Commentary by Saul Klein
With the success of major real estate search portals in attracting consumers, comes a certain amount of dissatisfaction around their business models and use of the data they receive from industry sources—MLSs, brokers and agents. The real estate industry is awakening to the idea that there may be more value attached to listing information than originally contemplated by industry leaders. Data begets data, and the behavioral data created when consumers search listing data also has a market and value. The industry data monetization idea is also fueled by conversations around derivative works, primarily AVMs (automated valuation models) and insurance company data uses. If you align these thoughts with the valuations of the publicly traded stock of some real estate portals, it’s apparent that somebody is seeing something the rest of the industry must be missing. An example is Zillow trading at 300 times its earnings, while Apple trades at 10 times its earnings.
That was then, this is now.
As brokers, agents, MLSs and associations begin to ask the hard money questions, we will see great push back from the entities that have invested hundreds of millions of dollars with the intent of creating commerce around your listing data. These companies already believe, or claim, that they are providing adequate value in return for the listing data provided to them by MLSs and brokers. But are they? Or are you sacrificing the future of your real estate business for a few sales today?
The value proposition offered by portal sites must be re-examined and re-evaluated. Why should the destination sites reap the monetary benefits of the hard work of the army of REALTORS® who toil in the marketplace every day to obtain the listings (and who don’t get paid unless—and until—the listing sells and closes)?
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