Last night I was at a meeting where the internet was used as an example of true innovation. There is no denying that fact. The issue that arises with the internet is that many of us think that everything on the internet is fact. Well, that’s not the case. If you have ever done research (maybe for college or work), you know that primary data is the most reliable. The farther you get away from the primary data source the less valuable and reliable the data.
This is one of the main issues with third party real estate websites and their data; it’s not primary data straight from the MLS. There are many choices for websites that let consumers search through real estate listings, but they aren’t all good.
I hear my husband often have this conversation with his clients, “No, I can’t tell you why on (fill in the blank third party website – i.e. Trulia, Zillow, Redfin, RealEstate.com) it says that property is still available, but the MLS and the listing agent both say it’s sold.” He’ll get off the phone and say to me, “Why don’t they just use the service I’ve provided them that has the current info????”
Buyers and sellers today have a vast array of websites that provide them with access to real estate listings. Let’s look at how the sites are created. They break down into three primary categories:
- Third Party Websites
- Franchise Websites/Broker Websites
- MLS Feed Websites
Let me explain what the differences are and why.
Third party sites have attracted a wide consumer audience because these sites are very “sexy” with a lot of bells and whistles. Many of these sites have listing data that is inaccurate a great deal of the time, yet consumers continue to visit these sites because they create a fun, engaging experience for consumers while the professional sites simply have the best data.
Third party sites are defined by WAV Group as: Consumer facing websites that are not operated or owned by real estate agents, brokers, associations or MLS’s. Some of these sites include Zillow, Trulia, Homegain, Homes.com and many more. They have a significant voice if you look at how many consumers use them. Unfortunately, they also have the lowest accuracy and completeness of listing and comp information. A study done by WAV Group showed that data accuracy and completeness of listing information that is published to these third party websites have a range of being inaccurate somewhere between 20% to 92% of the time. They get their data from a variety of sources and, unlike the MLS which is controlled by strict rules and regulations, this data has very limited controls and therefore higher rates of errors.
Third party sites can have errors with the initial data. The bigger problem is the update of that data when changes are made to the listing, such as price changes, listings that expire, or listings that have sold. What this means is that websites managed by the MLS and Real Estate companies will always have the most reliable local listing information for a given market.
There are a couple of very positive things these sites do. Their interface is very simple which creates very little frustration for the consumer. They also add the sizzle we talked about earlier – like Zillows “Zestimates” for comps. They also add neighborhood information and other important data when looking at purchasing real estate.
So as they say, – “buyer (or data user) beware.” If you want to search for property on the internet connect with your real estate professional and get an MLS feed. More on this later.