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Writings about real estate, branding, marketing, media and technology from the principals of 1000watt.

Market Leader’s RealEstate.com play: Welcome to Crazy Town

I am not a black and white person. I try to see the complexity in most things and work through it. I am also slow to anger. But I am angry now. 

The opinion I put forward below is strong. I welcome yours.

Market Leader, the software company previously known as HouseValues.com, bought the realestate.com domain from LendingTree about a year ago.

This week, they made some noise about what they’re doing with it.

In short, they are raising a giant middle finger to MLSs, the spirit of IDX and, most significantly, to operating brokers.

Let me break this down for you:

  • RealEstate.com operated as a brokerage when it was owned by LendingTree. They had several physical offices and practiced real estate. They were, on paper and in practice, a real estate brokerage.
  • When Market Leader bought the domain, they also acquired RealEstate.com’s brokerage licenses.
  • They have used these licenses to get IDX feeds from over 150 MLSs. But they evidence no plans to operate as a real estate brokerage. They are, seemingly, a “paper brokerage.”
  • On the IDX-powered RealEstate.com, Market Leader (quoting their press release) “features only one real estate professional per market area” who gets the business generated from these listings. Market Leader makes its money (again, from the press release) “via an industry-friendly flat-fee referral model.”

So, you have what I’m calling a “paper brokerage” leveraging IDX to grow their “lead-to-close marketing system.”

It gets richer:

Unlike Zillow, Trulia and Realtor.com, which have spent gazillions negotiating for voluntary access to listings from MLSs and brokers, Market Leader, by virtue of its brokerage licenses, simply grabs the IDX feed.

If you’re a broker, you can pull your listings from Zillow, Trulia and Realtor.com at your discretion (as some have recently). But if you’re a broker and you want to prevent your listings from being used on RealEstate.com, the only way to do that is to withdraw from IDX altogether, thus cutting off serious local marketing power and your ability to display other brokers’ listings on your own company website.

Moreover, because brokers have successfully pressured Zillow and Trulia to make their listing displays more broker/listing agent friendly over the past year, the branding/attribution/clicks they’re getting on the IDX-powered RealEstate.com is actually significantly less than what they get on the “aggregator” sites.

Finally, it should be noted that entities like Century 21, a company that is much more clearly “in the real estate business,” than Market Leader got denied from simply indexing IDX feeds from their operating brokers because they, as a franchisor, were not legal “Participants” in the MLS.

Yes. It’s not just you: we’ve just entered Crazy Town.

But it gets weirder. Say you’re a broker and don’t like this. You raise hell. Fire off a cease and desist. Sue.

Forget it. Remember that DOJ settlement? Unless you want the feds on you again, you don’t really want to try limiting access to the MLS based on what a “brokerage” is or isn’t.

In fairness to Market Leader, I should note that this business model is not new. Companies like Sawbuck and Estately have IDX-powered websites but operate largely on a referral basis. But RealEstate.com is at a different scale.

Market Leader’s message in this announcement is odd, too. There’s an arrogance here that adds to the flagrancy with which that middle finger is raised. Consider this quote:

“We are excited to launch RealEstate.com as the only real estate site dedicated to helping brokers and agents build relationships with home buyers and sellers.”

The “only” site? For god’s sakes…

What to do? What will happen? I’m not sure, really. This could start the unraveling of IDX, but that’s unlikely in the short run. It almost certainly will intensify the various murmured plans for broker-owned portals, MLS apostasy and retrenchment.

I don’t like any of it.

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58 Responses to “Market Leader’s RealEstate.com play: Welcome to Crazy Town”

  1. Brian Hickey says:

    Does this give ZTR (etc) more interest in some kind of brokerage operation for themselves – or take them farther away from the idea – guess we’ll have to wait and see.

    • Jay Thompson says:

      Hey Greg, Jay T from Zillow here.

      You are correct in that Zillow still has a brokerage license in Texas. We dropped all state licenses in 2008, except for Washington and Texas. Since then we dropped Washington and retain Texas. We decided to keep the license in Texas because it is a non-disclosure state so having the brokerage license allows us to access certain data which helps us produce Zestimates.


    • Brian Boero says:

      That is correct, Mark.

      I do not, however, view selling advertising as inherently problematic.

    • Brian Hickey says:

      Lots has changed in those years – maybe they just pulled the plug too early? I see this as a trend, it solves many problems and gives the (a) portal(s) flexibility with their model going forward.

      The big money is being a part of the transaction, ad $’s will just be gravy.

