I am an active user of the IDX system to generate new business and have been for over a decade. I have significantly invested time, innovation, creativity and money in both my personal real estate website and our brokerage sites to drive new business. We are not “listing aggregators” selling leads to buyer’s agents. We are a brokerage company of REALTORS® providing real estate brokerage services to both buyers and sellers. Don’t confuse “aggregator” platforms where you pay for advertising with brokerages and REALTORS® themselves using IDX—they are not one in the same.
Recently, real estate franchisor Realogy proposed a change to the IDX rules regarding the display of listing brokerage and agent contact information. I believe the National Association of REALTORS® (NAR) Multiple Listing Issues and Policies Committee and the NAR Board of Directors should reject this proposed policy change.
I have read Realogy’s proposal, including their rationale, and numerous articles on the topic. I am aware that currently the IDX rules require the listing firm to be displayed. I take no issue with this rule; I consider it the same as a photo attribute one would give when publishing a photo owned by someone else.
While I can, point by point, argue Realogy’s rationale, to minimize the length of my comments, I will focus only on a few main points. To be very clear, I am pro-consumer. Our job as fiduciaries is specifically to protect the consumer through reasonable care and loyalty, and I believe that reasonable disclosure when in contact with a consumer, especially regarding agency, is critical to the viability of our industry. The framing of this issue as “pro-consumer” is troubling to me as those opposed can be labeled anti-consumer, anti-transparency or anti-innovation. I reject those labels outright and will not be distracted by such efforts to quash reasonable debate.
First and foremost, this proposal would have the direct effect of mandating that users of IDX prominently and equally display the name and contact information of competing brokerages and agents.
I can think of no other industry or trade organization that mandates competitors to clearly and prominently advertise each other. This change literally means that every franchisor and brokerage with a website connected to IDX will now be compelled to prominently advertise their competitors on said websites.
With all the talk of anti-competitive business practices, especially with concerns expressed by the DOJ, and the need to preserve competition to drive higher quality service and innovation, this one seemingly simple and innocuous change completely alters the competitive landscape, giving franchisors, brokerages, teams and agents who list more properties a tremendous advantage over those who do less. I have trouble thinking of something more anti-competitive than this proposed change. Are you specifically trying to drive brokerages and agents that don’t list significant numbers of properties out of the business? This change is certainly a step in that direction.
Supplementing this first point, this change will not happen in a vacuum. There are likely a million or more REALTOR® IDX websites and thousands of website providers. Very few are “aggregators” selling leads—a great majority use the system exactly as we do, to advertise for and generate new business. Each brokerage and REALTOR® would have to incur both time and monetary cost to implement these changes. The total costs of these changes across all IDX platforms and providers could easily reach hundreds of thousands or more. Again, these costs will be much more easily borne by larger, more well-funded companies, putting others at a competitive disadvantage.
Second, IDX has been the key driver of REALTORS® creating a broad real estate marketplace that is beneficial to consumers.
This argument is critical to the value of a REALTOR® and to the rationale behind earned commissions. With a simple search, in a typical area, homebuyers and sellers can find literally anywhere from dozens to thousands of options to search for homes and seek real estate brokerage services. This huge marketplace, while arguably suffering from some lack of standardization that harms some development of new technologies, helps consumers find the best options for their representation needs and offers sellers tremendous exposure to seek the best possible price and terms.
Demotivating brokerages and agents from using IDX because it now becomes an advertising platform for your direct competitors stands to harm this large, diverse marketplace.
Third, a specific issue Realogy claims is being solved is that the listing agent is the authority on the property for a variety of reasons, and the consumer should be allowed to choose with whom they interact.
Nothing in the current IDX rules prevents the consumer from choosing how they wish to interact with the property. In fact, today, it takes very little effort for a consumer to find the listing agent’s contact information, if they so choose. In the worst-case scenario, they would have to either drive by the property to look at the yard sign or look on realtor.com® or Zillow, none of which is an unreasonable burden on a consumer who wishes to only interact with the listing agent, and certainly no reason to force a massive change to current business practices onto the market. Ultimately, we are talking about a convenience to some consumers, not an impossible barrier to finding listing agent contact info.
Supplementing this third point, two words not mentioned at all in the Realogy rationale are “agency” and “representation.” I find this to be a gross omission from the rationale behind the proposed changes and a disregard for the true legal options available to a consumer. While Realogy opines that the ultra-competitive market is another reason to display the listing agent’s contact information, it completely disregards the value of a buyer’s agent in that same ultra-competitive market where a buyer may, more than in any other type of market, need proper and exclusive representation.
