Love them or hate them, property search portals are a major component of the consumer search experience. That's why from now through the end of the year, we're taking a side-by-side look at what each portal offers so that brokers can make a more informed decision about which sites to partner with.

In our last article, we explored the importance of frequent listing updates and looked at how often each of the three major portals updates their data. Today, we're shifting our focus to how each portal protects the data and integrity of your brand in three key areas:

• Use of AVMs
• Re-syndication or sub-licensing of data
• Inclusion of FSBO listings

1. Use of Automated Valuation Model (AVMs)

An AVM is a mathematical property valuation that requires no human input. Property search portals often display them next to listings to give consumers a ballpark idea of what a home is worth. Zillow's Zestimate is perhaps the most well-known - and controversial - AVM on the market today.

What makes portal AVMs a point of contention among real estate professionals is their accuracy, or lack thereof. As our own Victor Lund recently stated, AVMs offer "fuzzy truths" that can be either very close to a property's correct value or wildly off-base. Thanks to portal AVMs, agents and brokers are no strangers to conversations with sellers who think their home is worth far more than it actually is, e.g. "But Zillow says my home is worth..." Similar conversations happen with buyers who think the property they're interested in is overvalued simply because a portal's AVM told them so.

But AVMs aren't bad, per se. In fact, they can be used as a catalyst for an in-depth conversation about property pricing and the value that Realtors® can bring to the process. Where AVMs step into dubious territory, however, is when they appear on active listings rather than just off-market properties. In that case, the AVM is undermining the price that the seller and the listing brokerage have agreed upon, and publicly calling into question the judgment of the real estate professional.

Let's look at an example. In our survey of the top three property search portals, we found that only Zillow offers AVMs on active listings. A home in RE Technology's locale is listed at $1.8 million, but the Zestimate pegs its value at only $1.5 million - a $300k difference! A more modestly priced condo in our area is listed for $470k, but the Zestimate again undervalues it at $415k. Price differences of that magnitude require serious management of buyer expectations on one hand, and the suspicion that the seller and their broker are guilty of price gouging on the other.

Which portals include AVMs on active listings?

• Trulia - No. Trulia doesn't include AVMs on any listings.
• Zillow - Yes. Zillow includes AVMs on both active and inactive listings.
• realtor.com® - No. Realtor.com does not include AVMs on active listings. For off-market listings, it ports in estimates from three different AVM providers.

2. Re-syndication or sub-licensing of data

What happens to your listing data after it's syndicated to a property search portal? To protect the integrity of your company's data, be sure that there are provisions in place that protect your listings from re-syndication or sub-licensing. Firms using listing distribution platforms like ListHub generally do not have to worry about this, as the platform itself negotiates syndication contracts with portals that have these protections in place. Brokerages who forego distribution platforms should be sure to negotiate agreements that expressly forbid the re-syndication or sub-licensing of their data.

Why? When data is re-syndicated, brokers lose control of their listings. They no longer know where their listings are displayed or what information is included. Plus, the further away a listing goes from its primary source, the more unlikely it is that it is being updated in a timely manner. This results in inaccurate listings that reflect poorly on your brand - if that listing even carries the originating broker's name at all anymore.

Which portals re-syndicate or sub-license your listing data?

• Trulia - No
• Zillow - Yes
• realtor.com® - No

3. Inclusion of FSBO listings

Does the property search portal that you're considering include For-Sale-By-Owner listings on their site? While yes, inclusion of FSBOs provides consumers with a more complete picture of what is active on the market, it also directly undermines the value proposition of real estate professionals. For some brokers, this is of minimal importance. Individual firms will have to decide for themselves how, or if, this issue will impact the portals they partner with.

Which portals include For-Sale-by-Owner listings?

• Trulia - No
• Zillow - Yes
• realtor.com® - No

Stay tuned for Part 3 of this series! We'll be exploring the ways property search portals can help you grow your brand with agents.

More Articles in This Series

• Why Frequent Listing Updates are Better for Your Brokerage
• 3 Ways Portals Help You Hire (and Retain) Top Agents
• 3 Ways Portals Help Brokers Build Brand Awareness