There’s a lot of talk lately about monetizing real estate listings as a new income stream for MLSes. It’s an interesting concept built on the populist notion that “Zillow should pay us for our listings.” On the surface, it makes a lot of sense, right? Especially on days like yesterday:
It’s hard not to think that Zillow is making money on the backs of listing agents, but does that mean Zillow should pay for listings? Sam DeBord recently inked a great opinion piece over at Inman News where he called for brokerages to come together and let MLSes lead:
“Brokerages need to allow the MLS the ability to negotiate on our behalf from a position of power. Whether that means negotiating a revenue model for listing syndication, restricting that dissemination, or creating new and creative ways to improve our processes, the MLS needs the flexibility to work as our voice in the industry. Mistakes will be made, but as MLS organizations across the country collaborate over the most effective processes, the efforts will become streamlined and our ability to direct industry momentum will continue to strengthen.”
Here’s my problem with this idea, and all ideas that revolve around monetizing listing data. No one seems to be able to tell me what a single listing is worth. How much should Zillow pay for it? One hundred dollars? Ten dollars? Five? One dollar? And who gets paid for said listing? The MLS? The broker? The agent? Is there a split of some sort?
Nobody wants to answer these questions with real numbers because, no matter how you slice it, the agent’s cut is just a tiny fraction of what they will earn as a commission on the sale of the home. So what’s more important to them? The potential to earn $5 on a listing syndication deal, or the potential to lose thousands of dollars because they refused to list a property on the nation’s largest real estate portal?
Is it fair that Zillow is making all this money? Is it fair that listing agents feel obligated to put their listings on Zillow? No. But who said capitalism was fair? If, as an MLS, you think you are ready to cut off your syndication feed to Zillow over a revenue deal, make sure it’s not a bluff. Zillow already knows what the current market price is (their massive exposure), and isn’t likely to pay more. Agents don’t need the MLS to post listings on Zillow. What’s the carrot you intend to provide that will keep them from doing it without you? Which brings me back to the question at hand: what is a real estate listing really worth?