The real estate consumer has a dizzying array of websites that provide them with access to real estate listings. There are numerous third party websites like Zillow and Trulia as well as national real estate franchise sites and local real estate company websites. Consumers likely assume that all of these sites provide updated, accurate and complete information. Unfortunately this isn’t the case.

To be competitive in engaging the real estate consumer online, brokers and franchisors offering consumer property search portals need to offer equal or better services than third party listing websites.

Today, consumers are often surprised to find out a listing they found on one site has already sold, or find out that another site reports that it has expired or simply that another site has much more complete information on the property. When they follow the link to obtain "more details" they find themselves in a totally different website with a totally different interface, and perhaps different pricing on the subject property. Brokers and franchisors need to be mindful of this if they want the consumer to make their website the primary site for obtaining their real estate information.

Professional real estate websites are losing the battle for consumers online.

Real estate professionals are competing against very well constructed third party listing portals that have huge amounts of information and provide an easy user interface. In contrast, broker and franchise sites lack supporting data like demographics, or school info, or other things provided by their third party competitors. This may be swaying the consumer in the direction of third party listing websites and be the cause of reduced web traffic and potential customers for brokers and agents! We call this problem the "Property Search Delta."

Many consumers use multiple third party websites that link to broker or franchise websites to see more information. Consumers experience a confounding world of "this" vs. "that."

How does search information experience change for the consumer when they link over to the franchise and broker sites? Is it better? Do they like it? Do they see more and better information when they leave third party sites and go "directly to the source" of the real estate listing data? Will consumers view the leap to the real estate professional’s site as a great experience?

This white paper chronicles our findings on the consumer search experience. We call it the "Property Search Delta." Our intent is to show, at a high level, what consumers actually find at various franchise and broker websites and the disparity in search experiences between third party, franchise, and broker sites.

Do all sites present the same depth of property data fields? Is the search experience fairly uniform? Not at all! There are huge differences, or Deltas, in the type and quality of information found on property websites.

Competition is Fierce

Franchise and real estate companies face stiff competition from third party sites like Zillow and Trulia that use broker listing data as the basis for their portals. While the information on the franchise and broker sites may be more accurate and complete in terms of property data, many third party sites are putting a huge amount of money and effort into creating richer and deeper consumer experiences while they are viewing properties. They are adding supporting information around the property data, such as sold data, valuations and neighborhood information to make the consumer more informed.

In this paper we are looking through a consumer’s eyes to point out the "bar" that has been set that they will be compared against by these consumers when looking at franchise and broker sites.

There are three primary categories of consumer property search websites that make up the lion’s share of consumer traffic.

  1. Third party websites
  2. Franchise websites
  3. Real estate broker websites

Beyond these three top categories, there are also MLS consumer websites and agent websites that have been excluded from this overview. MLS consumer websites and real estate agent websites display broker-listing content that is consistent with real estate broker websites.

There is an intimate connection between third party consumer-facing websites and broker and franchise websites. Listings that appear on third party websites typically provide a link to the franchise or broker site where consumers can click to see additional information. As a result, the Property Search Delta is always going to be there for consumers to see, judge and decide.

Brokers and franchises are risking erosion of consumer traffic as a result of the Property Search Delta. It is our intent in this paper to point out a few of the things that franchise and broker websites can do to tip the Property Search Delta back in their favor so the consumer bookmarks their site, not the third party site.

Property Website Data – The Truth

There are basically two types of data on any property website.

  1. Listing data
  2. Supporting information

Listing data is specific information about a property, like the number of bedrooms, baths, price, style, etc.

Supporting information comes in many different forms. It is data that is relevant to someone buying the property, but the data does not describe the property itself. Things that fall into this category would be data like:

  • Floodplain data
  • School information
  • Nearby restaurants
  • Public transportation information
  • Comparable sales information
  • Valuation calculators
  • Closing cost estimators

The most important information on any property website is the listing data, since without that the supporting data means nothing. Here’s the truth — only sites using a full IDX feed for listing data have the best listing data available anywhere. And only licensed brokers and agents or their providers are allowed to use IDX feeds to populate their websites.

Since this is true, why do so many more consumers go to sites like Zillow and Trulia to perform property searches when the data is not as accurate as the data on a broker or franchise site?

The number one reason is because CONSUMERS DON’T KNOW the listing data may not be as complete or accurate, and the real estate industry doesn’t tell them.

