What were the most important events in real estate in 2021? And how might those events change the industry moving into 2022?
On this episode of Industry Relations, Rob and Greg sit down to reflect on what they see as the most significant headlines of 2021, discussing the real reason behind Zillow’s abrupt exit from the iBuyer market and what Zillow 3.0 might look like.
Rob and Greg explore the significance of NAR’s apology for its racist past and policy changes around hate speech, describing how the ethics complaint against Pastor Brandon Huber reflects a growing division in the industry.
Listen in for insight on the impact of MLSs becoming technology companies and find out why it’s time for you to start learning about the blockchain and what this trend toward decentralization means for the future of real estate.
What‘s Discussed:
Rob & Greg’s take on the most important events in real estate in 2021
The DOJ’s withdrawal from its settlement with NAR and Biden’s subsequent Executive Order on competition
How Zillow’s acquisition of ShowingTime changed the way vendors, MLSs and associations do business
The real reason behind Zillow’s exit from the iBuyer market and what Zillow 3.0 might look like
Rob’s prediction that Rich Barton will retire again in 2022 and why Greg thinks he’s wrong
The significance of NAR’s policy changes re: the transparency of listing data
Why NAR’s apology for its racist past matters and how it might serve as the first step toward reparations
The ethics complaint against Pastor Brandon Huber and how it reflects the growing division in organized real estate
How Greg thinks about MLSs becoming technology companies and what it means for vendors
Rob’s insight on how blockchain technology might impact real estate
Connect with Rob & Greg:
Resources:
Biden’s Executive Order on Promoting Competition in the American Economy
The DOJ’s Antitrust Case Against NAR
The DOJ’s Withdrawal from Its Settlement with NAR
Business Insider Article on Zillow’s Project Ketchup
Rob’s Post on Zillow’s Project Ketchup
Ben Thompson on Zillow’s Decision to Exit the iBuyer Market
Rich Barton on the Stratechery Podcast
NAR Policy Changes on Transparency of Listing Data
Bloomberg Article on the NAR Formal Apology for Past Racism
Changes to the NAR Speech Code
Pastor Brandon Huber’s Lawsuit Against the Missoula Organization of REALTORS
The Bitcoin Standard: The Decentralized Alternative to Central Banking by Saifedean Ammous
Chris Dixon and Naval Ravikant on The Tim Ferriss Show
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The DOJ pulling out of its antitrust settlement with NAR seems like bad news for the industry.
But what if it could be an opportunity?
Michael Wurzer is the CEO of FBS, the leading innovator of MLS technology. Prior to FBS, Michael spent seven years practicing law in California and Minnesota, working in corporate law, litigation and serving as Assistant General Counsel for Aveda.
On this episode of Industry Relations, Michael shares his unique perspective on the DOJ withdrawal, discussing the Biden administration’s intent to refocus on antitrust principles and the need for smaller, independent businesses to ensure competition in any sector.
Michael explains how organized real estate might engage with regulators, describing how MLSs could serve as labs of experimentation to promote transparency and competition in the industry.
Listen in to understand the challenge of overcoming what Rob calls the regulatory mindset and find out how real estate can take an offensive posture with the FTC, working together to innovate around Brandeis and Patman’s antitrust ideals.
What’s Discussed:
The intent of the Biden administration to refocus on antitrust principles
Why industries need smaller, independent businesses to ensure competition
How the competitive nature of the MLS benefits NAR in negotiating with the DOJ
Why Michael sees an opportunity for the industry to engage with regulators
How MLSs might serve as labs of experimentation to promote transparency and competition
The concerns around Ben Harris’ advocacy for delinking of commissions
How a willingness to experiment would be a good defense for government intervention
Rob’s concern that the regulatory mindset won’t allow for such a nuanced approach
Why Michael doesn’t see NAR or large MLSs as Goliaths to be broken up
Connect with Michael:
Connect with Rob and Greg:
Resources:
Justice Department Withdraws from Settlement with the National Association of Realtors
Goliath: The 100-Year War Between Monopoly Power and Democracy by Matt Stoller
‘Amazon’s Antitrust Paradox’ by Lina M. Khan
Biden’s Executive Order on Promoting Competition in the American Economy
REX on Industry Relations EP055
‘Anticompetition in Buying and Selling Homes’ by Roger P. Alford and Benjamin H. Harris
Michael’s Presentation on the Expanding MLS
British Columbia’s Shadow Flipping Controversy
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The Department of Justice pulled out of its proposed settlement with NAR and President Biden has issued an executive order addressing ‘exclusionary practices’ in real estate. Now, more than ever, NAR will need to exercise its political power to fight off FTC regulations. But how much political pull does the organization really have?
On this episode of Industry Relations, Rob explains why he thinks NAR is the weakest it’s ever been politically, discussing how changes to the Code of Ethics harmed the organization’s unity and what that might mean for contributions to RPAC.
Greg offers the counterargument that NAR’s record-high membership is a reflection of its political capital, and our hosts explore the concerns professional staff and academics in DC have raised around real estate for the last 20 years.
Listen in to understand how the insanity of the 2020 housing market might influence the way the public thinks about real estate and learn what you should be doing to combat potential government regulations or plan for lower commissions moving forward.
What’s Discussed:
Why Rob thinks NAR is the weakest it’s ever been politically
Greg’s counterargument that NAR’s record-high membership is a reflection of its political capital
What a conversation between an NAR lobbyist and the chief of staff for a senator might sound like
How changes to the NAR Code of Ethics harmed the organization’s unity (and what that might mean for RPAC contributions)
How NAR’s head lobbyist’s connection to the Trump organization might impact her ability to get the REALTOR agenda through
The concerns professional staff and academics in DC have raised re: real estate for the last 20 years
How the insanity of the 2020 housing market might influence the way the public thinks about real estate
Rob and Greg’s challenge to listeners to engage their membership in conversations around potential regulations
The benefit of contingency planning for lower commissions
Connect with Rob and Greg:
Resources:
Justice Department Withdraws from Settlement with the National Association of Realtors
Biden’s Executive Order on Promoting Competition in the American Economy
NAR Code of Ethics & Professional Standards Policy Changes
REALTORS Political Action Committee
Phillip Cantrell on The Notorious POD EP017
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Early this month, in an unprecedented move, the Department of Justice pulled out of its proposed settlement with NAR. And soon thereafter, President Biden issued an Executive Order on Promoting Competition in the American Economy.
