It seems that every day I receive a new email from a real estate directory or free listing site that is claiming to be exactly what I need to improve my websites traffic flow and supply all of the clients that I could ever want (well that is a slight exaggeration).  An now the Point2 system has renamed its Point2Home site the NLS or National Listing Service.  So who is really benefiting from all of these websites?  Is it the agents?  The consumer? or just the site operators?

I was once told by a broker in my area that "the worst thing to happen to the real estate industry, in Canada, was the opening of MLS.ca".  At first I was pretty sure that he was full of "it", of something, and grumbling about how it had effected his business, which was not making any effort to build an online presence.  That was probably part of it but I keep thinking that we are building ourselves a large trap by using these sites.

The public is starting to believe that they can get all of the information that they need, to find or sell a home, online.  Unfortunately, much of the information that they get is too general to be useful in all circumstance and often outdated.  I recently had a client that liked to surf for homes trying to see if they could find a home, that I had not sent them, that was right for their needs.  In mid January 2007 they sent me 10 homes that they wanted to see that I had not sent them, mostly found on REALTOR.com.  Shocked that I had missed any appropriate homes I immediately pulled up the listings to see how I had missed them.  Sometimes there is incomplete, or incorrect, information that causes an appropriate listing to be left out of a search even though I do not use most of the factors that I find are the "usual suspects" for these anomalies.

I though that this might have been the case, though I was perturbed by the number and worried there was a larger problem.  So, I quickly opened the listings and found that every single one of them had sold.  Not just last week or even last month.  Most of the homes had sold and even closed last June (2006).  Six months ago and they though my clients had thought that they had found the perfect homes.  when they had first found the homes they must have been wondering what I had been doing not sending them these homes, and if I was in there place so would I.  Yet, the homes that I did send were the current best homes and they did buy one (still pending closing), but they may have missed out on the home I was not able to prove to them that I was providing them with all of the appropriate homes and not just homes that "I" wanted to sell.

REALTORS® lose out with when they use most of the directories because the directories are usually getting paid by using a pay per click advertising network or they offer a lead generating program where they will sell REALTORS® client leads when ever a consumer fills out requests for information on their sites.  They also usually ask for a reciprocal link from each agents site making it so that they often out rank many agents on the Search engine results.  This means that REALTOR® websites get fewer hits, were consumers could actually get answers, and the directories get more hits and any requests for information that the consumer has will have to wait until an agent buys the lead and sends the information that is requested.  This is time consuming and the agent that you end up with is the one who pays not necessarily the one who works hardest to promote their service or the interests of their clients.

Unfortunately, we are now in a situation where if you do not link with these sites you can be out ranked by those agents that are willing to either link or pay for inclusion on the sites.  The only way to really combat these parasite sites is to band together and use quality link trading with other REALTORS® to try and out rank them enough that they can not make a living through leads and PPC. 

As for the Public "MLS®" sites, the general public needs to be educated that they are only marketing sites and not the best way for a serious home buyer to find a home or for a home seller to set do market research for pricing.  These public sites do not usually have any sold information and if they do then they are only hurting the industry  in the area that they cover.  The NLS is another case of marketing that I hope does not turn into too much of a parasite on the industry.  They do sell "neighbourhoods" to agents for more than they are currently worth but is that were it will end?  The system has fewer controls over quality of information than MLS.ca and it is limited to agents on the Point2 system, but is that going to be enough for them in the long run.

Sometimes I worry about whether the real estate industry is going to shoot itself in the foot with its over exuberance to market widely and with all of the cost cutting that takes place in an effort to stay afloat.  Soon it may be a case that no agents can afford to stay in the business unless they are so over worked that they are more prone to mistakes.  After all how many deals can one agent negotiate, track and close in a day, week or year?  How many homes can one agent show to clients each day, week or year?  And how many clients each agent realistically find and help when there are hundreds if not thousands of other agents also looking for the same client?  And finally, how low can an agent go on commissions and truly survive in the long run, with only that reasonable number of clients?

But then again, that is another story