Third party sites have attracted a wide consumer audience because they have placed a "pretty dress" on the listing data. At first, many of these sites had listing data that was inaccurate over 40% of the time, yet consumers continued to visit because (1) third party websites are marketed to consumers very effectively, and (2) because they put all types of really fun information and tools around the data that consumers have never seen before. Consumers who visit real estate broker and franchise sites rarely see these same types of tools. In contrast, the third party sites create a fun, engaging experience for consumers, while professional real estate sites simply have the best data, but consumers do not realize broker listing data is better!

Third Party Listing Website Overview

WAV Group defines the category of third party listing websites as consumer facing websites that are not operated or owned by real estate agents, brokers, associations or MLSs. Top third party listing websites include examples like Zillow, Trulia, Yahoo, Google, Homefinder, Homegain, Cyberhomes, and many more. (Note: Realtor.com is a third party listing website but it is not included because it is governed by agreements between the National Association of REATLORS® and participating MLS – and uses IDX data like broker websites.) If you add all third party sites together, they have a significant share of voice in communicating listing information to the online consumer. Unfortunately, they also have the lowest accuracy and completeness of listing information. In a study done by WAV Group in 2008 for Roost, research showed that data accuracy and completeness of listing information that is published to consumers is often more than 20% inaccurate and, in some cases, more than 92% inaccurate on some third party sites. (Reference: Online property search for Dallas, Miami and San Diego)

Third party listing websites have lower accuracy and completeness of listing information because they receive listing information from a variety of sources and these sources do not regulate the data collection in a consistent manner. Top sources include franchise databases, virtual tour companies, brokers, agents, agent productivity software, foreclosure databases, MLSs, other third party websites, listing aggregators, and more. Unlike the data that comes directly from MLSs, which is controlled by strict rules and regulations, this data is less controlled, and therefore higher rates of error are present.

This lack of reliability from some listing sources creates two significant data challenges for the third party website companies, and subsequently to consumers using these sites. The first is dealing with unknown listing accuracy; and the second is dealing with changes to listings that may not be corrected in a timely manner or ever, such as price changes, listings that expire, or listings that are sold.

To resolve these challenges, third party websites evaluate listing content from a variety of data feeds and rank them by listing authority. The following lists shows an example of how a third party site might have their listing authority ranked. At the top of the list, in this example, is the listing agent, while the MLS listing feed might be in the fourth position.

  1. Agent who enters a listing manually
  2. Broker listing feed
  3. Franchise listing feed
  4. MLS listing feed
  5. Other listing feed (virtual tour, other third party site, etc.)

Note: Not all third party listing websites follow these listing authority rankings – each one is different; however, the ranking above is representative of a number of third party listing websites.

What this priority list means is that data in a higher position, with "1" being the highest, will trump data submitted from a lower position. So even if data is available from an MLS,if another "higher" source is available, it will override the data that is lower in the priority list.

Some third party sites do receive "syndicated data" directly from MLSs. In the case of Cyberhomes, MLS feeds are considered the most authoritative, which has helped to improve listing accuracy. But this is the exception, not the rule. Unfortunately the problem of data accuracy with third party property websites will continue to exist until and if they receive dedicated feeds from MLSs as brokers and agents do. What this means is that websites managed by MLSs and real estate companies will always have the most reliable local listing information for a given market. Some franchise websites, like RE/MAX, that link to their local brokers, also insure that the data you are looking at is direct from the MLS and therefore the most accurate data available, although may not be the most complete.

The problem is that consumers have no way to know that the data they are looking at on a given website is accurate or not until they contact an agent or engage the seller (many sites allow FSBO listings). As a result, consumers continue to rely on third party listing websites for property searches. These sites embody excellent usability, nationwide search, provide tons of additional fun information, and let consumers do their searches -- most importantly -- without any sales pressure. These third party sites also provide a level of expectation, or an information standard that consumers are likely to expect from any site they are going to spend time on.

Franchise and broker sites need to keep the following point in mind as they work to deliver their own property search websites. To compete online, you must offer consumers the same or better information than the third party websites that consumers are using.

Third Party Search Interfaces

One common theme you will see across the numerous third party sites is the use of very simple search interfaces. Anyone can go to these sites and find properties. What this means to the consumer is "no frustration" and success in finding listings.

