The cat is out of the bag. Zillow has gone where no MLS has gone before. They have embraced the broker and agent demand for pre-marketing listings. They are entering a place where Zillow will have listing content before listings become available. Consumers are going to love it, brokers and agents are going to love it, and MLSs are going to hate it. The program is called Coming Soon, and allows brokers and agents to market listings on Zillow up to 30 days before publishing it in the MLS.
Clean lines and business rules are the cornerstones of the MLS foundation on offers of cooperation and compensation. Agents must post a listing into the MLS within 24-48 hours of completing the listing agreement. Uniformity is the practice of publishing a listing into the marketplace at a time when everyone can show the property. It is like the start of a race and every agent and customer is on the line at the same time.
Well, that is sort of true most of the time, but not really. REALTOR® Associations have long held the tradition of hosting meetings (with an intermediary in the room) where agents talk about upcoming listings and buyer needs before the weekly new listing broker open home tour. It is a condoned behavior that also stretches into the broker office meetings (no intermediary) and into Mastermind and Top Producer Clubs (typically no intermediary). There are even Coming Soon yard sign riders.
I bring up the issue of intermediary because Zillow is an intermediary, and an intermediary is important. If you don’t think so, ask a few MLS executives about The Sherman Act that prohibits price fixing, collusion to control the marketplace, and/or collusion to carve up the marketplace. Meetings of competitors are normally where violations occur. Think about the risk of pocket listings and listing clubs that have plagued our industry in hot markets. By my reading, placing a Coming Soon listing on Zillow would pass muster by compliance with The Sherman Act. There are plenty of brokers who publish Coming Soon listings in their back office that may not be as compliant without this Zillow feature – especially those firms that incentivize agents with premium compensation or benefits when selling company listings.
Did Zillow Do It Right?
First off, Zillow places the consumer at the top of their decision tree and is willing to take criticism from their paying customers (agents and brokers) whenever the consumer prevails. Consumers want the Coming Soon listings so they will get them from Zillow if they cannot get them from other sources. The Zillow auto-alerts for new listings will deliver the information to the consumer well ahead of the MLS compliant broker websites.
Secondly Zillow is addressing a need in the marketplace. For obvious reasons, MLSs may not fulfill this need. Some MLSs have created coming soon statuses that share information among its subscribers. Others have gone further to make that data available in data feeds that power broker intranet systems. But, none that I know have allowed the public display of coming soon listings. MLS Listings, Inc in San Jose, CA has a robust coming soon program but they have absolutely no intention of sending a coming soon listing to Zillow. Moreover, even if an MLS tried to do this today, it may take a year or years for the MLS Policy committee to update the model rules. Regardless – Zillow will be happy to take Coming Soon listings directly from the MLS or in the Listhub feed.
I doubt that Zillow made this decision over a cup of coffee. Rather, they surveyed consumers and asked their MLS and Broker advisory committee. They may even have done some A/B testing with consumers to make sure that they are delighted with the program. That is the way they roll. Their construct is the online version of putting a Coming Soon sign in the online yard. This is really nothing new for Zillow. Agents have been publishing coming soon listings on their site for quite awhile. This product launch simply formalizes the process.
Coming Soon is only available to Zillow Premier Agents and Brokers. In parlance, if you are not paying Zillow for online marketing today, you can’t participate. The leads go directly to the listing agent.
There is a requirement that the listing be converted to a For Sale listing within 30 days. In the press release, Zillow indicates that the listing is instantly converted when the listing is marked For Sale in the MLS. I think that this was a PR oversight because most data feeds to Zillow are from Franchises, not MLSs. Presumably they are indicating that the listing will display as For Sale when the data feed indicates that it is For Sale with the exception of markets where MLSs license data to Zillow for the purposes of Match and Append.
Zillow has a website about the program http://www.zillow.com/coming-soon/
What to do
There is little doubt that MLSs will be upset by this strategy from Zillow. Some may choose to educate their members on the challenges of pre-marketing listings. However, it may be in the best interest of the MLS to configure coming soon fields right away. This would allow the MLS to remain the central and authoritative feed source. This may also help resolve many of the Off MLS listing issues that have plagued some markets that are super short on inventory. It is better to be part of program than a critic who shouts from the bleachers.
Brokers are likely to shrug this off. This is not anything that is likely to cause a premium Zillow broker to withdraw the listing feed and cancel their agreement. If anything, this is likely to strengthen or induce more participation in their Premier programs. Remember that this coming soon feature is a filter. If you want to publish your listings as coming soon without being premier, do what agents have already been doing – Put a coming soon banner over the corner of the photos.
Franchise vs. Independent Firms
MLSs who fail to embrace these programs may be catering to franchise brokers by default. Since franchises have listing input that will support the feed of coming soon listings to Zillow, they may become the first listing source ahead of the MLS. The independents and Leading RE brokers will need to step up. And, broker website vendors. Listhub, Bridge Interactive, Real Estate Digital, and Point2 would be wise to create a coming soon listing input module ASAP if they want to stay in the middle of syndication beyond the boarders of the franchise and MLS programs.
Franchises will be delighted to accept coming soon listings. In fact, this may solve a problem for them. Not every listing makes it into the franchise solution every time. Some listings come and go so fast that franchisees forget to put it into the franchise system. This creates a horrible problem when it comes to ranking the top 500 firms etc. The Coming Soon solution for franchise firms also averts a dilemma with link backs. The broker is unlikely to be able to display the listings on their website (pesky MLS and IDX rules in most markets that require listings to go into the MLS in 24-48 hours), but the Franchise website has no such limitations. The URL link back to the franchise listing detail page is all set and ready to roll. Moreover, the new-listing auto-alerts and listing updates to consumers will be pushed out on Franchise Saved Search and Favorite listings (Zillow’s too) a month ahead of MLS and Broker solutions. The SEO experts are bound to fill their blogs with the impacts to indexing listings on Google. For the record, third party listing websites like Zillow, Trulia, Realtor.com, and Homes.com have already won this battle. Redfin and Zip Realty were making headway but they will fall back from this.
Zillow Moves Mountains
Zillow has the ability to move mountains in real estate in real estate. That ability is derived from 81 million consumers, 110 million property records, and nearly $5 Billion dollars of market valuation, and the listing inventory of all but a small handful of real estate brokers. They are going to use that ability to plow new inroads into the practices of organized real estate.
WAV Group has long advocated for organized real estate to become consumer-centric. As always, we will pay close attention to this development. I would suspect that Trulia will come out with a similar solution if Zillow has much success. Do not expect the same from Realtor.com. This is not in their wheelhouse. Likewise, Homes.com is less likely to launch a Coming Soon feature.
I look forward to seeing how this rolls out. We spoke to more than a few big brokers and big MLSs in the past few days about this. Change is inevitable in life, and this change like so many others will have its day. It will result in a new world that we will adapt to, or it will pass like a summer storm.