Category Archives: Uncategorized

Project Upstream: Tax Reform for Real Estate?

This article was originally published in Realtor Magazine:
by Sam DeBord

Business owners take risks to create valuable products and services. They drive the national economy and create jobs.

But no good deed goes unpunished. These entrepreneurs are rewarded with a slough of tax reporting requirements from a tangled web of government agencies. A single business might file fee or tax reports with its city, county, secretary of state, state department of revenue, licensing board, insurance commissioner, and the IRS.

Business owners often feel powerless, subject to countless mandates with no voice in the process. In an ideal world, the system would be reformed. A business would file a single revenue report that could be used by any agency, cut one check to the government, and get back to work. No one is holding their breath for that outcome.

Disjointed Real Estate Listing Distribution

Real estate’s convoluted listing system creates a similar feeling. Property listings, and the services that support them, are the revenue drivers of the industry. Making listing delivery efficient should be a priority. Yet a single listing might have to be input in a dozen different locations before it has been comprehensively distributed. The process doesn’t improve much after distribution. The listing creators often have little control or feedback regarding how their information is treated.

Brokers, agents, staff, and others waste valuable time entering the same listing data into multiple MLSs, vendor websites, franchisor platforms, and advertising portals. The data is the same, but each listing outlet requires a different process of delivery. It’s the definition of inefficiency.

Loss of Control, Uncaptured Value

Once delivered, the listings can take on lives of their own. Brokers and agents often sign on to agreements with little protection for their data rights. Advertising portals rework and manipulate the data and media as they see fit. Some go so far as to republish listing photos in unrelated advertising campaigns without credit or compensation given to the creators.

The single brokerage, on its own, has little ability to reform the process or negotiate a better contract. The inertia of the current system is too great. As a nationwide collection of brokers, though, a single voice like the Upstream coalition would have that power. It has the assets necessary to create a new process and the clout to motivate listing data recipients to operate on a more level playing field.

This, of course, is where fears of power consolidation reside. Tax reformers promote a streamlined system but are wary of granting a federal government agency greater powers to make it possible. Project Upstream’s goal is to streamline business and benefit the entire broker sphere. It will also be a place for brokers to manage a broad range of other kinds of information beyond listing data, including customer databases, vendor contacts, and agent rosters.

Its motivation, though, is the subject of conspiracy theories regarding elimination of small brokers and takeover of MLSs.

Us vs. Them, or All for One?

Luckily for real estate, the body with the power to streamline its processes isn’t the IRS. It’s a collection of “us.” The forces combining to support Project Upstream are the brokers who deal with the value-sapping quagmire of the current listing system every day.

These are business owners who represent over 70 percent of brokers nationwide (and growing). When we get past fear, the benefits of Upstream are fairly straightforward for brokers:

  • Eliminate redundant labor in listing input
  • Improve accuracy and timeliness of listing data output
  • Ensure broker control and choice regarding which outlets receive data
  • Establish broker rights and display rules over the data and media

Upstream’s challenge will be conveying this message to the individual. The project’s developers clearly understand the mission. Can that message be delivered in a way that motivates a broker or agent to change course in their everyday duties in support of a greater movement? Much like each individual voter must understand and believe in a cause to take the time to cast a ballot, adoption by the masses, one by one, will determine the viability of this venture.

Tax reform may be wishful thinking. Listing data reform, on the other hand, is right under our noses. There’s no czar or military coup attempting to seize power and take our autonomy from us. Brokers are merely creating better tools and more control for themselves.

Real estate brokers nationwide haven’t collaborated this closely toward a clear goal in quite some time. Let’s not allow conspiracy theories to cloud the way forward.

Sam DeBord

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

The Millenial Mortgage Myth

This article was originally published on the National Real Estate Post: 

Millenial Mortgage MythMillenials, if we’re to believe media revelations, are an information-empowered generation that seek less human interaction. They don’t need a real person to guide them through financial transactions. They simply want devices and software to automate the processes for them.

