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The Trulia–Zillow merger could put the squeeze on real estate brokers

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But consolidation isn't likely to have much impact on the average consumer

News broke this morning that the two biggest names in online real estate listings — Trulia and Zillow — have agreed to a merger. Zillow will acquire Trulia for $3.5 billion in cash and stock, combining companies that had been fierce competitors. For the average consumer, experts say little is likely to change in the short term. But for brokers, this may mean less leverage and higher prices when they want to list and advertise on these sites. Down the line, agents say, this could also lead to a battle that may keep certain properties off these giant listing aggregators and silo the information, harming consumers who want simple access to the best picture of what's available on the market.

"They aren't even planning any integrations short term, just like with StreetEasy," says Doug Perlson, CEO of the online brokerage RealDirect. StreetEasy was another online-listings site acquired by Zillow last year. Zillow CEO Spencer Rascoff says the goal is to create a suite of real estate sites, much like IAC has done in the world of online matchmaking. "For people who are using these sites to try and find property to buy, or folks listing their own homes for sale, not much will change," says Perlson.

"It should clear out the realtor population within a year or two."

In the longer term, however, Perlson believes a showdown between the brokers and the aggregators is inevitable. "Everyone uses Zillow and Trulia, but there is a lot of grumbling. If these two combine, the only way they can really grow would be to increase their prices, and I think that would definitely push the big brokers, especially ones that have a dominant position in certain cities, to stop feeding them their listings." That would hurt the quality of information which appears on these listing portals.

Some smaller realtors, on the other hand, worry that a combined Zillow-Trulia might have enough leverage to put them out of business. "We are not a union and there is no real leadership among realtors. We are independent contractors spread all over the map, literally and figuratively, so trying to get us to rally for the cause will be met with indifference," wrote Jim Klinge, a veteran of Century 21 and RE/MAX. He sees the Zillow-Trulia giant becoming the de-facto hub for the business, raising prices and eventually implementing a ranking system that would result in only the top-performing realtors surviving. "It should clear out the realtor population within a year or two, and turn upside-down the local associations, MLS [multiple listing service] companies, and the top-heavy big corporations who own real estate franchises."