Realtor.com operator Move Inc. says it will compete with Zillow.com and Trulia and sell “lead forms” to buyer brokers and agents that will appear next to for-sale listings on the site.
Listing brokers will have the ability to opt out of the “Connection for co-brokerage” advertising program, but will be rewarded if they allow the ads to appear next to their listings.
When listing brokers allow the Connection ads to appear next to their listings, Realtor.com will display up to 25 photos of listings that are accompanied by advertising at no charge, up from the four that are displayed at no cost today.
In addition, ads for buyer agents will not appear next to “enhanced listings” — listings that brokers or their agents have paid Realtor.com to appear at the top of search results with their company branding and contact information, and which can also be accompanied by up to 25 photos and additional “extended content” such as virtual tours.
Some listing brokers object when third-party listing portals run ads for other companies’ agents next to listings that they represent.
They may view listings as “content” they create when they submit information about properties they represent to multiple listing services, and resent the ability of third-party listing portals to use listings as content to generate website traffic that can be converted into “leads” and sold back to them.
When ads for agents that work for another brokerage appear next to their listings, brokers may also lose out on the chance to represent both the buyer and the seller, capturing the entire commission on the sale rather than sharing it with a cooperating broker.
Realtor.com President Errol Samuelson said the site is unique in offering brokers the ability to opt out of the Connection ad program, and in offering incentives to those who do choose to participate.
“The main trick is for people to understand the listing broker has options, and is also in control,” Samuelson said. “The broker is able to decide how … to market the listing, and can do so in an industry-friendly manner.”
Listing brokers represent the buyer and seller in the same transaction only about 12 percent of the time, he said, citing a NAR survey.
Move operates Realtor.com, the official listing portal of the National Association of Realtors, under an agreement with NAR. The agreement was amended last year for the first time in more than a decade to allow Move to run buyer broker and agent ads next to listings, among other changes.
Because the ads will not feature company branding or agent photos, Move is characterizing advertisements for buyer brokers and agents as “lead forms.”
Some brokers have dubbed the agent advertisements that appear next to listings on third-party sites the “three-headed monster,” because headshots of competing brokers’ agents sometimes appear in ads alongside of their listings.
Move began test marketing the Connection ads in seven markets this summer — Colorado Springs, Colo.; Austin, Texas; Traverse City and Ann Arbor-Troy, Mich.; and Jacksonville, Orlando, and Miami-Dade County, Fla.
Samuelson said only one broker in the test markets who was not buying enhanced “Showcase” listings decided to opt out of the program, forgoing the offer of additional free listings photos in order to block the ads from appearing next to that broker’s listings.
At a meeting last week with a large group of brokers on the West Coast, most were receptive, with “one or two (saying they) might opt out,” he said.
Samuelson, who is also Move’s chief revenue officer, said Move hopes to make the Connection ads available to buyer brokers and agents in every market in the country by the onset of the spring buying season. The next markets to launch include Dallas; Denver; New Orleans; St. Paul, Minn.; Scottsdale, Ariz.; Tampa, Fla.; and Albuquerque, N.M.
Realtor.com will sell buyer brokers and agents a ZIP code or groups of ZIP codes in six-month increments, at four price tiers that are keyed to home prices and Realtor.com website traffic.
“If you compare homes in Dayton, Ohio, to (Los Angeles), the median sales price is different, so the return on investment is different,” Samuelson said. “There are discounts for markets with lower median home prices, and also we have different levels of traffic in different markets.”
Brokers and agents have had mixed reaction to the Connection program, which Samuelson discussed with Chris Smith, Inman News evangelist and contributor to the InmanNext site, in a post published on the site Monday.
Some commenting on the post said they liked the fact that unenhanced listings will be accompanied by more photos, calling it a consumer-friendly move.
Others questioned whether buyer brokers and agents will get their money’s worth from the lead forms. One broker said he was told by Realtor.com sales agents that the number of leads he could receive would be be “hard capped” at a predetermined number.
Samuelson said there will be no cap on leads, although the number of leads will vary with buyer interest. More leads will be generated in the spring, for example, than in the weeks leading up to Christmas, he said.