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Forced MLS membership no more? The time for ‘choice’ is now

This article was originally published on Inman News:

  • Under “MLS of Choice,” brokers and agents would only pay for the MLSs they choose to access and use. But the question is not “if they choose an MLS;” it’s “which MLS(s) they choose.”
  • MLSs engage in a value-driven service model that encourages customer focus and competition.

MLS of Choice

The committee with the longest name in real estate — NAR’s MLS Technology and Emerging Issues Advisory Board — has posted its solution for creating what some are calling “MLS of Choice.”

This solution will be put up for a vote of NAR’s Multiple Listing Issues and Policies (MLIP) Committee in November. The MLIP Committee makes MLS policy recommendations to NAR’s Executive Committee, which then chooses whether to pass them up to the NAR board of directors for final approval.

Proposed policy change synopsis: Brokers and agents need to participate, subscribe and pay dues to at least one MLS. But brokers and agents can’t be charged fees by MLSs that they don’t wish to access and use.

Changes to NAR MLS Policies 7.42 and 7.43 would allow a broker to participate in multiple MLSs, while the broker’s agents only pay dues to the MLS(s) that they wish to access.

This is accomplished by requiring MLSs to give fee waivers to agents who are already paying subscriber dues to a different MLS (where the broker also participates). The MLS can require the waiver requesting that the broker and/or agent sign a certification of non-use.

In effect, principal brokers choose which of their offices will operate and pay dues in each respective MLS service area. Brokers participate in the MLSs their agents want to access. Agents subscribe to one or more MLSs that best fits their needs.

Intended consequences:

  • MLSs engage in a value-driven service model that encourages customer focus and competition, much like the environment brokers work within.
  • Brokers are no longer prevented by artificial geographic boundaries or financial obstacles from joining additional MLS service areas and bringing on agents who work in those markets.
  • Agents are no longer prevented by artificial geographic boundaries or financial obstacles from joining brokerages with the best support model for their businesses.

Questions you may have

“Won’t some of my MLS’s agent subscribers stop paying for services? Will my headcount go down?”

Subscriber count could go either direction, but there likely won’t be much of a shift. Remember that this change allows brokers to join more MLSs without prohibitive costs. So some MLSs will likely see subscriber and participant counts go up. The vast majority of agents that want/use their local MLS’s services will continue to pay. This isn’t “if MLS,” but “which MLS(s).”

“What if agents try to cheat the system?”

What would be new about that? This was a bigger problem in the past with agents sharing listing books. Today, we have the luxury of software that can verify who’s logging in and using MLS services. Cheaters will always exist. We have to prioritize improving business conditions for great brokers and agents, and not let a minority of bad actors overshadow their needs.

“What if a broker from another area joins my MLS, and her agent wants to sell a property in my area? He doesn’t know my town well enough to be qualified.”

There are always unfit agents. Some are unfit to sell their own backyard.

The MLS doesn’t exist to keep agents and brokers “over there” from selling “over here.” It exists to foster greater cooperation. It is the job of brokers and agents to prove their superior knowledge and value to clients. As we’ve seen in countless consolidations, the fear of “agents coming over the hill” or “across the water” is overblown. It just doesn’t play out in any significant numbers.

“What if that broker joins my MLS, but her agent doesn’t subscribe? Does my cooperation/compensation still go to that agent if he writes a contract on my listing?”

Yes: Cooperation and compensation will continue to flow to the broker participant and, subsequently, to all of the participant’s agents. That won’t change. More brokers joining more MLSs will create an even broader broker cooperation network.

Certainty makes for healthier marketplaces. Sellers will know that even more brokers and agents will be confident in bringing buyers and not be held back by boundaries.

Agents will have certainty that compensation agreements are in place across MLSs. They’ll be confident to occasionally sell a home in another MLS (where their broker is a participant) that just happens to perfectly fit their clients’ needs best. This brings buyers and sellers together in situations that might not occur in a less cooperative environment.

Greater market exposure and certainty are created via the MLS. It’s a win for consumers and the industry.

A request to brokers and agents: Engage with your company’s leadership, your local association and your MLS’s board of directors. Let them know how this new flexibility of choice will improve your ability to do business and grow.

MLS leaders and directors: Let us know your concerns now. We’ve spent much of the past year discussing this issue with your colleagues, brokers and agents. We’ve surveyed membership for feedback. CMLS published a white paper summarizing the issue. It would be a shame to have this policy come to a vote in November without your questions being answered long before then.

MLS policy committee members, and NAR directors: Find out from the MLS’s primary customers — brokers — how they feel about this new potential policy. Ask us questions about the specific policy changes now, so we’re all on the same page in Chicago.

If you’ll be at the CMLS (Council of Multiple Listing Services) conference this week in Austin: Read the MLS 2020 Agenda prior to your arrival. Some of the industry’s smartest leaders are refining the direction that MLSs must take to be relevant and valuable in an industry experiencing dramatic change. Updating the MLS business model was a frequently mentioned concern.

Take it from one of MLS modernization’s master planners, David Charron:

“The moment of truth for MLS leadership must be in understanding that much of what has gotten us here will not carry us further. Much of what we created 10 to 20 years ago is worthless. Dead. So, standing down, or worse, building walls of protectionism, in the face of such enormous change does not properly depict who we are or what we aim to be.

“Successfully innovating on our base and our business model is a tricky maneuver. We have worked so hard to get here! But our primary mission is helping brokers succeed! It’s on us to band together; be that small group that enacts the change that advances our industry.”

NAR’s November vote on MLS Policy Statements 7.42 and 7.43 will be another moment that provides clarity as to whether we’re ready to embrace this kind of change. Let’s move forward.

See you in Austin.

Sam DeBord is managing broker of Seattle Homes Group, VP of Strategic Growth for Coldwell Banker Danforth, President of Seattle King County Realtors, and 2018 Vice Chair of the National Association of Realtors’ MLS Policy Committee. You can find his team at SeattleHome.com and SeattleCondo.com

NAR politics, Instant Offers and a noisy week in real estate

This article was originally published on Inman News:

  • Credit unions are buying brokerages and bundling services.
  • Zillow isn’t a broker but its toes are deeper in the transaction.
  • Alexa’s going to serve you listings.
  • Upstream’s pragmatic pivot is causing a stir.
  • Your choice of MLS may be growing in the future.

NAR’s midyear meetings took place in Washington, D.C., last week. I was just finishing up a recap when two other big stories dropped.

Credit unions are buying up brokerages

Banks are prohibited from opening real estate brokerages. Credit unions, on the other hand, are not. Steve Murray of Real Trends says credit unions are rapidly purchasing brokerages and bundling services.

“Buy from us. Borrow from us. We’ll rebate 20 percent of the commission to you, and we’ll give you 20 basis points off your mortgage’s interest rate. Oh, and we’ll also make your agent whole on the rebate.”

To me, that’s the biggest news of the week. On to that other story you may have heard about:

Zillow Instant Offers

Zillow’s pitch to agents: We’ll facilitate direct purchase offers from our identified investors/venture capital firms/flippers to potential sellers. We’ll let you deliver a CMA to the same folks.

C’est la vie; it’s a business decision. Consumers are given options to work with agents, but some agent-free transactions will occur via Zillow initiation. Offers and transactions are managed in Zillow’s transaction management software.

Zillow’s not technically becoming a broker with this move, but it’s taking on every activity it can that doesn’t require a license — smart. Some agents are screaming. Some are yawning. Let’s just not pretend that initiating a purchase offer for a buyer, providing the forms for the contract, and directing the services upon which it will be transacted isn’t a big shift.

Some agents will love the seller leads. Some are just fed up with the long-running tap dance act of Zillow’s messaging to the industry. Brian Boero distilled it perfectly.

In the latest scene, we’re told, “It’s just a test.” This is apparently supposed to educate us that transactions happening in the real world are none of our concern until the “test” label is removed by the marketing department.

Of course it’s a test, one that management approved, to see if it’s worth expanding nationwide and monetizing. Just tell us, “Shareholders want profits so we’re looking for new revenue streams, and dipping our toes a little further into the transaction looks like a good direction.” We already know.

The Opendoor in the room

Opendoor is the Instant Offers precursor you’re probably most familiar with. While it was reported on Inman that I “chided” Opendoor previously, I’ll note that I commended Opendoor’s leaders and technology. I merely chided the media fawning over a supposed huge new value to consumers.

Flippers are not new, they’re just better financed with better tools, and now they’re getting better access to sellers.

Opendoor’s folks are genius, just as are Moneytree’s founders. They’re doing transactions with massive short-term fees and significant time savings, and putting their services in front of people who may want them. My opinion that these transactions make financial sense for a scarce few doesn’t preclude the businesses from selling them to whoever will buy them.

Alexa’s hawking listings

Back to NAR midyear: voice activated systems (like Amazon’s Alexa and Google Home) became officially approved technologies for brokers to use for delivery of IDX listing data.

While there was some concern about the ramifications, brokers are already using this technology in the field. We want to ensure that the spirit of IDX cooperation and attribution continues, but not hold back innovative brokers.

Will this tech become popular? Spencer Rascoff said at the T3 Summit that he didn’t think it would be a big deal in real estate search. It’s difficult to say, but imagine what it could do to help folks with visual disabilities interact with brokers and agents.

The technology will change by the day. So maybe Rascoff’s right, or maybe brokers have an opportunity. He does have a lot of other things on his plate.

Upstream

Upstream had two big stories last week. First, more NAR funding was approved for RPR to build out the project. Second, instead of only allowing broker/agent listing input at Upstream’s interface, it will now accept a broker’s feed of listing data from the MLS itself.

Spending a week with much of the industry in one place reminds you how much you don’t know. The politics surrounding this initiative are staggering. There are plenty of folks proclaiming Upstream’s “pivot” as a sign of failure.

