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Listings Aren't Airline Tickets

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Joe Ferrara asks whether listings are like airline tickets in his post about American Airlines pulling its ticket listings from Kayak:

Are home listings like airline tickets to be freely given by listing brokers and agents to any and all third party listing sites? Do listing brokers have any reason to complain so long as they get exposure of home listings to consumers and a link to their websites?

My take is that home listings are completely unlike airline ticket listings for one very important reason: the listing broker does not own the underlying property.

For American Airlines, who provides the actual service of transportation, to get pissy with Kayak is its decision.  If the decision to pull its ticket listings from Kayak results in fewer sales of American’s seats, that only affects American Airlines and its shareholders.

In contrast, a listing broker who pulls listings from TruZillia or some other online aggregator has to answer to the ultimate client: the home seller who has engaged the listing broker to represent his property.  If pulling listings results in fewer leads and fewer inquiries and therefore a lower sale price than might have been possible, I’m 99.99% certain that any court anywhere in the United States would be finding for the homeseller plaintiff against his “fiduciary” broker.

I note that there is a difference between failing to list on some website (which could theoretically be justified as there are a plethora of websites out there, and the broker might not have heard of XYZ listing aggregator) and pulling listings off of a site.  I would think that the broker would have to show that the listing aggregator was 100% ineffective at generating additional leads, so that pulling listings from it had no impact whatsoever on the exposure (and ultimately the offer) that his client received on his house.  And how in the world do you show that?

In short, pull listings off of aggregators at your own peril, brokers.

-rsh

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Rob Hahn
Managing Partner of 7DS Associates, and the grand poobah of this here blog. Once called "a revolutionary in a really nice suit", people often wonder what I do for a living because I have the temerity to not talk about my clients and my work for clients. Suffice to say that I do strategy work for some of the largest organizations and companies in real estate, as well as some of the smallest startups and agent teams, but usually only on projects that interest me with big implications for reforming this wonderful, crazy, lovable yet frustrating real estate industry of ours.

26 COMMENTS

  1. you’d think so, but consider Windermere, which dominates Seattle. They pulled their feed from Realtor.com a couple years ago. They feed their stuff to google and others, but not realtor. Doesn’t appear to have hurt their business at all. Exception that proves the rule?

    I still can’t fathom the American Airlines strategy though…

  2. you’d think so, but consider Windermere, which dominates Seattle. They pulled their feed from Realtor.com a couple years ago. They feed their stuff to google and others, but not realtor. Doesn’t appear to have hurt their business at all. Exception that proves the rule?

    I still can’t fathom the American Airlines strategy though…

  3. Are there any ambulance-chasing attorneys in the Seattle area? 🙂

    I think Windermere is looking like a nice fat target.

    -rsh

  4. You raise an interesting point. Once you sign up for an listings aggregator/syndicator, are you bound to stay with them as part of your fiduciary duty? Does it require you to show 100% ineffectiveness? That’s a tough standard. And are listing agents who only put their listings on the MLS breaching their fiduciary duty? Very interesting indeed.

  5. You raise an interesting point. Once you sign up for an listings aggregator/syndicator, are you bound to stay with them as part of your fiduciary duty? Does it require you to show 100% ineffectiveness? That’s a tough standard. And are listing agents who only put their listings on the MLS breaching their fiduciary duty? Very interesting indeed.

  6. JF –

    I think you and the other legal minds are the ones to answer the question definitively — well, not “definitively” as a court ruling might… But wouldn’t you think that fiduciary duty to the seller would require expending best efforts?

    I suppose the case would turn on the definition of “best effort” — I’m thinking that in order to avoid liability, the agent would have to show that the removal of a listing is something the fictional “reasonable agent” would also have done. It can perhaps be justified on cost/benefit grounds, or on grounds of ineffectiveness, but otherwise, I’m thinking Big Ole Judgment. Yah, the 100% ineffectiveness might be too tough a standard, but the good old “reasonable person” standard isn’t.

    An agent who only posts on the MLS in today’s environment, I think, is possibly opening himself up to liability for malpractice. It would be easy to call expert witness after expert witness to testify that they post listings to a bazillion websites to maximize exposure for their client’s property.

    Let’s get some bright legal minds on this sucker!

    -rsh

  7. JF –

    I think you and the other legal minds are the ones to answer the question definitively — well, not “definitively” as a court ruling might… But wouldn’t you think that fiduciary duty to the seller would require expending best efforts?

