Understanding IDX and VOW
Your listings on the Internet. For Better or Worse, They are There... Now What?
Public display of other broker’s listings via the Internet has created the potential for major change in the real estate industry, and that is exactly why we must move forward with our eyes open, going back to the basics and understanding the fundamentals before we move forward. It is time to re-evaluate where we have been and then where we want to proceed, or someone else will do it for us.
Let’s start by looking before the days of the www (the graphical part of the Internet), which has been around since 1992 or so with the development and then commercialization of “browsers” (The Internet has been around in some form since 1969).
Things were pretty simple in the pre-1992 real estate. The two major ways to make money in real estate sales were: Listing & Selling.
If I took a listing, I could use that listing to help me generate more listings. “For Sale” signs and “just listed” mailings increased my “presence” and the chance that other owners would recognize me as a real estate sales leader in the neighborhood (and hopefully, help me get more listings). There was a recognized promotional value in the listing. Other brokers were not allowed to put their signs on my listings. They were not entitled to the promotional value I gained when I got that owner to sign my Exclusive Authorization and Right to Sell (listing agreement).
Listings and their promotional value helped me find buyer leads for my listing, other listings I might have and because I was a member of the MLS (“unilateral offer of compensation”), listings of other broker members of the MLS.
If I had a listing, I could run ads, and when calls came in (leads), I could begin to work with the caller by inviting them into my office to meet and discuss perhaps other properties in which they might have an Interest. This might include other broker’s listings as well as my own. I had no obligation to give the name and phone number of the listing broker when I provided listing information to a prospective buyer who came into my office. When I took a prospective buyer out to look at the property, I had no obligation to give the prospect the name or phone number of the listing broker. I simply “showed” the property” and provided information, answered questions, etc. If the buyer said: This is great, now please give me the name of the listing broker so I can write an offer,” I was under no obligation to do so.
Once again, and this is an important concept, the listing itself had a promotional value that we all recognized and of which, only the listing broker, could take advantage. Listing brokers had no obligation to let competitors benefit from the promotional value of the listings they worked to obtain (Listings are the property of the broker. We all learn this in pre-license classes, and the Internet and web do not, because of their existence, change this foundational aspect of the business).
As a matter of fact, state real estate laws prohibited the advertising of another broker’s listing without the listing broker’s permission (still the case today).
Now Roll Forward to 2002
As many RealTalkers might remember we been putting the IDX/VOW subject in front of readers for at least the last year, and most REALTORS® in the field are not yet aware of ideas and concepts that have the potential to change the way many do business.
Today, there are at least 3 identifiable ways to make money in real estate sales: Listing, Selling & Lead Generating and Referring
While referring existed before 1992, it was not a major part of most real estate businesses (except for maybe relocation, which was usually done within the confines of particular companies).
Listing information is content, and it still has that promotional value. So who is entitled to the benefit of the promotional value created by listings? Many are saying all brokers (and even their agents, without their broker’s permission) have the right to display on their website as information, all the MLS listings without obtaining the permission of the listing broker. While IDX requires permission, VOWs do not. This is a major distinction and critical to any discussion on VOWs.
And what about leads from the Internet? If you don’t have the means to generate them yourself, there are companies that will help you with Internet leads for a fee. Weigh carefully their business proposition to you because they just might make economic sense.
There is a cost to lead generation, and you need to examine your cost and compare it to some of the new referral programs available online. I recommend that those who are serious about being competitive in this business over the next five years do some web surfing to see what they might be up against and how they can best utilize the Internet in the development of their business model.
The business has always been about leads. What is one of the biggest time consumers in a REALTORS day prospecting, and working on the development of leads from cold calls to door hangers to direct mail to signs on listings to classified ads all designed to make the phone ring, leads Brad Inman says nothing new when he says the business is all about leads. What is new is where many of those leads will come from, how they will be matched and distributed, and if there is a more cost-effective way to develop leads than the old ways many agents and brokers are so used to.
What are you paying for your leads right now in your time and marketing? How can you generate leads from the Internet? What will you (do you) pay for those leads? Is it less than you are paying now for leads (when you consider all your marketing, advertising, referral fees, prospecting, cold calling door knocking, etc.)? It is your job to find out what is right for you and how you fit into a changing real estate industry. Referral models are proving to be a third major area of revenue in the real estate sales business Listings, Sales, Referrals.
Just like many in the industry did not and still do not know about IDX and VOW. Many do not know about some of the new business models that have the potential to change the business of real estate. And it is everyone’s responsibility to know about the business they are in and know that there is no substitute for your due diligence.
From someone who has observed closely the evolution of listings and consumers on the Internet since 1993, from the inside and the outside, I want to stress to you that IDX and VOW are important pieces of a much bigger puzzle. Who will put the puzzle together first is the question we are all looking to answer and by participating with us in our online discussions, you will have a better chance of learning what you need to know about industry changes first, and how these changes might affect your livelihood and your future in real estate.
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