Trulia! Zillow! … and now Roost! Where do they come up with these names?
Roost, a new startup in the increasingly crowded real estate search space, launched last week to a cacophony of commentary from the re.net. Joel Burslem covered its feature set, its performance, and noted that Roost has the complete MLS inventory because it gets its listings from MLS’s, albeit indirectly. Greg Swann fawned over its business model and complete inventory.
If I understand Roost’s business model correctly, it intends to make money in a way that’s clever, unique, and possibly illegal non-MLS-compliant. [1/30/08 update: I've been thinking about my choice of words, and "illegal" is definitely not the word I should have used. "Illegal" is mugging somebody, or stealing something. What Roost is doing is 100% legal and above-board. It may -- and I emphasize may -- be viewed by some as being non-MLS-compliant.]
The unique aspect of its business plan: it offers brokerages the opportunity to sponsor search results and get the resulting click-throughs to their own site. A search in Sacramento, for instance, reveals that the current sponsor is Sacramento heavyweight Lyon Real Estate.
The first three listings I see are from VM Group, Gold Financial Services, and Prudential CA Realty, all clearly identified in compliance with Sacramento’s Metrolist MLS services.
Here’s the tricky bit…if you want more information, you click on “View Details on Featured Broker’s Site.” When you do that for, say, the Prudential listing, you get information about the Prudential listing on the Lyon Real Estate site:
This sleight-of-hand is accomplished through a too-clever-by-half url manipulation, much to subtle to be noticed by the average consumer, but apparently kosher enough to pass muster from the Sacramento MLS — at least for now. What if Prudential gets upset that the click-through on one of their listings on a public MLS-ish site goes through to one of its competitors?
Here’s how (I believe) Roost and Lyon defend themselves: Look at the url. When you search in Sacramento, you’re not actually using the Roost site at all; you’re actually using the Lyon site (GoLyon.com). For as long as Lyon is the sponsoring broker, the search is being conducted at golyon.roost.com — a (sub)domain under the control of Lyon Real Estate — and hence in compliance with those silly old arcane MLS rules.
Watch what happens when you go back to the site. In my case, I ran another search, and this one was sponsored by Intero. Same results, same look and feel, but the search is now running at InteroRealEstateIDX.com…and sure enough, the click-through goes to Intero’s own site.
Very, very clever. I really like this part of their business model, for reasons I’ve explained before: The current real estate business model heavily favors the listing side of the equation, and I’ve been clamoring to the likes of Zillow and Trulia to think about buy-side advertising offerings. If I’m a small brokerage in Sacramento, and I currently only have, say, 5 listings, I could decide to spend, say, $5000 sponsoring X number of real estate searches in that market. The number one bait that still seems to draw eyeballs in real estate is listings, listings, listings, and if I don’t have many of my own, why not leverage those of my competitors?
Now for the questions of MLS legality compliance …without going into all the details, I tried something like this trick about 2 years ago. It involved subtle manipulation of a url so that searches on a heavily-trafficked site were done — technically — using a url that was under my control. A good lawyer could easily have argued that this was in strict compliance with all the MLS rules. No dice. Within hours I got slapped down — not just by the MLS, but by my own broker!
I certainly wish Roost all the best, but I’m afraid they’d better put a sign on their front door that says, “Couriers please deliver cease and desist letters here.” Any business model that requires MLS compliance involves by definition an order of magnitude more headache. Why do you think Trulia and Zillow decided to get their listing feeds straight from the brokers?
Further commentary:
- TechCrunch, predictably, gets a few facts wrong. It’s not clear they understand the difference between a broker (e.g. Redfin) and a listings site (e.g. Roost.) Also, if I understand this bit of fine print on Roost’s site, they don’t get their data directly from the MLS, but by piggybacking on broker IDX sites. Subtle but important difference.
- Dustin notes that piggybacking off IDX feeds is a great way to scale your listings database quickly, but it puts some pretty onerous restrictions on what you can do with the data.
- Michael Price explains the url sleight-of-hand.
- Jay Thompson notes that, once again, the business model is about brokers providing listings, then paying for traffic.
- Sellsius praises Roost’s comprehensive and accurate results.
And still more commentary:
* At the last Inman, Brian and I finally answered that great conundrum: Did his ancestors add on “o” or did mine drop an “o” at Ellis Island? The answer: neither. His ancestors are Italian, and mine Dutch. So no, we’re not related — except of course, through Lucy.
Tags: Alternative business models, Industry, MLS, Real estate, Roost, Trulia, Zillow
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11 responses so far ↓
1 Lenore Wilkas // Jan 28, 2008 at 8:26 am
I wonder who will end up laying the egg here, Roost or someone else, like the dumb agent who pays for leads on their own listings?
