Are you having trouble making money using the Internet?

If you are reading this story, chances are that you own a Web site, or that you have purchased a Web page so that you can have a presence on the Web. But the chances are just as good that your Web site has failed to bring you a single customer. Why? You don't have the one thing the Internet-empowered consumer wants to see - listings. Why not? You're been hamstrung by the very people who should be making it easier for you to make sales - your broker, your Realtor association, your MLS organization, and the National Association of REALTORS. It's time to rethink the traditional brokerage agenda and how it hamstrings all agents, including their own, on the Internet.

The large listings services, Realtor.com, Homeadvisor.com, Homeseekers.com, Cyberhomes.com, Homes.com and others, have competed bloodily for listings dominance in the belief that the organization with the most listings will emerge sovereign in the online real estate category. Why? Internet consumers want to see listings first, and then meet agents second.

There's nothing new about this concept, except that agents are supplying the listings and getting the Internet shaft when it comes to getting the leads.

Agents have been advertising their listings in newspapers and homes magazines for decades. They get a call when a buyer is interested in seeing a particular home. This is an ideal way for brokers to market who want to work both sides of the transaction, using the listing as the hook to get the buyer to call. Most of the time the broker pays for the advertising of listings in a limited number of venues, but when it comes to the Internet, the agent incurs the costs of self-promotion and the promotion of listings in the thousands of dollars. Yet, they don't own the listings, the broker does, and that's where the agent is vulnerable.

The Internet works differently from other media. These large organizations have created repositories of listings from various sources in order to build critical mass which they then leverage by selling services to the Realtors who supplied them with the listings in the first place. Lots of listings means lots of traffic and lots of traffic means lots of opportunity for Realtors. Most of these companies either offer free Web pages (and upsell the agent to upgrades) or they offer pay-to-play Web pages and sites so that the agent can capture leads off the traffic volume generated by the sites.

Sound good so far? Here is where it breaks down. Only agents who have listings benefit from this exposure. If you are sold out of listings, or you are a buyer's agent or a relocation agent, you have nothing in your basket to sell, no listing on which to piggy-back, or to attach to your web site or vice versa. Your Internet marketing has just stalled.

The aggregators have fueled an appetite in the online consumer for more. Consumers aren't happy going to an agent's site and seeing only a few personal or company listings. They want the whole enchilada - the MLS consumer database for their community.

So your marketing has to revert to plan B - getting found by consumers who are looking for agents via search engines. That's not going to work as well because first-step buyers want to see homes, not look at agents, and the closing rate of agents online is the same as offline. Buyers overwhelmingly hire the first agent they meet. Online, that is the listing agent on the listing they want more information about.

If an agent is dependent on having a buyer find them on the Internet, that is akin to finding a needle in a haystack which brings the story back to its incredible Catch-22. Without listings, agent Web sites are next to worthless. And with so many companies vying to give agents a "Web presence," word is beginning to get around among the agents. The Web sites don't work unless they result in leads, and where do the leads come in - from listings.

If agents were empowered with listings, their own and others, perhaps framed on their Web page or site by their favorite listing service partner, they could turn the same static Web site into a dynamic marketing tool. Only they can't. Their brokers won't let them.

The Broker

Most brokers pay lip service to wanting to put their homes on the Internet, but if that were really true, they would be doing everything in their power to give their listings to other brokers to advertise, as well as offer the listing to as many of the national listing services as possible. It's called Broker Reciprocity. But they don't. Some believe they have the Internet covered by participating in the Gold Alliance program in which they only allow Realtor.com to publish the listing. Some believe that by voting to restrict the MLS from allowing its own members to publish listings on their personal Web sites that they are hurting their competition, and they are. But what goes around, comes around. Their own agents are being hurt, too, because they can't act as buyer's agents when they have nothing in their own baskets to sell. Does posting just the broker's listings help? No, we already covered that - consumers want to see multiple listings. How long will any consumer stay on a site with only a handful of homes in their price range or neighborhood when they are only a click away from another site that can offer tens of hundreds.

No, these brokers have a secondary agenda. First, they own the listing, because the agent contracted the listing in the broker's name and the broker is assured of a piece of the transaction when the home sells. But before the home sells, it has a very real value as a commodity that profits the broker beyond the seller's commission - brokers can be paid for the publication of the listing by the site partners before it is sold in cash and in some cases, stocks. In one of life's unfair twists, the agent of the broker gets no commodity money, and this is only the first example of where the agent gets the shaft. Third, the listing can be used to control market share, if only a street at a time, by limiting other brokers' access to it.

The MLS

The MLS is a cooperative of brokers that enable competitors to make sales with and for each other. MLSs are either operated by or directed by local Realtor organizations which are made up of brokers. Under the direction of the majority, the MLSs will allow the repository of the listings to be used for the greater good of the voting membership. But the greater good invariably turns out to be what's good for the brokers, not their agents.

MLSs could empower all agents at the local level by allowing them to post not just their own, but everyone's listings on their personal Web sites, but most MLSs prohibit the listings from benefiting individual members, despite the fact that all members pay an equal amount of money to access the MLS database and that broker reciprocity depends on agents outside of the brokerage to sell most homes.