    • TheRECoach says:

      What an interesting comment, as we sit here today 5/8/2013 and Trulia has Purchased RealEstate.com (Market Leader), making them a Broker! =)

  2. Norma Wall says:

    Yes, I got the call today. They are selectively selling us back our own information with lead genertion for “broker exclusive zip codes”. I can’t take it!

  3. Mark Holt says:


    Actually, in Massachusetts they let their MLS-PIN participation lapse…it wasn’t until I pointed out my listing, and after MLS-PIN pulled their ‘vendor’ feed, that they rushed a Georgia domiciled reciprocal broker to the fore. Paper office indeed! Their ‘office’ is a UPS store mailbox!

    More frustrating yet, they’ll serve up any zip code paying agent as the contact, whether they are even in the listings mls.

    This is yet another example of how the 99% are going to continue suffering until we come up with a national idx framework we can all subscribe to.

    Mark Holt Boston MA

  4. Greg Fischer says:

    We will eliminate confusion among consumers. It needs to happen now. Consumers will select their agency purposefully in lieu of ‘accidentally’ landing on sites like realestate.com. I don’t go to law.com to select my attorney…Not tomorrow. But soon. Its one of my main goals. Others’ too

  5. Mike Russo says:

    Angry about what? This is nothing new and these are the same arguments revisited for the last 10 years.

    The Realty Generator model that Market Leader paid $10M for was the same principal except with unique websites for each agent and brokerage.

    RealEstate.com wasn’t originally a brokerage that only came later. ML’s roots are in lead generation and they need to do something to monetize their $8M investment in the URL.

    As you mention, Estately and others on a smaller scale are doing the exact same thing. Roost was doing it on a slightly different model.

    Quite frankly this is the model Zip is headed towards.

    Same argument over and over. Like a broken record.

    Oh BTW, unless I am incorrect and I don’t think I am, no one as made a profit at this model yet.

    • Brian Boero says:

      Actually, Mike, you’re wrong about a few things here:

      First, Realty Generator, like many other IDX-powered products, was set up on behalf of the agent or broker paying for it, not under the authority of a broker license maintained by the tech provider.

      Roost fit in this vein, too.

      And this model can indeed be profitable. Estately announced it was profitable over a year ago.

      In any case, I do not view this as yet another flare up over syndication. This is an agressive position to take a broker tool to places it has never gone.

    • Alon Chaver says:

      Thanks Brian…provoking my thoughts to a place I have not gone before.

      Didn’t eBay pursue broker licenses in every state at the beginning of the last decade as part of its strategy to create a consumer-to-consumer real estate marketplace?

      Shouldn’t we all worry about the key players – the local practicing brokerages who are critical to a functioning real estate market – being increasingly under threat?


    • Mike Russo says:

      You think that ML has licenses in enough places to aggregate 150 MLS-IDX’s. I would bet they don’t and they are using the 150 feeds that they are aggregating for the RG sites.

      As far as the profitability comment, let me be a little more clear. No one has made money at this model that had any scale.

      Estately is profitable because it is a small company with no scale and a few people.

  6. Dan @ Follow Up Boss says:

    Good reporting :).

    My thoughts are way too much red tape in real estate, ridiculous amount of MLS’s, IDX formats etc.

    All that red tape does is give monopoly players like ZTR and ML a barrier to entry, stifles tech innovation and lets crap like having a paper brokerage come up.

    The intentions behind “Lets limit access to our MLS data” might be good, but the actual outcomes don’t seem good for the real estate consumer, agent or broker.

  7. Jim Flanagan says:

    Personally, I believe this is the first canon fired in the first of many battles that will be waged as the real estate market “recovers”. As a broker, I have already been preparing for an entirely different recovery.

    If we believed Redfin and Foxtons were disruptive, we won’t stand a chance in this round.

    Is it out of the realm of possibility to see Walmart and Costco operating brokerages? I don’t think so. Change has been upon us for some time.


    • Jason Sandquist says:

      Walmart already operates a realty (walmartrealty.com). Although it is mainly used at this point as a disposition of excess commercial space and development opportunities.

  8. Leslie Ebersole says:

    I pitched a fit about this early this year when I learned how realestate.com was going to be getting their feeds. I suggested that ML could easily transition to either collecting leads to sell them or even migrate to brokerage model like a Redfin. At the time they had brokerage licenses in about 30 states. In a public FB thread I was assured by the ML and re.com people that they had no intention of doing either. We’ll see.

  9. Melina Tomson says:

    This is interesting. In Oregon brokerages have to have a physical address as well as a licensed principal broker in order to get a brokerage license here. Otherwise you can’t “practice” real estate which includes collecting referral fees and being a member of MLS’s.