An executive order with a specific clause concerning ‘exclusionary practices in the brokerage or listing of real estate.’ So, what’s going to happen next?
On this episode of Industry Relations, Rob and Greg discuss what Biden’s executive order means for real estate, describing the kind of regulations the FTC might impose on the industry in 2022.
They address the influx of institutional capital in real estate in the last two years, exploring what that could mean for buyer’s agent commissions and why it actually might be good for NAR’s renegotiation with the DOJ.
Listen in for insight on the need for price discrepancy between a good and bad buyer’s agent and get Rob and Greg’s opposing predictions on how the government might change the rules around cooperation and compensation—or not.
What’s Discussed:
How the DOJ reneged on its settlement with NAR and why it’s a big deal
What Biden’s executive order on competition means for real estate
The ideas re: concentration of power behind the Bradeis movement
Why Rob thinks the real estate lobby is at its weakest right now
Greg’s prediction that mortgage banks will step in to keep buyer’s agent commissions the same
The influx of institutional capital in real estate in the last two years (and why that might be good for NAR’s renegotiation)
The number of new business models designed to help consumers buy, sell and finance homes
Rob’s view that institutional investors will support the elimination of buyer’s agent commissions
The lack of price discrepancy between a good and bad buyer’s agent in real estate
Rob’s thought experiment re: whether the rich need buyer’s agents
Rob’s prediction that the FTC will issue proposed regulations for real estate
Connect with Rob and Greg:
Resources:
Blockchain and Real Estate on Notorious POD EP022
Justice Department Withdraws from Settlement with the National Association of Realtors
Rob’s Post on the DOJ Pulling Out of Its Settlement with NAR, Part 1
Rob’s Post on the DOB Pulling Out of Its Settlement with NAR, Part 2
Biden’s Executive Order on Promoting Competition in the American Economy
‘Amazon’s Antitrust Paradox’ by Lina M. Khan
‘BlackRock Is Not Ruining the US Housing Market’ in The Atlantic
Rob’s Response to The Atlantic Article
Rob’s Post: Do the Rich Need Buyer’s Agents?
Our Sponsors:
Zillow has been consumer-centric since its inception in 2006. And in the early days, the tech company didn’t pay much attention to agents. Now Zillow realizes that reducing friction for consumers means helping agents respond to online leads and schedule showings, for example. But is it too late to earn the industry’s trust?
Errol Samuelson is the Chief Industry Development Officer at Zillow Group. With 25 years of experience in proptech, he served in leadership roles at Realtor.com, Top Producer Systems and Move, Inc. before joining Zillow in 2014. On this episode of Industry Relations, Errol sits down with Rob and Greg to explain why Zillow is acquiring ShowingTime and explore what’s behind the industry’s volatile reaction to the announcement.
Errol discusses the real estate industry’s distrust of Zillow, acknowledging the frustration the tech company has caused over the years and assuring us that his team will not misuse ShowingTime data. Listen in to understand how Errol thinks about CoStar as a competitor and learn why he believes an industry without cooperation and compensation is not good for agents, brokers or consumers.
What’s Discussed:
Why the real estate industry went apeshit over Zillow’s acquisition of ShowingTime
Zillow’s assurance that ShowingTime will remain an open platform with a strict privacy policy
What problem Zillow is trying to solve by acquiring ShowingTime
Errol’s insight on the rumor that Zillow bought ShowingTime to keep it out of CoStar’s hands
How Errol thinks about the fact that people assume Zillow is lying
Errol’s acknowledgement of the frustrations Zillow has caused agents over the years and how the company’s behavior may have amplified the industry’s distrust
The possibility that social class and age are a factor in the industry’s mistrust of Zillow
The focus of Zillow’s Q4 earnings call (Zillow Offers vs. streamlining the consumer experience overall)
Why innovation in the lending space is limited by federal regulations
The unique opportunity Zillow has to innovate around ownership models
Errol’s thoughts on CoStar as a competitor and why CoStar’s success hinges on the government putting an end to cooperation and compensation
Connect with Errol:
Connect with Rob and Greg:
Resources:
Rob’s Post on Zillow, ShowingTime & Paranoid Realtors
Zillow’s Press Release on Acquiring ShowingTime
Zillow’s Q4 2020 Earnings Call
Gary Keller’s 2021 Family Reunion Vision Speech Recap
Rob’s 2020 List of the Seven Most Interesting People in Real Estate
Federal Regulations on Mortgage Finance
CoStar’s Q4 2020 Earnings Call
Our Sponsors:
As the real estate industry has evolved, we’ve been trained to focus on who owns the data. And Zillow’s acquisition of ShowingTime has many concerned about sharing their data with the proptech giant. But what if hoarding your data is not the only way to compete with a company like Zillow? What if it’s not really about access to the data but what you do with it?
Nick Bailey is the Chief Customer Officer at RE/MAX. With nearly 25 years of industry experience, Nick served as an agent, broker and proptech vendor before becoming the head of a major real estate franchise. On this episode of Industry Relations, Nick joins Rob and Greg to share his take on Zillow’s acquisition of ShowingTime and what’s behind the industry’s emotionally-charged reaction.
Nick offers insight on how the data Zillow acquired was already publicly available, explaining why that information doesn’t necessarily give the tech company a competitive advantage and reminding us that it’s not unusual for companies at scale to offer various products and services to the industry at large. Listen in for Nick’s perspective on what we can do to improve the process of buying or selling a home for consumers and find out why you shouldn’t panic about Zillow’s acquisition of ShowingTime.
