NAR has been selling all the listings Realtors provide to their local MLS systems for years. Obviously this is a huge data file and a profit-center for the association. Generally listings held by Realtors account for about 80% of the home sales in the United States, and while that's an impressive number, it misses the other 20%. These listings include new homes under construction and for sale by home builders, used homes owned by banks and municipalities, rentals, FSBO's (for sale by owners who don't want to pay a commission) and so-called “pocket listings” known only to a few real estate agents, and offered quietly. This week NAR has approved changes to its operating agreement that allow realtor.com to publish listings from sources beyond those provided by their Realtor members. In other words, realtor.com will attempt to offer “all the listings.”
Consumers have long been able to access more than just the MLS through a host of real estate resources anytime, anywhere, from their desktops or their smart phones, whether it’s information about a specific house or inventory level in their community. These varied sources of information often cause confusion as consumers come across data that’s incomplete, contradictory, outdated, or flat-out wrong. They may lead buyers and sellers to erroneous conclusions about a home’s value, the prevalence of distressed sales, or frankly what's even for sale in a given area.
I have had a rash of calls over the last month from consumers who have discovered a listing—one which I sold 3 years ago to an investor, and then listed for rent. It was rented almost immediately and the tenant is still there and happy with the property, but somehow the listing has reappeared as currently for sale in some web site—I know not which--and so my phone rings.
Maybe this is a function of “scraping,” in which unscrupulous computer programmers write code that extracts information from Realtor web sites. The problem with scraping goes beyond the unsanctioned taking of content. It creates mountains of online real estate info that’s obsolete and inaccurate. Even legitimate sites can end up with imprecise information.
The problem of “bad data” includes these cyber errors, as well as scammers who pick up a real listing and then run it elsewhere (think Craig's List) as being for rent by owner. These guys claim to be out of state property owners, they will mail you a lease and with your deposit in hand they will send you the keys. (Remember since they don't own the property, you really shouldn't expect the keys to arrive right away.)
Zillow, the well known real estate site has acknowledged issues caused by their “Zestimates,” which generally give consumers unrealistic ideas of property values. Zillow says they try to come up with credible data, but say their software cannot consistently determine the exact worth of properties in all situations and settings.
Internet real estate listing sites rely on data that usually comes from real estate agents (though sometimes by way of an MLS or syndicator). Almost all of the data Realtors put into their MLS sites is then “borrowed or sold” to third-party national websites. Changes to a listing made after the initial listing appear immediately in the MLS, whereas there is always a delay before these changes make it into the third-party sites—if it ever does.
Over the years, the NAR has invested millions of dollars in building information technology to give consumers online access to real estate information. With the new decision to be a data aggregator, NAR is looking toward the future and not at their members—even though these changes to realtor.com may have a substantial impact on NAR’s members.