    I was curious so I looked them up. They just became a brokerage in Oregon in July of this year. (FastStart) is what they are using. They have an “office” at someone’s house to meet the Oregon criteria. They are a member of my MLS.

    Essentially they will have the advantages of Realtor.com with complete IDX fees AND the ability to create VOW’s, which are much more powerful. The difference is that they have no tie to the NAR so they can go completely rogue in this business model. Not even Redfin is in every state.

    Having partner agents that pay through the nose for the rights to all prospects? I see big bucks heading the way of RealEstate.com.

    The real question will be, will they pull in all of the local content generated on ActiveRain over the past several years to drive traffic to RealEstate.com. AR has the right to distribute and republish the content on the blogs per the TOS. No one has that kind of IDX coverage with access to that much locally generated content. I totally see it going to RealEstate.com via feed.

    Anyone see who could compete with that?

  10. J. Philip Faranda says:

    To echo Melina’s thought, I was assured by ML that none of my 1200+ Active Rain posts would be used on Realestate.com. Perhaps. But they got their last dime from

    I do tend to agree that while this is a model that makes waves, I don’t see it as being terribly profitable. I was happy to read in the comments that Estately is profitable, but that doesn’t surprise me because Galen Ward is uber smart. I can’t say the same about Zip or Redfin, and I was the first Redfin Partner agent in New York. That relationship is no more.

    For a brokerage to be truly profitable, you need good real estate minds running the show and agents out there making sales. I am not convinced that corporate suits and an IDX feed alone that siphons off traffic from brokers in the field for the purpose of referral fees will work organically.

    • Drew Meyers says:

      “For a brokerage to be truly profitable, you need good real estate minds running the show and agents out there making sales. I am not convinced that corporate suits and an IDX feed alone that siphons off traffic from brokers in the field for the purpose of referral fees will work organically.”

      Agreed. Great people are required for any business to succeed long term.

  11. J. Philip Faranda says:

    To echo Melina’s thought, I was assured by ML that none of my 1200+ Active Rain posts would be used on Realestate.com. Perhaps. But they got their last dime from me last March and I have all but stopped posting there.

    I do tend to agree that while this is a model that makes waves, I don’t see it as being terribly profitable. I was happy to read in the comments that Estately is profitable, but that doesn’t surprise me because Galen Ward is uber smart. I can’t say the same about Zip or Redfin, and I was the first Redfin Partner agent in New York. That relationship is no more.

    For a brokerage to be truly profitable, you need good real estate minds running the show and agents out there making sales. I am not convinced that corporate suits and an IDX feed alone that siphons off traffic from brokers in the field for the purpose of referral fees will work organically.

  12. Matthew Ferrara says:

    Well, I’m not too sad about this, actually, as I’ve been a fan of getting rid of MLS altogether for at least a decade. This might just cause brokers to pause entirely, and decide to bring their entire data management in-house. It’s a piece of cake to feed data to other broker’s sites – IF you want and with WHOM you want – using modern technology. All of the larger listing houses can easily afford this, too. Leaving IDX, and MLS (at least the data side; they could continue to agree to blanket compensate all agents the same, which I also disagree with, but that’s another story…) – leaving MLS/IDX will save them a ton of headaches, dollars and abuse of their hard work. So, from an evolutionary standpoint, I’m excited about this play. I think it might lead to a wonderful, although unintended, outcome!

    - Matthew Ferrara

    • Melina Tomson says:

      This might work in some cities that have dominant franchises, but in mine, the largest franchise is 12% of the market and it goes down from there split between other franchises and indies. In fact the indies make up 50% of home sales in my area. Franchises could walk and indies would just ban together and continue to use the MLS. We are an independent MLS anyway. It would be a very fragmented system and the franchises would lose in my area as it wouldn’t go over well with agents.

      Maybe some states have dominant franchises but we don’t here.

    • Alon Chaver says:

      If they only shared listings with a select group of other brokers, the “only” issue they would have to face is anti-trust.

      A few (large listing house) brokers “cooperating” to advertise in their market is one of the key reasons MLSs (neutral intermediaries) came to be.

