The U.S. Department of Justice is requiring local realtors to share listing data with online realtor sites.
There are several implications of this settlement, which arose out of Justice Department antitrust concerns as expressed in a 2005 lawsuit alleging that “NAR’s policy prevents consumers from receiving the full benefits of competition and threatens to lock in outmoded business models and discourage discounting.”
The National Association of Realtors has allowed local associations to withhold listing information from online realtors whose mega sites tend to outperform local realtors’ sites in some search results. (Example: Cf. seattle house listings on Google.) Search engine optimization specialists have been aware for years that the hyperoptimized real estate vertical is one of the most highly competitive search markets.
The consumer may or may not benefit from the settlement, considering that local realtors offer opportunities for face-to-face discussions that online forms and search tools simply cannot provide. The fact that local realtors have little to no search visibility in some critical search terms may imply that the Justice Department has in fact created an unfair business advantage for an already overwhelmingly powerful industry group.
Local realtors just don’t have the resources to compete with the mega sites, and the U.S. Justice Department’s lawsuit fails to take this imbalance of search positioning resources into consideration. From a search perspective, the Justice Department’s action may have the exact opposite result of its original intent in that it may very well limit the competition. After all, most searchers will never look beyond the first ten results shown to them and major search engines have no incentive to show the best results for queries where they are already showing acceptable results.
On the surface, the NRA is being required to treat online brokers as if they are local brokers by granting them full access to local brokerage shared databases. The search engines already treat online brokers the same way, and the reviewing court might very well take the view that consumers’ best interests are not being served well by restricting online brokers’ access to data (which they apparently make little or no contribution to themselves).
There are a great many real estate agents and brokerages who have actively developed their online visibility for the past several years. That community needs to assess how this proposed settlement may impact their online business. Will they need to develop new query spaces (a practice I have advocated but which is not widely implemented) in order to compensate for the Justice Department’s settlement? Will the settlement have little to no adverse impact on the small realtors’ online presence at all?
This proposed settlement (which must be approved by a court) is designed to help the home buyers, not the realtors, but if a large number of small realtors find themselves competing against unfairly leveraged online content, now would be the ideal time for them to speak up and prepare documents showing the courts (and the U.S. Department of Justice) why the settlement should not be approved.
A lawsuit filed in 2005 would be in no way capable of protecting or even recognizing the state of the online real estate search market in 2008 (much less 2009 and beyond). If the settlement is put into effect, local realtors will have to share their listings with online realtors for 10 years. 10 years is equivalent to about 4-5 generations of search technology and optimization trends. In ten or eleven years, the online real estate market will look absolutely nothing like it does today.
This is an important issue that realtors with Internet marketing initiatives should examine closely before they lose what may be their last opportunity to compete against unfairly advantaged online resources.
DISCLAIMER: Although 1st Query has handled some real estate clients, the views expressed in this article are strictly my own and do not necessarily represent those of my employer, co-workers, or clients.
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