Comparing Search Results – Franchise/Broker/Third Party Sites

As WAV Group researchers began the process of understanding the consumer Property Search Delta, we chose to look carefully at both the user interface that the consumer experiences, as well as the field level data that gets returned with the search. To begin our review, we searched Edina, MN, for single family properties in the $300,000-$400,000 price range. We were careful to omit foreclosures, FSBOs (for sale by owners) and other apparently non-broker, non-agent represented listings. We used three third party sites — Trulia.com, Zillow.com, Homefinder.com, and one local real estate company that we confirmed to have accurate MLS IDX listing information, Edina Realty (edinarealty.com) — for our initial comparison. The results are very interesting.

Each site was easy to use and each site had a very nice representation of the listing data. Our first significant observations were the Delta of listing count among the sites reviewed.

Third Party Website
Edina, MN
Single Family, Residential Search
Numbers found
on search

Why are the numbers different? What does this mean?

If you were the unsuspecting consumer looking at these examples, you might believe that the Homefinder.com site with 137 homes is the best site because it shows the most number of listings. Trulia would come in second, showing 53, Zillow shows 49, and edinarealty.com shows 41!

We know that the data on edinarealty.com comes directly from the MLS database, and that data is controlled by very strict rules and regulations that ensure properties are reported when they are sold, or expired. So why are the numbers different? We can’t say for sure within the scope of this paper but it would appear that there may be data on these third party sites that is no longer active but still shows as being active. Consumers most likely will not know this and may be very disappointed to find out the home of their dreams, found on one of these third party sites, was sold several months ago!

What Third Party Sites Do Really Well!

Third party sites like Trulia and Zillow came about for one simple reason: They saw a very definite consumer need and they filled it. They realized that consumers want and demand more information and transparency in everything they do, and that includes home search. The real estate industry, on the other hand, tried very hard to circle their wagons around their MLS data and channel consumers to agent and broker websites only. Consumers gain access to MLS IDX data through broker and agent websites and Realtor.com, the only national IDX property search website.

MLSs often see consumers as customers of their participating brokers and subscribers, not as end benefactors of high quality MLS listing content. Some progressive MLSs did create MLS public websites that allowed the general public to search for listings directly, but these sites remain controversial as brokers often feel they compete directly with websites that they have built themselves. The end result of these positions was the emergence of third party sites that recognized a strong consumer demand for aggregated property information along with a rich consumer experience. Brokers are now sending their listings to these competing sites on one hand and fighting against MLS websites on the other. This is a confounding paradox.

What third party sites could not do in data accuracy they did with flash and sizzle! Zillow came out with their "Zestimates," and anyone that tried that little tool knows that it is hugely inaccurate in many cases (Zillow transparently provides data on the measure of inaccuracy in each market). But it was cool! If a consumer got a value that was high, they loved it! If they got a value too low, they didn’t, but they still talked about it and soon everyone was trying it. Consumers liked it.

The third party sites didn’t stop there; they added sold property information from public record information. MLSs traditionally do not allow brokers or agents to display sold data through IDX, though that rule is changing today in many progressive MLS areas. MLSs who do not allow brokers to publish sold listing data may want to be considerate of the impact that this rule has for brokers competing against third party websites online. Even if your rules do not allow the publishing of MLS sold listing content, allowing brokers to comingle active listings with public record data would also allow brokers to compete with other third party sites.

Third party sites also added neighborhood information and other fun facts important when considering a home sale or purchase. These third party sites knew how to "dress things up" for primetime. In our appraisal, third party websites provide an excellent search experience and should be commended for raising the bar for the whole industry. Again, like the rules against displaying sold data or comingling public record data -- some MLSs have IDX rules that prohibit the broker from comingling neighborhood information with IDX listing content.

Part II of this series will be published tomorrow.

WAV Group provides professional consulting services to the Real Estate industry. Our firm helps Multiple Listing Services, associations, real estate firms, franchise organizations and technology vendors in the US, Canada and Europe reach their business goals. Whether it is a vendor selection and implementation for a real estate association, assisting a technology vendor develop a better user interface for their product or conducting research to determine member or client issues, WAV Group always begins with a clear understanding of the needs and objectives of the customer as well as the end user.  Our team can help you outline a new strategic direction for growth, product or service improvement. We can help you better understand your member and clients needs by proven research methodology. We can assist you to make wise technology decision and stay with you and drive implementation. In short, we work with your organization to help you successfully reach your specific business objectives!

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