Realty Thoughts and the Silicon Valley/San Jose Business Journal both are reporting that the Houston Association of Realtors has reached an agreement to post all of its MLS listings on Google Base.

Some may argue this is another step toward the imminent demise of the MLS; that conclusion makes little to no sense since the Houston area MLS is the vehicle through which these listings will be entered into Google. I would be willing to entertain arguments that this is another nail in the coffin of Realtor.com; while R.Com remains the dominant player for real estate listings (despite Zillow's traffic catching up, the big Z lacks the listings at this stage), signs of erosion are growing.

This agreement also likely will lead to the usual Chicken Little chirping from those who believe this will push Realtors closer to extinction. Aside from the immediate idiocy of the argument - who do you think is entering these listings into the MLS - and the general need to rationalize one's own decision to go it alone with real estate versus using an expert, this stance also assumes an unbreakable (but non-existent) link between Realtors and Realtor.com.

Back to this in a moment.

Says Bob Hale, president and CEO of HAR, "As far as I know, we're the first association in the country to put all of our listings on Google." Congratulations, Bob. I think. We only can assume (and/or hope) that Bob and his group asked the member brokerages before making the decision. This isn't to say the idea is poor but it does lead to other questions, such as those raised later in the San Jose Business Journal article ...

"Google won't sign a document to protect the data, and they won't sign a document to use it for limited reasons," says [James Harrison, president and CEO of REInfoLink, the Silicon Valley MLS service.] His agreements with the brokers who provide listings to REInfoLink limit what his company can do with the listings information, he says, and he legally cannot give Google more rights than that. ...

No matter how benign the relationship appears today, questions remain about Google's longer term strategy.

Will Google try to sell advertising around the content? Or ultimately will Google replicate a business model others have tried of seeking payment from local real estate agents for leads generated from the Web site traffic?

To its credit, Realtor.com does not sell its leads back out to the agents who are providing the content with their listings. But they do charge a fairly substantial sum, based on the number of listings an agent has, for "enhanced" listings that are more visible on the website. Pay an extra fee and you can add additional photos, get a pretty color border around your listing, etc.

Personally, I've yet to pay for a Realtor.com upgrade because I've not seen any value other than being able to tell the sellers "look at the pretty colors." There are reports that show the number of viewings each property has had - not bad for CYA - but most sellers are less interested in the number of showings as the number of offers they have received. To me, the value's just not there.

So to try and link my business to the fate of Realtor.com would be a mistake. And the same goes for the MLS, which I believe will remain if only because it still serves its original purpose - allowing brokerages to communicate listings to each other. Those who understand the basic premise of the MLS also will understand that the future of a local MLS is unrelated to all the other changes technology is bringing to the real estate industry.

Dissemination of listings to the public was an inevitable outgrowth of the Internet-drive communication revolution. But despite the increased visibility of these listings, the public is not a party to the MLS - not in its truest sense, not looking at it for its core purpose. While many agents still inexplicably tell clients that the MLS sells homes, adding to the misguided mystique, others of us are doing everything we can to market our homes outside the MLS. We are embracing the technology and leveraging it to our clients' advantage.

Back to the Houston MLS ... is the agreement with Google Base a good thing for sellers? Probably. For brokerages? Possibly. For agents? Time will tell. But, much as I feel with Zillow, I believe HAR should keep an eye out for the other shoe in case it drops.

(c) Jonathan Dalton, 2006 / Jonathan Dalton's Arizona Homes

Zillow opinions continue to flow, though the anti-Zillow discussion backlash also has kicked in. Personally, I'm planning on using Zillow to my advantage when possible. Covering our eyes and pretending it doesn't exist seems fairly silly ...

Mary McKnight at RSS Pieces has suggested a group of us swap blogs for a day ... keep your eyes open next week for the first ever Yankee Blog Swap.



(c) Jonathan Dalton, 2006 / Jonathan Dalton's Arizona Homes

Here are some fun facts as I perusing Zillow's new listings ...

In Surprise Arizona there are eight home listings as of 8:30 local time:

• Six of the eight were entered by agents
• A seventh was entered by the owner but currently is listed
• The eighth is an unrepresented seller
• Six of the eight are priced above Zillow's estimates including (wonder of wonders) the unrepresented seller's home

In the Arrowhead area (zip codes 85308 and 85310, roughly speaking) ... well, we will have to wait as it appears Zillow's server is down.

Assuming (and assuming safely I might add) that my guess is correct, I'm willing to gamble many or most of the listings in these areas also have been entered by agents looking for one more electronic avenue where a home can be marketed.

