Tag Archives: Technology

technology

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.

Artificial Intelligence (AI) in real estate: Negating or monetizing an agent’s experience?

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

Have you ever emailed or texted someone, and subsequently opened Facebook on your phone to immediately see that person in your news feed?

You read the entire terms of service when you downloaded that app, right? So you remember agreeing to every bit of your phone’s hardware and software recording and interpreting the signals that your everyday actions are creating (just nod your head yes—it’s watching you right now).

Artificial Intelligence is seeing tremendous growth in consumer-driven industries. It is the ability for software to learn and adapt to consumer behavior via live feedback. Cars, websites, wearables, and apps are becoming more intelligent and adaptable.

We’re seeing huge advances in the affordability of AI software that match the exponential growth of hardware’s computing power.

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Simultaneously, human labor in developed countries is increasing in cost. Minimum wage laws, increasing liability, and rising health care costs are pushing employers to replace labor with technology. McDonald’s employees become kiosks that order Big Macs. Chase Bank tellers are replaced by apps that scan and deposit checks. Companies like Circuit City and Borders Books shutter their stores as websites more efficiently serve their customers.

How AI intersects with RE

Intelligent software has massive potential for creating technology that changes labor markets. Real estate labor is a natural target, and a couple of recent pieces got the ball rolling this past week.Russ Cofano penned a broker outlook that viewed “cognitive computing” not as a threat to labor, but an asset to the baseline of real estate’s agent intelligence:

“So here’s the question. What if cognitive computing enables agents to be better professionals and make better recommendations to their clients? What if access to cognitive computing power, and the data necessary to power it, becomes the 21st century equivalent of the MLS utility?”

Further, Cofano states, “Cognitive computing has the potential to add massive value to the real estate brokerage value proposition and do for agent professionalism what no other initiative could touch.”

While the piece focused on the superior delivery mechanism (Upstream vs. the MLS), it provided support to the idea that brokers could adopt intelligent data systems to improve agent capabilities industry-wide.

Not surprisingly, a different take came from Rob Hahn, focused on the costs of repetitive labor and the likely evolution:

“The $6 billion question is where real estate brokerage services fit in the spectrum of services if we put McDonald’s order-taker on the one extreme and the Chief Engineer of Nuclear Fusion Reactors on the other extreme in terms of specialized skill and knowledge.

I think most of my readers know the answer. Real estate is far, far closer to McDonald’s than it is to McDonnell-Douglas.

…rote procedures and manual inputs are being displaced by technology. Why would it be any different for the rote procedures and manual inputs in the real estate business?

Answer: it won’t.

Those real estate agents who survive will have to be ‘upskilled’ and focus on niche areas or ‘be equipped to handle smart systems.’”

Comparing two views on AI

So we have two very different views of software intelligence’s effect on real estate agents. In one, brokers might adopt cognitive computing measures to improve agents’ core capabilities to serve consumers. They improve and survive as a unified group of forward-thinking adopters.

In another, AI wipes away the entire foundation of repetitive services performed in real estate. This debases the masses of agents and eliminates the need for their services. It leaves only the specialized practitioners above water when it’s done.

It would be remiss of me to gloss over the McDonald’s analogy. The skills that allow agents to survive in their occupation can’t be crammed into a single linear comparison. It seems prudent to point out that the comparison of rocket scientists, real estate agents, and Egg McMuffin order takers should be complex.

In recent real estate history, replacing a repetitive procedure in the sales process with software has simply changed the sales process. It hasn’t removed the sales person. There are graveyards full of real estate labor would-be disruptors who have a poignant understanding of that history.

artificial-intelligence-REAL-ESTATE

The intrinsic skills that keep real estate agents strongly entrenched in the industry seem to center on two things:

  • Personalized intelligence (unique local knowledge, negotiation, transactional experience)
  • Personal relationships (emotional IQ and sphere building)

The latter is almost invariably ignored in real estate labor disruption conversations, yet it’s probably the single greatest barrier to disruption. People list with people. Sellers’ top three requirements for a listing agent are reputation, honesty, and trustworthiness.

