Brokers war over Web listings
By Mary Umberger and Geoff Dougherty
Chicago Tribune
CHICAGO — When Kate Foster went condo shopping online, she was surprised she had to hunt through eight brokerage Web sites to find what was available.
Some sites would e-mail her about one new listing when she knew that 10 new properties had just been posted elsewhere. Others delivered announcements of "new" listings she had gotten a week earlier from other sites.
"When you're buying a property in Chicago, a week is everything," said Foster, a 23-year-old commercial property manager.
Foster's condo search ended happily. But she still wonders why she had to work so hard.
Real-estate listings used to be closely guarded by agents, who had a near monopoly in the business of uniting buyer and seller.
The Internet promised to make house hunting easier and faster. To a large degree, that has occurred. Search engines at Web sites allow consumers to look for properties by neighborhoods and ZIP codes, by number of bedrooms and price range.
There are also photographic "virtual tours" that provide a peek inside some properties.
But the power of the Internet also has helped fuel a war among brokers over control of real-estate listings, including the timing of postings and their exclusivity.
Although 71 percent of all home buyers use the Internet at some point in their search, according to the National Association of Realtors, the thousands of publicly accessible real-estate listing sites have become a Wild West of inconsistency and confusion.
Some brokers ensure that their properties are listed far and wide while others guard them like maps to treasure.
Smaller brokers may decide not to list their properties on their own Web sites. An agent may decide that he risks losing part of the commission on a property if he allows it to be listed on another broker's Web site.
Despite the practical factors involved, there is one overarching explanation for the halting flow of information.
"When you have the best properties on your Web site and nobody else does, you're going to sell a lot of property," said Steve Cook, spokesman for the National Association of Realtors.
The situation has been further fragmented by developments at MLSNI, the nation's largest multiple listing service.
Last spring, brokerages Coldwell Banker, Koenig & Strey GMAC and Baird & Warner yanked their North Shore, Ill., listings from the multiple listings service and placed them exclusively with MAP MLS, a much smaller rival based in Palatine, Ill.
The brokerages said MAP's policies give brokers control over the outside use of the data.
The move further scattered the collection of real-estate listings data, exposing some homes to a smaller group of potential buyers. At the same time, it shielded some brokers from competition for the commissions that come from selling those homes.
And there is more controversy afoot.
In 2003, the National Association of Realtors attempted to impose some order on its members' online listings. Traditional brokers were riled up about new, Internet-based brokerages that were taking their listings, placing them online and collecting a discounted commission.
Premier among them is ZipRealty, a California-based company started in 1999. Zip promises to cut commissions up to 25 percent by relying on an efficient Internet-based approach to the real-estate business.
The firm employs more than 600 agents, and took in $33.8 million in revenue last year, primarily from sale commissions. Zip operates in 12 metropolitan areas, including Chicago.
"Obviously, the established industry wasn't and isn't enamored of those new firms, and that's putting it politely," said Steve Murray, an industry consultant in Littleton, Colo.
The traditional brokers wanted, and got, a policy change allowing them to prevent particular competitor Web sites from using their listings. They reasoned that their inventory should not be used to subsidize the lower-overhead operations of online firms and of smaller firms in general.
The online and discount operations have said an opt-out rule would force them out of business — that they cannot compete without full listings access.
Murray agrees.
Within five years, he said, "You could have three to six brokers in a given market that would have most of the listings, and they would simply cut everyone else out."
The policy is on hold for now, as the U.S. Justice Department investigates whether the practices violate fair-trade laws.
As the brokers wrestle over listings, Cook said it is important to realize how far the industry has come in recent years.
"It wasn't so long ago that the entire real-estate industry was scared to death of having this information out there," he said. "As time has passed, we're seeing more data each day than we were seeing yesterday."
