Where Real Estate Gets Its Dirt

The Battle In Seattle

Real Estate Bad Ass – Ian Morris

Market Leader just kicked Zillow in the balls.

Here’s an excerpt from an article on Inman Newsdescribing Market Leader’s launch of RealEstate.com as a referral portal.

RealEstate.com back as referral network

Now — nearly one year after acquiring listing portal RealEstate.com from Tree.com for $8.25 million — Market Leader says it has agreements with multiple listing services in more than 150 markets that are providing Internet Data Exchange (IDX) feeds containing information on about 1.6 million listings to the site.

MarketLeader in turn provides leads on an exclusive basis to more than 1,000 brokerage companies and agents that have joined the site’s referral network.

Fucking genius.

But Brian Boero of 1000watt doesn’t think so…

Market Leader’s RealEstate.com play: Welcome to Crazy Town

“Market Leader, the software company previously known as HouseValues.com, bought the realestate.com domain from LendingTree about a year ago.

This week, they made some noise about what they’re doing with it.In short, they are raising a giant middle finger to MLSs, the spirit of IDX and, most significantly, to operating brokers.”

Crazy like a fox, is what I say. For all the talk about how Zillow is a big innovator and disruptor in the real industry Ian Morris just walked the walk.

One side note, the design of RealEstate.com really does suck, so fix that. Thanks. Moving on….

First let me get this straight, the listing portal business can be somewhat sleazy. “Three headed monsters”, “Zombie Listings”, “Sin-dication” and now the you’ve got both Zillow and Homes.com pounding their chest about the opening of two new boiler rooms in Southern California. You almost feel sorry for the poor real estate agent who happens to pick up the phone.

But the industry is reaping what they sowed and you can’t blame Market Leader for taking this path. It’s a bold and risky move; some may say a “Hail Mary” pass. Sometimes, the Hail Mary works.

What matters now is execution. So far Zillow is really killing it. Everyone thought they would be flash in the pan after they went public, not so. The IPO was over a year ago and they have been getting stronger every quarter. Spencer and his team deserve strong Kudos.

Market Leader has been putting together a few big deals of their own; the acquisition and integration of Sharper Agent has gone well, they also won the business to be the lead vendor behind Keller Williams’eEdge platform, combine that with recently announced partnerships with Realogy’s Century 21 and Better Homes & Gardens they seem to have a lot of momentum.

The Battle of Emerald City is now in place:

Ian vs. Spencer

(Granted with names like these it seems they should be fighting over a jar of Grey Poupon instead of online listing dominance.)

But I love a good fight and this is going to be fun to watch!

  1. Definitely interesting happenings! Frankly, I agree with Brian that Market Leader has raised their “giant middle finger” to MLS’s. Getting a brokerage license in 150 MLS territories does not make them a broker in the spirit of IDX. Sadly, I predict that what they’ve done will end up setting back listing data on the Internet by 10 years once the brokerage community retaliates and changes the IDX rules once again.

  2. I read Rob’s take on RealEstate.com – http://www.notorious-rob.com/2012/08/12/realestatecom-idx/ – but as per the article where I was quoted on Inman News last week, I don’t see why there is substantial risk to MLSs withdrawing the data feed (there is always *some* risk of baseless suit). Most MLSs are very clear about the legitimate use of IDX data, and the site owner is not providing brokerage services. In the terms of service, this is clearly stated: “The Web site you are accessing (the “Site”) is provided by Market Leader, Inc, and/or an affiliate thereof (individually and collectively, “ML”) … ML does not provide any real estate, appraisal or home-related services, and do not hold ourselves out as being licensed to perform any such services.” An IDX site must be under the apparent control of a local broker. This site does not identify itself as running under the control of a brokerage. It seems straight forward to me, but MLSs – talk to your attorney before taking action.

  3. Stu – why a need for a rule change – see my comment above. They are breaking the rules now – there is no loophole. This seems the same as any other unauthorized use of a data by a broker.

  4. Matt, as I said in the comments, I meant to suggest that IF NAR/Assoc/MLS promulgates a new rule aimed at MarketLeader, then it’ll face antitrust actions.

    But in light of your point, I’d love to hear from MarketLeader’s legal. They have a legal team; there’s no way they went into something this big without checking it out.


  5. Rob, I don’t see where any new rule is needed, so I don’t know where the anti-trust argument is coming from. All, MLSs already have rules precluding this use, and many have strong data license agreements on top of those rules, as well.