Advertising, whether marketing a listing for sale, or marketing your services as a listing or buyer’s agent, is just a component of your legal and ethical obligations. IDX has traditionally offered brokerages and REALTORS® a low-cost, sticky, easy-to-implement method of advertising all services available to consumers, including buyer’s agency. It has had the secondary benefit of allowing room for competition, innovation and creativity by giving brokerages and agents a great tool to offer value to the consumer (listings and property data through IDX), while balanced with a reasonable attribution of the source data. The proposed change, while great for scaling tech and a convenience for some consumers, greatly diminishes the value of IDX to brokerages and buyer’s agents seeking new business.
In addition, Realogy’s arguments seem to focus on this mystery “listing aggregator” from whom buyer’s agents buy leads. Are they referring to Zillow? BoomTown? Some other service? I can only guess. However, my use of IDX as a REALTOR® and as a broker/owner is not to “aggregate” listings to sell to any random buyer’s agent. It is to generate business for our agents—who have, for decades, faithfully paid dues and been members of REALTOR® organizations. We are not aggregating listings to mislead the consumer; we have a legal and ethical obligation to disclose our true position in any transaction, and we do so.
Listings are simply the very best way to attract the attention of both buyers and sellers to then have an opportunity to offer our services. To imply that we are somehow purposefully misleading the consumer or otherwise acting to harm the consumer as users of IDX is another gross mischaracterization by Realogy’s rationale.
Finally, who is harmed and who benefits from this change? While we could all be naïve and hope Realogy, and others, are just simply trying to help the consumer through transparency or data streamlining, all that matters from a business perspective is where that consumer lands in the process. And where the consumer goes, so goes the money. Could or would Realogy benefit from this change as proposed? Absolutely. Co-opting all of your competitors to prominently advertise your listing agents is a stunning and disproportionate benefit of this proposed change. Other larger organizations will benefit as well. It’s the smaller brokerages and individual REALTORS® who will be the biggest losers, now having to decide between using IDX—the best possible REALTOR® advertising tool—and directly advertising your competitors, or not using IDX and losing any benefit afforded by the platform.
For consumers, will they benefit or be harmed? A consumer who, for whatever reason, wishes to communicate directly with a listing agent will find it much easier to get said agent’s contact info. However, how hard is it to find such info now? And for Realogy’s contention that consumers are deceptively directed to advertising agents to be true, you would have to accept the fact that the advertising agent is failing to properly disclose their role in the transaction to the consumer—another issue wholly unrelated to this proposed change.
Can consumers be harmed? Definitely. Removing a pathway for a consumer to find and secure a buyer’s agent who is obligated to protect their best interests can certainly result in harm to the consumer. By this proposed change, are listing agents now going to be making sure buyers are fully protected in a transaction or are they still going to be obligated to protect their sellers?
By the exact same argument that consumers are harmed by being unknowingly directed to an advertising agent, consumers will be directed to a listing agent whose legal and ethical obligations begin and end with protecting the seller, with limited exception. That, too, is a pathway to harm for the consumer.
As it always does, it comes down to what an agent says to a consumer when in contact. Does the agent properly disclose their status as a listing or buyer’s agent, or not? If so, then the consumer will be properly informed. If not, then the consumer may not understand or receive their full legal and ethical rights and be harmed regardless of what contact info was found on an IDX feed.
Realogy’s argument is thin on facts, data and rationale for such a significant, consequential change. In fact, it appears to purposefully obfuscate the use of IDX, for example tying it to aggregators selling leads, which is claimed to be harming consumers, to generate a visceral response to support the proposal.
What about all the brokerages and REALTORS® properly using IDX, properly disclosing their status to consumers and actively contributing to our massive, diverse marketplace through IDX, providing tremendous value to both buyers and sellers?
It’s no small change to force an industry, let alone one as significant as the business of real estate, into a business practice that clearly undermines the competitive nature of the business and weakens the position of the thousands upon thousands of smaller brokerages and individual REALTORS®. This change of forcing us to prominently advertise each other does just that and for this reason alone should be rejected in full. I sincerely hope that the NAR Multiple Listing Issues and Policies Committee and the NAR Board of Directors will carefully consider these comments and reject the proposed change.
Joe Hayden is the principal broker/owner of RE/MAX Properties East in Louisville, Kentucky, and owner of RE/MAX Advantage in Floyds Knobs, Indiana. He’s a member of the Greater Louisville Association of REALTORS®, having previously served a term on the Board of Directors, the Southern Indiana REALTORS® Association, the Kentucky Association of REALTORS® and the National Association of REALTORS®. Hayden has also previously served as a commissioner on the Kentucky Real Estate Commission.