What’s Discussed:
Nick’s background as an agent, broker, tech vendor and head of a major real estate franchise
Why Nick sees Zillow’s acquisition of ShowingTime as one tech company acquiring another to make the process of buying and selling homes easier for consumers
How ShowingTime’s market share influenced the industry’s emotionally-charged reaction to its acquisition
Nick’s argument that the data Zillow has acquired was already publicly available
How Nick addresses the objection that the ShowingTime acquisition forces agents and brokers to provide Zillow with a competitive advantage
How it’s not unusual for companies at scale to offer various products and services (e.g.: RE/MAX’s acquisition of Motto Mortgage)
What Nick is doing to educate agents around the spirit of cooperation in the industry
How Nick thinks about whether Zillow is a RE/MAX competitor
What the real estate industry can do to improve the fragmented process of buying or selling a home
Nick’s insight on what differentiates RE/MAX in a competitive industry that includes a growing number of iBuyers
The trend toward a greater concentration of power among fewer agents and how that might contribute to the panic around Zillow
Nick’s advice for MLS, franchisor and large brokerage CEOs on using data to identify trends and create contingency plans accordingly
Connect with Nick:
Connect with Rob and Greg:
Resources:
ShowingTime’s Press Release on Its Acquisition by Zillow
Nick’s Video on Zillow’s Acquisition of ShowingTime
Rob’s Post on Zillow, ShowingTime & Paranoid Realtors
Brad Inman’s Piece on Zillow & ShowingTime
Gary Keller’s 2021 Family Reunion Vision Speech Recap
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Zillow’s Economic Research Team just released its forecast for 2021, and they expect it to be the best year for home sales since 2005. In fact, Zillow’s number crunchers believe that a whopping 6.8M existing homes will close next year, marking the biggest one-year gain in sales (nearly 22%!) since the early 1980’s.
Jeff Tucker is a Senior Economist at Zillow Research where he studies the causes and consequences of changing supply in the housing market. On this episode of Industry Relations, Jeff joins Rob and Greg to discuss the inputs his team used to make its predictions for 2021 and describe how current growth differs from what we saw at the height of the bubble in 2005.
Jeff offers insight around the demographics of who’s buying and selling homes right now, sharing his take on why the low millennial marriage rate may not impact the housing market as much as we think and how feasible it is for young, working-class Americans to afford homeownership. Listen in to understand how COVID facilitated the single-family home inventory crash and get an economist’s perspective on why the housing market will stay hot through 2021.
What’s Discussed:
The inputs Jeff’s team used to predict that 6.8M existing homes will close in 2021
How current growth differs from what we saw at the height of the bubble in 2005
The decrease in the share of income spent on mortgages since 2018
Why the iBuyer’s mission to create a frictionless experience is so important moving forward
Jeff’s insight around the demographics of who’s buying and selling homes
The distinction between family and household formation
Why the low millennial marriage rate may or may not impact the housing market
How COVID facilitated a single-family home inventory crash
Why Jeff sees appreciation slowing down by the end of 2021
Jeff’s take on the feasibility of homeownership for working-class millennials
How the skyrocketing US money supply might impact the real estate market
Connect with Jeff:
Connect with Rob and Greg:
Resources:
NAR Data on Single Women Home Buyers
Pew Research on Millennials & Marriage
Our Sponsors:
Not too long ago, REALTORS were unified, often claiming to be neither Democrat nor Republican but members of the REALTOR Party. Today, however, the polarization in our country is reflected in the real estate community. And the recent changes to the NAR Code of Ethics, specifically Standard of Practice 10-5, seem to have pushed us even farther apart. So, how are these changes likely to affect REALTORS in practice? Can we be more inclusive without favoring one political party over another?
Laura Farley serves as General Counsel at the Virginia REALTORS Association, and she has more than 10 years of experience handling and supervising professional standards cases. Prior to joining the state association, Laura was an attorney for the Northern Virginia Association of REALTORS. On this episode of Industry Relations, Laura joins Rob and Greg to provide an overview of the three major changes to NAR’s Code of Ethics and offer insight into how those changes might impact real estate professionals now that the professional standards apply to everything a REALTOR does, real estate related or not.
Laura explains why NAR’s list of protected classes in Standard of Practice 10-5 is more inclusive than a lot of states and addresses the subjective nature of determining intent as well as the concerns that 10-5 gives some REALTORS more speech rights than others. She also discusses the significance of removing the word ‘willful’ from NAR’s definition of public trust, introducing us to the concept of disparate impact—and why it may or may not apply to Article 10. Listen in for Laura’s insight on how 10-5 has further polarized the REALTOR community and get her take on the best possible outcome around the revised Code of Ethics.
What’s Discussed:
Laura’s decade of legal experience with professional standards cases
Laura’s overview of the 3 major changes to the NAR Code of Ethics
Why NAR’s list of protected classes is more inclusive than most state lists
The significance of the word ‘use’ in Standard of Practice 10-5 (REALTORS must not ‘use’ harassing speech, hate speech, epithets or slurs)
The controversy around how 10-5 gives some REALTORS more speech rights than others
The subjective nature of determining an agent’s intent to harm, hurt or harass
How Laura thinks about the concerns of REALTORS on the political right re: implicit bias
The significance of removing the word ‘willful’ from the definition of public trust
The concept of disparate impact and why it may or may not apply to Article 10
How the change to 10-5 has further polarized the REALTOR community
Connect with Laura:
Connect with Rob and Greg:
Resources:
Laura’s Code of Ethics Update Video
Virginia REALTORS Code of Ethics Resources
NAR’s Code of Ethics & Standards of Practice
Rob’s Post on an Alternative to the New Speech Code
Virginia REALTORS Diversity & Inclusion PAG
Rob’s Post on Disparate Impact
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The November 2020 DOJ-NAR settlement requires that buyer’s agent commissions are apparent to consumers. But that transparency is just a first step in a push to divorce real estate commissions entirely. Should the other DOJ lawsuits succeed, home buyers will negotiate buy-side commissions directly with the buyer’s agent. So, what happens if the disruptors calling for these changes (like Jack Ryan) get their way?
On this episode of Industry Relations, Rob and Greg discuss Sam DeBord’s passionate Tweetstorm in response to their recent interview with Jack Ryan of REX, clarifying the arguments made by both Jack and Sam and considering how transparency around buyer’s agent commissions is likely to reduce the population of agent-facilitators and drive market share to the true realtor-counselors in the space.
Rob and Greg describe how a rule ending cooperation and compensation would impact the industry long-term, exploring a possible transition from a buyer’s commission to a flat fee or hourly model. Listen in for insight into the questions industry disruptors raise with regard to the role of the MLS, the brokerage, and the agent in the absence of cooperation and compensation.
