Nothnagle REALTORS of Rochester, New York decided last week to stop syndicating their listings to Zillow or Trulia. This was justified by Nothnagle’s President & CEO on the following basis:
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This is a big deal if you’re a publisher. Poof! There went a lot of listings. And this isn’t in Minneapolis (where Edina Realty already did this). Nothnagle’s CEO, Armand D’Alfonso, makes a compelling argument in his blog to justify this business decision. Nothnagle is one of NAR’s top 75 firms, and has substantial listing inventory. While there hasn’t been a stampede for the exit on syndication, I’ve heard that several more jumbo brokers are considering this move. Based on conversations I had last week at the NAR meetings in Orlando with both Realty Alliance and Home Services brokers, the tide may be shifting and others are planning to follow.
Clareity also held an impromptu MLS and broker focus group last week in Orlando where NAREP was one of two topics discussed, and NAREP’s founders presented their mission and plans. NAREP – the National Association of Real Estate Professionals has a primary mission to “STOP SYNDICATION ABUSE”. The group has attracted a number of brokers that “are fed up and not going to take it anymore” including a few very large and influential firms. NAREP states it is not anti-syndication, but rather is establishing rules based upon Clareity Consulting’s 2011 “Syndication Bill of Rights” for responsible syndication that restrict what publishers can do with a broker’s IP.
5 out of 5 Brokers at our focus group in Orlando supported NAREP’s mission, and so did the five MLS executives. This was not a scientific study by any means, but I can say with confidence that 4 out 5 strong independent brokers feel this way, and are likely to support NAREP. That’s a lot of inventory – like a million listings or so.
Publishers will need to figure out in a hurry if they can both satisfy the revenue and growth targets they told the Street AND the business model limitations and other restrictions set by those who provide the listings. If not, it’s time for the publishers to be more forthcoming with their investors and Wall Street’s analysts about the significant business risk of declining listing inventory on their horizon in 2013.
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