And speaking of marketing, after checking out the wiki feature on Zillow, I decided to add a couple of pages of my own about Glendale and Peoria. While I link back to my main sites, I decided against going the out and out advertising route as I have a hunch much of that will be edited and stripped away in time. I consider the wiki pages to be off-shoots of my blogs, where any overt effort to generate business is going to be to be met with derision - and deservedly so, as discussions about real estate ought to aspire more to education than blatant commercialism.

The two pages are very rough and very brief ... I'll go back and flesh them out in the coming days, but I wanted to get them started.

(c) Jonathan Dalton, 2006 / Jonathan Dalton's Arizona Homes

With getting some listing paperwork signed late yesterday afternoon, spending some time with the family and then attending an Executive Committee meeting for my local synagogue, I was out of the electronic loop from about 4 p.m. yesterday until mid-day today. Little did I know the new real estate world that would be waiting for me today.

That, of course, is an exaggeration. But from the proliferation of articles today on one topic - an upgrade to Zillow that allows property owners to "list" their own properties and set a "make me sell" price (a dream price at which they'd start packing, even if they had no intention of moving) - it would seem the real estate industry as we know it has come to a halt.

Well, yes and no. And it seems opinions on the ultimate impact of Zillow's changes depend greatly on the author's already-established opinion of the direction of the real estate industry.

Merv at the Northern Virginia Real Estate Guide opined ...

The significance of this might well be to make every MLS obsolete, realtor.com irrelevant, Google Base old fashioned, Craig's list history and significantly transform the role of a real estate agent as a central figure in the transaction to one of a real estate transaction advisor as buyers search for homes and sellers are empowered to market their own homes on a massive scale.

I believe we're several steps short of every MLS being obsolete or even making Realtor.Com irrelevant. For all of the discussion of local Multiple Listing Systems pulling their listings from Realtor.Com, the fact remains that the vast majority of brokerage-listed properties not only can be seen on the site but are automatically populated. Zillow, at this juncture, is relying solely on property owners and enterprising agents to enter homes for sale. Kris Berg at the San Diego Home Guide discusses this further.

As for the impending obsolescence of the MLS, I believe this is a notion fed by a misconception of the MLS' purpose. As I have stated many times, the Multiple Listing Service is nothing more or less than a database that allows real estate brokerages to communicate their listings to each other while also offering cooperation to those brokerages who bring buyers to the listings. Since Zillow does not have all the homes for sale, and there is no offer of cooperation, it in no way replaces what exists in the MLS.

Now call my a cynic (I'll wait while you do so) ... but if Zillow attracts a great number of people to the website to list their homes, and in time it is proven that this service provides value, isn't it logical to expect the big Z to charge for the service? And once they cross that threshold, are the Zillow listings anything more than a better marketed FSBO site?

Also, Zillow has decided to allow agents to add their property listings to the site. I've tried it here and others, including Ardell in Seattle and the aforementioned Kris Berg, were doing the same. And again, if it is proven that there is value to a Zillow online listing, wouldn't it be natural to assume that Zillow ultimately will charge for this service? And when they do charge for listings to be added, does the site then become more or less relevant than a Realtor.Com that also charges for upgraded listings?

I'm going to wrap this as much of today's discussion across real estate blogs has been duplicative. But before I call it an afternoon, I'll add one final twist.

So far I've added one property to Zillow. Why? Because in the other cases, the Zestimate provided is lower than the list price of the home. While it seems like a simple difference in calculations, consider the possible ramifications over time:

1) Does a lower Zestimate, accurate or not, provide a prospective buyer with a starting offer or, worse yet, a perceived notion of value that will not or cannot be overcome with additional information?
2) Since Zillow allows property owners to adjust the estimated value of their home, are we going to see homeowners adjusting their prices to the values they'd rather see to justify higher possible list prices? (In theory this can happen now, but I believe the side-by-side sales price and estimated value will create an inexorable link in the mind of a buyer.)
3)  Can a property owner opt out of the system when the estimate can impact their ability to sell for fair value? Sellsius wrote about this one.

And the final question ... while the technological side of things seems wonderful, is there anyone else wondering how strong a structure being built upon a house of cards possibly can be? Keep in mind I have no issue with Zillow adding listings - while the bubble heads are off praying for the destruction of the real estate agency, those of us in the industry with any kind of a clue already are adapting in under a day.

