The CNBC curse?

Hi Jim –

I’m delighted to see you post so often on this topic; it’s a pretty brave step in my opinion.

The reason Realtors game the MLS is pretty simple – their profit center relies on information asymmetry (to use the nice euphemism employed by the authors of Freakonomics). They go into lengthy arguments about agents/brokers and their knowledge of the ‘Inventory’; I don’t think that’s the real issue, or what you’re seeing when people ‘game’ the MLS.

When I worked for CAAR (long before Freakonomics), there was a very long argument/debate among the membership about the inclusion of data, which the anti-data slight majority ultimately won. The reason is simple: restricted information makes the agent/broker a necessary piece of the chain. If there is too much data available, buyers may select so stringently that they never ‘see’ your listing, or , if they run a wider search and pull the property as a result, they will eliminate it before seeing it, based on that information.

Moreover, the less data published, the less potential legal liability along the disclosure/diligence lines. In short, to the extent that agents and brokers make their money by being the market maker rather than by providing value added services, the better off they are restricting information. The less alternative information available to the client, the easier it is to…putting it nicely…present things in the most expedient way for the immediate exigencies.

Keep up the good fight!

Jim,

That’s a fair response, thank you.

Jim,

Zillow is a database of ALL homes; not a snapshot of just those homes that are on the market. Through our VSS program (virtual sold sign), brokers and agents get attribution for their past transactions. Information supplied when the home is listed becomes part of that home’s permanent record on Zillow. And unlike the MLS, homeowners can also contribute to the rich data set on Zillow – so far, more than a million owners have claimed their homes on the site and updated facts or posted images.

Andre’s correct; Zillow is not your competitor. Zestimate values have attracted a massive and affluent audience of home buyers and sellers and we offer Realtors the ability to promote their listings and services to those folks for free. Remember that Zillow.com is the only large real estate site whose audience was not simply built on the back of your listing content.

Thanks Jim –

Your Realogy analogy is interesting though probably unlikely. If it ever did happen though, nothing would really change for Realtors. Realtors would still have access to all of Realogy’s listings; the only differences being that that access would be now be free and you would also find potential clients hanging out where you find the data.

IMO, the fact that Zillow will be a richer source of information than the MLS’s is a given. That’s simply because Zillow’s databases are populated by far more data sources than MLS databases are (with homeowners being the most notable missing contributors to MLS data.) Likewise, since Zillow’s databases are exposed to a much larger audience, there’s significantly more opportunity for correcting data quality issues than in the case of a closed MLS.