I know “Canadian lawsuit” is a phrase that usually makes my attention wander, but if you’re a homebuyer, real estate agent, or in the publishing industry, there’s one Canadian lawsuit out there that might affect your life. The history is a little complicated, so grab a cup of coffee while I give you a little background.
If you’ve bought a home in the last few years, chances are four out of five that you’ve used the Internet. It’s a source for information about neighborhoods and a way to check out the background of a real estate agent. Most importantly, it’s a way to look at real estate listings.
Now, the fact that you can get started looking at photos of homes with just a click of the mouse has lead to earth-shaking consequences in the real estate industry. I’ve only been an agent for a few years, but my boss, who remembers the days when listings were kept on index cards, says that it’s both easier for him to help buyers (he has access to a larger pool of potential inventory, so he can offer them more choices) and more difficult (you’re not necessarily dealing with a few other real estate professionals who you know and have built long-term relationships with, but have to go through the luck of the draw, re-forming relationships each time).
However, regardless of whether the computer is “good” or “bad,” as a tool for house hunters, it’s where we are. What’s happening now is a HUGE battle to be the first to get those house-hunter eyeballs.
Traditionally, local listings have been controlled by local real estate boards through Multiple Listing Services. An MLS would allow realtors to share information such as status changes, and a number of MLS systems across the country allow public search, so that consumers can see what homes are available. In addition, a consumer would often use the classified advertising section of their local newspaper as a search resource, providing a revenue stream that helped support their journalism.
As technology moved forward, we got new classified systems — think craigslist — as well as sites that would aggregate already existing listings and present them in different — ostensibly more “consumer-friendly” and “unbiased” — form.
Zillow and Trulia, the two biggies, both started in 2005. Google — maybe you’ve heard of it? — offers listings aggregation through Google Maps. Yahoo! (which until earlier this year was run by Susan Decker, a former equity analyst who had expertise in newspaper classifieds and must have seen where that industry was going) has realestate.yahoo.com, which lets you search more than four million homes.
Even WCBS TV, the New York City CBS affiliate and a cousin of the site you’re reading this on, has started offering “Eye on Real Estate,” which allows consumers to search homebuyer listings.
As a real estate agent (disclosure, I’m a member of the National Association of Realtors) I’m of two minds about all of this aggregation. On the one hand, I enjoy that my sellers get as much exposure as possible. It’s nice to be able to go into a listing pitch and tell a seller that their home will be on a website that attracts millions.
On the other hand, I want consumers to come to me. When data moves off my company website or out of my MLS, I lose control of it — not only in how it’s presented, which I care about as a marketer, but how accurate it is. Just because I update the source data doesn’t mean the aggregators update properly, and then buyers cuss at me that my listing is no longer available.
The aggregators really are in a no-win position vis-a-vis the real estate industry. If they extract our data exactly, we call them “scrapers” — which means they’re violating copyright, and that’s illegal. (According to the blog SearchEngineLand, this spring, the National Association of Realtors called Google a scraper.) On the other hand, if they build their own database from multiple sites, and layer in more information — well, they’re not always going to be accurate.
Now, this pot has finally come to a boil in Canada, with Garry Marr of the Financial Post breaking the news that Century 21 Canada, one of the country’s largest real estate firms, is suing Rogers Communications, the country’s largest telecom, for running a so-called scraper. The site, called Zoocasa, launched late last month as “home search with smarts.” According to Marr’s story, “sources indicate privately controlled Zoocasa is nearly 100% owned by Rogers.”
Century 21 is claiming that it spent millions of dollars to get listings data onto its sites and doesn’t want to share it without being asked. A Rogers spokeswoman, meanwhile, was quoted by Marr as saying, “we don’t agree with Century 21’s perspective on this.”
Keep your eye on this suit, as it will offer a glimpse of the future as far as who controls Internet home searching in the United States.
I’m also going to offer a prediction, that no matter who wins, we’ll see a counter-trend to take listings off the Internet. You heard me right: If I’m a salesperson who suddenly has millions of people stomping through my showroom, some of them asking questions about stuff I don’t even have for sale anymore, I’m going to keep the good stuff under the counter or in the back. How a real estate agent could build this “gray inventory” without violating her local board agreements remains to be seen — but dollars to doughnuts, or maybe I should say Zillow to zeroes, it’ll happen.
Let me know your thoughts in the comments below. I’m especially interested in hearing “shadow inventory” stories from buyers or agents.
