If you own a home, you’ve most likely heard of Zillow and its “Zestimate.” Launched in 2006, the online real estate syndicator quickly became a mainstay in water cooler real estate lingo. Why? Because the site was marketed as an all-knowing source for insider real estate information—and as we all know, everyone loves to talk real estate.
This technology was wonderful until sellers began using these Zestimates in an attempt to reflect their homes’ real market values. Zillow’s snappy branding and slick presentation convinced many homeowners that their Zestimate was a hard fact when, in reality, it's merely an estimate.
Zillow is a syndicator, meaning it grabs information from a variety of online sources, not just your local Multi Listing Service (MLS), and not all the information is accurate or up to date. The MLS listings published on syndication sites are muddled with inaccurate and unreliable data that they gather from other, less reliable sources. As a result, the public is getting confused and often misled, leading to compromised reputations of real estate agents and the MLS.
For example, FSBOs on Craigslist are displayed alongside local MLS listings on Zillow. Anyone can publish anything on Craigslist, whether it’s real, fake, exaggerated, or a downright scam. And when Zillow displays these willy-nilly listings alongside legitimate and regulated MLS listings, the public assumes that the willy-nilly is just as accurate as the MLS data.
Outdated and incorrect information can be just as harmful. Too often the data is simply wrong, and occasionally there are property addresses that don’t even exist. And when people hear the truth about these online inaccuracies, they’re often skeptical. But it was on Zillow, they wrongly assume, so it must be correct.
And the shady practices don’t stop at the listings. The syndicators are known to take the intellectual property of individual agents, mix it with other content, re-brand the property as their own, and then sell related advertising rights back to the agents from whom they plagiarized in the first place. This creates substantial confusion in the public marketplace for real estate buyers and sellers, as well as insurmountable frustration for the listing agents, who are bound by the regulations of the MLS.
The strict standards of MLS listings are meant to protect the public, as well as the reputations of local agents; there’s a whole book of rules that agents must follow. For example, listings must contain accurate information and measurements, and cannot contain misleading sales language or cross-promotions with other businesses. Agents who do not comply with the rules can lose their Realtor membership and MLS service. Yet these same rules don’t apply on Zillow and other syndication sites, making them the Wild West of real estate syndication, with no consequences for inaccurate or outdated information.
This battle between agents and online syndication is heating up as agents begin to push back against these questionable practices. The Boulder area MLS no longer automatically syndicates homes to Zillow; it’s up to the individual agent whether they want their listings on the site. And the number of Boulder companies choosing not to have their listings syndicated is growing quickly.
San Diego-based Realtor Jim Abbot put it bluntly, saying, “All listing syndicators have one thing in common: They act as middlemen and post our valuable listing data alongside the contact information of other agents and brokers who rent ad space on their sites.” Abbott continued, “Usually, they do this with(out) our permission, while claiming that exposure of our listings in any way on the Internet is a good thing. Time and results prove that it is absolutely not.”
When buying or selling a home, it's imperative to remember that only individual Realtors and real estate brokers have access to MLS data feeds. The data within these feeds is almost always more timely and accurate than the information found on a syndication site. We encourage all of our clients: Please, browse with caution.