Will Delayed Marketing Strategies Lead to the Downfall of Listing Portals? Here’s What You Need to Know
As the real estate landscape evolves, the introduction of delayed marketing strategies presents both challenges and opportunities for listing portals. This nuanced shift raises a critical question: Will these new practices spell doom for platforms like Zillow and Homes.com?
The Shift to IDX Feeds
The focus on delayed marketing is not without reason. In 2023, Zillow shifted from engaging in individual syndication agreements with brokerages to utilizing IDX feeds, gaining direct access to listing data from MLSs. According to a report regarding the lawsuit filed by REX Homes, Zillow described IDX feeds as the "gold standard source of listings data." However, if the majority of agents and sellers opt for the delayed marketing route, the pipelines crucial for IDX feeds could see a significant decrease.
“This will for sure impact them,” states John Campbell, an analyst at Stephens. “But we’re still trying to gauge the real impact—are we talking a 1% drop or could it be as high as 40%?”
Navigating the New Normal: Will Portals Adapt?
As industry analysts weigh in on the ramifications, it’s crucial to understand how different MLSs are approaching the delayed marketing strategy. Each MLS has the authority to determine the duration for which sellers can postpone marketing their properties via IDX feeds.
Embracing Virtual Office Websites (VOWs)
Portals like Zillow and Homes.com are not without alternatives. Long before IDX feeds became the norm, Virtual Office Websites (VOWs) were the first foray into online listing data. Unlike IDX feeds, which are open to the public, VOWs require users to log in, offering access solely to clients associated with specific brokers.
The NAR FAQ notes that delayed marketing listings could be showcased via VOW displays. Importantly, MLSs are unable to block delayed marketing properties from appearing on VOW feeds, which provides a potential lifeline for listings portals struggling with IDX sufficiency.
A Quick Transition
Industry consultants are optimistic about portals adapting swiftly. “They could make the change in a heartbeat,” says John Heithaus, former CMO of Bright MLS. “If they decided to switch this afternoon, they could do so by the end of day, effectively bypassing the IDX hurdle.”
Analyst Ryan Tomasello from Keefe, Bruyette & Woods echoes this sentiment but adds a note of caution regarding the user experience. “The execution of these delayed listings must be seamless; if users encounter friction accessing VOW sites, that could impact overall satisfaction.”
The Landscape of New Competition
As traditional giants grapple with this regulatory shift, a new contender is on the rise. Compass, a vocal critic of commission structures, is developing its own consumer-facing listing portal. “They’re trying to pull consumers in by creating a sense of exclusivity,” states Heithaus. Yet, taking on Zillow presents a monumental challenge. The preeminent portal continues to dominate the real estate search landscape.
Treading Through Impending Changes
While the real estate sector is rife with uncertainty in the wake of these changes, not all brokerages have the appetite—or resources—to develop their own listing services. Some may opt for independent agreements with established portals, posting listings contingent on seller permissions.
The Consumer’s Role: A Deciding Factor
Amidst the sea of strategic pivots and market speculation, the most potent variable remains the consumer. “The power of the consumer is often underestimated amid dramatic market changes,” suggests Tomasello. Sellers adopting delayed marketing strategies will now be required to acknowledge their choices via official disclosures.
The decision to proceed with delayed listings may fall more heavily on agents opposed to standard commission structures. “Markets where brokers resistant to CCP are prevalent could become hotspots for delayed listings,” Campbell predicts.
The Verdict: A Call for Market Vigilance
While the fate of listing portals in the age of delayed marketing strategies remains uncertain, there’s no pressing need for alarms just yet. “I find it hard to imagine that the industry is moving toward a direction that disintermediates portals,” Tomasello asserts. Despite the evolving dynamics, portals like Zillow are likely to retain a considerable role in engaging audiences nationwide through their established channels.
In conclusion, the onus falls squarely on consumers and industry players alike. As we navigate this brave new world of delayed marketing, adaptability and consumer insight will be the keys to ensuring listings portals continue to thrive.
