The CNBC curse?

Last year CNBC did a story on the “million dollar home” market in Charlottesville (actually Albemarle County, or “CharlAlbemarle”), and specifically referenced this house in Western Albemarle. The property has now dropped from its original asking price of $1.19 million; the current asking price is $895,000.

Two things jump out when looking at this (temporary) MLS link

1 – The property is now listed with a new agent and firm.
2 – The previous agent stripped most of the information from his listing – all photos, ad copy, etc – harming the quality and value of the MLS. When will Realtors learn that the quality of the data matters?

In Charlottesville and Albemarle, there are currently 146 properties actively on the market between $750k and $1.5 Million; 62 have sold in the past 6 months.

Related MLS reading:

What is the MLS?
Realtors Gaming the MLS

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11 Comments

  1. Scott February 6, 2008 at 14:14

    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!

    Reply
  2. Pavel February 6, 2008 at 15:01

    Jim,

    Your quote: “When will Realtors learn that the quality of the data matters?” is a bit generalized and perhaps even slightly demeaning…

    Reply
  3. Jim Duncan February 6, 2008 at 15:17

    Scott – Thanks.

    Pavel – it wasn’t intended to be demeaning, but I guess it could be taken as such. I stand by it, though – Realtors don’t generally recognize that the MLS is one of the, if not the, greatest tools we have.

    Who benefits from stripping the historical record of the property?

    We all (Realtors) suffer when we allow the quality of data in the MLS to deteriorate. I’ve long advocated for fines for those who game the system.

    The competitors – Roost, Zillow, etc. recognize that the data is integral to the quality of the product. Realtors (again generalizing because it reflects on us all) harm themselves, the MLS and their clients by placing strictly personal gain over producing the best quality product we can offer through the MLS.

    I’ve said it before and I’ll say it again, Realtors’ complacency may be one the contributing factors to our disintermediation with regard to the MLS – and that may very well be ok.

    Reply
  4. Jim Duncan February 6, 2008 at 15:26

    One more thing – I’ve heard it said many times – by many different people – that one of the differentiating factors that sets the Realtors’ MLS apart from the Zillows, Cyberhomes, or any of the others trying to eat the MLS’ lunch – is the historical record and accuracy of the MLS.

    That is what I perceive to be Realtors’ not getting it. By lumping all Realtors in, I am placing blame squarely on the shoulders of all 1.1 million Realtors.

    Reply
  5. Pavel February 6, 2008 at 17:55

    Jim,

    That’s a fair response, thank you.

    Reply
  6. Andre February 7, 2008 at 10:04

    i still find it so interesting that Realtors think that Trulia, Zillow, et al are even competitors. BTW, to mention Roost as a site is pretty laughable they launched last week and have 0 traffic… If I am worried about anyone it’s the redfin’s of the world, that “lie” when they say they “saved” people money – are people blind? The homeseller is still paying a commission, likely a full one – which is financed by the buyer’s loan, which is not receiving a refund, they are just receiving money that they are paying interest on anyway through their mortgage. That worries me – that is gaming the system.

    Reply
  7. David G from Zillow.com February 7, 2008 at 14:00

    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.

    Reply
  8. Jim Duncan February 8, 2008 at 06:49

    David G – Thanks for stopping by.

    By competition, I mean that Zillow has the potential to establish a better – richer, deeper and more accurate database than the MLS – because Zillow recognizes the value of having quality data. That’s why, I assume, ya’ll have been trying to improve since day 1.

    My argument with the MLS is that Realtors have become, IMHO, complacent and don’t see that there are threats out there.

    Where is the tipping point going to be when Realogy (for example) decides that it’s more beneficial to just send everything to Zillow rather than the MLS?

    We’re seeing a variation of the above example in some markets that have large non-Realtor populations – the MLS is not as effective due to lack of participation.

    Zillow is competition; if only for the fact that your data could one day be better than ours.

    Reply
  9. David G from Zillow.com February 8, 2008 at 12:42

    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.

    Reply
  10. Pavel February 8, 2008 at 14:08

    I’m curious how many Zillow “bloggers” or “content contributors” there are and if they are employed by Zillow. I’m wondering if a share of “For Sale By Owner” properties that actually SELL goes up over the next few years thanks to new online technologies such as Zillow, etc. Anyone tracking this data?

    Reply
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