Are Listing Agents Hurting Their Clients by Hiding Addresses?

At Redfin, we’ve long been opposed to dual agency, where the same agent represents both seller and buyer. This hasn’t always been an easy call because in some ways dual agency is more efficient. But it’s hard to represent both sides in a negotiation simultaneously, and the big problem is that it encourages the listing agent to market the property selectively to his own clients rather than broadly, to every possible buyer.

All the games that agents play with inventory were supposed to end now that that the DoJ settlement with the Realtors is being enforced. The settlement requires listing agents to publish to the web all the information about a listing that could be disclosed to a client in person. The loophole in the settlement is that the listing agent can require other brokers’ websites to register users before showing the listing, and to validate their email address.

In Long Island, where dual agency is common, a whopping two thirds of all listings on the market now require Internet visitors to register before seeing the address. The form New York agents use to list properties online includes a field indicating whether the address can be displayed without registration; for 66% of listings, the agent requires registration, overriding the default.2681531818_9b02375b5b

And overriding the default is definitely not in the best interests of the listing agent’s client, the seller. On our website last week, New York listings that freely publish their address got 42% more views than listings that require registration. If the seller discovers a registration requirement, he can ask the listing agent to remove the registration requirement, but most never find out: the Multiple Listing Service of Long Island doesn’t require seller notification or permission.

Why would a listing agent want to force Redfin to register you as a user before we can show you a listing’s address? Everyone knows that the vast majority of consumers don’t want to register, because most real estate websites are so spammy. And it has become increasingly clear that a web page requiring registration is invisible to Google — the Great Traffic Director in the Sky — whose indexing robots have no password, and no way of determining the addresses of these listings.

Perhaps some agents are old-fashioned and just don’t like listing information out on the web. Others want to protect the privacy of movie-star clients.

But withholding the address can be part of a bigger game to build the listing agent’s business, not a fiduciary duty to act in the best interests of a client. Any book on how to get your start in real estate begins with the advice to control inventory so you can attract buyers. “Listers,” the saying goes, “last.” It’s a big advantage if you can tell buyers about homes they can’t easily find on the web.

And by promoting their own listings  to their own buyers first and foremost, listing agents hope to double their fee by representing both buyer and seller in the same transaction. Recently, we’ve seen this happen most often with REO properties, which have been in high demand.

And it’s not just the gangs of New York that are doing this. In San Diego, where dual agency is much less common, more than a quarter of all home-sellers still do not publish basic information about their listing to the Internet. Here’s the break-down of San Diego-area listings in our database as of this morning:

  • 73.8% are publicly visible, with no registration required
  • 11.3% require registration to see the address; here, unregistered users cannot even see the property on the map
  • 2.6% require registration to see the listing at all
  • 12.3% agent-only, where even a registered user cannot see the listing via the Internet

And in San Diego, listing clients who don’t freely publish their address pay a steeper price: public listings get 110% more views than listings that limit the address to registered users.

What’s astounding about the San Diego data is that 12.3% of clients don’t publish their listing to the Internet at all; yes, because of the DoJ settlement, this requires seller permission but a listing agreement is so complicated that we wonder if the seller signs this permission away without even realizing it.

Now some agents will respond that showing a very high-end home to every Tom, Dick and Mary on the web won’t contribute one whit to an actual sale. But especially now, when so many high-end buyers are using the web to shop from overseas,  it’s hard to believe that 1 in 8 home-sellers are willing to take that chance. As of 2007, the California Association of Realtors estimated that 72% of consumers start their home-search online.

Of course, there’s a precedent for this. Back in the ’90′s, investment banks used to sell IPO shares to their cronies in exchange for a promise that the cronies would sell the shares back through the bank, doubling fees. This hurt the IPO client, because the stock wasn’t marketed to everyone for the highest possible price, but only to a particular type of buyer, one in fact who was less desirable than other clients. The bankers who did this faced criminal charges.

Today, nobody is going to jail over a withheld address. But we wish that more listing agents, and more sellers, would publish every address free and clear. And we wish that the MLSs would just do away with registration requirements altogether.

(Photocredit: Oldvidhead on Flickr)

Discussion

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  • http://www.foreclosuredataonline.com Matthew Griffin

    I think that we need some privacy in the listings. Here in ForeclosureDataOnline.com, you can see the property listings, but only after a registration you can check all the information, including the adress and phone number of the agent… This way we can avoid people who don’t want to buy and just do a check in the houses.

    By registering, we can see who’s really interested

  • http://blog.redfin.com/ Glenn Kelman

    @Matthew Griffin: have you ever walked into a store thinking you weren’t going to buy something and then walked out an hour later two bags in tow… the same thing happens in real estate.