AI is the intrusive stalker in your phone. Thelma is the amazing woman who comes to book club and walks with you on weekends. H.A.L. 2000 can’t touch her in terms of trust. This should be the overriding theme of every disruption conversation.

On to bottling knowledge

In the future, personalized intelligence might be a different story. If part of the value of exceptional agents comes from what they know from experience, the way they negotiate, and how they interact with clients, how much of that could be learned by an exceptional AI platform?

Could exceptional agents allow themselves to be profiled by their devices and capture that intelligence to monetize it? Would brokers be able to conglomerate the practices and intelligence of their best agents to provide a unique set of processes for their agents and answers for their clients that aren’t available to the general public?

It might not be as crazy as it sounds. Think about the vast amount of information that could be gleaned from one agent over a single year with all of his/her devices in “AI learn mode.” Spoken word, tone, movement, visual cues, timing, location data, digital communication, social engagement, contract negotiation—all of these and more could be processed into a database describing when, where, and how top agents interact with their environments to close more sales transactions.

Who owns the AI?

While the aforementioned could be done on an industry-wide basis to inform brokers as a whole, it might also be led by savvy top producing agents or brokers who would profit from it as a differentiator. Melded with predictive analytics on consumer behavior and market statistics, the right set of personalized intelligence could tell an agent when and where to meet a consumer, and how to begin interacting with that person to provide a greater likelihood of a client and a sale.

Of course, until personality can be direct-ported into the agent’s brain, we still need a human with emotional IQ to show up and close the deal. The creation of a relationship might be initiated by data, but it’s going to be sealed with emotion.

ThelmaRealtor software version 2.5 could be an AI profile that’s sold to brokers or new agents as a foundational of intelligence for their careers. Whether these benefits and profits go to the real Thelma, her brokerage, or the industry depends on who adopts the technology first.

Back to the people

If that’s all a bit too much sci-fi, let’s get back to the basics. There are huge opportunities for the brokerage community to leverage greater technology and AI to improve how they do business. Those that do will have valuable differentiating tools and skills.

Still, Thelma v. 2.5 isn’t going to wipe out the physical agents on the ground. Technologists with armies of software agents will continue to stare at screens, while real life agents are cementing unbreakable relationships with real people. Consumers will work with agents they view as trustworthy, no matter what amazing intelligence is dangled in front of them by H.A.L. 2000 Realty.

It’s true that consumers want more intelligent real estate transactions. Before that, though, they want trust. AI has great prospects for helping brokers and agents improve their business intelligence, but it’s not going to take the human element out of the transaction any time soon. The real Thelma’s role may change, but she still owns the most valuable, subjective, and defensible portion of the real estate transaction: the relationship.

Will ‘smart contracts’ replace real estate closers?

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

Key Takeaways

  • Criminals are taking advantage of poor security in real estate transactions to defraud buyers.
  • Security holes in the real estate transaction could be fixed with verification software.
  • The role of a closing agent could be drastically altered with smart contracts taking over verification.

Most of a real estate closing revolves around trust and verification. Buyers and sellers use trusted intermediaries to verify that properties, funds, contractual obligations and insurance safety nets are all properly vetted before closing a sale.

That’s part of the reason a real estate transaction has so many participants. Agents, lenders, inspectors, title insurance providers, notaries and closers provide independent verifications of individual facets of a sale. An escrow company or an attorney is usually the organizing force that pulls these individual points of verification into one trusted transaction.

Security is lacking

The security of the current process is weak at best. Homebuyers are frequently being robbed of their purchase funds. By simply hacking an agent or closer’s email account, criminals have put themselves in control of the closing communication.

The hackers spoof the closer’s email, ask the buyer to change the wire instructions, and the funds roll into an unverified bank account. By the time the buyer realizes what has happened, the money has been laundered overseas through multiple wire transfers. It’s gone.

Software security to replace human fallibility?