It’s a pragmatic swallowing of pride. Many insiders will tell you that the divide created by the unfortunate tone of UpstreamRE’s ancestors’ original messaging to the MLS community made this move a necessity. It’s also a big shift from the ideologically pure original intent.

At the same time, it removes the most significant hurdle to access for nearly every broker/agent in the country. There’s no retraining on listing input. You want Upstream? You got it.

The Upstream direct input (which is necessary in its system to solve multi-MLS overlap) requires technical development at the MLS level to accept the listings.

If multi-market brokers like what they see in the Upstream hybrid input product, they may eventually work with their MLSs and vendors to employ the single input solution. In the meantime, vendors may proactively develop software updates that provide faster Upstream implementation options on the most common MLS software platforms.

RPR in the mirror

It seems that someone whispers “National MLS” nearly every time RPR (Realtors Property Resource) is mentioned. If you’ve done the committee circuit for a few years, you know the routine.

Competitors have reason to keep looking over their shoulders, but this particular fear is tiresome. It’s as if we’re in the horror flick where the victims chant, “Candyman…Candyman…Candyman…” into the mirror to summon the Bogeyman.

Only in this version, the bogeyman RPR comes crashing through the mirror to take our cooperation and compensation agreements if we don’t keep whispering “National MLS…National MLS…National MLS…” to keep it at bay.

RPR has contractually agreed to never become an MLS. MLSs have been consuming each other at the rate of around one every four days. 100 have disappeared in one year. How many has RPR replaced?

‘Coming soon’ listings

MLSs across the country are trying to develop “coming soon” statuses. It seems like a solution for a problem that doesn’t exist, but agents want another marketing angle. So MLSs are obliging.

Currently, any MLS could accept an active listing, allow for a restriction on showings for two weeks while the seller fixes things up (with a seller’s signed consent), and create the “coming soon” buzz without adding a new status for MLSs and standards developers to deploy.

If a new status is the hoop everyone wants us to jump through, though, we’ll probably do it. So let’s define it.

If the property is shown, it’s not “coming soon,” it’s active. If it starts as “coming soon,” then goes active, and one minute later goes pending, it probably wasn’t ever “coming soon.” It was active.

We can do “coming soon,” but only if we’re going to be honest about it — not to promote double-sides, in-house sales or preferred buyers.

Politics at midyear

There’s a lot of talk about tax reform. As we hit the hill in D.C., our message was as clear as ever. No matter the tax policy coming forward, it should incentivize investment in homeownership, much like we incentivize investment in health care, retirement and education. That’s a tough message in a D.C. atmosphere that’s very loud, but we’re still carrying it.

Some members want us out of politics, but today’s reality is that if you’re not at the table, you’re on the menu. We’ll be at the table for our industry.

Can the Voice for Real Estate come through a revolving door?

I’m a local association president. Our board’s CEO relays media calls and interviews to me. I appreciate the deference and the recognition it creates, but I can see how it weakens the continuity of our voice as an organization. The tradeoff is difficult to swallow.

At NAR, we hoist a new name up for the media once per year and hope that it sticks. This is our tradition, and it’s a great gift to our presidents, but it’s probably time to take a hard look this practice’s effect.

Our voice needs to recognizable to stay on top. Our new CEO, or someone she/he hires, needs to be consistently in front of the media.

Is the board too big?

Most dare not even whisper these words, as a position on the board of directors is a sacred cow, not to be touched. NAR has about 900 directors on its board. What’s the ideal size of the board? Maybe it’s exactly what it is today, but it shouldn’t be heresy to ask.

Our volunteer members do amazing work supporting leadership from the committee levels. Can we have a real, effective debate at our current board of directors’ meetings with our current size?

Our data divisions make us vulnerable

Realtor members have less than ideal access to our data. Between NAR data, nationwide MLS data and RPR data, we have the opportunity to meld these resources into an incomparable asset for use by our membership. Yet we let it sit in artificial silos to protect our territories.

Meanwhile, innovative data companies create tools to aggregate and repurpose such data while we sit on our hands and watch or, better yet, cut them a check to buy it back.

There’s a lot of distrust within our organization. While there are many reasons for it, they make us weak relative to outside forces.

Legacy

Multi-generational Realtors are often the most devoted and knowledgeable leaders. I’m continually impressed when I travel to events at the percentage of committed volunteers who are second, third or even fourth-generation Realtors.

Our incoming president, Elizabeth Mendenhall, is a sixth generation Realtor. There’s no replacing that institutional knowledge. Kudos to those of you who carry that torch.

MLS of Choice

I’ll introduce this topic with the moniker it has taken on in the media, but this issue’s logistics are significantly different than Board of Choice. Yet, its intent is similar: to serve broker and agent members with a better, more flexible service model. Giving brokers and agents more choices in the MLS services they pay for is the path forward.

We’re looking into ways to incentivize brokers to grow and join MLSs without cost prohibitive policies holding them back.

The issue is complex and I won’t attempt to define all of the parameters here. Just know that we’re working with all of the stakeholders — MLSs, brokers, agents, associations — and trying to find a policy solution that positions all groups to be prepared to thrive in a changing marketplace.

You can contact us with your stories, concerns, and suggestions at mls@realtors.org. We’d love your feedback.

Sam DeBord is managing broker of Seattle Homes Group with Coldwell Banker Danforth and President of Seattle King County Realtors. You can find his team at SeattleHomes.com and BellevueHomes.com.

Shortcuts: Zillow Group’s power play, actual intelligence, and NAR’s next move

This article was originally published on Inman News: 

  • Zillow Group’s agent input ban will improve accuracy and squeeze brokers.
  • Its Premier Broker program and data management tools are taking aim at teams and Upstream.
  • Redfin uses agents to create better Zestimates, and no one should be surprised.
  • “Realtor” has immense value. NAR’s CEO search should keep D.C. in mind.

Zillow Group has been using its leverage in more dramatic fashion recently. The headline this week is an upcoming moratorium on agent-posted listings.

Beginning May 1, agents’ listings will only be allowed on the company’s portals if they come via a broker or MLS feed.

This is a power play, and one that the company has every right to make in its quest for a better product. Zillow Group is willing to crack a few eggs to make this omelet.

It’s being sold as an improvement to accuracy, and that checks out. Manually input listings are notoriously error-prone. (Of course, that’s not the only benefit.)

800-pound strategy

The ban creates an immediate friction point for agents whose brokerages and MLSs don’t feed to portals. It puts a wedge between agents and clients, and ergo, agents and brokers.

When clients find out that their agent literally cannot put their listing on Zillow, and their broker can’t fix it before open house weekend, the situation is going to get white hot.

A little message for Jay Thompson, Zillow’s director of industry outreach — please take some vacation and rest up now. May is going to be the season of 1,000 wildfires.

The move will create more feeds for Zillow, and some resentment. Strategically, though, it makes sense.

The big brokers won’t squawk. Most of the country has already signed on. Only the stragglers and iconoclasts will feel the squeeze.

Some agents will continue to be indifferent, some will demand their brokers create a feed — and those whose needs go unmet will find a new brokerage.

The 800-pound gorilla is tired of asking. Independent and holdout brokers: You’re going to feel the weight of its thumb coming down soon.

Premier Broker vs. hiring a team

Meanwhile, the concierge service for the Zillow Premier Broker program is the back end of a team in a box.

Lead generation, text/email/phone conversion, distribution, tracking and management — it’s done. Just answer the phone when your concierge wants to hand off a live one, and you, the solo agent, now have team support.

The program has huge upside. It’s not perfect. Many Zillow consumers have a bad habit of contacting a new agent for every listing and rerouting themselves into spirals of increasing contacts and annoyance from lead converters and concierges.

Those leads are not happy campers when they get an agent on the phone.

The back end works well, though. It affords brokers some shortcuts to team efficiency without all of the hiring and testing of products.

I’m surprised that Zillow Group is using a third-party CRM for tracking; they’ll probably have their own soon.

This program will be popular as long the pricing keeps brokers’ ROI (return on investment) in the black.

The data management arms race

Somebody recently told me to stop writing so much about Zillow. I will when ESPN stops covering the Patriots.

Build or buy? Zillow Group has clearly been leaning toward buying for its data management platform. Paul Hagey (of Inman fame) and I took a deep dive on the developments in this year’s Swanepoel Trends Report.

Jack Miller, president and CTO of the Swanepoel T3 Group, did an outstanding job fleshing out the entire industry’s competitive data management tools.

Bridge Interactive, Retsly and dotloop, when combined with Zillow Group’s in-house tools, could satisfy a wide range of broker demands. The real estate behemoth is buying up a set of tools that cross paths in major ways with Upstream.

Whether that’s the intention, the positioning, or the marketing angle doesn’t matter. The tools being purchased by Zillow Group are designed to solve some of the problems that Upstream solves — albeit perhaps in a way that’s less logistically elegant.

The company is shortening its timeline to a user base by spending instead of creating. We will see quickly whether or not that pays off.

AI (Actual Intelligence)

Inman reporter Teke Wiggin’s piece on a study of Redfin vs. Zillow online valuations sparked some interesting debate.

Wouldn’t every valuation improve with a human-derived “condition” factor added to the algorithm? Forget artificial intelligence, this is actual intelligence in the machine.

A real person’s insights about current condition would be an invaluable addition to an otherwise computer-driven model.

Redfin took the shortcut. Agents are already scoring these homes based on today’s condition. They even have market knowledge. Redfin simply leverages their insights via list prices and adds context to current data.

The results of the study were clear. When listing prices are available, Redfin incorporates them, and its estimates become significantly more accurate than Zillow’s. But Zillow’s estimates for unlisted properties are still more accurate than Redfin’s.

