[Note from the Editor: This is a sample Geek Estate Mastermind Newsletter (#37), which was published for Mastermind members last week. It’s the second newsletter we’re publishing publicly on the blog, the first was the analysis of Knock a few months ago. We’re making this one public because the Geek Estate Mastermind community as a collective is going to publish both a Bull and Bear argument for IDX. This piece pokes holes in IDX, at least in its current form. We don’t have all the answers, but we’re asking the questions. We’d like your help thinking through every angle. There are a wide range of incredibly smart and experienced individuals who read this blog. Are you bull or bear on the future of IDX? Please leave your comments, and that will help us produce the most comprehensive bull and bear arguments possible.]
Here is Something Users Can’t Understand. It’s IDX, Man.
IDX perpetuates the confusion surrounding online real estate search. It reinforces the status quo under the guise of innovation and stymies competition by encouraging parity in a crowded market.
It’s not that real estate incumbents wanted to mislead users. It was only ten years ago that brokers proudly displayed their own listings in streetside windows to generate inquiries, but happily showed other listings to buyers when exclusive inventory didn’t match their needs.
The mechanics of IDX
Think of the UI like a streetside brokerage window that shows all the listings for sale instead of just the Coldwell Banker exclusives. And if you walked down the street to a Keller Williams office, the listings in that window would look the same.
How would you determine which agency represented a listing in any given window?
Think of the UX like a locked office door with a fingerprint scanner just to walk in to ask a question about a house in the window, only to sit in the waiting room for a few hours merely to find out if the kitchen has a pantry or not.
Why would it be okay to treat curious homebuyers or sellers this way?
Think of the backend like a mission control room where agents surveil users every move, and programmatically deploy sponsored interruptions to everyday life by whatever means necessary to get attention.
The confusion around online real estate search
Even the most basic user testing experiments in real estate search find an overwhelming majority of participants can not materially explain the business model of portals or brokerage websites, much less who represents a house advertised “in any office window.” And truthfully neither can most agents.
Poking at it further, there a few sites where there is much less confusion. HAR.com is the best example. Listing agents are identified as the exclusive representative, and the brokerage contact information accompanies every house for sale.
Zillow is a distant second for at least always disclosing the agent representative for every listing to the same proportions as its paying advertisers.
However, when users browse a combination of all these sites (as most of them do), the clarity breaks down.
The spirit of IDX is as pure as an alpine stream: sharing present and past advertisements with other brokerages keep the industry alive. However, it’s possible that cloning the products of unvested parties didn’t automatically yield the most compelling innovations for the market either.
The dual agency distraction
Buyer agency is a valuable service in the U.S. not found in every other international market…and the best way we’ve seen to promote it is by pretending agents represent listings that they don’t?
I’m not suggesting taking away anybody’s tech; the most significant opportunities in real estate depend on rapid software innovation. I’m reporting that IDX is confusing from an end-user perspective. When’s the last time you formally observed a group of online home shoppers?
Brokers should unconditionally cooperate with, and use data from, other brokers. However, prioritizing white-labeled real estate search websites that mimic portal experiences amplifies incentives for portals more than it competes with them and further confuses consumers about how search and agency work.
The media and tech startups that challenged the real estate status quo over a decade ago now either provide services to incumbents or became one themselves. The most radical thing the establishment can do now is act more like their old selves instead of conforming to the same product roadmaps as portals.
Some portals argue that featuring listing agent contact information encourages dual agency, even though leads from unrepresented buyers on a specific property rarely result in its sale.
Even if it did; so what?
Brokers can be against dual agency but still provide informational resources to the public inquiring about an exclusive listing. Sellers demand it.
The argument against dual agency serves portals in public lobbying efforts but is grounded in confusion about what happens when people use the internet to look at houses.
Portals argue that house advertisements should have multiple agents to contact, which would be just like seeing four yard signs on the lawn of a home for sale instead of one. It’s absurd.
If consumers still don’t understand their right to buyer agency in contrast to advertisements for homes for sale online, then it might be time to drastically change the way we advertise homes for sale online.
Point of contact panic attack
The real estate establishment should be vocal about uncoupling agency from the funnel of online real estate leads in discussions around dual agency policy and its enforcement.
To decouple those, the establishment needs to demonstrate the most common syntax of the default internet lead, usually something to the tune of “I would like more info,” does not cause harm to a user if sent to the listing broker, nor enters them into a fiduciary contractual agreement with the agent who receives it.
To do so would establish the basis for something as ridiculous as a procuring cause case in which a broker pursued a commission because its user data showed that a particular homebuyer viewed a listing detail page of a property they purchased through another broker instead.
If a buyer wants to truly purchase a home an agent represents, local guidelines should encourage transparent rules in which buyers either decline representation or get referred to a colleague.
Let’s not kid ourselves. The listing agent and its brokerage are the authoritative sources of information about a listing and should be represented and trusted as such. Why not design new buyer agency acquisition flows around this particular constraint?
Elimination of IDX, as a driver of new opportunities for brokerages
Disassembling IDX in its current form could disrupt the user experience in a meaningful way by providing more transparency around buyer and seller agency, at what stage a consumer should seek it, and from whom.
It opens up opportunities for brokerages and agents to deliver new experiences focused on real consumer pain points around buying and selling, without the negative consequences of lobbying around a uniform online real estate search UI.
The opportunity is evident at Opendoor, which does not have a public-facing search of other brokers listings because the company is focused on its superior listings acquisition strategy and development of modern home buying tools that streamline the transactions it participates in.
Opendoor homes are a standalone listing product that requires syndication less as the brand scales. Innovation around how to best acquire listings and what condition to sell them in will drive real estate disruption versus the current paradigm of merely cloning Zillow.
Restricting the most grandiose versions of house ads to the listing brokerage of record (and truncating it for others) provides competitors with useful guardrails for product development, spurring differentiation instead of conformity, and protects the dynamics of reciprocity.
Brokers could be working on innovative new products to engage potential customers and clients, but should not be armed with UI’s that represent other brokers listings as their own.
Moreover, this might reduce brokers reliance on portals and eliminate the market for online leads from third-party search experiences as a consequence, which should be an exciting consideration no matter how you feel about the industry.
To summarize:
1. The current IDX implementation of cloned portal sites published by brokers results in a suboptimal real estate UX and confuses the matter of agency for end users.
2. Fielding inquiries about its own listings is one of brokerages main duties and the narrative that listing broker contact information on listings encourages dual agency is narrow and wrong.
3. Eliminating IDX opens up opportunities for brokerages and agents to deliver new experiences focused on real consumer pain points around buying and selling and increases healthy competition in the market.
So, what could everyone start working on if we burnt IDX to the ground?
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