  13. Leslie Ebersole says:

    Matt, the sharing of listing data is not a piece of cake. The variability in the fields on each broker site, plus the need to accurately represent the data, would be onerous to many small brokers. Clearly we could handle it, but when I think of the mom and pops, well, they’d be signing agreements with super-powered data distributors like ListHub. Then we’d all realize that “layers” with databases are more effective then feeds, and then we’d be back to what is essentially an mls but it would be in the hands of 3rd party sources. If we’d known that IDX, which was intended to level the playing field for small brokers, would have these consequences, we might have made different decisions. I wonder if you feel differently about an MLS like MRED which is not tied to an association but is paid for by broker members, vs. an association owning an MLS?

    • Alon Chaver says:


      I completely agree with your point Leslie…and wonder if you think that MarketLeader’s use of the IDX data in this case still allows the small brokers to participate on a level playing field. After all,all they have to do is “pay to play”, which is (it seems to me) in the spirit of IDX.

      I bet if MRED operated as consumer portal to generate (free) leads for its brokers, some of those brokers would be thrilled to have an alternative to paying MarketLeader for leads in their market :-)

  14. Chris Crocker says:

    Dictionary.com entry for Disruption
    dis·rupt (ds-rpt)
    1. To throw into confusion or disorder
    2. To interrupt or impede the progress, movement, or procedure of
    3. To break or burst; rupture.

    Previous over control policies have created #2, leading to #1 then eventually #3.

    Here is the wildcard. While we may think the major brokers control the market, truth is the small companies are the real market. Major brands have market share but small mom and pop shops are a huge portion of the system. More than half in most markets.

    So this isn’t as easy as major brands stopping their publishing to the MLS. If they did, the mom and pop shops flock to Z as the new MLS seeking exposure for their clients and furthering the demise of the MLS.

    Slippery slope to navigate.

  15. Sheldon Goldberg says:

    I see another play here. Have a powered by Zip type site, but embrace the 100% commission for agents type model. Accumulate a ton of agents and get 25% from them on leads from the site. We’ve been referring leads for years and I assure you that it is a lot easier getting the referral dollars when you refer to your own agents.

    http://www.DreamRealty.com already has the powered by Zip technology. Would love to partner with a company interested in creating a large brokerage with excellent web technology.

    Feel free to contact me.
    Sheldon Goldberg
    Broker – Dream Realty

  16. Bruce Lemieux says:

    Like any market, the pool of agents who will pay for lead-generating services is finite; and it’s already very crowded. ML has two big hurdles: 1. they must out-innovate ZTR and local brokers to get their IDX listings in front of consumers; and 2. they’ll need to out-sell ZTR for lead-generating services. The odds are they will fail on both counts. IMO, they’ve arrived at the party way too late. File this under “Yawn”.

    Still – agree it makes no sense that ML (and Sawbuck and Estately) get IDX data and not be real brokers; yet franchisors can’t. Add one more leach to our industry that looks to profit from listings yet adds no value to consumers or the RE profession.

  17. Bill says:

    Housevalues strikes again. The simple solution is for the industry to stop accepting referrals for a fee as well as selling consumer contact info. Do that and they are dead in the water… along with hundreds of other data skimmers.

    • Bob Wilson says:

      That wont happen. Agents and brokers that cant generate their own business will always pay others.

      Additionally by virtue of using their services, three large franchises, KW, BHG and C21 are tacitly endorsing ML.

      The irony here is that ML’s traction took hold when they became the provider for KW – a gig they won by default when no one else responded to KW’s RFP.

  18. Jon Zolsky says:

    It is funny how one “paper” operation creates another quasi paper operation. I checked some of local areas and they are “bought” by brokers/agents, who are marginally local, like from the neighboring city.
    I can understand that they would like to expand their coverage, but it is not the same as expansion of their expertise.
    What do customers get from ending up with agents, who have no real expertise of the market and the area.
    They are selling blankets, and for the consumer it is a big hit or miss proposition.

  19. Thomas Wissel says:

    What is the true test of the DOJ settlement definition of participant, “actively endeavors during the operation of its real estate business to list real property of the type listed on the MLS and/or to accept offers of cooperation and compensation…” The policy takes up two long paragraphs to define PARTICIPANT, but does not offer any yardstick to measure the truth of the broker’s efforts or intent to meet the “endeavors to list” standard. Who is going to mount the challenge or defense of the MLS’s reasonable standard?

  20. Joel Beasley says:

    Might I suggest a rewrite of this article?

    Pioneers get slaughtered, innovators profit.

    The initial rush of invention in the real estate technology industry slowed down. MarketLeader noticed, developed an innovative versus inventive business model. They could see the opportunity, planned, and executed.

    MarketLeader waited, and will profit from having done so. Unlike Zillow, Trulia and Realtor.com, which have spent gazillions negotiating for voluntary access to listings from MLSs and brokers.