It seems obvious that Zillow could win in both categories by incorporating list prices on listed homes’ Zestimates.

Zillow argues that consumers don’t want that. They want “independence” in their estimates.

No, they don’t. Consumers want the right price — remember that accuracy we were striving for earlier? It’s right in front of you.

Save our CRM

Vendors at Inman Connect New York repeated a phrase to me that I don’t hear often enough: “We integrate with your CRM.”

For all of the tools offered to agents, too many are built as standalone or loosely connected functions. CRMs with APIs, and vendors willing to use them, are taking away major pain points.

Brokers want our agents focused on their database, in their CRM. Some vendors are getting this.

Aiva, the AI-powered assistant by Deckspire; “First,” featuring predictive analytics (guys, you’re killing our searches with that name); and Cloud Attract from W + R Studios were just some of the product folks I talked to that understood this concept as a core issue.

Don’t build another CRM. Build something that works with our current CRM.

Goggling vs. feeling

News Corp. has helped realtor.com do some leapfrogging in the virtual reality (VR)/augmented reality (AR) world. Their work with Matterport and REA Group has provided the foundation for VR and AR in apps for goggles or the good old-fashioned mobile device in your hands.

They are a nice step forward, if VR’s where you think the industry is headed. Some of the hype is overblown, but it will be a nice a supplemental tool to increase conversions of internet traffic to in-person showings.

Buyers will love VR for property introductions. But when you think about downsizing mom and dad into a condo for their “final home,” or buying that first bungalow to raise children in, goggle-and-buy rings hollow. We want to smell how that home feels.

What’s in a name?

Marc Davison took us on an entertaining creative journey about the name “Realtor.” What’s the value? It depends on your audience.

When I go to Washington, D.C., in May and walk into a Senator’s office, you can be sure they understand it.

When our state’s legislative leadership calls us for insights on a policy negotiation, it’s clear that they know who we are.

Broker-owners ask us to come talk to their agents about what we do because they understand the value.

There is a disconnect with the public. It’s clear that they don’t distinguish between a licensee and a Realtor. But that in no way diminishes their knowledge of a Realtor’s value.

This isn’t a term that grew organically out of a need to describe a category of professions, like a doctor. It’s a trade organization being so effective with its label that its name has superseded the commonplace occupational designation.

The Realtor moniker being indistinguishable from a real estate salesperson makes us victims of our own success.

There’s clearly some frustration about the lack of distinction from consumers. We can continue to work to improve and distinguish Realtor members. But this is not such a bad problem to have.

Top job

National Association of Realtors CEO, Dale Stinton, responded to a reader letter on Inman. Read that twice.

Going forward for NAR, getting the right mix of transparency, accessibility, focus and resoluteness won’t be easy.

Kudos to Dale for being a leader willing to engage membership in an introspective and stout discussion about the association’s outlook.

Choosing the next CEO will be difficult. The right candidate needs a keen understanding of technology, communications, public policy and — most importantly — organized real estate’s multifaceted bureaucracy.

Somebody who knows D.C. pretty well just stepped aside from an MLS CEO position to allow the formation of a better marketplace for members.

That kind of leadership deserves a spot on the interview short list.

Sam DeBord is managing broker of Seattle Homes Group with Coldwell Banker Danforth and President-Elect of Seattle King County Realtors. You can find his team at SeattleHomes.com and BellevueHomes.com.

Is Opendoor the payday loan of real estate?

This article was originally published on Inman News:

  • According to research, median Opendoor homesellers give up 14 percent of their homes’ value through equity and fees.
  • The results for homeowners are like a payday loan: Some scenarios could push seller loss percentages into the 20s.
 Opendoor is a venture-capital-financed property flipper with a $1 billion valuation.

Inman had a fantastic piece last week by Mike DelPrete analyzing Opendoor’s progress in its first two years. Read it.

Quick observations based on Mike’s piece:

  • Opendoor buys and resells homes. Sometimes it fixes them up a bit, but its average relisting time is just 20 days.
  • More than half the time, the gap between the price Opendoor pays sellers and its resale price on the flip is 5.4 percent or greater.
  • On about 1 out of 5 resales, Opendoor pockets price gains of 10 percent or higher.
  • Consumers are also charged 6 to 12 percent in fees, averaging between 8 and 9 percent.

To Opendoor’s credit: There is a need in some specialized cases to turn real estate into a liquid asset in short order.

Even if the assets are heavily discounted in the process, there’s a niche audience that requires this service. Opendoor’s founders are brilliant in creating and selling this marketplace, and the company’s growth is evidence of that.

There’s good cause for some buzz, but the fawning over Opendoor’s value to the consumer seems off-key.

Forget the buyback options, warranties and unmanned lockboxes — these flashy headline-grabbers distract from the meat of the story. The shine on this unicorn is blinding some to the casualties of its financial mechanics.

Friction and leverage

Much of the excitement around Opendoor is in its removal of “friction” from a home sale.

Friction can mean the preparation, negotiation, financing and other logistical checkboxes necessary to maximize returns in a traditional sale.

Friction also includes financial transaction costs, though. The company’s median sellers appear to currently spend around 14 percent of their homes’ value between fees and equity to work with Opendoor. A significant number lose 20 percent or more in equity alone.

Of course we can look at the possibility that improvements to the property contributed to price gains. But Opendoor’s average home only sits 20 days between closing and relisting. That’s enough time for a quick shine in most cases.

We also don’t know if a full-time, local specialist agent could market and negotiate the home to an even higher price than Opendoor. Its average sale is giving a 5 percent discount off the list price to the buyer. The company’s carrying costs on vacant homes (financing 90 percent of purchases) incentivize it to be flexible in negotiations to expedite turnover.

Some have touted the model creating “leverage” for sellers, who are viewed as an underserved market.

Although it’s true that there are few other avenues for sellers to offload a home this quickly, the simultaneous decimation of equity wipes out the benefit to the vast majority of sellers. For most homeowners, it’s more of an outlet to swift surrender than a gain in leverage.

Location, location, location

Opendoor is successful so far in Phoenix, where there are no transfer taxes.

What happens when it moves into cities and states where transfer taxes can absorb up to 2 percent of the value on each sale? The seller may pay one tax directly, but the tax on the second sale probably has to be built into the pricing model, as well.

Someone eats those costs. The percentage of the home’s value being absorbed or spent in fees, taxes and equity could start reaching into those magical mid-20s for some.

There’s a sector of consumer finance that squeezes these kinds of short-term gains out of consumers. It’s not a media darling like Opendoor. Its existence is the reason for an entire category of usury laws.

Blissful ignorance?

These sales look more like payday loans than consumer innovation.

There should be no joy in watching home owners squandering so much money, so quickly. Their equity, in the homes that we’ve assured them are the best investments of their lives, is plucked away in a swift and slick transaction.

It’s clear from the numbers that most of them would greatly benefit from hiring an agent and waiting it out — if they had those numbers.

Buying and selling a home is all about informational leverage, though. Opendoor’s pricing model is, apparently, highly advanced, and the company deserves credit for its technical prowess.

The most profitable course for Opendoor would probably be targeting homes where its lowball offer price is similar to an identified, public online valuation. You can imagine the conversation: “It’s close to the Zestimate. It’s easier. Why not?”

Set an extra $15,000 to $20,000 cash in front of the same Opendoor seller in Phoenix and ask, “Can you wait a little while for an agent to get you this much more from a buyer? It’s what you, and your retirement account, deserve.”

Who are we rooting for?

When consumers have access to quick money schemes, some willfully ignore the big picture ramifications.

Payday loans are popular for a reason, and it’s not because using them is a sensible long-term decision. We may not be in the business of regulating consumers away from their own poor decisions, but cheering them seems distasteful.

I’m impressed with Opendoor’s strategy and growth. If the company’s crafted storyline continues to be more visible to consumers than the actual financial results, it could continue to make a lot of money for its investors.

Sometimes new business models just find a better way to extract more money from consumers without creating significant new value for them.

That’s fair, but let’s not canonize Opendoor just because it’s using technology to increase its margins. The new “I buy ugly houses” guy is just better-financed, with a slicker pitch — and a higher fee.

Sam DeBord is managing broker of Seattle Homes Group with Coldwell Banker Danforth and President-Elect of Seattle King County Realtors. You can find his team at SeattleHomes.com and BellevueHomes.com.

We Need Much More Honesty on Upstream

This post was originally published on the Notorious R.O.B.:

bogeyman2

Well, this should be fun. After Rob’s critique of my last piece about Upstream, I thought it would be appropriate to step into the Notorious octagon. Considering I’m not a trained attorney, that’s probably a mistake (yes, that’s the first of many self-deprecations to bloat my handicap on his turf). I once put a foot into law school before I realized I would likely work even more hours and earn far less than I could in real estate (cue the Raise the Barconversation), so that’s going to have to do the job.

Rob is a friend, one of the most precise analysts in the industry and a kind purveyor of a 3,000 word skewering. Though it’s outside my normal comfort zone (self-deprecation #2), I’ll try to adapt to the informal, irreverent, “quote and dissect” style employed here. Some of the best discussions in real estate happen here, and I’m honored to share with the Most Informed Readers in the industry. Enough of the lovefest—let’s get started.

I’ve made the case that a significant portion of pushback against Upstream is self-serving. Some of that comes from the MLS sector. Before the accusations of an MLS-hating broker begin, I think I’ve proven my bona fides in the past with love letters I’ve written to the MLS like this one. I’m not always right, but I have gotten guidance over the years from some of the smartest MLS leaders across the country and have great respect for the institution.

Digging in to the first grenade that Rob lobbed against my piece yesterday:

Rob: “he tries [to] position anyone who questions Upstream, criticizes it, or even questions it as some sort of a retrograde self-serving cabal of people desperate to stop progress”

Sam: “There are viable arguments against Upstream and its potential for success, but they seem to be the exception.”