What’s Discussed:
Lone Wolf’s acquisition of W+R Studios and how Greg & Dan are sharing $1M of the proceeds with their team
Sam DeBord’s passionate Tweetstorm in response to our interview with Jack Ryan of REX
What makes a real estate agent a facilitator vs. a counselor
How transparency around buyer’s agent commissions could significantly reduce the agent population
How Jack Ryan’s background in politics and high finance informs the way he thinks about making real estate better for consumers
How the end of cooperative compensation is likely to disrupt real estate referral networks
The opportunity for vendors to help buyer’s agents demonstrate their value
Why Rob thinks there could be a transition from buyer’s agent commissions to a flat fee or hourly model
What agents and brokers might do to take advantage of the required disclosure of buyer’s agent commissions
The questions Jack Ryan’s line of attack raises re: the value prop of the MLS or the real estate brokerage in the absence of cooperation and compensation
Connect with Rob and Greg:
Resources:
Lone Wolf’s Acquisition of W+R Studios
Greg’s Post on the Lone Wolf Acquisition
Sam DeBord’s Tweetstorm on Jack Ryan
Jack Ryan on Industry Relations EP055
Spencer Rascoff & Austin Allision on Industry Relations EP056
HousingWire’s Acquisition of REAL Trends
Jeff Corbett’s Post on Divorcing Real Estate Commissions
The NAR-DOJ Agreement on MLS Rules
Biden’s Proposed First-Time Home Buyer Tax Credit
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What happens when real estate tech royalty get together to brainstorm business ideas? Not surprisingly, a general discussion of underutilized assets lends itself to a new proptech venture.
Spencer Rascoff (former CEO of Zillow) and Austin Allison (co-founder of dotloop) are the Cofounders of Pacaso, a startup working to democratize access to second homeownership. On this episode of the podcast, real estate tech OGs Spencer and Austin join Rob and Greg to discuss how Pacaso solves the problem around the underutilization of second homes and explain how consumers, agents, and brokers alike benefit from the service.
Spencer and Austin describe how Pacaso manages scheduling and dispute resolution, sharing what differentiates their product from a timeshare or the traditional DIY co-ownership model. Listen in for Spencer and Austin’s insight on current events in the industry, including the radical acceleration of tech adoption through COVID, the long-term impact of the DOJ lawsuit against NAR, and CoStar CEO Andy Florance’s attack on Zillow.
What’s Discussed:
How Pacaso solves the problem around underutilization of second homes
How consumers, agents, and brokers benefit from Pacaso
What differentiates Pacaso from a timeshare
How Pacaso handles scheduling and what happens if one owner uses the home much more than the others
Why Spencer & Austin don’t see Airbnb as competition
How Pacaso manages dispute resolution and governance of a property
Why friction among owners is less likely with Pacaso vs. the DIY model
Spencer & Austin’s response to the idea that Pacaso is ‘rich people solving rich people problems’
How COVID has inspired a demand for co-ownership in city centers
How the digitization of real estate has accelerated through the pandemic and what that means for the industry
Why buyer side representation will not go away (despite the DOJ lawsuit)
Andy Florance’s attack on Zillow and how CoStar’s acquisition of Homesnap will impact residential real estate
Connect with Spencer & Austin:
Connect with Rob and Greg:
Resources:
Zillow’s Q2 2020 Earnings Call
Jack Ryan on Industry Relations EP055
CoStar’s Acquisition of Homesnap
Brad Inman’s Interview with Andy Florance
The FTC Suit to Block CoStar’s Acquisition of RentPath
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It has come to light in recent days that REX was the ‘power behind the throne’ in the Department of Justice’s lawsuit against NAR (and subsequent settlement). The suit alleged that the trade group’s rules on commissions artificially inflate the fees paid to real estate agents and put illegal restraints on competition in the market. So, what inspired the upstart firm to take its concerns to the DOJ?
Jack Ryan is the Cofounder and CEO of REX, the digital alternative to the residential real estate agent. REX uses big data and AI to provide consumers with a significant cost savings and an improved customer experience. On this episode of the Industry Relations, Jack joins Rob and Greg to explain why REX went to the Department of Justice and address the perception that his team is hostile to organized real estate.
Jack offers his take on why a commissions drop is not bad news, describing his libertarian vision of the future of real estate and how all involved would benefit—including MLSs, brokers, agents, consumers and communities. Listen in for Jack’s insight on eliminating the friction from the home buying process and find out what would have to change for REX to join the MLS.
What’s Discussed:
Why REX went to the DOJ with NAR’s ‘illegal restraints’ on competition in the market
What differentiates REX from other residential real estate brokerages
What’s behind REX’s decision not to join the MLS
Eliminating repetitive, standardized activities to make the real estate transaction more efficient
What the REX workflow looks like from a buyer’s perspective
Why Jack is more concerned with changing the system than making money
Jack’s argument that a commissions drop is not bad news
How Jack thinks about eliminating the friction from buying and selling a home
How a seller benefits from working with REX in terms of cost savings and level of service
The perception that REX is hostile to organized real estate and what would have to change for Jack to join the MLS
Jack’s libertarian vision around the future of real estate
How REX’s AI continues to improve and Jack’s intent to make the tech available to other brokers and agents
Connect with Jack:
Connect with Rob and Greg:
Resources:
Rob’s Piece on REX and the DOJ
Our Sponsors:
We are days away from the most important election of our time. Will Trump win reelection? Or will Biden take office? What factors influence the way people are voting? And how will the real estate industry be affected either way?
On this episode of the podcast, Rob and Greg are sharing their predictions around who will win the upcoming presidential election, discussing how the handling of the pandemic is likely to influence voting and whether Americans will choose a candidate based on self-interest versus moral integrity.
Rob and Greg reflect on the last four years in terms of the economy in general and real estate specifically, debating whether a modern leader should (or even could) inspire and unite us AND get things done. Listen in for insight on separating Trump’s behavior from what he has accomplished as President and learn how our hosts think about getting the US back to a place of normal political discourse.
