Advertising Real Estate: Avoiding the Pitfalls
June 26, 2012

For years an aphorism of the real estate industry has been "the more publicity about the listed property, the better." Unfortunately, the pitfalls of syndication are prompting many in the Rocky Mountain Region to rethink the wisdom of that unlimited maxim.

What is Syndication?

Some brokers and Multiple Listing Service (MLS) providers license listing data to on-line syndicators who in turn package the data for web companies who want to add value to their sites. Some syndicators sublicense, re-syndicate, or share the listing data with other sites.

What is the Problem?

In many instances the seller of the property does not know that the information provided to the broker about the listed property will be syndicated and the seller may not have authorized release of the data through syndication. Most important, control over the accuracy and integrity of the data can be lost resulting in:

  • Inaccurate data on third party websites, such as the wrong price, wrong address, and wrong description.  
  • Expired information because the syndicator or the website does not update the data.  
  • The listing broker is not properly identified with the property in the website so the buyer or the broker working with the buyer has difficulty arranging to see the property.  
  • Indeed, some brokers buy a zip code from the website and all properties in that zip code are listed with that brokers advertisement even if the broker does not hold the listing.

Are the Problems Important?

The industry is experiencing upset consumers, both sellers and buyers, because data on the website about the property is inaccurate. If the listing agreement does not contain appropriate language protecting the broker and the MLS provider from liability both sellers and buyers could pursue claims against the broker or MLS provider for damages incurred because of inaccurate data.

What is the Solution?

Brokers and MLS providers need to identify their existing syndication agreements and note what controls over the data, if any, are contained in the syndication agreements. Brokers and MLS providers should review National Association of Realtors' Checklist of Syndication Issues (available through our office) before renewing or executing new syndication agreements. Several states are implementing or studying disclosure and/or disclaimer language for listing agreements intended to authorize syndication and disclaim liability if the data is inaccurate or out of date. If a website displays data on your listing without permission of the listing broker or MLS provider, a cease and desist letter should be sent to the website to get the listing data removed or get the data corrected.

Conclusion:

There is no quick fix for this increasing problem and our firm continues to provide advice to address these issues including adding language to listing agreements intended to protect the brokers and MLS providers. Some syndicators are better at controlling, correcting, and updating listing data than others. The National Association of Realtors continues to study the issues but in the meantime a little due diligence may assist brokers and MLS providers in the Rocky Mountain Region to avoid disputes and lawsuits arising from inaccurate data and unauthorized release of data by syndicators.

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