How much of the industry is conscientiously against the business model, and how much is in self-preservation mode, we may not agree upon. But there’s definitely some of both. I’ve heard some really thoughtful arguments against the structural setup of Upstream, here on the Notorious blog, from some folks at HAR, and even my own NWMLS.

I’ve also heard arguments which have a primary goal of protecting the status quo. They may not be trying to stop progress, but their efforts would, nonetheless. The tone of the conversation is important. Here’s Rob, after a CMLS event that discussed Upstream at Midyear in DC:

“Then… the sessions end, people file out into the hallways, and… it’s ‘f**k them’ muttered sotto voce… I literally had one MLS exec say to me, ‘You know, I looked up the dictionary definition of “collaborate” — and we’re talking about the second definition here.’ For your edification, Merriam-Webster: (#2) to give help to an enemy who has invaded your country during a war.”

This doesn’t downgrade anyone’s argument for/against Upstream, but it adds clarity for the reader who may not wander those halls. I spoke on one of the Upstream panels at that CMLS. The reception was chilly. Being from a well-run regional MLS territory where we really like our MLS, it was eye opening to see the tension. Only my friend Carl DeMusz from NORMLS was willing to give me an alternate, yet reasoned MLS perspective afterward. There’s a history that has created a feeling of invasion in some of the MLS community. That’s partially brokers’ fault (we’ll get to that), but it also generates a defensive posture that lends itself to unnecessary skepticism in some.

“Perhaps the whole brouhaha would benefit from a little more honesty, that everyone involved kind of understands and acknowledges, but refuses to say for a variety of reasons.”

Let’s have that conversation. Rob apparently doesn’t care if he keeps his job, but I’ve always tried to avoid making enemies. Hopefully this conversation can be viewed as simply saying the things that we all hear in the hallways, but rarely make it into print.

There are self-serving interests on both sides of this conversation. Rob’s piece spells out some very real concerns that MLS interests might have, but doesn’t seem to touch the fact that we know some are merely holding back change that’s coming their way.

“There are brokers, nationwide, who will benefit from Upstream’s ability to reduce their costs of data input, normalization, delivery and storage. Instead of another set of Band-Aids, it delivers a cure for the mish-mash data delivery system the industry now employs.” – Sam

“Every single person involved with the MLS or with MLS technology supports those goals…Quite contrary to Sam’s assertion that there are these nefarious self-serving pricks who want to throw shade at Upstream because their salaries depend on stopping progress, every single person I know in the MLS industry, in the MLS technology industry, and in the Association world support the goals of Upstream.” – Rob

LOL. Can I write that here?

I’ll admit that I’m more than uneasy with the translation of my piece into calling MLS folks “nefarious pricks”. These things can take on a life of their own. So I’ll call it like it is, an inaccurate bastardization of my comments to support a point. (I was told that I needed to use many big words from leather-bound books.)

There’s a quality turn of phrase here, as “those goals” are supported by “every single person”. Based on our experience, that seems to be true only if he/she is allowed to control the process which governs those goals.

Let’s get to that honesty. I did call a portion of the industry self-serving. I meant that for the broker side as well the MLS side. Self-serving is natural. Business people should be seeking greater profitability, efficiency, etc. Brokers are self-serving in the pursuit of Upstream because it will benefit organized real estate, and themselves in particular.

Self-serving in a way that protects individual status quo and damages overall progress, on the other hand, can’t be allowed to drive the conversation. Letting grievances stall industry innovation while the organized sector of real estate continues with outdated, inefficient processes and falls behind the outside forces in real estate technology, is not acceptable. Yes, those “outside forces” include the Cthulu’s evil elder god (later).

“The first and biggest problem which I have raised ever since the first details about Upstream were made public is that Upstream wants to create its own database of property listings outside of the MLS.

I keep asking, Why?

Sam doesn’t address this. I’ve asked Alex Lange, CEO of Upstream, Cary Sylvester, the architect of Upstream and a Board member, and everyone else who would actually speak to me about this Database issue, and… well… the answers are unsatisfactory.

Except that we live in 2016, not 1970, when the whole concept of proprietary walled-garden databases is not exactly progress. In fact, it’s exactly the opposite of progress.”

This is a stretch. Accessible data is the future, but proprietary systems that strictly limit access to and use of that data are employed by some of the world’s most successful companies, e.g. Apple. They may pull in outside data sources to supplement their applications, but they restrict the hell out of their proprietary pathways and their repositories.

There’s nothing in a technologically advanced world that impedes the use of data on multiple databases, with a single database as the verification point or key. Though not the same as new technologies like blockchain, there’s an ideological similarity in having an Upstream database that assures all downstream databases that they have a source of data to trust.

Sure, some MLS vendors today can call APIs to dynamically generate data from central databases, but many MLSs still use antiquated systems which require vendors to replicate and store a copy of their database for end user functionality. The MLS in its current form is not a pure database available to all who need its information. Upstream does not add a layer of complexity on top of a seamless, pure listing input and distribution system. It adds a layer of uniformity and clarity on top of a tangled web of disjointed nationwide databases.

“Words and phrases like ‘nuclear option’, ‘push the red button’, ‘don’t plan too many more of these CMLS events into the future’, and of course, ‘You have ten days’ are… shall we say… attention-grabbing? … Have the brokerages behind Upstream — particularly the Realty Alliance and LeadingRE — ever publicly stated that their beef with the MLS was done, over with, and behind them? That thanks to the conversations that the ‘You’ve got ten days’ and ‘Don’t plan too many more of these CMLS events into the future’ sparked, they’ve buried the hatchet, smoked the peace pipe, and sang kumbahya with the MLSs?
If they have, I missed it.”

We are 100% on the same page here. I think most of us were shocked by the nature of the comments at that event. They’re still burned into our memories. In hindsight, it was probably the worst way to introduce what would become a project like Upstream.

This may be the single most influential and damaging moment in the industry relations history between MLSs and the not-yet-revealed Project Upstream. There are some unbelievably intelligent and talented people running the organization. That day at CMLS probably haunts some of their dreams.

MLSs should have been brought into the conversation early, consulted often, and been party to decisions. Yes, many would have pushed back heavily. Many still will. But the acrimony of that day will live in Upstream infamy.

“So, the truth is that Upstream needs its own database to serve as the nuclear option against the MLS. Having its own database makes it possible for Upstream, and its brokers, to cut off the problematic MLS so that its listing count goes from 100% of a given market to something like 50%, thereby rendering it more-or-less useless.”

No, no, no. I haven’t spoken (or whispered) with a single broker nationwide who wants to cut off the MLS. Of course they want to add efficiency to those that need it, and many support consolidation of MLSs in “overserved” markets. So do many of the top MLS leaders. They’re on stage at Inman talking about how many consolidations we can make happen and how quickly.

“But one of the most read posts on this blog is the one where I talked about the announcement of RPR back in 2009. Yes, it was rather laden with hyperbole… it’s how I write… so sue me. What I didn’t even mention in that post, however, is that the origins of RPR was in a NAR Presidential Advisory Group that seriously discussed the creation of a single national MLS under NAR’s control and ownership. Their ultimate recommendation was somewhat short of that, but read between the lines and you can see why the MLS people might be a bit nonplussed about this ‘Gateway’ that ultimately took form as RPR:”

“RPR partnering with Upstream to the MLS looks like a backdoor strategy to create this ‘national gateway’ from the 2006 PAG which differs from the MLS not at all. A rose by any other name….”

This is my realtor.com trigger, when I lose my ability to politely defer away misdirection. It’s akin to the unending drone of arguments that attempt to shut down any progressive ideas from NAR with reticence about a decision that happened in the 1990s.

Here are some honest questions: How much relevance would a thoughtful leader give to a domain name agreement 20 years ago in his/her decision making about other initiatives today? How much weight should an industry executive put in the words of a volunteer PAG in a 10 year old brief? Would you trust your technology strategists if they kept talking about Yahoo and AOL instead of focusing on Google and Amazon?

This strand of an argument goes from volunteer committee prognostication to RPR as vendor for Upstream that becomes the national MLS. I can’t tell you that a national MLS will never happen–who would’ve thought banks nationwide would give loans to people with no jobs, credit, or assets? Crazy things happen in this world, but casting shade on Upstream because of a 2006 PAG isn’t passing the smell test.

These kinds of things can not drive our strategic vision today. It is the worst kind of grudge that allows a decade-old perceived threat to cause industry members to undercut one another in case those old feelings might still reside.

“I asked this question on stage at CMLS Las Vegas this year to a room full of MLS executives and MLS leadership:
‘If Upstream had chosen Corelogic or MRIS as its technology partner, would any of you here have a problem with Upstream?’ Not a single hand went up.”

Now, we’re getting somewhere. I’d love to point out the self-selected evidence and the expected lack of hands in a situation like the one described. But let’s take the situation as truth.

If so, then the MLS world and Upstream would be singing harmony, if only RPR wasn’t the vendor. Would MLS folks really undercut a broker initiative that would offer a streamlined industry data system and financial benefits to the brokerage community—its core customers, members, and creators—just to make sure that RPR isn’t successful? Is this actually the enigma in the room that no one will speak about?

(*Update – I neglected to mention that I sincerely hope this isn’t the case, but we’re working with the scenario that was presented.*)

MRIS was on board as a potential vendor for Upstream, for god’s sake. If, as this conversation seems to insinuate, MLS support existed before the vendor choice, but not after RPR’s selection, we are drowning in a quagmire of self-preservation.