But given that Zillow's estimates only are as good as the last few sales, that in areas where there are no sales the data can be shaky, that there are any number of unzillowables out there ... with an increasing amount of information presented as fact versus conjecture, will this great real estate Tower of Babel come tumbling down if the underlying stones mentioned in the previous sentence aren't anchored more securely?

That's it for me ... I'll be going through the rest of the posts in a bit. If you're interested in the varied reactions, here's a list compiled by Drew at the Zillow blog:

Greg at the Bloodhound Blog on the 900-pound AVM
Ardell's first blush at Rain City Guide
Future of Real Estate Marketing, Zillow Offers Free Listings
Transparent RE's Zillow Primer
Kevin Boer at Three Oceans on the world changing
Galen's always unique perspective at Rain City Guide
Jim Duncan at Real Central Virginia
Maureen Francis' first-ever Zillow post. (Really?)
Jonathan Miller at the Matrix on the make me move price

(c) Jonathan Dalton, 2006 / Jonathan Daltons Arizona Homes

A few days ago, the gentlemen at sellsius reminded us all that there is no spoon. As this was the last post I've seen out of them, they since may have fallen victim to Agent Smith (follow the white rabbit, Neo) but that's neither here not there. Most interesting about this post was the complete lack of context. All we know is Keanu Reeves is being told the key is understanding there is no spoon.

As I looked at the picture, I realized the concept applies to many of the hot topics in the real estate blogosphere today.

Take, for example, the quest for finding the true valuation of a property. Zillow has its zestimates and eppraisal.com has its range of values. Zillow trumpeted the accuracy of its estimates, at least until they were called on some of the more glaring inaccuracies, while the folks at Realty Thoughts are clear from the get-go that their range is only an estimate and not a replacement for the work of an appraiser or real estate agent.

Having said that, even a full-fledged appraisal is nothing more than an opinion (albeit a reasoned opinion) about the value of a property. It is based on recent sales in a given area and adjusted according to the merits (and challenges) of the subject property. Appraisers bend the numbers like Neo and the children bending the spoon, but the truth of the matter is ... say it with me ... there is no spoon. Three appraisers can look at the same property and assign three different values but which is the true value? All of them? None of them? Is an answer possible?

Now let's say we find three appraisers to all agree on a certain value. Does that mean this is the price the seller can expect to receive should they decide to sell? Absolutely not. Market factors, completely different than the factors used for appraisals, enter into this equation - where currently listed homes are prices, at what prices listings have expired, the amount of traffic through a house at a given price. Oh, and also the size of the house.

The size of the house, you ask? Absolutely. As a home's square footage grows, it's market value on a price per square foot basis falls. There are a number of reasons for this but human nature and market mechanics are the dominant two; demand is stronger for the smaller homes than the larger ones, creating a larger pool of buyers and more competitive prices while human nature is such that buyers get antsy if the list price creeps toward magic numbers (such as a half million, etc.)

Is there one set market value for a home? Well, eventually there will be - only after buyer and seller have agreed on a price. But for the agents trying to calculate what that price may be, we fall back to dealing with one person's opinion. Three different agents easily can lead to three different perceived market values.

(Circling back, once an offer has accepted and the buyer and seller set their market value, it's then up to the appraiser to determine if that figure is reasonable enough for a lender to finance the loan. Most often, the appraisal agrees with buyer and seller which then leads to the appraised value being adjusted to meet the market value even though appraisal and market value most likely were two different figures when the transaction started.)

Sound confusing? Convoluted? Just plain insane? You either can follow Jimmy Buffett's recent advice - Breathe In, Breathe Out, Move on - or accept the reality that ... yes ... there is no spoon.

The spoon test also can be applied to compensation for buyers' agents. Some will argue the buyers are paying for their representation because they bring all the money to the table and the compensation is priced into the home. Some will argue that the seller is paying the buyers' agent because the commission paid represents profit that has been surrendered in the name of making a deal. Without delving too deeply into the issue (for that, you can go here or here or even here),  I'm absolutely confident in saying there is no spoon.

There is a physical manifestation - the check the agent ultimately receives - but for the buyers and sellers plugged into the Matrix of Real Estate (not to be confused with the Matrix blog) the commission does not physically exist. Neither will see it. The buyers almost certainly will pay the same price regardless of the commission. The sellers already wrote off the additional money when they signed the listing agreement. We argue over possession of the spoon but there is no spoon.

Next topic: "Do you believe that is air you are breathing?"

(c) Jonathan Dalton, 2006 / Jonathan Dalton's Arizona Homes