This kind of real estate fraud is possible because of a reliance on unsecure, disjointed communication methods. The purchase process has no safety envelope. It lacks a seamless layer of overriding security that verifies each sale condition throughout the process.

What if software could replace the parts of the closing process that rely on human verification for security? Smart contracts aim to do just that.

Imagine a digital contract that independently verifies every step in a real estate sale including the identities of the buyer and seller, the funds sourcing, the lender sign-off, deposits, property title transfer and delivery of payoffs to sellers and lien holders.

Before getting into the technical details, let’s look at the roles of an escrow closer or an attorney in the closing process.

Closing functions that could potentially be replaced by secure software:

  • Administration of transaction as a neutral third-party
  • Control of earnest money funds
  • Verification that proper paperwork is in place
  • Examination of title for liens, judgments, mortgages, clouds
  • Ordering of title insurance policy
  • Pro-ration and transfer of property tax and utility bills
  • Preparation of closing documents
  • Administration of signing appointment
  • Transfer of purchase funds to sellers and lien holders
  • Recording of deeds with local government

Closing functions in which human input may trump intelligent software:

  • Live verification of personal identity
  • Explanation and recommendations for resolving title issues
  • Review and explanation of contract items
  • Guidance of clients during unexpected or unique circumstances

Clearly, there is a large portion of the closing process that could potentially be absorbed by secure software. This isn’t to say that the smart contract is ready to take over 90 percent of a closer’s role today.

The potential is real, though. Some of the world’s biggest banks are already developing software based on a technology concept called blockchain to create smart contracts for the financial world.

This is not bitcoin. Although many have only heard of blockchain technologyas the foundation for the digital currency, its use as a software model can be applied to any number of reputable business processes.

The real estate concept, in an oversimplified explanation, is a digital contract embedded with smart money. Buyers, sellers, lenders and all other parties are identified by their personal information.

This data comes from decentralized databases that add to the verified blocks in the data chain — banking, credit reporting, employment, government or other information gathered from trusted sources.

After verifying individuals, the blockchain assigns them an encrypted ID, which allows the smart contract to approve their actions going forward.

You’ve been verified; you no longer need to be trusted

From here, a homebuyer can create smart money by uploading funds and programming them. The buyer’s programmed money goes into the contract with stipulations attached to it.

The seller cannot touch the funds until the buyer’s programming instructions have been met: inspection approved, title clears, lender releases funds, county records the deed and so on.

The lenders, title companies, government agencies and others can all become verified participants in the blockchain smart contract. These identified users in the transaction can make the sale move forward when they verify that certain steps have been accomplished. Only the verified sellers and lien holders will be allowed to receive the closing funds.

What does the smart contract mean for escrow and attorney closers?

Smart contracts could drastically alter the way real estate transactions are closed. With much of the verification process now handled by a network of databases instead of human interaction, there’s the potential to remove much of the labor that’s currently necessary. This is the way most technologies disrupt industries — through efficiency improvements.

Timelines for closings could be reduced. Software doesn’t take holidays, evenings or weekends off.

It’s clear that a smart contract with enough access to the right data could administer a large portion of a real estate closing. Any item that pertains to verification is ripe for delegation to the smart contract. The complexity of the human interaction in the transaction isn’t something to underestimate, however.

Barriers and holes in the process

Smart contracts can’t review and explain contract documents to a nervous seller or buyer the way a human closer can. It’s a stretch to believe they’d replace the closer completely.

It would also be foolish to ignore the most glaring hurdle to the full-fledged adoption of smart contracts in real estate. That is the decentralized and unharmonious makeup of the industry itself.

A typical transaction might have a buyer’s broker using Instanet software while a seller’s broker is using dotloop. Meanwhile, the escrow company and lender are trying to shoehorn everyone into their own custom software product.

Each individual wants the process to work smoothly, but no one wants to use the other’s solution. A consensus blockchain-style foundation could allow many different software products to access the same smart contract, but the industry’s track record of coalescing around a single solution is less than stellar.