There are MLSs with outstanding administrators, high quality products, and very happy customers. Then there are others holding down a geography. If they’re afraid of another company overtaking their business because they’re not providing a superior value to their members, they should be. That’s how brokers live. The focus on the RPR national MLS bogeyman is a distraction from the priority of running a competitive business. It just reinforces stagnation.

Next. Small vs. big brokerages is always a good way to divide and conquer.

“In every MLS in the country, the vast majority (I’m talking 70+%) of the Participant brokers are not HomeServices of America, NRT, or giant brokerage firms that belong to Realty Alliance. They are mom-n-pop shops with zero to five agents. They don’t work cross-market. They don’t have ‘overlapping market disorder’ problems. They don’t worry about flow of data into their back office systems, because they don’t have a back office system. In what conceivable way are these mom-n-pop brokerages in the same ‘broker sphere’ as the one Sam keeps insisting exists?”

At NAR’s MLS Technology and Emerging Issues Advisory Board (name dropping), we hear stories about small brokers who travel across state and county lines in rural areas. They do suffer the inefficiencies of overlapping market disorder and artificial geographic restrictions.

The follow-up conspiracy says that only big brokers will really benefit from the technological advances available from Upstream because they have more resources to build new tools and access the new functionality. Remove the word “Upstream” and replace it with anything else of value. Of course big brokers with more money will be able to leverage the tools more effectively. That’s how scale works. This has nothing to do with Upstream itself.

But let’s just include the next portion as we get to the bigger point:

“In Cthulu mythology, Hastur the Unspeakable is a mysterious evil Elder God also called ‘He Who Must Not Be Named’. Well, in the context of Upstream (and possibly in real estate industry in general), that role belongs to Zillow, ‘He Who Must Not Be Named’. [DISCLOSURE: I have a business relationship with Zillow, but obviously, they have nothing to do with this post or these opinions. I sell my time, not my opinions. In fact, I may get in trouble with them for this post….]
The uncomfortable, unspoken truth about Upstream is that it is part of an overall strategy by the largest brokerages and national franchise companies to ‘take back power’ from Zillow.”

It’s funny, because in my household, we actually refer to someone as “He who must not be named”. He’s a tailback from USC who wore #5, whose family greedily ruined the football program for years by taking improper benefits and lost his Heisman trophy…but I digress (did that suffice as a “Rob tangent”?).

Honesty:

Rob says Hastur is Zillow. I’d say, for brokers, it’s Zillow, Move, Homes.com, and anyone not involved in the actual sales transaction who profits from it. Brokers don’t want or need to shut them down. They simply want more leverage over the data they’re creating. Whether big or small, brokers’ margins have been shrinking over the years. They didn’t have the impetus or foresight to create a collective, broker-controlled platform together at the dawn of online real estate. They see its value now. In one arena they’re competitors, but in this sense, they are are aligned.

Of course we have moments like Realogy’s Alex Perriello questioning the value proposition. Brokers are only aligned in some facets of strategy, and their other responsibilities will overlap and create tension. Upstream’s eventual adoption rate won’t prove or disprove that there is a “broker sphere.” The fact that these companies came together and built a beta version of the platform has already proven it to an extent.

As a reminder, supporters include:

  • Better Homes and Gardens Real Estate
  • Berkshire Hathaway Home Services (HSF Affiliates LLC)
  • Coldwell Banker
  • ERA
  • Keller Williams
  • NRT
  • Realogy
  • Re/Max Holdings Inc.
  • Realty Executives
  • Sotheby’s International
  • Leading Real Estate Companies of the World
  • The Realty Alliance
  • HomeServices of America
  • Baird & Warner
  • Long & Foster
  • Real Estate One
  • William Raveis Real Estate
  • Northwood Realty
  • Shorewest, Realtors
  • Pacific Union
  • Private Label Realty/Tenura Holdings
  • Century 21 Real Estate
  • Crye-Leike Real Estate

Controlling data: this is where we often hear clichés about the cat already being out of the bag, or “that time has passed.” Poppycock. We are in day 1 of the internet. For anyone who believes the current power structure is set in stone, it’s time to retire. We are living in the wild west of real estate data management. Things will change more in the next five years than they have in the last 20.

Brokers want more power, relative to the organizations which use their data for profit. Call it “taking back” if you must look at the world in the past tense, but it’s merely a strategic push in one direction in a landscape where power has recently shifted to the opposite direction.

Should brokers assume that they’ll never have control, standards, or rights to all of their data in perpetuity? Shall we accept that we’ll never capture a larger portion of the value created by listing data? Is there some Great Wall of China that’s been built in the middle of the cyber world that can’t ever be budged because someone said “Zillow has already won”?

It’s ludicrous. Yes, brokers want to gain more power, leverage, and potential profitability relative to their current position. They’d be negligent business people if they didn’t. The other benefits of Upstream do not preclude it from also creating greater leverage. There is no sin in wanting both.

When brokers are given a dashboard with the ability to opt-out or turn off their syndication to portals, less than 1 percent hit the off switch. They don’t want to cut off the flow. They just want to know that they control the switch, because things will change. Owning the switch allows greater control as to how they change.

“It is entirely possible — hell, I’ll even say it’s likely that I’m wrong for the sake of discussion. Upstream and the MLSs can prove me wrong very, very easily in a few steps.
1. Tell all of your CRM, CMA, back office, Accounting vendors to start coding against Retsly. They’re your vendors; they have to do what you ask, or you’ll find another vendor who will.
2. Go to the local MLS and tell them to install Retsly and Bridge.
3. Ask Zillow to build a non-listings database for all of the data that Sam and Alex insist are far more important than listings data, and to do it for free, in exchange for access to data.
But once we get honest about what’s going on here, and get real about the unspoken, unpublicized issues behind the scenes, then I think we see that most of the ‘shade’ is actually justifiable concerns on the part of people who don’t want to see the baby out with the bathwater.”

Quickly on these steps:

1, 2, 3: Why would brokers ask their MLSs and vendors to build these tools with a publicly-traded company they don’t own, when they can do it themselves and direct it going forward?

Change is inevitable. Much like the “taking it back” conversations, there seem to be so many arguments that assume players in the industry will in the near future be what they are today. Imagine just five years ago thinking that Rupert Murdoch might own realtor.com and Zillow would be doing transaction management and translation/aggregation for MLSs.

The industry is transforming rapidly, and the entities that brokers get into bed with today might turn out to be totally different in the morning. This is why they’re building their own platform. Yes, the brokerage and NAR-owned vendors could change in time, too. But at least we know that our core, simplest missions are driven by the same fundamentals: real estate salespeople earning commissions. We can never be fully sure of our future, but we can certainly buckle in with partners who need the same foundation.

We can agree that there are “justifiable” concerns from some in the industry about Upstream. At the same time, the idea that “RPR the unspeakable”, 2006 PAGs, and uncomfortable words are driving resistance to Upstream’s progress is painfully depressing for the future of the industry.

So if competition is the main concern of MLSs who are wary of Upstream, so be it. Find your core value proposition and own it. Find the services that someone else can do better and let them. Don’t hold back industry progress because some poltergeist from a volunteer committee or a hot-headed panelist put a decade-long burr in your boots.

We know that there are many MLS industry members who want to work together with us on this initiative. It can’t happen without quality MLS organizations’ support. These folks shouldn’t be drug down by the fears from the past or their cohorts who can’t keep up.

We do need more honesty in the Upstream conversation. We need it from all sides.

This is business. Speak the names out loud, or hold your peace.

How long can aging agents dance on the bar?

This article was originally published on Inman News:
by Sam DeBord

  • “Raise the bar” is more bullhorn than boots.
  • Incremental change is insufficient.
  • International regulation should focus our industry on prompt action.

I’ve been trying to write this for some time, but it’s difficult to put a positive spin on it. I’ve put it back on the shelf a half dozen times, but after having a chat with Brad Inman in Seattle this week, I thought: “This is Inman. Just let it rip.”

So, here goes:

The real estate industry has a perpetual ritual. It’s titled “raise the bar.” After a decade of observing it, I wonder whether it’s a choreographed song and dance rather than a call to action.

The lyrics come from rote memory: “More education! More training! Higher barriers! It’s too easy to sell real estate!”

Self-flagellation follows: “There are too many bad agents. It’s our fault. It’s our brokers’, our licensing boards’, our associations’ fault. Mea culpa, mea culpa, mea maxima culpa.”

Feeling relieved to have aired our indignation, we return to the status quo until next year’s performance.

Paved with good intentions

To be fair, expressing our desire to better our industry is valuable. There are many people who have devoted their efforts to improve our practitioners.

That the progress is so slow is perplexing, though. With countless voices proclaiming to be the prophets of professionalism, there are far too few putting those words into action.

“Somebody should do something.” This is our usual unenforceable delegation. The National Association of Realtors, brokers, the state licensing board — someone else should raise the bar and shrink the pool of ill-equipped agents.

I’ve had the privilege of sitting through the conference calls and meetings with committees, task forces and licensing boards that intend to raise real estate standards. There’s a revolving door of well-intentioned people who express their viewpoints but won’t endure the process.

There’s little continuity. Little moves forward. The stalwarts become jaded and begin to give up (mea culpa). The bar remains the same. More untrained agents get licenses, write contracts and balloon the already overcrowded rolls of consumer complaints-in-waiting.

 More agents, not fewer?

A counter-narrative to the overpopulation of agents has popped up recently. It strikes me as bizarre, and it goes something like this:

There’s a problem with the aging population of agents. The boomers will retire, and we won’t have enough knowledgeable practitioners available. The public will be underserved. Unfit entities will fill the void.

The real estate market must be booming if this is our current concern. There are roughly 1.5 million agents today. There are 5 million homes sold annually.

Retiring agents will train their successors. Larger, more efficient teams will take up the slack for those that don’t. If we cut the agent population in half, we’d still have plenty of manpower to handle consumer demand.