2 TheCoach // Jan 28, 2008 at 2:27 pm
Great post Kevin. Another enjoyable read. And you are right, I was a bit “miffed” by the model that sends an inquiry on my Listings to Lyon RE. I will let the professionals handle it from here though. Thanks for the post! The Coach (Eric Bryant, Dir. of IS, Prudential California Realty - Central Valley)
3 Trevor // Jan 28, 2008 at 3:51 pm
perhaps the housing downturn will finally hit realtors enough to reverberate through the antiquated MLS organizations. as a consumer, i love what Roost is doing, and i hope that the downturn is deep enough such that the fiefdoms in the overgrown cottage industry of real estate will fall apart. it’s such a bloated industry with too many people in the cookie jar all held together by sales tactics and legal claims to exclusive information. Hail the Downturn!
4 Kevin Boer, Broker Owner, 3 Oceans Real Estate, Inc. () // Jan 28, 2008 at 3:52 pm
Eric — technically I believe they’re in compliance with the MLS regulations because the site that I conducted the search on was — at that moment — golyon.roost.com — ie a site under Lyon’s control. From that point of view, no different really from searching directly on the GoLyon.com site.
Lenore — thanks for dropping by. I’ve been giving that idea of “paying for leads on your own listings” some thought, and I’m beginning to think a little differently on it. We “pay for leads on our own listings” whenever we advertise in a paper, don’t we?
5 Kevin Boer, Broker Owner, 3 Oceans Real Estate, Inc. () // Jan 28, 2008 at 4:06 pm
Trevor — don’t hold your breath!
This industry has weathered any number of downturns, and we’ve managed to remain quite antiquated.
I also love what Roost is doing and wish them the very best of success, but let’s just say it’s unlikely their legal and lobbying team is up to par with CAR’s and NAR’s.
6 Alex Chang // Jan 28, 2008 at 6:34 pm
Alex from Roost here. Thanks for the thoughtful write up Kevin. Wanted to add a couple of thoughts:
a) You have it exactly right that Roost is open to all types of brokers large and small. That’s one of the beauties of our model, and you can tell that by seeing the mix of brokers we have involved. As you know, the spirit of Broker Reciprocity/IDX is to create a level playing field for all brokers allowing them to display all properties available on the market under their sponsorship…. so long as they permit other brokers display their listings under other sponsorships. Roost simply provides brokers with another IDX enabled site and sends qualified traffic to that site should the broker desire that
b) At its core, Roost’s platform is a network of individually-controlled broker IDX sites that are accessed by a search engine. Each site is in the broker’s control. In some markets these sites sit on a sub-domain which is unique to them, and in others they are owned by the broker directly. We have been and are committed to doing whatever the MLS requires. No sleight of hand, it is all above board. The Roost solution is much like the national IDX solutions that exist on some of the large national brands’ sites, except that the Roost platform is open to any & all brokers in the market
c) To be clear we are 100% transparent in making sure this is compliant with each local MLS’s rules. And we don’t launch a market until we’ve worked that through with the MLS. We have the concept approved explicitly at first and then secure IDX approval for each individual broker’s IDX site on Roost’s platform subject to the standard approval process of each local MLS
Thanks for checking us out! Love any and all feedback on how we can make this a great platform for Realtors (and consumers).
7 Kevin Boer, Broker Owner, 3 Oceans Real Estate, Inc. () // Jan 28, 2008 at 7:42 pm
Alex, thanks for dropping by. I apologize if my “sleight of hand” comment came across as implying that I think you’re doing something duplicitous. Quite the contrary — I like what you’re doing and I wish you the very best of success.
I think, however, that many brokerages are going to see it as “sleight of hand” and will complain to their local MLS. If you’re found to be in compliance — which you most likely will be — then they’ll simply change the rules and make you non-compliant.
I’m speaking from personal experience. I tried to do something very similar to what you’re doing here using Google Base about 2 years ago, and even though I was technically within the MLS rules, I got shut down pretty quickly.
8 Alex Chang // Jan 28, 2008 at 8:22 pm
Thanks Kevin.
Let’s hope the world has changed for the better since then
We’ve been very careful to get MLS input & buy in early and upfront in any market, and have spent a lot of time working with brokers on this.
I’m both confident and optimistic that the industry will see Roost as beneficial given its openness to all brokers, and transparent model.
MLS’s that we’ve spoken to recognize that their members will benefit from Roost.
I love that you appreciate what we’re up to. Don’t be shy in voicing your support!
9 Dothomes.com is a new real estate search site | 3 Oceans Real Estate, A Boutique Real Estate Brokerage Serving the San Francisco Bay Area // Jan 28, 2008 at 9:02 pm
[...] ← Roost Levels The Playing Field Between Listing And Buy-side Brokers, But (Speaking From Personal Exp… [...]
10 Andrew // Jan 29, 2008 at 11:04 am
The Real Estate search engine business model is tragically out-dated and depends too much on the hundreds of disparate MLS systems. It would be like online brokerage firms allowing you to search for stocks and nothing else. Instead, Wall Street handed over the analytics to the consumers. Which is exactly where real estate should be heading. But we keep getting different flavors of real estate search engines.
11 Ron // Mar 11, 2008 at 1:46 pm
it doesn’t hurt that the same Mike Lyon sits on the local MLS Board.
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