Moreover, the cross-industry participants necessary to close a financed sale make for an uphill battle. A single contract needs every member of the transaction to adopt its platform to be effective.

Brokers, lenders, title companies and even government agencies that record transactions would have to sign on for a truly seamless, secure transaction. That will take significant time and influence.

Digital disruption through leadership or pragmatic paper?

Smart contracts have significant potential for increasing the security of transactions, improving the speed of sales and making the closing process more efficient. They could effect profound changes on the role of the real estate closer, but they don’t eliminate the closer’s role entirely.

The smartest software in the world can die in unfulfilled anonymity in this industry. Adoption of smart contract technology won’t happen from the ground up. It will require the kinds of voices that can convince government agencies, banks and big brokerages to sign on.

Whether it’s blockchain or another solution, consumers deserve industry leaders’ full attention on providing a safer way to buy and sell homes. If it happens to make transactions faster and more efficient in the process, everyone benefits.

Every buyer and seller should be warned of the current danger of digital fraud at the outset of a transaction. Of course, there’s a simple way for many of them to avoid it.

Drive to the bank. Get a paper cashier’s check. Drive it to the closing office. Sign the paper. Thank your closing agent in person. As archaic as it sounds, until there is a solution, it couldn’t hurt.

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.

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.

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.

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.

Will RPR fears hold back industry vision for Upstream?

This article was originally published on Inman News:

  • Upstream provides the model for broker-led data management, but the expense of RPR worries brokers.
  • Data management isn’t free. Brokers need to spend to keep up with portals.
  • Inaction based on past failures will only deepen brokers’ loss of control.

Broker conversations about data today usually take on a grim tone. That was the case when I recently moderated an industry panel of MLS and broker executives. The topic was the future of organized real estate, and the conversation was filled with worry that we (the broker-centric world) had lost the ability to manage and profit from our data.

Brokers and agents create the bulk of real estate’s valuable data sources, and then promptly give them away. Technology companies use the data, with few rules attached, and drive the majority of their revenue with it. They charge brokers to advertise adjacent to it.

This sentiment isn’t new, nor is it unique. It’s been around since the first portal website started charging for advertising. The message’s volume has been steadily growing, though. Its simple truths haven’t become any less true.

So when our panel’s conversation moved to the potential of Upstream to right the power structure in the world of real estate data, one would imagine the tone would turn aspirational, hopeful, or determined. It did not. While the concept clearly addressed our biggest concerns and drew significant approval in theory, the outlook was met with skepticism and distrust.

Skepticism’s roots

Unfortunately, this wasn’t a rare instance. Many of the industry folks whom I speak with about Project Upstream begin their conversations with wariness. There are well-founded concerns about the ability to bring such a diverse group of real estate companies together to make the project work.

By and large, though, the fears keep coming back to RPR.

Let’s get the bogeyman out of the way: RPR has cost the National Association of Realtors more than $120 million since its inception. That’s about $120 per member over its lifetime.

New annual expenses for RPR are around $22 million. They’re included in members’ dues (the Second Century Initiatives include RPR, HouseLogic, Real Estate Today Radio, .realtor domain, and eProperty data, at a cost of about $25 per member annually).

Maintaining RPR is a significant expense, one which many brokers feel is too large. It was built to be a revenue-producing tool, and it hasn’t become that. Although many Realtors across the country love and use the tool, adoption rates are still far too low.

Lack of access to MLS data in certain markets hamstrings its ability to provide profitable analytics products (its initial revenue model). Border wars between MLSs, brokers and vendors have created a maze of roadblocks to its adoption.

Moving forward

That $120 million is a sunk cost. It’s gone. RPR has been a failure so far as a revenue producer.

But it’s pivoting. We built a powerful tool, not realizing at the time what its most useful application would be: It’s ready to plug in to the data dashboard that brokers have been clamoring for.

The hottest topic at industry conferences is the desire to take back the management of our data. Unfortunately, many of the speakers get gun-shy when the tools are laid out on the table.