What’s Discussed:
Rob and Greg’s predictions regarding who will win the presidential election
Choosing a candidate based on self-interest vs. moral integrity
How the handling of the pandemic might influence voting
Whether the governor or President should have more influence over the states
Greg’s call for a leader that can inspire and unite us rather than stoke the fires of division
Rob’s take that it’s less important that a leader be an inspiring orator and more important that they get things done
Separating Trump’s behavior from what he has accomplished as President
How the last four years have been good for the economy in general and real estate specifically
Whether the Democrats will accept Trump as the legitimate President
Getting the US back to a place of normal political discourse
Connect with Rob and Greg:
Resources:
What’s the Matter with Kansas: How Conservatives Won the Heart of America Back by Thomas Frank
Our Sponsors:
Realtors are tasked with helping families make the biggest financial decision of their lives. To that end, NAR wants to preserve the idea of a realtor as an intelligent professional. And when an agent engages in conduct unbecoming of a realtor (like posting racial slurs on social media, having sex in an empty listing, or threatening the life of a broker who takes a job at Zillow), the association can and should protect the realtor brand and let that agent go.
On this episode of the podcast, Rob and Greg are discussing the series of speech code proposals made by the NAR Professional Standards Committee to prevent realtors from discriminating against the protected classes and using harassing or hate speech, epithets or slurs in both their personal and professional lives.
Rob and Greg go on to explore the problems with the committee’s proposal, explaining why it’s difficult to define what qualifies as harassing or hate speech and how the rules don’t address other kinds of unprofessional behavior. Listen in for insight on how a Conduct Unbecoming Clause would work as an alternative to protect the realtor brand from behavior that is ‘disgraceful, unprofessional and unbecoming’ of an agent.
What’s Discussed:
An overview of the series of proposals made by the NAR Professional Standards Committee
--Policy Statement 29 applies NAR Code of Ethics to conduct outside of real estate
--Standard of Practice 10-5 prohibits harassing/hate speech, epithets or slurs of protected classes
--Definition of ‘public trust’ expanded to include all discrimination against protected classes
The problems Rob sees with the committee’s proposal
--Difficult to define what qualifies as harassing or hate speech
--Leaves out threats, harassment of unprotected classes
--Many conservative realtors feel targeted by changes
The benefits of Rob’s alternative Conduct Unbecoming Clause
How the history of race in America informs the way NAR is approaching the proposed changes
The value in protecting the realtor brand from conduct that is disgraceful, unprofessional and unbecoming of an agent
Connect with Rob and Greg:
Resources:
NAR’s Proposed Speech Code Regulations
Rob’s Post on the Proposed Speech Code Regs
The NAR Professional Standards Committee
‘NAR Proposes Ethics Changes to Crack Down on Social Media Harassment’ in Inman
‘NAR’s Proposed Ethics Changes Miss the Mark’ in Inman
Raise the Bar in Real Estate Facebook Group
Canadian Real Estate Association
CREA’s Conduct Unbecoming Clause
Rob’s Post on the Reputation of Realtors
Racism in Real Estate on Industry Relations EP052
Our Sponsors:
**** NOTICE: We recorded this pod using Zoom audio but had a few technical issues. The audio quality wasn’t great and at some point, Zoom stopped recording all together. We were able to piece together a good episode but not the whole conversation. I’m super bummed, but we all agreed, even if its not the full conversation, it’s still something we wanted to put out there. ****
Systemic racism has its roots in housing. Government policies deliberately disadvantaged Black and Brown people, and that’s led to segregated communities, educational inequalities and a substantial wealth gap. So, what can we do as an industry to address these disparities and better serve ALL of our clients?
On this episode of Industry Relations, Emily Chenevert, CEO of the Austin Board of Realtors, and Kenya Burrell-VanWormer, SVP of Diversity Solutions at T3 Sixty, join Rob and Greg to discuss the history of race discrimination in real estate, explaining how practices like redlining have stunted the Black community’s capacity to build generational wealth and why industry organizations need to recognize and publicly denounce the racism of the past.
Emily and Kenya share how the industry has improved, describing NAR’s shift to prioritize diversity and inclusion and exploring what organized real estate might do to further educate association members around equity moving forward. Listen in for insight on tackling home ownership disparities and learn what is (and what isn’t) our responsibility to do as an industry to address racial inequality in America.
What’s Discussed:
The history of race discrimination in real estate (i.e.: redlining, racist land use patterns)
How racism around housing has stunted the Black community’s ability to build generational wealth
The government’s role in creating a wealth gap in the US
Why organizations like NAREB exist independently from NAR
Greg’s call for industry organizations to recognize and denounce the racism of the past (and what that might look like)
The shift from diversity and inclusion as an afterthought to a need within NAR
How we might educate association members around issues of equity
The lack of diversity among the leadership in real estate associations and MLSs
Why 25 of the 26 agents caught steering on Long Island are still working
Kenya’s insight on tackling home ownership disparity by way of education, opportunity and resources
Emily’s experience with difficult conversations on race as Austin overhauls its land development code
What it’s our responsibility to do as an industry to address racial inequality (and what’s not in our lane)
Connect with Emily:
Connect with Kenya:
Connect with Rob and Greg:
Resources:
The Color of Law: A Forgotten History of How Our Government Segregated America by Richard Rothstein
How the GI Bill’s Promise Was Denied to a Million Black WWII Veterans’ in History
National Association of Real Estate Brokers
The Chicago Association of Realtors’ Apology & Recommitment to Fair Housing
The Newsday Investigation on Steering
HAR Diversity and Inclusion Task Force
Austin’s Land Development Code Revision
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Zillow started out as a listing portal or syndication site. But the company has evolved to become… Well, we’re actually not sure what to call it anymore. Perhaps ‘the Amazon of real estate’ is most appropriate. And on September 23, 2020, the company announced that it’s hiring employee-agents to streamline the iBuyer process. So, if Zillow is a brokerage now, what does that mean for the industry?
On this episode of the podcast, Rob and Greg are discussing Zillow’s decision to take its iBuyer operations in-house and how that move will impact other aspects of organized real estate. Our hosts explore how MLSs might respond to having Zillow as members and describe how access to MLS data could change the consumer experience on the Zillow site.
Rob and Greg go on to consider the impact of Zillow being part of NAR and state and local associations, weighing in on how their participation can be seen as a win for the industry. Listen in for insight on how Zillow’s announcement demonstrates their commitment to becoming an iBuyer-brokerage and learn how Zillow entering the system might lead to an improvement for everyone—or a ‘horror show.’
