Battle for Listings Between Realtors and Zillow Group Set to Intensify

By: Jann Swanson •

There appears to be a battle in the making between Realtor.com, which has provided on-line nationwide residential listing information since the Internet was only a novelty and upstarts Zillow and Trulia.  Both companies have made their own radical changes in the last six months with Realtor.com operator Move Inc. being sold and Trulia merging into Zillow.

Realtor.com's relationship with the National Association of Realtors has always been a bit opaque.  Starting in the mid-1990s Move Inc., then called RealSelect but operating principally as Homestore (remember those glass boxes with home listings scattered through airport concourses?) began managing listings of Realtors nationwide. 

In 1999 the company went public, raising $140 million with NAR holding a significant position and Homestore negotiated agreements with hundreds of MLSs and brokerages to secure direct feeds of listings.  In 2010, now named Move Inc., it acquired ListHub which provides MLS and real estate agents with a listing syndication platform.

When Rupert Murdoch's News Corporation announced its acquisition of Move Inc. last September, closing the transaction in November, it was unclear whether NAR was still a stockholder.  It owns the Realtor.com domain, however the site accepts listings from non-Realtor agents and Move Inc. appears to have operated it independently through an agreement with the REALTORS® Information Network, a NAR subsidiary.  NAR did have to sign off on the News Corp acquisition and said at the time that its two seats of the company's board of directors would continue under the new ownership.   

Meanwhile, the sale of Trulia to Zillow, a $2.5 billion stock-for-stock acquisition, is scheduled to close on February 24.  Last week things started to get a little ugly. 

REALTOR magazine, which is owned and operated by NAR, said that ListHub (the Move Inc. /News Corps subsidiary that provides list syndication services to Realtors) would no longer send listings to Trulia effective February 26 and Trulia will be removed from ListHub's publisher choices dashboard.)  ListHub cited the Trulia acquisition as terminating their relationship.   

ListHub also announced that its relationship with Zillow would expire on April 7 and that Zillow had chosen not to renew it.  For its part, Zillow has filed for a temporary restraining order to force ListHub to continue serving Trulia under a contract which does not expire for more than a year.   Apparently Zillow needs the time to complete transitioning to its own new "Data Dashboard" service through which it hopes to receive more listings directly from MLS and from brokers.    

While the three soon to be two, aggregators seem to be preparing for battle, it is going to be waged against a backdrop of growing unrest among the actual owners of the listings, the Realtors themselves.  Announcement of the New Corp acquisition was accompanied by a lot of dismayed comments from agents, some were unaware that NAR had not been owning and operating Realtor.com all along, and others who expressed displeasure about all three listing portals. 

These fell into several categories:  

  • The money private companies (including Zillow and Trulia) were making off their listings which included selling back leads.
  • The manipulation of their data. This included both ways in which it was being used such as allowing paid-for listings to pop up first in searches, delaying new listings for many hours, permitting another agents face to pop up on a listing.
  • A high error rate
  • Allowing non-realtor members to display listings, especially on the Realtor.com site.

According to an October 2013 article in Realtor magazine some local associations are beginning to take action, converting their existing member sites to public listing portals.  In San Francisco, for example its Association of Realtors offers only Realtor listings on a locally focused platform without competing advertising and does not sell leads. The site also proves local data such as neighborhood descriptions, crime states, and school district boundaries and had plans to expand listings to other Bay Area communities.   Other local portals have recently sprung up in Charlotte, Houston, and in Tennessee.  The Houston portal claims to attract more unique monthly visitors than any of the three major aggregators.

Local associations face a lot of problems in trying to compete with the aggregators.  For one thing, establishing a portal is expensive but two new platforms are making it more cost effective.  One, from Point2 Technologies, is cited in the article as making San Francisco's effort possible.  The second one called Spring, offered by Solid Earth, makes the private data platform used by members to list properties into a public facing platform.  Solid Earth is specifically marketing its product as a challenge to Zillow and Trulia.  

Potential portals don't always have support from local Realtor association members either.  Many firms, especially larger ones, feel they would provide competition to their own sites and level the field with smaller brokerages. 

Perhaps the acquisition of Move Inc. and Trulia, especially if accompanied by a battle for control of the market, will finally prompt large numbers of Realtors as well as the historically fragmented multiple listing organizations, to realize that their listings have some real value.  Then the situation could indeed get very interesting.