The demographic trends are an interesting study. The aging population won’t create a shortage of competent agents, though. Let’s put that distraction to bed.

NAR membership: Crutch or benefit?

There’s also been talk of NAR’s compulsory membership being an impediment to its members. Its revenue would suffer if it supports barriers to membership that reduce headcount.

It could, however, gain a more selective group of members as its distinguished Realtor representatives, according to a thought-provoking piece by Russ Cofano. If NAR didn’t compel membership, maybe only the best and brightest would rise to the top, uniquely identified as Realtors for all consumers to see.

That’s an engaging topic for the trade association. It won’t change the landscape of the overall sales force, though. We will only improve the industry’s reputation by creating standards that ensure all salespeople, Realtor or not, have the proper training and experience to do business with the public. If that means fewer members and fewer licensees, so be it.

Winter is coming

If we needed a wake-up call, the winds of change are storming in from the North. British Columbia, Canada, is attempting to put its real estate industry into a regulatory stranglehold. Canadian real estate has been dancing on the bar as long as we have. The Crown is tired of waiting for it to get down.

Rob Hahn put together a thorough breakdown of the potential changes. The regulations potentially placed upon B.C. real estate practitioners and the powers stripped from their associations would be sweeping.

Whether those winds spread to the U.S. is still in question. That we should be prepared for the possibility is not.

The essence of the government’s argument is that the real estate industry was allowed to self-regulate. It was given time to work out issues. It failed to act.

Our regulatory environment is significantly different, but we’d be foolish to ignore the implications.

Raise the bar: Brass tacks edition

We have reasons to improve. We have the motivation to improve. So, what would it take to discourage the hobbyist agent from dabbling in real estate?

Incremental changes won’t work; 200 hours of annual education isn’t enough. We all know about those online education schools (wink, wink). Licensing fees of $1,000 aren’t enough; $5,000 Realtor dues might not even be enough. Agents can make five-figure commissions on a single transaction. Two to three sales a year is a significant second income for many.

Higher education requirements and fees are popular suggestions, but they miss the point. Only training and on-the-job experience teach an agent how to run a business and act like a professional.

Mandated mentorship

A required apprenticeship would be a beneficial barrier and a boon to the real estate sales profession. It’s not a new idea, but it’s one that is usually passed over for easier so-called fixes. That’s probably because this kind of radical change would require immense, broad support.

Before licensees ever work solo with a client, they should work as an apprentice to an experienced agent for a significant length of time.

This isn’t a manager signing off on contracts. It’s a mentor required to train an apprentice in the full world of real estate. That’s more than paperwork. It’s interacting with clients and customers, marketing, business building, conflict resolution, etc.

Of course, this won’t affect the legions of hobbyists who already have licenses. When you’re in a flooding boat, though, your best bet is to plug the leak before bailing water.

Boots on the ground

Are we dancing or are we lifting? Our actions will make the answer clear. If you feel the need to talk about raising the bar, take the next step.

Engage your local Realtor association, your MLS board, your brokers and your managers. Prepare for a long haul. It’s not glamorous, but it’s necessary.

The irony doesn’t escape me — I’ve been dancing while you’ve been reading.

So I’ll shake off the cynicism and get back to work. I hope to see you there.

Sam DeBord is managing broker of Seattle Homes Group with Coldwell Banker Danforth and President-Elect of Seattle King County REALTORS. You can find his team at SeattleHome.com and SeattleCondo.com.

The broker-driven future of the MLS

This article was originally published on Inman News:
by Sam DeBord

  • Brokers need to understand the new initiatives changing the way we work with MLSs.
  • New tools can create efficiency and improved data storage and analytics for brokers and vendors.
  • Consumers will have access to broader, more accurate information and tools.

New technology initiatives are reshaping the future of broker relationships with MLSs. The sheer magnitude of the changes coming to the MLS portion of our industry is creating uncertainty for some and unease for others.

These initiatives are complex. That’s why many agents, and even brokers, simply avoid them. It’s what we were taught: If the MLS is working, there’s no need to investigate further. Get back to business.

That focus is not selfish or small-minded — it’s a virtue to salespeople.

These are historic times, though. Brokers and vendors are driving the creation of tools that will radically change our industry’s data delivery system — streamlining and enhancing it significantly. These efforts will require not only understanding, but broad, demonstrative support by the broker community to come to fruition.

If we’re going to make intelligent decisions about the future of the MLS, we need to understand it. Many agents don’t know how their MLS works, let alone Upstream. Here’s a start, from one broker’s perspective:

The future of real estate data

 

To be clear, this is not a technical data flow chart. It’s merely a visualization of how the MLS world could fit together in the future. The intent is to illustrate the players involved and how they are connected. Many technical details will be glossed over in an attempt to provide brevity and clarity.

The players:

MLS service providers

Core MLS service providers handle the MLS’s listings and office information database. These could be Corelogic, FBS, Black KnightRappatoni, a custom solution, another vendor, or in the near future, RPR AMP. These companies provide the back end for the MLS and deliver data to some vendors for brokers.

They usually also provide a front-end interface for MLS users. This could be Matrix, Paragon, etc. In the case of RPR AMP, it could be multiple front-end interfaces for MLS users simultaneously sitting on top of the AMP database.

Secondary MLS interface providers

There are also secondary interfaces available to MLS users. Homesnap MLSand CloudMLX are optional enhancements to an MLS’s user interface options. They are built on top of any core MLS provider’s database. They don’t affect the primary MLS interface but provide a different (and sometimes more streamlined) way for a user to interact directly with the MLS database.

Upstream

Upstream is the database that would streamline brokers’ data output. Brokers who join Upstream would no longer send listing and office data to dozens of unconnected outlets. They would use the Upstream database to store and update all of their information.

All of their data could then flow downstream to their providers (including MLSs) at the individual broker’s discretion. This would increase efficiency and improve data storage and analytics for brokers.

Those brokers who do not join Upstream would continue the current process of listing and office data distribution on their own. They would send separate data feeds to multiple MLSs, office tools, vendors, portals, etc.

Aggregators

Aggregation products allow access to IDX data across multiple MLSs for brokers. They provide a feed that brokers can use with their office tools and vendors. The breadth of the data is dependent upon the aggregator’s MLS reach.

Some aggregators have additional data. Zillow’s Retsly Connect adds public records data for broker use. Trestle from CoreLogic adds consumer-facing public records data and AVM data. It’s far and away the largest with 100 MLSs already signed up, but it won’t be available until late 2016.

Broker office tools and vendors

One of the misunderstandings about Upstream is that it’s only about listings. Brokers are currently feeding different kinds of data to a wide range of office tools. Company records, office addresses and photos, agent rosters and photos, staff information, accounting, transactions, and customer records are all uploaded to disparate databases that don’t talk to one another.

With Upstream, these broker tools and vendors can all go to the single source of that data for the information. The broker merely needs to keep one central set of records with Upstream to ensure uniformity.

Portals

The major consumer-facing real estate portals currently receive listings from many sources. Agents, brokers, MLSs, franchisors, vendors and syndication systems send listings of different levels of quality to be displayed on these platforms. The data rights of the senders also vary widely.

In an Upstream world, a foundation of rights over the listing data and photos would be established for any broker or agent member using the system. Listings delivered by broker consent through Upstream to a portal would have pre-existing rules attached to their usage and display.

Brokers could negotiate different or superior agreements with the portals if they wished to. In short, portals wouldn’t be taking listing photos and recycling them as they please. The broker retains control of them.

Broker Public Portal

The BPP is a totally separate animal. It’s essentially another consumer-facing portal, but it’s broker-owned and managed. Its intention is to deliver an accurate, timely, responsibly displayed database of brokers’ listings to consumers.

BPP recently hired Homesnap to provide the technology for its product.Somebody pinch me. Homesnap has shown an uncanny ability to combine software interfaces that attract consumers, deep connections of MLS data and a cooperative style that works well with associations. If there is a company that fits the mold for this to be a successful venture, Homesnap is probably it.

The environment:

Friction

It seems logical that a broker with access to Upstream at the front end of data distribution and an aggregator such as Trestle at the nexus of multi-MLS data would be significantly more empowered than one using today’s traditional system.

It shouldn’t be surprising, though, that some of these initiatives face pushback from entrenched players. In some cases, they create significant new work and additional complexity for MLSs. MLSs need to be at the table with brokers in the planning and implementation phases. The transition will not be easy.

Action

There will be objections to this new model, some with genuine concern for viability and some self-preserving or self-serving. It will hit road bumps, and there will be growing pains. The rumor mill is already in full churn. That shouldn’t discourage us from seeking long-term improvement in our systems.

The funding is in place to begin the process, and most of the industry’s biggest players are on board. Upstream has five alpha markets already selected to begin testing the program.

Then what becomes of the MLS? I’ve heard intelligent people predict everything from a national MLS to the end of the MLS. Neither is happening nor would they be good for the industry.

Focused MLS

These initiatives are taking items off MLSs’ plates that create controversy. Most brokers don’t want the MLS to make advertising decisions for them. They want fast, inexpensive access to broad MLS data. They want flexible software options.

They want to have their data synchronized across their plethora of tools without having to update it manually in so many locations. Upstream, AMP, aggregators and secondary MLS interface tools take much of this burden away from the MLS.

Brokers also want the MLS to continue doing what it does so well — cooperation and compliance. Brokers are the MLS. Its existence is invaluable to us.

The idea of a compliance arm of a national MLS handling enforcement is frightening. Imagine the federal government replacing all local police forces with the national guard and expecting everything to be OK. “Seattle, you’re OK with people smoking pot in the park. Provo, you’d like to throw ’em in jail for the weekend. We’ve got a single answer for both of you that will please neither. Your papers, please.”