Ignoring how conspicuously RPR fits in to the model of broker-led real estate data management is playing the small game. Brokers are emotionally scarred by past ventures that didn’t go as expected, but we can’t let that drive us into a perpetual state of stagnation. If there’s one thing we can guarantee, it’s that marketing portals won’t be sitting still.

We must demand that RPR is run efficiently in the future as a facet of Upstream. The $20 million a year price tag is a big ticket, though it pales in comparison to the $50 million quarterly losses that advertising portals are taking on to secure a larger portion of the digital real estate pie.

The opportunity to shift the landscape of the industry’s data management isn’t free. Our leaders have to be aware of past mistakes, but not let them paralyze our will to take strategic risks.

After venting fears about RPR, our industry panel had one final related question:

“Considering that data management is the primary concern we’re voicing at the moment, is downplaying Upstream because of questions about RPR a signal that we’re OK doing nothing? Will we be sitting here next year with the same issues, or worse, if we don’t at least attempt to support Upstream?”

There was no answer. That’s because, frankly, we all knew it was the case. Our industry has many intelligent leaders with legitimate concerns about the path going forward. But the inertia of inaction in real estate is often scarier than the uncertainty of change.

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.

Dumping IDX: Don’t burn our safety net

This article was originally published on Inman News:

We’re hearing more often from brokers that they want to go back to a more traditional way of doing business. Keep your listing leads. Close more sales in-house. Build a Broker Public Portal to send all inbound contacts to the listing agent — just like the sign calls of old.

And dump IDX — that’s a refrain that’s starting to blend itself into the conversation more often. If syndication is inefficient, then IDX must be as well.

Brian Boero’s post on 1000watt a couple weeks back crystallized the argument for pulling out of IDX. It’s hard to swallow, though, because in advising a big broker, it could be spot-on. But at the same time, it’s so problematic for the broker-centric industry as a whole.

The theory is that if you have large market share, you shouldn’t share your listing exposure via IDX with small brokers, paper brokers and so on. Big brokers should leverage their strength to differentiate the quality of their listing display and squeeze out the little guy.

Make the consumer come directly to you. That’s an attractive strategy from a competitive standpoint.

 Cooperation and duty

In most industries, that would be the end of the story. In real estate, though, we have an ever-fluctuating requirement to cooperate. Where the level of cooperation begins and ends depends upon current licensing requirements, a code of ethics, and MLS rules.

We cooperate because we know that the efficiency of the real estate market is greatly enhanced for all of us when we set a baseline of standards that consumers and agents can rely upon across brokerage borders.

 IDX might not be a required component of cooperation, but it’s a significant outward signal that a broker is committed to it. It is the foundation that allows brokers to market every listing to the full spectrum of buyers.

It’s a concrete benefit to the seller, one which would be difficult to downplay in a conversation about duty to the client.

Let’s be honest about the slope we’re led down if boycotting IDX is the starting point — because it ends in a circular firing squad. Big brokers battle one another for local dominance with limited databases of their own listings.

That might lead to more double-sided sales at first, but consumers will rely more and more on portals for an integrated set of listings. IDX itself will become ineffective for all brokers.

Traffic to brokerage websites will shrink at a faster pace, as they’ll be a scattered, unorganized way for consumers to search.

The cost of customer acquisition won’t go down. Advertising portals will hold the keys, and the pricing controls, to the only comprehensive listings databases and an even larger portion of online traffic.

They will dictate the cost of the leads that brokers are no longer generating. We’ve all heard the goal of 40 percent of the commission.

We could imagine the brokers pulling their listings from portals together in response, but we know how unlikely that is.

Without a coordinated effort (which would likely be illegal), there would always be someone willing to pick up the exposure of an exiting broker.

Ironically, brokers are probably less frightened about leaving IDX than they are of vacating their spots on advertising portals. If we were focused on the long term, it would be the other way around.

Protection as a whole

IDX-powered broker websites are the safety net in this tumultuous environment of online real estate. No matter what changes take place between public corporations and listing-focused tech companies in the future, we can still ensure an inexpensive way for brokers to display a clean, fair, timely database of properties for their clients.

