What is the favorite carrot dangled in front of real estate agents by real estate websites to get more of their money to list a home? You guessed it, The Featured Listing. (all bow in reverence). “Come on agents, get your featured listings here…featured listings here.” But are featured listings losing their allure? Did they have any to begin with? Is there a better way of doing it?
Do “Featured” home listings have value to anyone except the owner of the website?
In my opinion, traditional Featured Listings have absolutely no value to buyers and only some value to real estate listing agents. I shall expound.
Are Featured Homes Just the Previews?
A featured home has no intrinsic or added value to a buyer. None, nada, zip. I don’t know who came up with the word “featured” (maybe that guy who created “certified pre-owned automobiles” to replace “used cars”), but it’s more than a tad misleading, dontcha think? Featured stuff normally involves some value, some reason to pay your money– This movie features Angelina Jolie like you’ve never seen her before. But a featured listing? Featured for what? Because someone paid to jump the ticket line? That’s NOT value to the buyer. Buyers aren’t racing for buy the first homes listed on a real estate site.
In fact, I might argue the contrary– featured listings get passed over! They’re almost like previews — half ignored. Think about it. When buyers do a home search, they get hundreds, perhaps thousands, of homes in the results. And of that number maybe 2 or 3 are featured. I may be wrong, but I think most folks, the savvy ones at least, are going to look at those featured homes and say “Featured? Yeah, right.” Does anyone believe consumers think these homes offer something special? Furthermore, the featured status is transitory on many websites anyway— the designation is lost once the buyer re-sorts the results.
Could value be created for the buyer? Perhaps. For example, if a home was featured because the zestimate is $400K and the list price is $300K , that might give the user real perceived value. (hey, there’s another idea for Mr. Barton– feature homes on Zillow that are listed 50% below their zestimate. ) But featured listings don’t work that way– it’s pay to get your house to the front of the line– like a Disney Fast Pass.
The Value to the Listing Broker is Not Being First, It’s ….
My first thought was “if a featured house has no value to a buyer, how could it be valuable to the listing agent?” Then I figured it out– the value is not being first on line, it’s NOT being at the back of the line, where you have no chance of getting a seat. And as I explained, that front row seat value is not significantly greater than those in the next rows. It’s the folks in the last row of the balcony who have to squint.
Let’s take a look how the top three real estate sites display featured listings in search results:
Zillow: “Featured” is the default setting, but no individual houses bear the “featured” tag. Not sure if consumers really notice the distinction. In some strange way, that may be better, especially if the featured tag is understood by consumers as “bought”. There is no noticeable featured designation once the consumer re-sorts the houses (eg. price, bedrooms, etc)
Trulia: Only 3 homes are featured (the default setting is ‘best match’), and they are each labeled “Featured Listing”. Once the houses are resorted, (price, bedrooms, etc), no homes are labeled as featured listings.
Realtor.com: Like Trulia, the default setting is best match (they call it perfect match). But the marquee star of real estate websites, has taken a slightly different approach when it comes to listing placements that cost more. First, they ditched the word “featured” for “Showcase” and added a visual effect which catches the eye– a bright yellow corner. In addition, they gave these listings a headline. Interestingly, the Showcase listings appear on EVERY re-sort. Neither Zillow nor Trulia have featured listings on their re-sorts.
The only plot twist with Realtor.com was the showcased listings seemed to appear on EVERY page (I went 15 pages deep on one search and still saw them)– making the showcase label lose all of its uniqueness. A showcase on page 15? WTF? (what the featured)
If Featured Listings Have Value, Do They Favor One Group Over Another?
If someone can convince me a Featured Listing has value worth paying extra for, I’d say “Awright, then doesn’t that favor the group of brokers and agents who can afford to pay extra?” And while I accept that reality in a capitalist society, the system of favoring one home over another based solely on the ability to pay seems, in some way, unfair to the consumer. And isn’t it the consumer we are meant to serve?
A home for a buyer may be at the back of the line because the agent can’t afford to put it at the front. And the back of that line may wrap around the block so that the buyer is not willing to wait for that ticket. So, what can be done? You’ll say “Someone’s gotta be first.” And I agree. But maybe there is a better way. A system fair to everyone. (OK, Joe, you dragged us along this long, just spit it out– what’s the better way? )
An Alternative to the Featured Listing: The Revolving Listings System
My picture of fairness to ALL agents would be a revolving system for listings, where EVERYONE, regardless of number of listings or wealth, gets to sit in the front row —like driving cross country in August with 6 kids (hmm … sounds like Jeff Turner’s brood)– you gotta rotate the window seat. To let the oldest kid with the biggest allowance ride shotgun the whole way just ain’t fair in my station wagon.
What do the rest of you kids think?
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