  • http://www.foreclosuredataonline.com Matthew Griffin

    @Glenn Kelman

    I understand what you’re saying, it’s one point of view. What I said is just that we need to protect the owner privacy too. But you had a good point.

  • http://www.drivebuytech.com/ Ian Greenleigh

    Forced registration is one of the most rudimentary and annoying forms of lead capture & qualification out there today. I understand the thinking behind it, but it’s needs to be reevaluated. What’s really bad is when it’s not even an agent’s listings that require registration to view, it’s the perfectly-public MLS IDX feed on their site. In this case, success in modern real estate and 2.0-thinking coincide beautifully, in that providing relevant information to the consumer without asking for some reciprocal or committal act will, ultimately, be best for both parties. I’m happy to see the data you cite bore this out.

  • http://www.WebMLS.net Larry Whited

    Well written Glen. I posted the following today on Inman on the same subect;

    I love it when someone out side our profession suddenly has all the answers to our future. Walk in our brokerage shoes for a few years and then tell us how you see the RE Biz. I guarantee you will have a deferent opinion.

    Your hypothesis that unless we can prove showing an address in VOW & IDX generates a higher sale we should not display them is absurd and completely misses the point. If we follow your advise our profession will self destruct and be replaced by a Zillow, eBay, Google or Microsoft.

    The consumer demands a free flow of information in this internet world. If the FTC/DOJ allows our industry to hinder that flow of info, such as the address on all IDX and VOW sites, we will be replaced.

    The real issue is that the large, last century, dinosaur, brokerage models want to force the consumer to be dependant on their VOW sites and by doing so force commission back to 7%. They need higher commission to support their inefficient antiquated business models.

    They hope to accomplish this by crushing this century value brokerage models (virtual, low cost, full service) by not allowing their property address to display on the value brokers IDX sites. IDX is much less expensive to operate than a VOW and is vital to the growth of the value brokers.

    They know the value brokerages will always display our address to meet the demands of this century marketing and our clients. Thus they gain a huge advantage in that buyers can see all address on their large brokerage sites (the majority being their own listings) while they block their address on the value broker sites.

    Buyers want to see all addresses so they will gravitate to the larger 7% broker sites at the expense of the value brokers and the consumer will pay higher commissions to sell their homes.

    Your premise is anti-consumer, anti-competition and enables veiled price fixing. The FTC/DOJ must address this loophole quickly.

    Larry A. Whited, Sr., CRB, CRS, GRI
    President & Founder
    http://www.maxUnet.com & http://www.WebMLS.net
    A Virtual Real Estate Franchise System
    ** Virtual Is the Future **
    P.O. Box 757
    West Chester Ohio 45071
    Direct – (513) 543-2727 Fax – (513) 297-7497

  • http://theclozing.com jf.sellsius.theclozing

    The issue that interests me is whether the decision to hide an address should be that of the homeowner or the listing agent.

    I would assume listing agents have the stats to support the reason why registration is preferable– more sales— do you know if those stats exist?

    I am curious to know where you got your statistics on those 66% requiring registration — can you add a link or somehow direct me to the source.

    Thanks

  • Anthroholic

    In my case, my agent decided to hide the address without asking me. When I asked her about it, she blamed it on Redfin saying they do this arbitrarily so that their agents can get the deal. BS! I’m so ready to fire her.

  • Patrick

    I real enjoy this real estate blog. Good information. Thanks

  • http://www.facebook.com/profile.php?id=1175333193 Bill Smith

    There's is also a liability factor when you represent both the buyer and seller in a transaction. I always ask my clients if they want their address hidden, most of them will list it just to help get it sold in this market.
    Bill Smith
    Keller Williams Realty
    914-420-1974
    http://www.HomesForSaleInOrangeCountyNY.com
    http://www.TownhousesForSaleInOrangeCountyNY.com
    http://www.CondosForSaleInOrangeCountyNY.com

  • http://www.85254homesforsale.com James swartz

    I believe that there are a lot of things that a listing agent does that is not in the best interest of their client the seller. The problem with the majority of agents in today's world of the internet, is that they just don't understand how the internet really works. It take a lot of time to understand and work the internet correctly.

    I believe that the address, as well as the best pictures that can be taken, should be blasted out on the web. There are more and more buyers, and sellers using the internet today, than ever before, and it is only growing more everyday.

    If you want to know more about the web and real estate go here: http://dotcomrealestatedomains.com/Sales.html
    If you want to see how I believe a real estate site should look and display property, go here: http://www.85254homesforsale.com
    I am the Owner/Designated Broker for Az Realty Results L.L.C. located in Scottsdale Arizona
    http://www.azrealtyresults.com