For a couple hundred bucks a month, brokers can ensure that all of our clients have a way to search for homes, free of whatever marketing shenanigan the disrupters think of next.

Is it Zillow display quality? Of course it’s not.

Do real buyers and sellers care, though? They really don’t. They’ll buy the right home for them whether they find it on a postcard or a billboard.

So, maybe big brokers are winning right now, and they could take their ball and go home. When they step away, though, they leave a void.

 Someone else will fill it. It’s better to be collectively in the game, than to fracture, leave and let someone else take over the field. Cooperation requires some big picture, long-term vision.

IDX is an important part of ensuring some control of our digital future. It’s not just a tool. IDX is brokers’ collective bargaining chip. We can’t break it up, or we all lose its value.

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.

Zillow + dotloop: Raising the bar or boiling your data?

This article was originally published on Inman News:

Zillow’s acquisition of dotloop has generated quite a commotion this week. Let me try to summarize the fast-moving conversation:

  1. Zillow’s paying members might get a nice product in dotloop. Initial statements note that Zillow will be “making it available” to agent advertisers (we’ve yet to hear whether that’s at a discount or for free).
  2. Zillow is no longer “just a media company.” I’m sure Zillow Group staff members are as tired of saying it as we are of hearing it. The company’s main revenue source is still advertising, but with dotloop it’s now fully integrated into the real estate transaction from start to finish.
  3. Owning a transaction management platform used by many different brokerages seems to preclude Zillow from becoming a brokerage, unless they either dump that platform or all of its customers.
  4. Dotloop’s data on transactions in nondisclosure states could give Zillow a unique data advantage in those locations.
  5. Big brokers and franchisors are about to get a lot of questions from their agents using dotloop.

Big congratulations are due to Austin Allison, dotloop’s founder. He had the smarts, guts and work ethic to make something huge happen at a young age.

I remember when he called me years ago trying to make connections with our local MLS members. The founder was just Googling brokers and calling. That’s grit.

On to the outlook:

Raising the bar

Agents already have too many vendors to deal with. If Zillow can streamline services and bring more agents into the present with transaction management and e-signatures, it’s good for the industry and consumer experiences. Big money backing a tool can drive down the costs on a per-user basis.

Agents who are buying advertising on a long-term basis are, in one narrative, the agents who have enough money to do so because they’re productive. The more those agents improve their practices, the bigger effect on the transaction pool.

The combined technology could also allow customers to track return on investment (ROI) from lead to closing, something not often seen in a single platform.

Although some brokers track leads from the source to the CRM to the transaction management system, most don’t track it at all because it’s just too time-consuming. The synergy here, from an analytics standpoint, is attractive.

On the other hand, those points are difficult to hear over the dull roar of “Zillow’s going to have my clients’ personal information and all of my transaction data?!”

The data is the deal

When Trulia bought Market Leader, that deal concerned brokers and agents. The advertising portal might have access to their leads, their prospecting lists — their entire CRM database.

A CRM is a pittance of data when compared to a transaction-management platform. The hard data available from a platform like dotloop has not only client names and information, but forms, contracts, signatures, transaction milestones — all the way down to documents that might point to transactional situations that only the key members of the transaction knew existed.

Keller Williams has more than 80 percent of its agents on the dotloop platform. Other big franchisors have massive adoption as well.

Forget for a second about the agents who squawk at anything to do with Zillow.

Every other agent using dotloop will now be asking himself or herself, “What is going to happen to my clients’ data?” They’ll be asking the broker who supplied the system to them.

Dotloop’s terms of service, at the time of a well-publicized conversation about data rights with the California Association of Realtors, looked like this:

“You automatically grant, or warrant that the user content owner has expressly granted, to us (dotloop) a worldwide, royalty-free, sublicensable and transferable right to license to use, reproduce, distribute (and) create derivative works …, publicly display, publicly perform, transmit, and publish your user content in connection with our services.”