What’s Discussed:
The evolution of listing portals into brokerage and iBuyer hybrid models
How Rob and Greg define brokerages differently
Zillow’s decision to use employee-agents to bring its iBuyer operations in-house
How MLSs are likely to respond to having Zillow as members
Rob’s theory on how Zillow might reposition its Industry Relations team
The potential impact of Zillow being part of NAR as well as state and local associations
How to access to MLS IDX data and VOW rules could transform the consumer experience on Zillow
The leverage Zillow has in getting information from smaller MLSs
What makes Zillow’s shift a WIN for humans (and organized real estate)
Connect with Rob and Greg:
Resources:
Opendoor vs. Zillow on Industry Relations EP050
CLAW’s Delay to Syndication Feeds
REALTOR Political Action Committee
NAR’s Rules on Virtual Office Website
The 2008 DOJ-NAR Settlement Agreement
‘It’s a Good Life’ Episode of Twilight Zone
‘A Trifecta! NAR Sued Again Over Buyer-Broker Commissions’ in The Real Deal
Thomas Jefferson’s Quote on Change in Laws and Institutions
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Opendoor recently announced a merger with special purpose acquisition company (or SPAC) Social Capital, a venture fund headed by rockstar VC Chamath Palihapitiya. This partnership puts the pioneering iBuyer on the same playing field with Zillow. And the battle between the two will be epic.
On this episode of Industry Relations, Rob and Greg are discussing what the competition between Opendoor and Zillow means for consumers, real estate agents, and the industry in general. Rob explains Zillow’s advantages in terms of customer acquisition and monetizing seller leads, and Greg describes Opendoor’s leverage when it comes to operational excellence (otherwise known as ‘eating BPS for breakfast’).
Rob and Greg go on to consider how Opendoor might catch up with Zillow when it comes to lead flow, either through an additional acquisition or by working with the industry. Listen in for insight around how this battle of the market-makers will make it easier to buy and sell houses and lower transaction costs—and how that will impact the real estate industry as a whole.
What’s Discussed:
The benefits of a merger between Social Capital and Opendoor
What competition between Opendoor and Zillow means for consumers
Zillow’s advantage in terms of consumer audience and monetizing seller leads
Opendoor’s advantage when it comes to operational excellence
Rob’s prediction that Social Capital might also acquire either Redfin or Realtor.com
How Opendoor might work with the industry to generate lead flow
How competition between Opendoor and Zillow is likely to impact real estate as a whole
--Easier to buy and sell houses (mobility)
--Much lower transaction costs
How MLSs might change if transactions double while commissions are cut in half
Greg’s take on why it’s a great time to be a real estate agent
Connect with Rob and Greg:
Email gregrobertson@gmail.com
Resources:
‘Yelp: Nearly 16,000 Restaurants Have Permanently Closed Due to COVID’ in QSR
Opendoor’s Merger with Social Capital
Rob’s 2014 Blog Post on Opendoor
Stratechery’s Interview with Rich Barton
Social Capital’s 2019 Investor Letter
Opendoor’s September 2020 Investor Presentation
Rob’s Thought Experiment on Real Estate Agents & Productivity
The Art of the CMA by Greg Robertson
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For every tech platform that sets out to disrupt real estate, there’s a story of slow evolution to working with brokers and agents. And while companies like Zillow, Opendoor, and Offerpad have brought about minor changes to the home buying process, they always end up morphing into our traditional system. Why is it that these so-called disruptors just can’t change the way we do real estate?
In this episode of Industry Relations, Rob and Greg are exploring why would-be disruptors have such a hard time changing real estate. Greg walks us through his five-stages-of-grief analogy around how tech platforms always end up working with brokers and agents, and Rob compares real estate with the auto industry, reflecting on how little buying processes have changed despite advancements in technology.
Rob and Greg go on to introduce the idea that the human connection is what prevents tech disruptors from succeeding in our industry, speculating that agent teams have been the biggest disruptor in real estate in recent years. Listen in for insight on how human knowledge and connection factor into making tech platforms successful and learn why the human need for approval is not disruptable.
What’s Discussed:
Rob’s take on the two possible reasons why disruptors have trouble in real estate
--System has been perfected over time
--Entrenched infrastructure (need billions to play)
Greg’s five-stages-of-grief analogy re: how disruptors end up working with agents
The similarities and differences between real estate and the auto industry
--Way we buy + sell changed little in spite of technology
--Remember dealership but not broker (agents ≠ employees)
How technology has expanded consumer knowledge around price, inventory, etc.
Greg’s insight that real estate tech disruptors struggle because they lack human connection
Why agent teams have been the biggest disruptor in real estate in recent years
How Zillow has evolved its Zestimate algorithm to include human knowledge
Why Rob believes that our human need for approval is not disruptable
What makes Zillow the most likely platform to cause true disruption in real estate
The Tom Ferry study around top agents living paycheck to paycheck
Connect with Rob and Greg:
Resources:
Rob’s Blog on Innovation in Real Estate
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Long-distance relationships are never easy. And if you’re part of the traveling circus that is the real estate conference circuit, you may be struggling to keep your professional relationships going in a virtual environment. Would being an orc help?
On this episode of Industry Relations, Rob and Greg are discussing the current pause in the real estate conference and trade show circuit and mourning the loss of chance meetings that don’t happen in a virtual environment. They explore why massively multiplayer online games (MMOs) like World of Warcraft work to create community and how real estate might replicate that always-on culture until the conference circuit comes back.
Rob and Greg go on to cover the challenge of sustaining long-distance relationships in an online world, explaining why we just can’t duplicate face-to-face interaction at virtual events. Listen in for insight on how going virtual is impacting MLSs, associations, and vendors and learn about the possibility for a 2020 MLS Proptech Symposium (which Rob wants to rename to the “2020 MLS Herd Symposium”) that would help sponsors make decisions about the feasibility of their own fiscal events.