Painting the corners

There are a lot of angles and conspiracies regarding how these initiatives benefit some parties over others. Many have credence. These are businesses trying to make money.

That doesn’t have to be the narrative about these initiatives, though. They also create a picture of an MLS system that effectively serves its brokers, while brokers simultaneously gain back efficiency and control over their data distribution. They remove conflicting territories.

Will some outside platforms lose leverage? It seems that they might, but improving the business for the brokers and agents who actually generate transactions should always be viewed as a benefit to the industry.

And lest we forget, there’s a consumer angle. They’ll simply get more accurate data across consumer-facing outlets, better tools developed at faster rates and access to broader information across markets and MLS territories.

That’s worth a shot.

Sam DeBord is managing broker of Seattle Homes Group with Coldwell Banker Danforth and President-Elect of Seattle King County Realtors. You can find his team at SeattleHomes.com and BellevueHomes.com.

Culling the lazy, bloodsucker real estate agents

This article was originally posted on The Real Daily:
by Sam DeBord

Liar. Cheater. Loser. Choker. Incendiary rhetoric seems to be in vogue this year.

“The consultants are like bloodsuckers. They’re ten times worse than a real estate salesman or broker, ten times, which is saying pretty bad stuff.” This was the biting yet confusing commentary from Donald Trump, a real estate salesman himself, at a recent political rally.

Inside the industry

The shots at real estate agents are coming from within the industry as well. Keller Williams’ Chairman Gary Keller recently said that agents who buy leads from Zillow “are lazy and don’t want to do the work.” Surely many of his top agents and teams who effectively use the leads would disagree.

Zillow’s CEO Spencer Rascoff recently told CNBC that the company no longer wanted to work with agents who weren’t “great” (they don’t spend a lot of money on advertising). So they’ll be “culling” those agents who aren’t up to snuff. While a practical business move, avoiding a term associated with slaughtering inferior or surplus animals might be item #1 for the PR team’s next executive media coaching session.

Real estate classism

Before we get self-righteous about these leaders’ word choices, though, it’s worth noting that this kind of language pervades much of the industry’s conversations on the quality of real estate agents.

There’s no shortage of snobbery and classist speech among agents and brokers.

Just ask a high volume agent how we should raise the bar of professionalism in the industry:
“Raise Realtor dues by 1000% and we’ll lose 90% of the deadbeats who bring us down.”

Talk to boutique brokers about their counterparts:
“That head shop will hire anyone who can fog a mirror. Their agents are bottom feeders who don’t sell anything and make us all look bad.”

You hear it from speakers at industry conferences:
“Let’s use the 80/20 rule. We need to get rid of the 80% of crappy agents who are making us look bad, so that the good agents who do 80% of the volume are the only ones left.”

There are some really important conversations to be had about the quality of real estate agents in our industry. We want clear answers as to how we fix them problem. We want the answers to be simple.

Unfortunately, big answers are often necessarily complex. When we group real estate agents into simplistic silos to try to fix our issues, we do a disservice to ourselves.

Volume does not equal quality

We can all agree that there are real estate licensees without the experience, ethics, education, or conscience necessary to serve their clients well. There are bad apples in our midst. They’re a poison on our reputation and should not be allowed to sell real estate.

Let’s not overreach with our reaction, though. This rhetorical journey usually ends with lower producing agents or those with non-traditional business models being given the scarlet letter and pronounced as a scourge on the industry.

Volume does not equal professionalism or quality. We’ve seen sweatshop practitioners become real estate celebrities, only to later lose their businesses and licenses when their practices came under scrutiny.

On the other hand, some of the lowest-volume agents often have the most experience to with which to guide their clients. Agents who are nearing retirement will often shrink their active client base significantly. The buyers and sellers who work with them are afforded all of the benefits of an agent with decades of experience and insight, as well as a greater share of that agent’s attention.

The client who works with an agent who has only one client at the moment may be the client who is receiving the most comprehensive personal service possible.

Then there are those “lazy” agents who buy leads, or pay fees/splits to others who prospect for them.  Since when was specialization of skill and division of labor a sign of laziness?

Selling vs. lead generation

Admittedly, this comes from my position of personal bias. We’ve brought agents on to our team who were low volume producers before they joined. Most had experience, but didn’t want to prospect anymore. They just wanted to work with clients and sell.

Meet “Jane”. She sold for 30 years before joining us. She is one of the smartest, most dependable, respectful, and effective agents we’ve worked with.

By many counts, she should have been tossed from the industry the year before because she only sold two homes. She sold 15 homes last year, a healthy business in a market like Seattle. It still probably wasn’t enough for the sales police to label her volume sufficient. She’s “lazy” because she’s relying on others to generate leads and focusing on her core skills of selling. She might just be “culled” with the other low-rung agents who provide outstanding service and consistently receive raving reviews from their clients.

It’s more complex than that

To be fair, we’re in an industry that has an unhealthy obsession with sales numbers. I’ve stopped counting the number of times someone asked me, “What kind of volume do you do?” within the first two minutes of a conversation (It almost sounds like “How much do you bench, bro?”). So it’s not surprising that an agent’s volume is often the first metric many look to for a frame of reference. Volume makes a big difference in finding out whether or not an agent is good for your team, your office, and your business model.

Let’s just not let it creep so far into the conversation about who deserves to belong within the greater industry. There are a lot of different business models, and different roles that fit within them. Not everyone needs to be a solo, door-knocking, cold-calling top producer to provide great service to clients.

“Jane” isn’t. Her clients will scoff if you tell them that her volume and prospecting system make her a bad agent. If we’re going to talk about improving the reputation of real estate agents, let’s stay away from oversimplifications.

The answer is more complex than volume or business model.

It’s about education, experience, dedication, and professionalism. Those are difficult things to measure, but improving an industry isn’t supposed to be easy.

Let’s skip the simple labels. They’re part of the problem.

Don’t Go Solo, Tech Bro: Do Your Homework

This article was originally published on Inman News:
by Sam DeBord

  • Someone else already failed at it. Why will you succeed?
  • Real estate is a collaborative business.
  • Look to profitable precedents for true tech investment opportunities.

Picture the scene: “Tech bros” with money to burn surround the table. The disruptor-in-chief is rallying the troops to the tune of nine figures. The pitch is some variation of a model that has failed repeatedly and without exception for decades. “Today,” he states, “we will finally change real estate because we have — technology!”

SoloPro’s enticement of a $1.6 million investment from Lowe’s is just another data point in a long line of over-funded, soon-to-be-failed commission-busters.

That’s not broker-centric hubris speaking. It’s history.

The company’s “nod to the traditional real estate model” by bundling services this week wasn’t just a slide toward traditional commissions. It was the first step in admitting its model doesn’t work. The bluster of “blowing up” agent commissions is a tiresome, thin smokescreen to the seasoned observer.

Tech money is pouring into real estate, but some techpreneurs seem more interested in spending than doing their homework. Many of them need a Real Estate 101 course, with a significant portion dedicated to the history of failed ventures.

Don’t be offended, tech bros — I used to be one of you

I was a techie know-it-all who was appalled by the broker-agent model that dominates the industry. Agents were overpaid and commissions were overblown. We knew tech disruption would rid us of real estate’s high costs and inefficient labor. Then I spent 10 years in the trenches with real brokers and agents, and I saw how wrong we were.

If you’ve ever been lucky enough to hear Sean Carpenter speak, you’ve heard that in real estate, “Everything you need to know, you learned in kindergarten.” Having taught a significant number of kindergarten classes myself, I’d like to deliver a few of those lessons.

Let’s sit on the reading rug, clear our minds and start with the basics:

1. Read — read a lot

Find out if your business plan is just a carbon copy of something that’s already been done. Don’t let your ego get in the way. Many smart people have probably already tried it.

You’re saving consumers money by cutting commission costs? See Help-U-Sell since 1976. See the litany of competitors already entrenched in the marketplace and the graveyard of imitators in their wake.

You’re adding technology to increase the commission discount value proposition? See Redfin. Is $200 million in funding enough to reach 3 percent coverage in your primary market? That’s what it took them, along with continually shrinking the discount model.

The vast majority of that money came after the company changed its tone from adversarial to cooperative. So….

2. Play nice in our sandbox

Real estate is a relationship business. Abrasive characters usually find themselves a new attitude or find themselves out of the industry.

You’re not Steve Jobs. You don’t get to be a sociopath in this industry and get away with it. Real estate’s leaders are intelligent, savvy and financially motivated. They also make a lot of decisions based on long-term relationships. That’s not just the old boys’ club. It’s an acknowledgement that being amicable is profitable.

Many of our leaders were once real estate agents and brokers themselves — the smiling, anything-for-my-clients kind of folks. You’re going to have to shake a lot of hands, listen to a lot of different viewpoints and make a lot of friends to survive long term.

3. Build things. Don’t break things.

Disruption conjures images of broken models. Changing the way real estate works doesn’t have to mean tearing things down, though. It’s usually not the best path to profitability.

Our disruptive friends who are hell-bent on breaking everything in sight are often the fastest ones to the exit when it comes to earnings time. We love innovation in our industry, but don’t walk in, kick down the sand castle and tell us how smart you are.

Rather, build innovative tools that help us do business. Look at who’s actually generating revenue in this industry — listing advertising portals, productivity app developers, transaction management platforms, e-signature providers and so on.

Although some of these companies are still operating in the red, they’re at least hanging around with revenue long enough to establish themselves.

Brokers and agents have money, and they’ll spend it. Innovate and bring us a product we want to buy.

4. Follow the rules (as much as possible)

You’re entrepreneurs, so you’re naturally inclined to break the rules. Feel free to bend the rules of formality, tradition and stagnant thought. Just don’t ask to join the group and then pretend that you didn’t read the rules.

