For decades, real estate agents paid dues to REALTOR® associations and Multiple Listing Services with the expectation that these organizations existed, at least in part, to protect the interests of the professionals who created the industry’s inventory.
Then the Internet changed everything.
And in my opinion, the National Association of Realtors failed its members at one of the most important moments in the history of the real estate industry.
REALTORS Created the Product
Think about what a real estate listing actually represents.
A real estate agent prospects for business. The agent spends money advertising. The agent builds relationships in the community. The agent meets with a homeowner, prepares a market analysis, competes against other agents and ultimately convinces that homeowner to trust him or her with one of the largest financial transactions of their life.
Then the agent photographs the property, prepares the marketing, gathers the information and places the listing into the MLS.
Without listing agents doing that work, there is no inventory.
And without inventory, there is no real estate website for consumers to search.
The listings were the product—and REALTORS created that product.
Then Zillow Arrived
Zillow launched in 2006 as an online real estate marketplace.
Here’s the important part:
Zillow wasn’t originally a real estate brokerage.
It wasn’t another local REALTOR competing under the same traditional MLS structure as the agents who were generating the listings.
Yet over time, listings generated by real estate professionals increasingly found their way onto third-party portals such as Zillow through syndication arrangements.
Eventually Zillow entered into enormous numbers of direct relationships with MLS organizations. By 2015, Zillow was publicly announcing agreements with hundreds of MLSs to receive their listings directly.
And Zillow became one of the most powerful consumer destinations in American real estate.
This Is Where I Believe NAR Failed Its Members
There should have been one non-negotiable condition from the beginning:
If you are going to use a REALTOR’S listing to attract consumers to your website, the individual listing agent should be prominently identified and given the primary opportunity to communicate with consumers interested in that property.
Period.
That listing existed because an agent earned it.
Instead, the real estate industry allowed a system to develop in which third-party websites could use the industry’s inventory to attract millions of consumers—and then monetize that consumer traffic.
That was an enormous strategic mistake.
Imagine This Happening in Any Other Business
Imagine spending years building a business.
You acquire the customer.
You create the product.
You pay the expenses.
Then your professional association allows another company to display your product to millions of consumers.
But when a consumer becomes interested in YOUR product, the website presents opportunities for OTHER professionals to receive that consumer’s inquiry.
And then those professionals pay the website for that exposure.
You created the product.
Someone else created the website.
And suddenly you’re being asked to compete—or even pay—to get access to consumers attracted by the product you created in the first place.
That’s essentially what happened to real estate agents.
Zillow Didn’t Steal the Industry. The Industry Opened the Door.
I don’t blame Zillow for building a successful business.
Zillow saw an opportunity.
It understood something many people in organized real estate apparently didn’t understand quickly enough:
Control the consumer, and you gain enormous power over the industry.
The failure was allowing REALTOR-generated inventory to become the fuel that helped another company establish that consumer relationship without insisting from day one on ironclad protections for the individual professionals who generated that inventory.
NAR and the MLS establishment should have recognized the danger immediately.
Instead, the industry helped feed the machine.
Then We Started Buying Our Own Customers Back
This is the part that should infuriate real estate professionals.
The industry supplied the listings.
Consumers went online to look at those listings.
The portals accumulated enormous consumer traffic.
And real estate agents became valuable advertising customers for the portals.
Think about the irony.
Real estate agents supplied the inventory that attracted the consumers, and then real estate agents paid to reach those consumers.
It was a brilliant business model for the portals.
For REALTORS, it should have been a warning.
The Listing Agent Should Never Have Been Secondary
The listing agent isn’t some incidental participant in the transaction.
That agent is the reason the property is on the market.
The agent established the relationship with the seller.
The agent obtained the listing agreement.
The agent created or coordinated the marketing.
The agent supplied the information that ultimately reached the consumer.
Attribution to that individual agent should therefore have been one of the most fiercely protected principles in online real estate.
Instead, the industry spent years fighting over feeds, syndication, IDX, portals and advertising while enormous consumer platforms became increasingly powerful.
Interestingly, years later Zillow itself began advertising its direct MLS partnerships by emphasizing something that should have been fundamental all along:
Under its Zillow Partnership Platform, participating agents would be prominently displayed as the listing agent on their own listings and receive leads directly from Zillow.
Why was that such an important benefit?
Because listing-agent attribution and control of the consumer inquiry had enormous economic value.
Organized Real Estate Failed to Understand What It Was Giving Away
The most valuable asset in real estate wasn’t simply the MLS database.
It was the connection between the property and the consumer.
Whoever controlled that connection controlled an enormous portion of the future real estate marketplace.
Organized real estate should have protected that relationship aggressively.
Instead, third-party portals became household names.
Consumers increasingly began their home searches outside the websites of individual brokers and agents.
And REALTORS found themselves purchasing advertising and leads from companies whose enormous consumer audiences had been built, in substantial part, around real estate listings supplied by the industry itself.
That’s Why I Call It a Betrayal
REALTORS paid dues.
REALTORS funded associations.
REALTORS funded MLS systems.
REALTORS generated the listings.
REALTORS created the inventory.
Their national association should have been looking ten years down the road and asking:
What happens to our members if another company gains control of the consumer by using our members’ own listings?
Instead, the industry allowed the balance of power to shift dramatically toward the portals.
To me, that’s not simply a technological miscalculation.
It was a betrayal of the professionals the organization existed to represent.
The Lesson for REALTORS Today
This isn’t merely about something that happened years ago.
It’s a warning about the future.
Real estate professionals need to ask a simple question whenever an association, MLS, technology company or portal proposes a new way of distributing their data:
Who ultimately owns the relationship with the consumer?
Because listings have tremendous value.
Data has tremendous value.
And consumer relationships have even greater value.
REALTORS should never again blindly surrender any of them.
The real estate industry learned that lesson the hard way.
We created the inventory. We paid for the infrastructure. We built the relationships. And then we watched someone else build an empire around our listings.
That should never happen again.