What’s Discussed:
The current halt to the real estate conference/trade show circuit
What Greg covers in his forthcoming book, The Art of the CMA
The chance meetings that don’t happen in a virtual environment
Why we can’t duplicate face-to-face interaction through virtual events
The challenge of sustaining long-distance business/personal relationships
Why MMO games work to create community + how real estate might replicate that always-on culture
When the real estate conference circuit will come back
The impact of going virtual for MLS and association communities
--Increased engagement and attendance
--Eliminates serendipity of networking
How new vendors might build trust in the absence of in-person interaction
What we can do to gauge circuit response to physical events
Connect with Rob and Greg:
Resources:
2020 NAR Realtors Conference and Expo
Cover Art Choices for Greg’s Book
Greg’s Draft Agenda for the 2020 MLS Proptech Symposium (with Rob's edits)
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The Coronavirus forced many of us to work from home, leveraging technology to do our jobs remotely. Not only has this made us more comfortable with digital tools, it has us rethinking the need to commute to our offices on a daily basis. So, what do these changes mean for the real estate industry?
On this episode, Errol Samuelson, Chief Industry Development Officer at Zillow, joins Rob and Greg to share his top predictions around the post-pandemic future of real estate. He explores how commercial real estate is likely to change in light of COVID-19 and speaks to the potential to make transactions 100% digital moving forward.
Errol weighs in on how different geographies experienced the pandemic in different ways and how he thinks about the crisis’ potential long-term psychological impact. Listen in as Errol shares Zillow’s most recent stats on the changing consumer preferences for homes and learn how our growing comfort with virtualization will impact the way brokers and agents do business in the future.
What’s Discussed:
Errol’s top predictions re: the post-pandemic future of real estate
How commercial real estate will change in light of COVID-19
The potential to make real estate transactions 100% digital
The accelerated consumer use of digital tools in the home search process
How Errol thinks about the possibility of virtual appraisals
How virtualization is likely to impact brokers and agents
Zillow’s stats on how working from home is shifting consumer preferences
How cities may look different in a post-pandemic world
The possibility for COVID-19 to have a long-term psychological impact
How different geographies experienced this pandemic in different ways
What sci-fi technology is likely to change real estate in the near future
How Zoom is driving changes in the way we communicate
Connect with Errol:
Connect with Rob and Greg:
Resources:
Dotloop’s 8 Predictions About the Post-Pandemic Future of Real Estate
The New York Times Article on Working from Home
Books by Nassim Nicholas Taleb
The Atlantic Piece on the ‘Patchwork Pandemic’
Glenn Kelman’s Diary of a Pandemic Part 1
Glenn Kelman’s Diary of a Pandemic Part 2
Glenn Kelman’s Diary of a Pandemic Part 3
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Last week, Rob & Greg imagined what the future of real estate might look like in the aftermath of the pandemic, pending a best-case scenario. Today, they get real about what’s ahead for the industry given the reality of our current circumstances. And they’re bringing on a number of industry stakeholders to offer their outlook as well.
On this episode of Industry Relations, Rob and Greg are leading a group chat around what’s next for real estate as the Coronavirus pandemic plays out. The group offers predictions on how the MLS landscape may change, debating whether it’s the number of MLSs or the number of MLS databases that really matters and offering examples of hybrid solutions that may serve as a model for the future.
Greg and Rob go on to solicit the group’s thoughts on the potential shape of the recovery curve and the possibility of a shift to a buyer’s market in 2021. Finally, they explain why an increase in property taxes is likely in the aftermath of the COVID-19 bailout and how that might impact buyer demand in the real estate market. Listen in for insight on Open House numbers in states where stay-at-home orders have been lifted and learn how those stats might be a good sign for other industries.
What’s Discussed:
A review of what Rob & Greg covered in their best-case discussion
Greg, Clint Skutchan, & John’s predictions re: the number of MLSs by 2023
Why the consolidation of data is more important than the total number of MLSs
Tim Dain’s vision of a future with ten or fewer MLS databases that talk to each other
How the pandemic demonstrates the industry’s underutilization of telecommunication
Why Georgia is watching the commercial market for clues re: the future of residential
Georgia’s concept of a J-shaped recovery
Why Joshua Lopour is predicting a buyer’s market in 2021
Why Greg expects a best-case scenario uptick in buyer demand
Why property taxes are likely to increase and how that might impact buyer demand
The significant uptick in Open Houses scheduled in states where stay-at-home orders have been lifted
How Open House numbers may be a good sign for other industries
Connect with Rob and Greg:
Resources:
Great Recession + COVID-19 Bailout Comparison
ShowingTime Showing Activity Statistics
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Imagine a best-case scenario in which the Coronavirus is under control and the country is up and running by May 1. How have our social norms changed? What do these cultural shifts mean for organized real estate? And how is the industry different in a post-COVID-19 world?
On this episode of Industry Relations, Rob and Greg get relentlessly positive, discussing the post-Coronavirus landscape of the real estate industry should the best happen. They weigh in on the cultural shifts that are likely to occur in the aftermath of COVID-19, predicting which rituals will persist once the current restrictions have been lifted.
Greg and Rob go on to debate what open houses will look like in a post-pandemic world, why showings may (or may not) be restricted to serious buyers, and when we might be back to pre-COVID transaction levels. Listen in for our hosts’ best-case expectations regarding buyer demand as well as NAR membership and brokerage numbers come September—pending a V-shaped recovery.
What’s Discussed:
Rob & Greg’s parameters for this potential best-case scenario
How the culture is likely to shift in the aftermath of COVID-19
What open houses will look like in a post-Coronavirus world
Why Rob believes showings will be restricted to serious buyers
When we might be back to pre-pandemic transaction levels
Why Greg expects a best-case scenario uptick in buyer demand
Rob’s prediction of a 20% drop in first-time homebuyers
Why Rob & Greg anticipate a 20% decline in NAR membership
How Rob & Greg differ around which agents will leave
The potential for 25% of small brokerages to join a larger team
Connect with Rob and Greg:
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On the surface, the government’s effort to support homeowners through forbearance is a good thing. Many Americans have lost their jobs because of the Coronavirus pandemic and simply don’t have the resources to make a mortgage payment right now. But what does this mean for the servicing industry? Why are lenders concerned about the unintended consequences of Washington’s response?
On this episode of Industry Relations, mortgage banking expert Rob Chrisman joins Rob and Greg to discuss what’s happening in the capital markets as a result of the Coronavirus shutdown. He walks us through how a mortgage functions as a product, explaining the relationship between the servicer and the end investor in a mortgage-backed security or MBS.