But there's more than one way to go around that obstacle. What about allowing the listings partner such as Realtor.com to frame the listings for the agent? ( Framing is a method of posting data from one Web site onto a section of a second Web site, while the first site maintains and controls the integrity of the data, as well as captures the click-throughs.) Realtor.com would love to do that as a way of leveraging the incredible critical mass of listings they have accumulated and turning it into a revenue model. A regional sales manager with

A Realtor.com regional sales manager told this reporter that he could sell Realtor.com framing all day long - that agents are begging for it. But his hands are tied by none other than the National Association of REALTORS, which has expressly forbidden Realtor.com to do so. Why? Because the N.A.R. is made up of brokers.

The N.A.R.

The N.A.R.'s reasoning, according to this insider, is that the individual agents may not have permission to "advertise" the listings of other brokers, because they have no control over how those listings will be presented. Horse pucky. Couldn't this problem be handled with pre-approved vendors at the local level? Can the MLS be empowered to speak for the broker community and those who do not wish to share their listings on the Internet, don't have to. But for those who do wish to share, can't the MLS be empowered to give permission to the listing site partners to frame the listings for the individual Realtor who would like something in his or her basket to sell?

The value of the listing has been bent to benefit the broker, instead of the broker benefiting the listing, and this goes all the way to the top - the National Association of Realtors. But the fall-out of this self-serving chain-of-command is only just beginning to be felt.

By putting the brakes on Realtor.com, the organization may be not only hurting the online marketing efforts of its own membership, but it is also hobbling its own cash cow. A board member from a mid-size California real estate association with about 1,100 members admitted that despite a heroic sales effort, Realtor.com has only been able to sell 44 i-LEAD pages in its market. What makes that figure so astounding is that the MLS is a Gold Alliance member. The reason that the i-LEAD pages aren't attracting agent buyers, according to him, is that the agents don't understand the value of placing a page next to a listing, without being able to do the reverse - put listings on their Web pages.

When asked if this were true in his market, too, the Realtor.com regional sales manager didn't deny it. "Buying a Web presence is what we sell," he said. "But we're finding that isn't enough to make the sale. The agents want to know how they are going to get leads from it."

In other words, Realtors want to be in more control of their marketing, particularly when they, not the brokers, are writing the checks. In his analysis of Homestore.com, Thomas Weisel Partners, L.L.C. analyst Jim Fowler suggested that "In our opinion, the best and most economically efficient manner for a Realtor to keep up with the significant changes underway in their industry is to become a customer of Homestore.com. It is incumbent upon management to align themselves with these Realtors and offer them products that will enhance the consumer experience."

Too bad Realtor.com is prohibited from doing just that, because its competitors aren't so encumbered. Homeseekers.com has a program that has proven very popular with agents in which all the local listings are shared. The CityNet feature puts the listing first, and the broker's and listings agent's information second. The listings are framed on the Homeseekers' customer's site, giving any agent who wants to take advantage something in their basket to sell and a lead capture tool. Would you like to see this listing? Cyberhomes, a VistaInfo subsidiary, is working on developing a similar feature for its database; coupled with the National MLS database platform, that could make VistaInfo a much more serious competitor to Homestore than it has been in the past. Homes.com and Homeadvisor get their listings direct from cooperating MLSs, feeder companies, and from brokers and agents.

Move.com is in a unique position of strength to take on Realtor.com. While it is under contract to share listings with Homestore for another two years, that arrangement could be leveraged to Move.com's advantage even more when the contract runs out. With three of the largest brands under the Cendant/Move.com roof, the companies could easily form their own pre-MLS. By enabling their agents to post listings directly to the Internet, brands such as the Cendant brands, RE/MAX and Prudential can easily outrun and outwit the slower MLS-bound systems, giving them faster, cleaner inventories of listings. By having a critical mass of listings because of brand loyalty, they are also capable of hurting the independent brokers in their markets.

So far the brands have not used the advantage of speedier, fresher, and more accurate listings, and they have stayed out of the listings wars, but they won't much longer. They have leverage, and no reason not to use it. So it all goes back to the individual broker. Where should their loyalties lie? To self? to the N.A.R. and its partners? to the franchise brand?

What about the agent? No matter what the revenue model is for the broker, MLS, the brands, or the N.A.R., nobody is going to meet their Internet goals if the individual agent can't make money on the Internet. Agents are spending too much money trying to conquer the Internet and they aren't getting the results they were hoping for. The deck's too stacked against them.

Brokers, it's time to take off the handcuffs and free your agents to make money on the Internet.

Start with your own MLS and vote for broker reciprocity. Preapprove the vendors so the brokers will retain control over the integrity of the listing information. Keep the listing broker's name and contact information on the listings.

Let your agents publish all the MLS listings on their Web sites. If you allowed a large listings service to publish your listings for your own personal profit, you should do the same for your own agents.

What goes around will come around, and the agents will be the better off for it.

Published: June 13, 2000

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