    I’m sure we’ll see the legal maneuvers start soon enough.

  6. Matt,

    I expect that if ML gets pressure from MLSs, it will co-brand the site to the local brokers who buy their leads and make it look like a “broker controlled” website.

    If ML made the IDX content displays look like broker IDX site displays, how would an MLS differentiate a “Powered by ML” from a “Powered by Zip” IDX website? How would an MLS differentiate an “ML-broker branded” lead referral site, from the lead referral sites operated by Redfin…and some of the franchisors?

    In addition to DOJ pressure, I also have a feeling that the local broker who is buying the leads from ML would apply significant pressure on their MLS to not withdraw the ML feed as long as ML comes close enough to make their site look like it is “under the [apparent] control of a brokerage.”


  7. Alon, I’m not sure that would be enough. Last year, when an exception was mistakenly made for franchises, an argument could have been made for a usage similar to how RE/MAX structured its site – a master site for individual broker websites. But, if you remember, that rule was rescinded. Now IDX use is limited to *individual* broker websites. Of course, if ML changes things enough to comply with the rule – that is, to create both apparent and actual control, of course there may not be any further issue – but at the point where it is evident that you are on individual broker websites, the ability to use the realestate.com domain to its fullest would be diminished.

  8. Rob,

    I agree with you that any rule changes by NAR/AORs/MLSs would get close scrutiny from DOJ, and I don’t currently see how MLSs would be able to change the IDX rules in response to ML’s move without taking on significant litigation risk.

    However, I also believe that if certain MLS participants (large listing brokers) pressured their MLSs to allow them to opt-out of sharing their listings with everyone in their MLS (“end of IDX”), and only share them with other MLS participants they select (“Selective IDX”?), these brokers and the MLSs would face DOJ litigation.

    If these (presumably large listing) brokers pull out of IDX completely and only “cross syndicate” with each other, they would either have a data set which would be too small to have “market power” in their MLS…or large enough to give them market power, and subject them to the of risk DOJ litigation.

    Unlike the “REN-proponent Franchisors”, Market Leader is willing to pay MLS fees (as a participant) and abide by the IDX rules.

    I expect that Market Leader would also be willing to take payments from any broker rather than only allow affiliated franchise operators to participate, which (IMHO) makes RealEstate.com much more in the spirit of IDX than “Franchisor IDX”

    Someone was going to do this…not surprised that Ian, with help from Alex Lange (formerly of Roost) is the one.


  9. Matt, I do remember – and the “Franchisor IDX exception” was rescinded after significant legal and political pressure.

    However, RE/MAX (and other franchises) refused to become MLS participants (pay MLS fees and sign agreements to legally abide by IDX display rules & regs) which would have legally entitled them to display the IDX data on the master site.

    Following the rescission, they opted for the cheaper solution (REN is free to them) which allows them to pay no fees to the MLSs that provide data to REN and… advertise freely – which strikes me as much more of a “giant middle finger” to MLS’s” and a “giant middle finger” to the other MLS participants who cannot “pay to play” (or advertise) on their site without becoming franchisees.

    I agree with you that if ML made too many changes they would diminish their ability to use the RealEstate.com domain to its fullest, but knowing the talents presently at ML, I think they can make it pretty useful.

    What I find most interesting is the “broker-friendly” and “MLS friendly” (or at least “MLS Compliant”) positioning this move achieves for Market Leader…quite a contrast to Zillow’s “agent friendly” position which is generating a lot of friction at the moment.

    I must admit, I tend to agree with Greg when he says “F___ing genius” move…


  10. Alon, I am also agreed that the move is “genius” – and I have nothing against the ML folks. The franchise vs. broker network issue isn’t relevant – again, one of the problems with the old franchise rule – one that spelled the demise of that rule – was that broker networks could NOT display IDX data in the same manner as franchises were being accommodated. Anyway, it’s just going to be a matter of ML either changing their site to come into IDX compliance or going through battles with MLSs and/or dealing with an uncomfortable period of transitioning to a syndication channel data aggregation approach. It’ll be interesting.

  11. Agreed Matt – fundamentally, I think it is just one more player in a crowded space with diminishing margins, who has to compete for the wallets of the local brokers with real agents that close real deals.

    So (IMHO) not much change in the current landscape, but given the “Broker-friendly and MLS-compliant” approach, I stand by my bets on the staying power of the local brokers and local MLSs who make the whole industry work.

    We’ll just have to sit back and watch this unfold 🙂

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