The big winners of syndicating real estate listings are the syndication sites themselves. Secondarily, buyer agents and new agents also benefit from the lead generation aspect of the advertising they are able to do without having any listings themselves. This is a huge change from the rules that have governed advertising in the past when print media was the mainstay for realtors. Rules regarding advertising a home by someone other than the listing agent require that the advertising agent receive written permission from the actual listing agent.
Contrasting print media, online syndication sites have little oversight and the listing agents have no input as to who is advertising next to their listing. Zillow reports that it generates 90% of its revenue via advertising local agents that are presented in each zip code across the country. There are 42,000 zip codes in the US alone. Multiply the number of zip codes by the average cost per advertising in a single zip code ($150 per month) multiplied by the number of advertisers in each zip code (10) and the big winner is the syndication site that is capable of generating $63,000,000 a month.
After seeing the numbers it is not hard to imagine that a listing agent would want a piece of the pie that they in fact helped to create by their hard work and creativity. Writing copy for the listings, having photos taken and collecting and compiling the information associated with each listing requires a substantial investment of time and money. The listing agent receives no compensation from the syndication sites or the data aggregators that generate their revenue by selling the data to the syndication sites.
Listing brokers such as those in Austin, Texas that are now joining together to stop the perceived theft of their intellectual property are also seeing less return on their investment. The cost of advertising a listing has not gone down while the potential of capturing both sides of the transaction have been significantly reduced. “Dual agency” is the term used when a real estate agent represents the buyer and the seller and it is mandatory to inform the buyer in writing that the dual agent has a fiduciary responsibility to negotiate the best price for the seller. Reducing the opportunity to capture both sides of a transaction is built into the pricing of the services rendered by the listing agent. Remove this possibility and the equation changes significantly.
The buyer brokers and new agents are the next to benefit from the syndication of the real estate listings. By advertising alongside real estate listings in their area they are often confused with the listing agent and are contacted by a home buyer interested in a particular property of which the real estate agent in most cases knows nothing about other than what the home buyer knows by looking on the same site. This is a windfall for the buyer broker and the new agent, both of which have little to no inventory of their own. Syndication sites are a very effective way for buyer brokers to advertise and this is made all that much more important by the fact that local newspaper readership is down 70% over the past 6 years.