Would a merger of Trulia and Zillow have an effect on your real estate practice?

  • No. (51%, 75 Votes)
  • Yes. (49%, 73 Votes)

Total Voters: 148

As if on cue, the National Association of Realtors (NAR) has allegedly demanded the Federal Trade Commission (FTC) block the proposed merger of listing aggregator giants Zillow and Trulia. Although NAR has yet to make an official statement on the deal, an anonymous source tells the New York Post the trade group has raised the antitrust flag.

The multibillion-dollar deal, which first surfaced in July, would see online real estate marketing frontrunner Zillow acquire Trulia, its closest competitor, to create a massively influential real estate tech behemoth. NAR’s version of the online home search, Realtor.com, distantly trails both Zillow and Trulia in both traffic and ad revenue.

According to the Post, the deal has NAR tucking tail and crying monopoly—reportedly asking the FTC to block the deal on antitrust grounds.

That’s an interesting move coming from a one-million member trade association with tentacles reaching into virtually every local real estate market in the United States. As has been shown time and time again, NAR, and its California manifestation CAR, have an aggressive history of trying to control nearly every aspect of the real estate business whenever it can.

NAR’s claim that a merger between the two listing aggregators is anticompetitive is a thinly veiled protestation of the fact it would require NAR to become more competitive with its online offerings. Zillow and Trulia both make money helping agents find clients and market listings—whether they’re independent or trade association members.

Coincidentally, so does Realtor.com—and NAR clearly doesn’t like the idea of competing with their combined forces for that revenue. Who is being anticompetitive here, exactly?

On top of the revenue generated from marketing and advertising with Realtor.com, NAR makes income from their vast network of local and state associations, including member dues and MLS revenues, plus other holdings and operations.

NAR membership is built into every local and state Association of Realtor’s dues schedule and was $155 in 2014. That figure, of course, includes neither the remainder of fees and dues which go to state and local associations, nor the cost of access to forms programs and other “benefits.”

Online listing searches are not the core of NAR’s business, which—judging from their ancillary endeavors—is significantly diversified.

Further, the potential marketplace for online real estate listing and marketing is enormous. As we’ve reported before, Zillow and Trulia’s combined revenues account for just 4% of what agents and brokers spend on marketing annually. As buyers, sellers and agents increasingly gravitate toward the Internet as the primary locus of their real estate activities, there remains a vast amount of business to go around—not just for Zillow, Trulia and Realtor.com, but smaller competitors like Redfin and upstarts like Estately.

The FTC has until September 3rd to decide whether it will pursue the antitrust issue or let the merger move forward. For now, NAR has remained mum on the issue (aside from anonymous leaks to the media)—but the coming weeks will bear out the entity’s true feelings on this competition issue. We don’t expect a warm response.