File this under crazy ideas that Todd came up with that are full of risk and not likely to happen. It’s just a brainstorm. Hear me out.
It’s no secret that one of the few advantages that companies with IDX powered real estate search sites have over Zillow and Trulia is superior MLS sourced listing coverage. In virtually every market, brokers have to opt in to syndication before Zillow and Trulia can display their listings. In most markets, broker listings are automatically included in IDX, with an option of opting out. As a result, IDX feeds are more complete than syndication feeds. There’s a third feed. It’s a VOW feed. This is a complete set of MLS listings that every broker is entitled to. The only stipulation is that it needs to reside behind a registration wall. Zillow and Trulia spend a lot of time trying to convince more brokers to opt into syndication, but the other option is to convince brokers to opt out of IDX.
Stay with me here. I contend that a broker with a dominant share of listings in a market isn’t necessarily served by IDX. Brokers pay the MLS to submit listings. The MLS turns around and charges other brokers a fee for those listings. Those other brokers get to use those listings to generate their own leads. Sure, the IDX feed gives attribution to the listing broker, but it’s so buried that almost no one will see it. Compare the attribution Zillow and Trulia give to the listing broker to what IDX rules require; the difference is almost laughable.
So, instead of trying to acquire the long tail of brokers who haven’t opted in, Zillow and/or Trulia could go to a select number of brokers in a market, and entice them to partner with the portal in exchange for opting out of IDX.
Why would a broker do this? Z & T bring a lot to the table. They could offer white label versions of their site and apps to these brokers. They could offer them premier placement for free or for a drastically discounted price. They could even offer to build a VOW client for the brokers that moves traffic from the broker’s listings on the portals to an exclusive broker VOW site (and app) with all of the MLS’s listings, powered by Zillow or Trulia.
Z&T wouldn’t have any more listings than they already did, but every IDX competitor would now have 10, 20, or maybe even 30% less listings on their own sites. The concept of IDX as a gold standard would be greatly disrupted. The brokers who pull out of IDX could still build VOW sites, and would have a funnel of traffic from the portals. Zillow and/or Trulia could then argue that they have the most complete set of listings through VOW access to their premier broker partners. Suddenly IDX doesn’t look so attractive.
Is your blood boiling? Is this idea crazy? Could it work? Tell me why it won’t.
Photo: Creative Commons license via Flickr user inorman