    I suppose the case would turn on the definition of “best effort” — I’m thinking that in order to avoid liability, the agent would have to show that the removal of a listing is something the fictional “reasonable agent” would also have done. It can perhaps be justified on cost/benefit grounds, or on grounds of ineffectiveness, but otherwise, I’m thinking Big Ole Judgment. Yah, the 100% ineffectiveness might be too tough a standard, but the good old “reasonable person” standard isn’t.

    An agent who only posts on the MLS in today’s environment, I think, is possibly opening himself up to liability for malpractice. It would be easy to call expert witness after expert witness to testify that they post listings to a bazillion websites to maximize exposure for their client’s property.

    Let’s get some bright legal minds on this sucker!

    -rsh

  8. Well I’m clearly not a “bright legal mind”, but I’ll chime in.

    This is an interesting topic. Where does my fiduciary duty begin and end?

    Clearly I can’t put a listing on every possible web site. But is saying “I didn’t know about that site” reason enough? *Shouldn’t* I know about all the possible sites? (a nearly impossible task as new ones pop up almost daily.)

    Does my fiduciary duty require me to purchase enhanced listings on realtor.com? That approaches 100% ineffectiveness, though I could argue that enhanced listings are more effective than standard listings.

    What about single-property websites? Is the agent that doesn’t utilize them “wrong”?

    Am I breaching fiduciary if I don’t repost to Craig’s List every week? A listing there probably becomes 100% ineffective after a week.

    Personally, I rarely send “just listed” postcards to the neighbors. Am I doing a disservice to my clients?

    Could a seller argue that since I didn’t hold an open house, I wasn’t doing what a reasonable and prudent agent would do?

    I think if I inform my clients up front “this is my marketing plan”, and I disclose things like “no postcards” and “I’ll build a single property site”, “open houses suck” then as long as I do what I say I will (and won’t) do, I’m meeting my duty. That is the plan they bought in to.

  9. Well I’m clearly not a “bright legal mind”, but I’ll chime in.

    This is an interesting topic. Where does my fiduciary duty begin and end?

    Clearly I can’t put a listing on every possible web site. But is saying “I didn’t know about that site” reason enough? *Shouldn’t* I know about all the possible sites? (a nearly impossible task as new ones pop up almost daily.)

    Does my fiduciary duty require me to purchase enhanced listings on realtor.com? That approaches 100% ineffectiveness, though I could argue that enhanced listings are more effective than standard listings.

    What about single-property websites? Is the agent that doesn’t utilize them “wrong”?

    Am I breaching fiduciary if I don’t repost to Craig’s List every week? A listing there probably becomes 100% ineffective after a week.

    Personally, I rarely send “just listed” postcards to the neighbors. Am I doing a disservice to my clients?

    Could a seller argue that since I didn’t hold an open house, I wasn’t doing what a reasonable and prudent agent would do?

    I think if I inform my clients up front “this is my marketing plan”, and I disclose things like “no postcards” and “I’ll build a single property site”, “open houses suck” then as long as I do what I say I will (and won’t) do, I’m meeting my duty. That is the plan they bought in to.

  10. the loiting agreement we use here in Central Florida states under broker obligation:

    “Advertise the property as Broker deems advisable in newspapers…, including the internet…”

    I believe that is there to protect the Broker from this type of issue.

  11. the loiting agreement we use here in Central Florida states under broker obligation:

    “Advertise the property as Broker deems advisable in newspapers…, including the internet…”

    I believe that is there to protect the Broker from this type of issue.

  12. @Jay

    I have a question out to a couple lawyer buddies of mine, but I don’t know how up they are on agency law and fiduciary duty issues.

    But you’re right on all of your observations. What does fiduciary duty require of listing brokers?

    I suspect it will come back to the notion of the “reasonable broker”.

    I further expect that if you inform your clients up front what the marketing plan is, then contra a specific instruction from the client (for which you, as the agent, can at least demand further compensation and cost), I think you’re likely good to go. That ain’t legal advice, though. 🙂

    At the same time, I don’t know that staker’s listing agreement is going to cut it. Because the language is so vague — “Broker deems advisable” — the smart lawyer will simply argue that the Broker was so negligent, and so below the standards of the ‘reasonable broker’ that he ought to be held liable for malpractice. In other words, a ‘reasonable broker’ would have deemed it advisable to list on Trulia; so that this particular broker did not deem it advisable is evidence of malpractice.

