its "copyright" to your data, but of facilitating your violation of their "copyright." So how confused can they really be about who's using the data?
We think they're hiding behind their MLS agreements, and have said so. Real Estate Technology Insight covered the issue (subscription required) as well, and will feature an in-depth story in its next print edition.
Real Estate Intelligence Report will feature a piece on the issue in its next quarterly print edition. We received so many requests for statements or interviews that we released our own press release on the matter which can be found here.
You, as the listing owner, are not a "third party." We think they're doing this so home buyers won't go to your site, but will instead go to REALTOR.com®, so they can cross-sell to you, and so they can sell advertising to home improvement companies, moving companies, even — mind-bogglingly — cut-rate discount brokerages that undercut traditional agents.
We won't back down from this fight. A week's worth of whirlwind media coverage is the beginning, not the end of this fight. And as we've said, you, as an individual broker or agent, need to ask tough questions of your board. Have they indeed made some sort of Draconian arrangement with their MLS whereby your listing can only be shown on REALTOR.com® and not your own website? If you find this is the case, we hope and expect you'll act in the best interest of yourself as a businessperson and your home selling customers and demand it change immediately.
"Traditional" agents may be the norm for now, but
alternative RE biz models gaining traction
Inman News kicked off its fall audio
conference series last Thursday with a discussion on new real estate
business models and their impact on traditional agents and brokerages.
Five "alternative" firms spoke briefly about
their business models and how they deviate from the model the
majority of the industry uses and how such models will impact the real
estate business in the future.
Bradley Inman, Publisher of Inman News,
hosted the panel of industry experts that included Lyle Martin,
Co-Founder, Assist-2-Sell; Mike Davin, EVP & Co-Founder, CataList
Homes; Brian Yui, CEO, HouseRebate, Lawrence Bunnell, CEO/Principal
Broker, InSight Realty; and Steve Malachowski, President, One Percent
Realty, Inc.
Many traditional 6 percent commission agents have
been wary of the new wave of discount and Internet-based brokerages
because of potential threats to their business. But, alternative
models are not for every home buyer, the panelists pointed out. There
are still many home buyers that prefer a traditional agent to oversee
the home selling or buying process for them.
"Ninety-eight percent of consumers still feel
that way, and that’s why the discount model in California has never
really gotten above 1 percent market share," said Assits-2-Sell’s
Martin, who noted later that Assist-2-Sell’s Los Angeles office
currently has about 3.5 percent of the market share, but the newer
Orange County office only has about 1 percent of the market share. "We
get blamed for the failure of a lot of real estate agents who are out
there. The truth is there's room for everybody. The good agents are
not threatened by our model."
Malachowski of
One Percent Realty agreed. His company
charges an up-front fee to encourage only "serious buyers and sellers
to do business with us" and a 1 percent commission for the
transaction. "We’re not trying to replace 100 percent of the
people that transact real estate. I think in a down market, more
people may start to forego the luxury [of having a traditional
Realtor] if dollars are tight. There are a lot of ways around this and
we’re all looking for ways to attract the right amount of consumers
over the next few years," he said.
While buyers may turn to alternative models for
various reasons, the money savings are a big draw. Yui said that
HouseRebate, a full-service discount firm that
employs independent agents who work from
home offices, tends to get much of their business from first
time home buyers and cost conscious consumers. "A lot of our customers
are new to the country and they’re more apt to try to save money by
using a discount service," he said.
"In lower-priced
markets where people have 100 percent mortgages or home equity lines
eating the value of their home, that 6 or 7 percent commission
represents a tremendous portion of their equity. If they didn’t have
an alternative, they’d have to go for sale by owner,"
InSight Realty’s
Bunnell added.
Will these new guys be able to compete with the
realty giants like Century 21 and Coldwell Banker?
Malachowski said he doesn’t feel
threatened yet. "I kind of enjoy it when we lose business to a big,
full-service real estate firm because their infrastructure does not
allow them to compete at the margin that firms like ours can. They may
get that business, but they’ll be doing it at a loss," he said.
"We have a productivity problem in the business.
The agents — not brokers
— doing
15-50 deals a year won’t have a problem competing with us. It’s the
agents only doing five or six deals a year that will feel the heat," CataList Homes’ Davin added.
CataList Homes, which specializes in the middle- and upper-end
seller’s market, employs full time agents who work for a salary and
bonus system in lieu of a traditional contracted agent and commission
split. The company also supplies all of the agents’ marketing and
selling materials.
In fact, Bunnell commented that some big realty
firms have started offering MLS-only packages and other alternatives
to compete with the growing popularity of discount brokerages like
InSight
Realty. The company’s core offering is an online, flat
fee Internet listing package but the company also offers bundled home
buying service packages and a la carte services.
Although traditional real estate models dominate
the market today, the panelists believe the market will evolve to
accept more and more alternative business models in the future. In
fact, several of the panelists indicated they’re now building up their
companies now so they’re prepared when the market eventually flips.
One conference attendee commented to the
panelists that the real test of these models’ stability will come as
the market slows. However, Martin disagreed. "The truth of the matter
is that when the market gets tough, home sellers have to be more
competitive in the pricing of their home and they are equally
responsive to saving money. MLS services will become a vital marketing
tool that given the choice, many sellers would take advantage of in a
slower market," he said.
As Davin puts it: "A bad housing market hurts
everybody."
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