There’s plenty of truth in the cavalcade of hype surrounding technology’s influence on consumer behavior. The connectedness of our devices causes us to become more disconnected from the need for interpersonal service. Young consumers who grew up in an atmosphere where it was easier to ask Google than grandma have been trained to seek the efficiency of an application over the advice of a trusted advisor.

The fascination with this mindset, though, becomes a self-reinforcing cycle. Millenials crave efficiency via technology, the media locks in on that generational persona, and businesses cater more and more to removing the human interaction from their services. The snowball keeps rolling downhill, growing in size and speed.

Not All Technology Is Gain

Sometimes, though, everyone loses when we cater to the preconceived notion of efficiency through automation. There are many processes that are improved by diminishing the level of personal interaction. In other cases, the human experience, knowledge, and flexibility that’s only possible through direct interaction is necessary to deliver a quality experience.

That has been our experience in the mortgage financing world. As real estate agents, throughout our careers, we’ve interacted with mortgage lenders. They’ve proven to us, and our clients, that they have the skills and responsiveness necessary to make our transactions run smoothly. We’ve built up a level of trust with our most qualified lenders and those of our associates.

We recommend a list of these professionals to our clients because we understand the alternatives. We’ve seen the bad actors in lending. We’ve watched transactions go sideways. We’ve experienced fly-by-night operators and inexperienced rookies who botch transactions that put home buyers and sellers out in the cold. We know how expensive, painful, and inconvenient mistakes in the mortgage lending experience can be.

Technology has improved much of the processing and underwriting functions of modern mortgage companies. But as much as we love technology’s influence on the efficiency of our industry, we often cringe at attempts to use its influence on the selection of a mortgage lender.

Online Reviews: A Risky Selection Criteria

We’ve been told that millennials trust reviews as much as they trust advice from their friends. While online reviews are great for easily described products on Amazon, in today’s climate, they’re a poor way to judge a mortgage professional. Much like how real estate agents game the online review system for oodles of five-star reviews, mortgage lender reviews are a wasteland of trumped up data. The vast majority of lenders have no reviews on any given platform, so consumers are choosing between a select number of marketing-driven review profiles.

Most consumers don’t know this, though. Younger consumers trust reviews, so they trust Yelp. They trust Zillow and LendingTree. They trust whichever app has helped them buy the best bike accessory or webcam. It doesn’t work out as well for mortgage providers.

Anecdotally, we’ve had three recent transactions where our young buyers did their own research online and selected a lender of whom we’ve never heard before. These lenders came highly recommended from online review sites, so they were selected over our preferred lenders.

None of them closed on time. Twice, we had to “save” the transaction with one of our preferred lenders at the last second.

Our situation isn’t unique. Sit down at a real estate conference and ask a group of agents how they feel when a client selects a lender based on online reviews. The overwhelming response will be a groan. We’re not suggesting lenders to our clients for any sort of financial reward or kickback. We make money, and we make our clients happy, when transactions close according to plan. That’s our only incentive in guiding the lender selection process.

So the next time an app developer, industry consultant, or mortgage company owner says that we need to distance the personal connection of the lending process more to enable millennials, push back. That may be what they say they want, but we know better. Sometimes the best referral is done with a phone call to a trusted adviser.

Don’t believe the myth that millennials don’t need our personal advice. Get in front of your clients’ lending education process early, and explain the gaps in the information available to them online. Reinforce the importance of working with someone who has a track record and level of experience that everyone involved in the transaction can trust. Don’t give in when your clients say “I found a great lender on Yelp.” They’ll thank you for it later.


Sam DeBord

Sam DeBord is a managing broker with Seattle Homes Group and Coldwell Banker Danforth. He is 2016 President-Elect of Seattle King County REALTORS® and has been featured in Inman News’s Top 101 In Real Estate and the T3 Swanepoel Group’s Top 20 Social Influencers. His team sells homes and condos in Seattle and Bellevue.