The news of Edina Realty pulling their listing from Realtor.com have been rippling through the industry since announced. There are probably a small handful of brokers who have done the same, but that is about it. This became newsworthy because Edina Realty is a big broker – really big. Moreover, the parent company, Home Services of America is second only to NRT in terms of being the largest brokerage in America. NRT has about 750 offices and 250,000 sides. Home Services have about 300 offices and does about 125,000 sides. There is a lot at stake for syndication and online advertising if Edina realizes business growth as a result of their decision.
Edina Realty is a smart company. This was not an emotional decision, but the result of intense and calculated strategic development. They have researched the opportunities and risks carefully and will measure impact to many facets of their business.
The Home Seller
Clearly, Edina Realty needs to not only promise great marketing on a seller’s property, but they must deliver. One measure of this will be Days on Market. Edina (and their competitors) will know if their marketing strategy lengthens or shortens days on market. The second measure will be List Price to Sales Price Ratio. Edina will measure the variation from their historic or competitive benchmarks for list to sale price. Edina agents use this information in their listing presentations today.
The Real Estate Agent
For agent recruiting and retention, Edina Realty will need to demonstrate and build confidence in their new marketing strategy. Their leadership has been to every office and explained the decision, arming agents with information that justifies the initiative. Today, Edina Realty agents support the decision. But that could change.
Agents expect their brokerage to give them the best opportunity to be successful. In Edina’s case, there is instant street credibility to an agent who works for Edina. They have earned the respect of the customers they serve over decades of delivering satisfaction. The brand means something. But agents also expect tools for managing their business and marketing their services. Syndication is only a piece of that. Edina does a lot more and their agents know it. However, at the end of the day, the agents expect their brokerage to deliver leads.
Today, Edina knows exactly how many leads they generate from every syndication channel. They also know exactly what happens when they turn channels off. Edina never syndicated listings to Zillow (Concerns about Zestimates, FSBO listings, terms of use, etc) Edina increased traffic and lead generation when they turned off Trulia (Concerns of data quality, PreForeclosure, terms of us, etc). They have hopes that the same will happen with Realtor.com. They will know the results to their business very quickly.
Why Realtor.com
Realtor.com is very different from other advertising websites. Realtor.com is governed by many principals and covenants that other publishers are not. Homes.com and Homefinder are very similar. Think of them as old school. But the new kids do not necessarily play by the same rules.
Realtor.com is not infected with bad data. They display a facsimile of the same data that is displayed on a broker website, and nothing more. They do not display FSBO data. They do not display Pre-Foreclosure data that aims to entrap revenue from unknowing consumers. They do not put a competitors’ advertisement on a broker’s listings.
Realtor.com will sell inquiries from a broker listing to a competitor unless the broker opts out. (Edina opted out when this program launched).
In many ways, Realtor.com is more friendly to the broker and the consumer, but they are still a third party website, an advertising outlet. Like Realtor.com, MLS Consumer websites are also friendlier than third party websites. I have always argued that if a broker does not want a consumer facing website operated by the MLS, then they should not be sending data to Realtor.com or any other third party website. Edina has never supported the notion of an MLS consumer site in their marketplace, by pulling from Realtor.com now pure on their strategy, and that is to be applauded.
Here is a hierarchy of broker friendly third party websites:
- Other Brokers
- Realtor.com and MLS Consumer Sites
- Homes.com and Homefinder
- Most others
I base this hierarchy on details of how these companies operate, how they display data, and their terms of use when brokers provide listings for publication. We wrote a paper on this issue that you can read here. It is a free download and you should read it or re-read it if you have not looked at it in awhile. Terms of use on third party sites are a problem for real estate brokers.
Edina’s decision may be right for Edina’s agents and customers, or it may be wrong. You can trust that they will be the first ones to know. If it does not work, they know exactly what they put at risk. They already know how much web traffic Realtor.com generates for them. They already know how many leads are generated. They already know how many of those leads result in a sale. It is calculated risk, smart risk. If it does not work out, they can turn it back on in a day. It is that easy.
If their strategy pays off, they will be the first mover to gain a competitive advantage. And that is significant. They will be the first ones to have the analytics. They will be the first ones to understand how to roll out and communicate their new strategy. They may boost their online presence far beyond their competitors.
Good luck Edina, and congratulations on diligently testing your business options. The industry honors your leadership.