    I’d love to find out — if my friends respond to me, I’ll post it here.

    -rsh

  13. @Jay

    I have a question out to a couple lawyer buddies of mine, but I don’t know how up they are on agency law and fiduciary duty issues.

    But you’re right on all of your observations. What does fiduciary duty require of listing brokers?

    I suspect it will come back to the notion of the “reasonable broker”.

    I further expect that if you inform your clients up front what the marketing plan is, then contra a specific instruction from the client (for which you, as the agent, can at least demand further compensation and cost), I think you’re likely good to go. That ain’t legal advice, though. 🙂

    At the same time, I don’t know that staker’s listing agreement is going to cut it. Because the language is so vague — “Broker deems advisable” — the smart lawyer will simply argue that the Broker was so negligent, and so below the standards of the ‘reasonable broker’ that he ought to be held liable for malpractice. In other words, a ‘reasonable broker’ would have deemed it advisable to list on Trulia; so that this particular broker did not deem it advisable is evidence of malpractice.

    I’d love to find out — if my friends respond to me, I’ll post it here.

    -rsh

  14. Something from my litigator friend:

    don’t know the answers, but realtors are sued all the time, so it’s probably out there.

    Off the top of my head, the liability std. might be akin to what it is in professional malpractice cases — did the failure deviate from the level of knowledge and skill that prevails within the profession in the region at issue — i.e., the ordinary level of competence that characterizes realtors in the area where the house was being sold.

    If that’s right, you probably would need an expert to establish the applicable std of care and whether there was a deviation. This does not seem to be a “common knowledge” type situation.

    In order to get damages, you’d probably have to prove that the house (i) would have sold if listed on one of these engines, but didn’t, (ii) would have sold quicker, thereby precluding some sort of economic losses (e.g., preventing the seller from incurring carrying charges, taxes, etc.) (iii) would have sold for more than it did — unless there’s some sort of quirky loss that the realtor knew or should have known would arise from their negligence. Might depend on whether it’s a falling or rising market — the seller could actually benefit from the delay in a rising market.

    (My friend Matt Lewis, of Riker, Danzig in Morristown, NJ, in case you need an attorney — free plug for his free thoughts)

    -rsh

  15. Something from my litigator friend:

    don’t know the answers, but realtors are sued all the time, so it’s probably out there.

    Off the top of my head, the liability std. might be akin to what it is in professional malpractice cases — did the failure deviate from the level of knowledge and skill that prevails within the profession in the region at issue — i.e., the ordinary level of competence that characterizes realtors in the area where the house was being sold.

    If that’s right, you probably would need an expert to establish the applicable std of care and whether there was a deviation. This does not seem to be a “common knowledge” type situation.

    In order to get damages, you’d probably have to prove that the house (i) would have sold if listed on one of these engines, but didn’t, (ii) would have sold quicker, thereby precluding some sort of economic losses (e.g., preventing the seller from incurring carrying charges, taxes, etc.) (iii) would have sold for more than it did — unless there’s some sort of quirky loss that the realtor knew or should have known would arise from their negligence. Might depend on whether it’s a falling or rising market — the seller could actually benefit from the delay in a rising market.

    (My friend Matt Lewis, of Riker, Danzig in Morristown, NJ, in case you need an attorney — free plug for his free thoughts)

    -rsh

  16. Jay’s observations/questions show how complex things can get.

    The problem may be one of proof of damages. If a homeowner claims the agent only put the home on the MLS and not on TruZillia , having pulled it, and the owner says “hey, that’s a breach of your fiduciary duty” what are the damages? How can the owner prove (1) they would have gotten a better price or (2) sold faster, if it was on truzillia? Perhaps the owner’s sole remedy is to take the listing to another broker.

    Consider also that the MLS probably has a greater ROI than TZ or any other ad venue.

  17. Jay’s observations/questions show how complex things can get.

    The problem may be one of proof of damages. If a homeowner claims the agent only put the home on the MLS and not on TruZillia , having pulled it, and the owner says “hey, that’s a breach of your fiduciary duty” what are the damages? How can the owner prove (1) they would have gotten a better price or (2) sold faster, if it was on truzillia? Perhaps the owner’s sole remedy is to take the listing to another broker.

    Consider also that the MLS probably has a greater ROI than TZ or any other ad venue.

