Takeaways:
- Dump IDX — that’s a refrain that’s starting to blend itself into the conversation more often.
- It’s hard to swallow because in advising a big broker, it could be spot-on; at the same time, it’s so problematic for the broker-centric industry as a whole.
- IDX is brokers’ collective bargaining chip. We can’t break it up, or we all lose its value.
We’re hearing more often from brokers that they want to go back to a more traditional way of doing business. Keep your listing leads. Close more sales in-house. Build a Broker Public Portal to send all inbound contacts to the listing agent — just like the sign calls of old.
And dump IDX — that’s a refrain that’s starting to blend itself into the conversation more often. If syndication is inefficient, then IDX must be as well.
Brian Boero’s post on 1000watt a couple weeks back crystallized the argument for pulling out of IDX. It’s hard to swallow, though, because in advising a big broker, it could be spot-on. But at the same time, it’s so problematic for the broker-centric industry as a whole.
The theory is that if you have large market share, you shouldn’t share your listing exposure via IDX with small brokers, paper brokers and so on. Big brokers should leverage their strength to differentiate the quality of their listing display and squeeze out the little guy.
Make the consumer come directly to you. That’s an attractive strategy from a competitive standpoint.
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Cooperation and duty
In most industries, that would be the end of the story. In real estate, though, we have an ever-fluctuating requirement to cooperate. Where the level of cooperation begins and ends depends upon current licensing requirements, a code of ethics, and MLS rules.
We cooperate because we know that the efficiency of the real estate market is greatly enhanced for all of us when we set a baseline of standards that consumers and agents can rely upon across brokerage borders.
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IDX might not be a required component of cooperation, but it’s a significant outward signal that a broker is committed to it. It is the foundation that allows brokers to market every listing to the full spectrum of buyers.
It’s a concrete benefit to the seller, one which would be difficult to downplay in a conversation about duty to the client.
Let’s be honest about the slope we’re led down if boycotting IDX is the starting point — because it ends in a circular firing squad. Big brokers battle one another for local dominance with limited databases of their own listings.
That might lead to more double-sided sales at first, but consumers will rely more and more on portals for an integrated set of listings. IDX itself will become ineffective for all brokers.
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Traffic to brokerage websites will shrink at a faster pace, as they’ll be a scattered, unorganized way for consumers to search.
The cost of customer acquisition won’t go down. Advertising portals will hold the keys, and the pricing controls, to the only comprehensive listings databases and an even larger portion of online traffic.
They will dictate the cost of the leads that brokers are no longer generating. We’ve all heard the goal of 40 percent of the commission.
We could imagine the brokers pulling their listings from portals together in response, but we know how unlikely that is.
Without a coordinated effort (which would likely be illegal), there would always be someone willing to pick up the exposure of an exiting broker.
Ironically, brokers are probably less frightened about leaving IDX than they are of vacating their spots on advertising portals. If we were focused on the long term, it would be the other way around.
Protection as a whole
IDX-powered broker websites are the safety net in this tumultuous environment of online real estate. No matter what changes take place between public corporations and listing-focused tech companies in the future, we can still ensure an inexpensive way for brokers to display a clean, fair, timely database of properties for their clients.
For a couple hundred bucks a month, brokers can ensure that all of our clients have a way to search for homes, free of whatever marketing shenanigan the disrupters think of next.
Is it Zillow display quality? Of course it’s not.
Do real buyers and sellers care, though? They really don’t. They’ll buy the right home for them whether they find it on a postcard or a billboard.
So, maybe big brokers are winning right now, and they could take their ball and go home. When they step away, though, they leave a void.
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Someone else will fill it. It’s better to be collectively in the game, than to fracture, leave and let someone else take over the field. Cooperation requires some big picture, long-term vision.
IDX is an important part of ensuring some control of our digital future. It’s not just a tool. IDX is brokers’ collective bargaining chip. We can’t break it up, or we all lose its value.
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Sam DeBord is managing broker of Seattle Homes Group with Coldwell Banker Danforth and 2016 president-elect of Seattle King County Realtors. You can find his team at SeattleHome.com and SeattleCondo.com.