Rob C. addresses how government forbearance for borrowers will impact big banks as well as smaller, independent lenders and weighs in on Ginnie Mae’s promise to back nonbank servicers lacking the capital to pay investors. Listen in to understand how the Federal Reserve’s activity in the MBS market affects mortgage servicers and learn why the lending system is not broken despite the changes imposed by the health crisis.
What’s Discussed:
Rob C.’s background in mortgage banking + understanding of capital markets
How a mortgage functions as a product manufactured and sold to a buyer
The relationship between a mortgage servicer and the end investor
How government forbearance due to COVID-19 impacts mortgage servicers
Ginnie Mae’s promise to back nonbank servicers lacking capital to pay investors
How current circumstances compare to the 2008 recession
The tens of billions of servicers will owe in margin calls due to the MBS price increase
The consequences of the Federal Reserve’s activity in the MBS market
Why the non-QM and jumbo loan markets are on life support
Why Rob C. is predicting a V-shaped recovery for residential lending
How underwriting guidelines have changed in light of the global shutdown
Why property values are unlikely to take a dive across the board
Connect with Rob Chrisman:
Rob’s Daily Mortgage & News Commentary
Connect with Rob and Greg:
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No one in the real estate industry planned for a global pandemic to hit in 2020. So, what does a black swan event like the Coronavirus mean for agents, brokerages, associations, MLSs and vendors? How does the potential economic effect of COVID-19 parallel the virus itself?
On this episode of Industry Relations, Rob and Greg are discussing the short- and long-term impact the Coronavirus is likely to have on the real estate industry. They explain how fear and uncertainty might hurt the housing market over the next several months and explore the opportunity the pandemic presents for models like Redfin and Opendoor as well as investors with deep pockets.
Greg and Rob go on to consider how the cancellation of real estate conferences will cause a domino effect through many other industries and which brokerages, agents and vendors won’t be able to survive this kind of pause in business. Listen in for insight on the serious flaws in our economic system exposed by the health crisis and learn how embracing a little of the prepper mentality can help us respond and adjust to a black swan event like the Coronavirus.
What’s Discussed:
The short-term impact Coronavirus might have on the housing market
The potential opportunity for models like Redfin and Opendoor
How investors are likely to take advantage of low-interest rates
The cancellation of real estate events and its domino effect through other industries
How the economic fallout of the Coronavirus parallels the virus itself
The brokerages, agents and vendors who may not survive a pause in business
How the pandemic exposes flaws in our economic and healthcare systems
Rob’s insight around manufacturing necessities here in the US
The pros and cons of having the world’s reserve currency
Embracing the prepper mentality to survive unforeseen circumstances
Connect with Rob and Greg:
Resources:
President Trump’s March 11 Address
The Black Swan: The Impact of the Highly Improbable by Nassim Nicholas Taleb
Antifragile: Things That Gain from Disorder by Nassim Nicholas Taleb
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What does organized real estate look like in 2030? Who is winning?
Incumbent brokerages are betting on the recruit-and-retain model that has worked for the last several decades, doubling down on the agent’s sphere as their primary source of leads. Disruptors are betting on a world where the agent matters less than the brand itself, where realtors are only responsible for service delivery and leads are generated entirely through the institution’s online platform. Who is your money on?
In this episode of Industry Relations, Rob and Greg are discussing the themes that came up at Inman’s CEO Connect and the confidence incumbent brokerages have in their ability to outlast market disruptors. They cover the advantages incumbents boast in terms of scale and profitability, exploring whether industry giants are truly all-in on technology and the iBuyer models—or if they’re adding those initiatives simply to overcome agent objections.
Greg and Rob go on to consider a potential decline in the number of agents by the end of this decade and explain why agent teams continue to pose the greatest threat to brokerages. Listen in for insight around how key players in other industries have leveraged the power of incumbency to compete with disruptors and place your bet on either the agent-centric incumbent brokerages OR the institution-focused disruptors.
What’s Discussed:
The advantages incumbent brokerages have in terms of scale + profitability
Adopting new tech as a marketing ploy to bolster a brokerage’s value prop to agents
Why many brokerages chose to partner with rather than acquire iBuyers
Why successful brokerages can do everything right and still lose market leadership
How key players in the automotive industry have leveraged the power of incumbency
The fundamental difference between real estate incumbents and disruptors
How the future of real estate will continue to be dominated by agent teams
Why the number of agents is likely to drop to 400K by the end of the decade
Connect with Rob and Greg:
Resources:
John Campbell on The Notorious Interview
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At present, MLSs are run like nonprofits. And without a way to raise capital, industry executives limit their vision based on the resources at hand. But what if there were no constraints? What kind of Big Hairy Audacious Goals could MLSs pursue with funding from deep-pocketed venture investors?
In this episode of Industry Relations, Rob and Greg are challenging MLS execs to consider what they would do differently with access to significant capital. Greg weighs in on the discussions around implementing the MLS Statement 8.0 Clear Cooperation Policy (otherwise known as Ocho) that took place at Inman Connect, describing how the differences among individual MLSs will inform its implementation.
Greg and Rob go on to discuss how the challenges associated with switching MLS vendors benefit incumbents and why most MLSs adopt a system of choice approach to consolidation. Listen in for Rob’s take on how MLS execs constrain their vision based on the resources available and take up Greg’s challenge to think about what you would do differently with $5M, $50M or even $500M.
What’s Discussed:
The discussion regarding how to implement the Clear Cooperation Policy at Inman Connect
How Ocho impacts Compass’ strategy for differentiating its listings
How the differences among MLS Coming Soon policies will inform Ocho’s implementation
The possibilities for interpretation around what qualifies as marketing
How the challenges associated with switching vendors benefit incumbent MLSs
What’s behind the system of choice approach adopted by most MLSs
Why Rob contends that MLS execs constrain their vision based on resources
NAR as a trade organization vs. the MLS as a tech product + service provider
Greg’s challenge for MLS execs to consider what they would do with access to capital
Connect with Rob and Greg:
Resources:
MLS Statement 8.0 Clear Cooperation Policy
Homesnap Pro’s Predictive Analytics
Rob’s Post on the Clear Cooperation Policy
Rob’s Post on the Fundamental Problems in Real Estate
Business Insider Top 15 Real Estate Podcasts
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