You can be a unique snowflake, but if you stand on your desk and throw rocks, you’re probably going to fail.

You could prove me wrong.

One of you will break all of the rules and be successful. I’ll let you buy me a drink and tell me all about it when you get there. But for most of you, building cooperatively is an easier path to profits in this industry. It has lower hurdles and more successful precedents to follow.

Innovate, but research first. Ask a broker why it won’t work. Take the advice seriously.

Then get busy building something that will loosen up our pocketbooks. History, and your investors, will look favorably upon you.

Sam DeBord is managing broker of Seattle Homes Group with Coldwell Banker Danforth and President-Elect of Seattle King County Realtors. You can find his team at SeattleHomes.com and BellevueHomes.com.

Broker Public Portal: Angling for a new face

This article was originally published on Inman News:
by Sam DeBord

  • Accuracy isn’t enough. BPP needs attractive tools and media content.
  • BPP has valuable exclusive data that could be leveraged for exposure.
  • Public relations will generate earned media on a tight budget.
  • The name has got to go.

Organized real estate has undertaken some potentially transformative ventures in the past couple of years. Project UpstreamRPR-AMP and theBroker Public Portal have aligned the vision of brokers in numbers that would have been unthinkable in the recent past.

What these projects seem to have in common is that their progress since initiation has been difficult to follow. Although they have secured initial funding, the strategic direction of each feels like it’s taking shape in the dark.

It would be satisfying for industry constituents to have more insight into the mindsets of the leaders of these programs. In particular, the Broker Public Portal seems to be as much of an enigma today as it was when it was first proposed.

We know the leadership and the stated mission: to provide a simple, direct home search experience that connects consumers directly with brokers.

What we don’t know is how it intends to produce a distinguishable value proposition for consumer viability. Its success is reliant upon its ability to create a unique consumer benefit. That benefit then has to reach the general public’s consciousness — possibly an even greater task.

Doomed to fail

Some critics have already called BPP a failed concept — an exhibition built without an audience in an arena where the titans already own the stage. They’re correct to point out the challenges, but probably overstepping in the sweeping conclusion.

Detractors will point to NRT’s short-lived portal, homesforsale.com, as a cautionary tale. It was released and then mothballed in 2015 because it didn’t garner any consumer traffic. That venture’s difficulties should be poignant for BPP’s leaders. Homesforsale.com didn’t seem to have a particularly unique sales pitch to consumers.

BPP is a different animal, though. NRT’s site was intended as a lead-generation and referral-fee platform within a branded silo. BPP’s mission sounds more like a grassroots, brand-agnostic platform. It seems to want to be the Wikipedia of real estate listings, the Switzerland of the portal world.

Too small, too late

Many have pointed to Zillow Group portals and realtor.com and asked how BPP could possibly compete.

BPP has $500,000 in funding so far. Portals are billion-dollar operations.

BPP’s people have said repeatedly that they don’t intend to compete with the top portals. They’re just creating a different option, a product offering that might be preferable to some portion of the consuming public.

Let’s be honest: “We don’t want to compete with the big portals,” sounds a bit like a coach saying, “We’re only thinking about today’s game.”

BPP’s leaders must have large-scale aspirations. They want to be a champion as much as their portal competitors do. They’re just wise enough to avoid inciting rivalry right away.

Why BPP?

The most important question being asked is: “Why would a consumer use the Broker Public Portal?”

What angle will BPP leverage to make it successful?

Make no mistake, it’s an angle. Its success will require sharp differentiation. Simply creating a neutral platform with direct broker data won’t cut it. The big three already have unbelievable amounts of data, user interfaces that provide superior experience and enough capital backing them to buy consumer traffic for the foreseeable future.

Can BPP be the neutral source for listing data — the Wikipedia for real estate consumers — if consumers can’t hear the message?

Realtor.com has blanketed consumers with its marketing pitch of being the most accurate and up-to-date site. Its 800-plus feeds from MLSs make this claim difficult to dispute.

It’s true that BPP could eventually have a broader set of listing feeds, but could it outspend Rupert Murdoch and actually get that message to the general public? There’s a natural conflict of messaging between the two portals if this is BPP’s elevator pitch.

If practitioners prefer BPP’s model and display rules to those of the other portals, it could become the preferred platform for agents and brokers. That might have little effect on consumer traffic, though.

Realtor.com is coming back today from its recent slide, but not because Realtors prefer it. It’s gaining steam because its operator and owners, Move Inc. and News Corp, are hustling and spending to get in front of consumers.

Building the shiny proprietary tools

Consumers don’t choose a portal based on a lofty mission statement. They use a website with attractive tools. So the portal’s strategy shouldn’t be overwhelmingly focused on how to build the framework that combines nationwide listings (though that’s a necessary foundation). It should be initially focused on what kinds of consumer-centric tools will attract organic consumer traffic.

What could those shiny new tools be that generate traffic? They could come from access to exclusive data that the member MLSs allow BPP to display.

Imagine the clickbait that BPP could generate by creating visualizations of electronic keybox histories. Home showing velocity and volume could be displayed as heat maps, time lapses and neighborhood trending reports.

That’s just one set of data out of many that BPP might be able to leverage in its quest for unique exposure. Access to immediate updates from MLSs’ raw data would allow BPP to inform its consumer base through news, social media and messaging in ways not possible for other consumer portal sites.

That positions BPP less as Wikipedia and more as Wikileaks. The portal could expose information to consumers that they can’t get — or aren’t allowed to see — anywhere else. There’s nothing more viral than exclusive content.

Perception: Marketing and public relations

BPP’s obstacle and opportunity is perception. The portal needs to first be perceptible to consumers. Without generating initial awareness, the rest of the package is irrelevant. That was NRT’s portal’s downfall. The second portion is the perception that consumers will have of the brand’s personality — how will the public perceive its image?

The kind of proprietary data BPP has access to could allow it to establish itself as a unique information source to the news media. Traditional brokers and Realtor organizations often complain that media outlets seek out sources such as Redfin and Zillow for news stories.

What they don’t often admit is that those companies are proactively driving the publicity. They employ researchers to build attractive consumer stories and public relations teams to push them to reporters. The media coverage they receive is not accidental.

Public relations is a gaping hole in the broker world. BPP could become the go-to source for inimitable media insights on the real estate industry.

Creating this content would, of course, be constrained by formidable broker and MLS restrictions on how broadly their data is used. The opportunities, though, are great:

  • Immediate market reports, leveraging daily market statistics while other outlets are working with weeks-old or months-old data
  • Keybox showing analytics tied to effects on sales results: Sale-to-list price, DOM, regional and seasonal variations
  • The best times and days to show a home to buyers, based on their likelihood of writing an offer
  • How likely a new agent is to sell your home in 30 days vs. an agent with 10 years’ experience
  • How long a property stays on the market when listed by a Realtor versus a non-Realtor licensee
  • Whether homes listed by single agents or teams sell faster
  • Whether agents with larger listing inventory have a higher percentage of overpriced listings that don’t sell

These kinds of stories are irresistible to consumers and to the news media. To be able to publish this kind of content, BPP’s members will have to fully buy in to the concept and allow for a deeper exposure of their data.

Angling for success

BPP has some significant strategic disadvantages when going up against the biggest national portals. It doesn’t have to compete with them initially, though. It just needs to create a ripple to demonstrate its potential.

Some strategy to make waves on a tight budget:

  • Start by imagining attractive tools and content for consumers that sit on top of an adequate listing database — not an overbuilt database followed by an interface. Consumers rarely know what’s under the surface. Give them what they want upfront.
  • Leverage proprietary data and pitch it incessantly to the media. Public relations generates inexpensive “earned media” when the content is truly unique. BPP could be the easiest pitch in the industry if it curates its assets correctly.
  • Don’t lean too heavily on pitching the data as accurate. Realtor.com is already buying that space. Reporters don’t bite on accuracy stories as much as they go for “new,” “cutting-edge” or “exclusive.” Build the perception that consumers, and news media, must come to you first for the biggest scoop.

Drive at an angle. Say it out loud.

  • “Trulia’s data: weeks old. Case-Shiller’s data: months old. Our data: updated this morning. Know first.”
  • “Find out where your city’s buyers are moving with data no one else can see.”
  • “Real estate tell-all: Choose the right kind of agent with exclusive data direct from the source — their broker/owners!”

That name, that name — Broker Public Portal

We don’t know if Broker Public Portal is intended to be the name of this effort long-term. Let’s hope it’s not.

“Broker” is a term that is known in the industry but foreign to most consumers. It sounds like a middleman who carries jewels wrapped in velvet in his breast pocket. Consumers can’t even distinguish a Realtor from an agent. This isn’t a good start.

“Public” is important for industry distinction. It is redundant to the consumer. Telling them that a consumer website is public conjures images of Austin Powers: “Allow myself to introduce — myself.”

“Portal” sounds like a mystical doorway or a stark public restroom. Neither conjures the friendly, useful image that BPP should be portraying to consumers.

I’m sure the good people at BPP and their consultants are aware of this issue and are working on it. The brand needs a lot of makeup.

All bets down for BPP

A betting person would put a strong dollar on BPP never competing with the top-ranked portals. Based on the current landscape, that would probably be a winning bet.

We’ve seen so many gamblers squander their capital on ill-fated, poorly vetted real estate ventures, though. In this industry, what you don’t know can really hurt you.

And BPP’s media arm, if it plays its cards right, will know a whole lot more than its competitors. If it can leverage that proprietary knowledge into earned media, it could find an angle to unchecked publicity.

I’d put a buck on that dark horse.

Sam DeBord is managing broker of Seattle Homes Group with Coldwell Banker Danforth and 2016 president-elect of Seattle King County Realtors. You can find his team at SeattleHome.com and SeattleCondo.com.