  18. JF –

    You make a lot of sense, my friend. Have you thought about law school for your future? 🙂

    You’re likely right. Thing is, in terms of “how to prove”, I actually don’t think that’s all that difficult. As my friend Matt said, the plaintiff will want to establish that there’s a applicable standard of care common in the industry (expert witnesses, statistical studies) and then say that not posting to TruZillia (or not doing whatever) is a deviation from that.

    Damages will be tricky, of course, but I can definitely see that being a battle of expert witnesses as well.

    I suppose the real question is whether the case, if brought, would be dismissed out of hand by the court. I don’t think so. I think there’s probably enough there to survive a motion to dismiss. I think there might be enough in many cases to survive a summary judgment motion as well. That means enormous litigation cost for the broker, especially if he’s facing a contingency fee class action suit, as a LARGE broker might.

    Safest route is probably to do what Jay said: tell the client in detail about your marketing plan. Get the client to signoff on it.

    -rsh

  19. JF –

    You make a lot of sense, my friend. Have you thought about law school for your future? 🙂

    You’re likely right. Thing is, in terms of “how to prove”, I actually don’t think that’s all that difficult. As my friend Matt said, the plaintiff will want to establish that there’s a applicable standard of care common in the industry (expert witnesses, statistical studies) and then say that not posting to TruZillia (or not doing whatever) is a deviation from that.

    Damages will be tricky, of course, but I can definitely see that being a battle of expert witnesses as well.

    I suppose the real question is whether the case, if brought, would be dismissed out of hand by the court. I don’t think so. I think there’s probably enough there to survive a motion to dismiss. I think there might be enough in many cases to survive a summary judgment motion as well. That means enormous litigation cost for the broker, especially if he’s facing a contingency fee class action suit, as a LARGE broker might.

    Safest route is probably to do what Jay said: tell the client in detail about your marketing plan. Get the client to signoff on it.

    -rsh

  20. Yes, bottom line protection lies in a contract with the seller, setting forth the marketing plan, with certain discretion to broker– you can’t run an ad in the NY Times indefinitely.

    You can track traffic from Truzillias but ROI is lacking.

  21. Yes, bottom line protection lies in a contract with the seller, setting forth the marketing plan, with certain discretion to broker– you can’t run an ad in the NY Times indefinitely.

    You can track traffic from Truzillias but ROI is lacking.

  22. There will always be plaintiffs and lawyers litigating for various reasons. I can not say any lawsuit over which websites a listing was posted on should not occur. I can say that any lawsuit brought for those reasons is without merit. It would have be based on the (erroneous) premise that inquiries from those various sites actually directly helped or caused a home to sell.

    The top national site for traffic is Realtor.com. I currently pay about $4,000 a year to “enhance” my listings. There was a time that every 20 leads from Realtor.com equaled a closed escrow on *a* home. Seldom the one they inquired about. Now, the *only* reason I am on Realtor.com is to be able to say to our sellers that “we feature your home on Realtor.com”. That is the ONLY reason. In the past four years, I have never sold a listing because it was on Realtor.com, Trulia, Zillow or any of the other sites. I have sold homes to buyers because we received an email lead because we have a lot of listings on those sites. Big difference.

    If you are wanting buyer leads those sites may or may not be good. If you want to “impress” you sellers, they can be very good. If you want to actually sell that house I don’t see that they make *any* difference.

  23. There will always be plaintiffs and lawyers litigating for various reasons. I can not say any lawsuit over which websites a listing was posted on should not occur. I can say that any lawsuit brought for those reasons is without merit. It would have be based on the (erroneous) premise that inquiries from those various sites actually directly helped or caused a home to sell.

    The top national site for traffic is Realtor.com. I currently pay about $4,000 a year to “enhance” my listings. There was a time that every 20 leads from Realtor.com equaled a closed escrow on *a* home. Seldom the one they inquired about. Now, the *only* reason I am on Realtor.com is to be able to say to our sellers that “we feature your home on Realtor.com”. That is the ONLY reason. In the past four years, I have never sold a listing because it was on Realtor.com, Trulia, Zillow or any of the other sites. I have sold homes to buyers because we received an email lead because we have a lot of listings on those sites. Big difference.

    If you are wanting buyer leads those sites may or may not be good. If you want to “impress” you sellers, they can be very good. If you want to actually sell that house I don’t see that they make *any* difference.

  24. Wow, Russell — your comments are amazing. The implications are staggering. Thank you for them — I will be posting on these soon.

    -rsh

  25. Wow, Russell — your comments are amazing. The implications are staggering. Thank you for them — I will be posting on these soon.

    -rsh

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