That blank slate should be enough to make you choke on your coffee. That’s not an indictment of dotloop. Your licensing attorney shoots for the moon on the first set of terms, and then waits for the customers to push back.

Many folks signed on to dotloop under these terms and are pointing to this past version of the agreement to say that Zillow will now be able to do anything it wants with your transaction data, but it appears that the concerns of CAR and others warranted changes.

Here’s what the dotloop’s website says today in terms and conditions:

“You own your Content. In connection with your use of our Services you may submit documents and other content (“your Content”) to the Services. Subject to ownership interests of third-parties, you will retain full ownership of your Content. We don’t claim any ownership to any of your Content. These Terms do not grant us any rights to your Content or intellectual property except for the limited rights that are needed to run the Services … We will not knowingly share or allow anyone to access your Content other than as we describe in our Privacy Policy. It is yours and we work to keep it that way.”

For those who worry about Zillow seeing your data: Zillow will be able to see your data. It seems that, at least for now, though, Zillow would be limited significantly from using the users’ content in any advertising.

Whether the raw sales data could be melded into the market analytics that Zillow uses to display sales data is a bigger question.

In nondisclosure states including Alaska, Idaho, Kansas, Louisiana, Mississippi, (parts of) Missouri, Montana, New Mexico, North Dakota, Texas, Utah and Wyoming, public data on real estate sales is primitive, and Zillow could get a leg up on its competition with this new trove of sales data.

Slow boiling the frog

For my cohorts and I in the tinfoil-hat-wearing, we’re-losing-our-data and the get-off-my-lawn crowd, I think there was a simultaneous shaking of the head and a chuckle when the acquisition was announced.

Imagine if CAR hadn’t pushed back and dotloop’s original contract was still in place when Zillow had acquired dotloop’s customer base. All of the users’ data would not only be visible to Zillow, but licensable to the highest bidder for public advertising.

That doesn’t seem to be possible now, but the terms and conditions usually change when ownership changes take place, so this will be something to keep an eye on.

We’ve been here before. Syndication was no big deal because it was easy. A direct data feed from the broker or MLS was faster. “We’re supposed to negotiate Fair Display Guidelines in the data agreement? We just want to get the home sold.”

All the while, brokers were the proverbial frog in the pot. The water was warming just slowly enough that we didn’t jump out with our data. The potential repercussions were ignored in the pursuit of the comfort of another transaction. We were busy selling.

So maybe it shouldn’t have been a surprise when the data aggregators expanded their reach straight into our transactions. Agents reacted vocally, but our data was already being reused in new and profitable ways by the day.

Zillow used agents’ profile information in advertising campaigns to draw traffic to its website. They’re defending, in court, the position that agents’ photos of sold listings not only don’t belong to the agents, but they can also be used in unrelated marketing campaigns.

Agents or their brokers often probably gave these permissions when they didn’t pay attention to their data agreements.

We’re all guilty of clicking the checkbox and saying “I agree” without reading. It’s not that our service providers are vindictive. They just don’t think that we care, and we usually prove them right. They keep turning the temperature up, and we just sit in the water and hope it doesn’t boil.

Peoplework with boundaries

Our problem in real estate is that we’re so people-oriented that we sometimes allow personal trust to overrule our instincts to verify. We like the people at dotloop and Zillow.

Peoplework is the dotloop mantra, and it’s wonderful, but it can’t exist in a vacuum. We can’t ignore the boundaries that have to be framed around our businesses just because we like the people with whom we work.

Your former clients’ master bedroom can already be used in an unseemly advertising campaign. Something more personal might be next.

Companies change. Management changes. Terms and conditions change.

We need to pay more attention to the protections we give to our clients’ data as an industry. We can forge agreements with vendors without having every modicum of our data rights gutted by their attorneys, but it can’t be done on an individual level. We need leadership to provide a unified voice.

Let’s all take a step back and reset our expectations of data rights with our vendors before diving, head down, into the next transaction.

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.