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Article from Robert Hahn
Linkedin profile:  https://www.linkedin.com/in/robhahn/

Over a decade ago, the hot topic in the industry was the so-called “syndication wars” in which brokers and agents were getting very upset at portals like Zillow and Trulia “poaching” their leads.

There were hundreds of conversations, but Jim Abbot at ARG started an avalanche when he posted this announcement on YouTube: Video Link: https://youtu.be/P4pZ0zJdfAY

It caused a brouhaha for a while. The issue as I saw it — and as the pre-Zillow Jay Thompson saw it as well — is that the whole thrust of Jim’s argument applied to IDX as well as to syndication. If consumers should talk only to “the source” which is the listing agent, then it makes no difference whether consumers end up talking to someone not-the-listing-agent because of Zillow or IDX or VOW or messenger pigeons or a buyer’s Sixth Sense.

 

Here’s Jay Thompson from Land Before Time:

If you feel syndicators are harming consumers by making it difficult to contact listing agents, they you must, MUST, also keep  your listings out of IDX distribution. The exact same issue of not reaching the listing agent that seems to bother so many in syndication also exists in IDX.

Trust me, we get calls and emails ”“ seven days a week ”“ from people searching on this very site who think we are the listing agent for the property they are viewing. Every. Day. [Emphasis in original]

What I was arguing back in the 2010s was that there is no practical difference between Syndication (which at the time was going only to portals) and IDX, which powered brokerage/agent websites. Yet, most of the industry seemed to believe that they were as different as Edward Scissorhands is from Malcolm X.

It appears that in the aftermath of Howard Hanna pulling out of IDX, that same old argument is coming back around again. Like the Terminator.

The Good, the Bad and the Ugly

I got inspired to write this because of an exchange on LinkedIn, where someone from Zenlist wrote in response to my Industry Relations podcast with Greg Robertson:

Do broker and agent websites really not matter?? In response to recent news of Howard Hanna’s decision to walk away from IDX, Robert Hahn argues that the war on portals may be over. He states that since broker and agent websites aren’t generating leads, IDX websites aren't providing much value.

But even if that’s true and you’re ok with your listings not appearing on other IDX sites, removing IDX feeds from your website and directing leads to search on public portals, as Rob suggests, is problematic. Public portals strip agents of their control over client connections, leaving them vulnerable to lead poaching.

I naturally asked what “lead poaching” meant in this context and here’s the answer:

With public search sites like Zillow, it's very hard to control who your clients are being connected to. It often happens that agents are already working with a client, but the client independently explores properties on Zillow. When they come across a property of interest and request a tour through Zillow, the request is directed to a different agent who has paid for leads.

Why is your client requesting a tour off of Zillow, instead of sending the listing to you and asking you to arrange it? Oh, because you didn’t tell the client to let you know what houses he wants to tour! You skipped Training Day with your client, which lets some other agent Snatch him away. I see how your failure to explain the process and build rapport with your client is Zillow’s fault, said no one ever.

Besides, when that other agent talks to your client, she will quickly realize that he’s working with another agent, i.e., you. So she might be pissed that she got a bad lead, but what do you care?

That’s a red herring. So what’s the real deal?

By providing a home search platform that connects agents and clients throughout the home search, agents can maintain ownership of their leads and prevent them from being routed to competing agents. The problem is, of course, that the entire point of IDX is to sidestep that whole “maintaining ownership of their leads” deal. The Good of IDX is that brokers and agents generate leads from their own IDX websites… or at least try to.

The Bad of IDX is that brokers and agents mostly fail to generate leads from their own IDX websites in 2023, because… well… it’s 2023 and the Portal Wars have been over for years.

 

The Ugly of IDX is that it is a straightforward transfer of leads from one group of brokers and agents to another. Namely, the small group of broker and agents who get most of the listings transfer them to the much larger group of brokers and agents who get very few listings at all.

 

All those brokers and agents who (try to) generate listings off of their IDX websites are simply refusing to acknowledge a simple fact: the listings they use to generate leads belong to some other broker, some other agent. If that were not the case, they wouldn’t need IDX at all. Every broker, every agent can put their own listings on their own websites without permission or license or blessing from Clerks at the MLS or anybody else.

Which means that sending your listings via IDX to other brokers and agents is, by definition, surrendering ownership of “your leads” and surrendering “control over your client connections.”

Rebel Without a Cause

In some cases, and at one time, most brokers perceived the benefit from participating in IDX to outweigh the loss. IDX was seen as a potluck. Sure, you gave away your listings, but you got more than enough listings from all the other participating brokers that you all made more money. All of those listings would make your website more attractive to internet visitors, who would then convert into buyers. That was the theory. So brokerages formed a Fellowship of the IDX Ring to go after the Treasure of the Sierra Madre.

 

And maybe in some situations in some places, at some point in history, that worked. But if such a time and place ever existed, they are Gone with the Wind. The days of “your website will shower you with leads” is among The Departed. The portals with their huge war chests and top technologists have won the war years ago. Instead of singing a Requiem for a Dream, however, some folks in the industry really think abandoning IDX — a 25 year experiment on listing-potluck — is Superbad. They are looking for all sorts of ways to keep brokers and agents who have lots of listings to Walk the Line so that somehow, somewhere, someone who doesn’t have a lot of listings can become a Slumdog Millionaire.

 

So we return like a Jedi to an old, old topic: lead poaching. The idea of lead poaching is the same one as from Jim Abbot: the buyer leads from a listing “belong” to the listing agent. “Talk to the source!” said Jim, and in response, a whole lot of the industry said, “Fair Display Guidelines.” And in 2023, CoStar piped up with “Yes, We Can!” Of course… as I explained above, if you would avoid having your leads poached, then IDX is No Country for Old Men. IDX is quite literally the Avatar of lead poaching, since those who have listings don’t need it, and those who don’t think it’s a Million Dollar Baby. You simply cannot pretend to care about lead poaching, but keep sending your leads into the IDX Hurt Locker. That would be Dumb and Dumber.

It is entirely possible to put together an argument for IDX and for strong listing brokers and agents to stay in IDX. I’m not sure what those would be just now, but perhaps the fact that many technology vendors (stupidly) use IDX to power their software instead of Broker Back Office means that if we’re going to do away with IDX, let’s do it the Day After Tomorrow, so the industry has time to adjust. It makes a good deal of Sense and Sensibility not to Rushmore into such a big change like a Raging Bull. What kind of Psycho does that? Don’t be hasty, and Do The Right Thing.

That’s at least a reasonable argument.

But one argument for IDX that cannot be made, at least not without Hangover-inducing amount of hooch, is to claim that IDX somehow prevents lead poaching. The Ugly Truth is that IDX is lead poaching.

-rsh

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