    Rewritten by:

    Joel Beasley
    CEO @ Merge

    I’d love to stay and chat, but I have some stock to buy.

    Congratulations MarketLeader.

    • maya paveza says:

      Cheers! Me too! I loved JustListed.com when I started using it in 2005, and I still love Market Leader.

      My question for Brian…
      If the following things are true about me and my business, then…
      1. I have multiple websites that specialize in lead generation that I, as a licensed real estate salesperson and REALTOR, have IDX feeds that I pay my MLS (Trend) for every month.
      2. I have additional products like REALTOR.com Connection zip codes, and more Market Leader products (I will use whatever they have, if budget were no problem).
      3. I have a license for BoomtownROI. I want to lock down the other BoomtownROI license in my immediate market and any I can in surrounding areas.
      4. My goal is to build enough lead generation to then “refer” those leads to other agents, so I can qualify, then refer, thereby making a passive income (to some degree)… Heck, after my accident in December walking up and down stairs, and even sitting in the car is painful, I can’t do my job as a real estate salesperson as easily as I used to be able to do it.

      If I understand the point of your post, you are telling me that if I do all those things I am ? Would I be a “paper agent” because I am not running around showing the properties but essentially building my own freelance team? Who is to say I wouldn’t want to put out MY qualified leads to the highest referral fee paying agent.

      I always thought it was called free enterprise and entrepreneurship, to me it sounds like sour grapes to me. I have always admired how Market Leader and REALTOR.com seem to sit on the side lines quietly waiting while Trulia and Zillow seem to fight for the spotlight and I theorize might actually do more harm to each other than good. I fight the Zestimate every day, I hate scraping. I pay for data, and I wish my MLS would charge the vendors more for data.

      Market Leader is a Brokerage in having purchased RealEstate.com from LendingTree, which would also likely make them members of most of the REALTOR boards… so…. the Code of Ethics is pretty clear on how a REALTOR would speak about another REALTOR…

      Slow and steady wins the race doesn’t it?

  21. Alberta Ceres-Buda says:

    It seems to me that their will always be corporations and groups that will figure out a way to sell their third party access to our business back to us. This has been going on for years. It’s not just that our industry and the government has allowed it to happen, it’s that we don’t share all of this information with the public at large. If the end consumer (home buyers and sellers) understood that they are being data-mined to charge us for their information, do you think they would care?

  22. maya paveza says:

    As an agent who CAN generate her own business, and also believes in “paying for leads” – you guys make it sound so dirty, I don’t “pay for leads” I can afford what some agents can not, or will not pay for.

    It is each individuals choice how they run their business, and I would never tell anyone what is right or wrong, I just know what I do and what my company does.

    It all comes down to marketing, and if I can buy a zip code some where and be the only agent who appears on that space then I will buy it and use it. I love REALTOR connect, and I love my Market Leader product, they had proven themselves to me back when they were HouseValues and Market Leader was the CRM. I loved my JustListed.com leads, I had 10 a month and I loved the drip campaign and the fantastic ROI I got using the product.

    Personally I think the best brokerage model is one that will be paying a base salary plus commission bonus, where there is no dual agency and the agent still gets paid even if they don’t sell anything, truly then able to put the consumer first. Maybe someday that will happen, but for now I believe we all need to stop bickering publically, treat “leads” like the human beings who need housing that they are and not as leads. We need to stop complaining about what is fair and what isn’t fair.

    Let’s all celebrate the successes we are all having as the market makes some strides in gaining back the lost ground, let’s all worry more about the ethics of lenders, and the banks and how foreclosures were handled.

    Enough is enough. Market Leader is doing very well, and I am proud to say I am a fan, and I have been a fan for a long time, and I will continue to be. My sites just keep bringing in the consumers giving me the chance to try to assist them in their real estate needs. =)

  23. Matt Cohen says:

    These types of sites – built using data obtained the ‘wrong’ way or not complying with their data license (this site fails to meet IDX rules and data licenses by its very nature) – they tend not to last long. Well, a year or three sometimes – but not long term. It’s a bad play for all concerned – especially the agents that sign up for it. Eventually MLSs in key markets will audit the site, won’t see remediation, and will withdraw the data feed. Then the site will be a sad, rag-tag thing and Market Leader will need to retrench to figure out what else to do. The MLSs sometimes move slowly, but eventually that’s how I see this playing out.

  24. Matt Cohen says:

    I think focusing on the point of participation is missing the argument that’s more likely to be successful – that this site isn’t an IDX website that complies with IDX rules and MLS data licenses.

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