This week on Industry Relations, Rob and Greg discuss the insanity of the current housing market. In our discussion, Rob gets heated about dollar devaluation and nominal inflation; and Greg tells horror stories of house flipping in California. We both agree on one thing though: we need to bring millennial homeownership above 50% before we see generational warfare. Join us!
Please subscribe to our YouTube channel today so we can be known as simply Industry Relations Podcast, and not: https://www.youtube.com/channel/UCrUi4dF6sAOpacTSkemskkw
Here is the graphic Rob didn’t tell Greg he had lined up: http://pricedingold.com/us-home-prices/
Here is that study Rob discussed about wealth building from Tobias Peter:https://www.aei.org/wp-content/uploads/2017/12/Wealth_Building_WP.pdf?x91208
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On this episode of Industry Relations, Rob and Greg speak with John Cambell; Managing Director of Stephens Inc. We get John's unfiltered opinion on Wall Street's take on the real estate market, and the future of the industry. We also chat about proptech influence with sites such as Zillow, Redfin, and CoStar.
Connect with John Campbell on his LinkedIn Page
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What is an 'enhanced listing?' Do 'enhanced listings' work? Do sellers and buyers want or need them? As Costar comes onto the real estate scene, what will that look like with competitors like Zillow, Realtor, and Apartments.com? What will that look like for sellers and buyers? Greg and Rob discuss what consumers really want when they're searching online in this episode of Industry Relations!
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Today Rob and Greg talk about Marge vs Brenda (don’t worry they’ll explain) How is the average real estate doing vs the top 10 percent? After things like the real estate stocks and the acceleration trends due to the pandemic, who is winning this epic battle? As they say the ‘internet is undefeated’ but is ‘Marge’ undefeated as well? Greg thinks she is, but what does the notorious Rob think? It’s a great discussion on this week’s episode of Industry Relations!
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On today’s episode Rob and Greg talk about creating the “Bloomberg of Real Estate,” with special guest David Blum. David Blum is the co-founder of ‘Plunk’ where they are working to bring the next generation, real-time analytics platform to residential real estate. What does the future of this prop-tech company hold for the real estate industry? Rob Han and Greg Robertson are your hosts for the re-launch premiere of the Industry Relations podcast!
Learn more about David Blum and the exciting work they’re doing for the future of residential real estate at www.getplunk.com.
Connect with Rob and Greg:
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On episode 66 of Industry Relations, Rob and Greg discussed the potential repercussions of ending mandatory compensation. And Rob asserted that without cooperation and compensation, the value of the MLS lies solely in its data and technology tools.
How did those comments sit with MLS leaders?
Justin Landon is the CEO of the Lexington-Bluegrass Association of REALTORS, a 4,000-member MLS based in Lexington, Kentucky. Ryan Castle serves as CEO of the Cape Cod & Islands Association of REALTORS, a 3,000-member MLS serving Cape Cod, Martha's Vineyard, and Nantucket. On this episode of Industry Relations, Justin and Ryan join Rob and Greg to share their argument against the assertion that the value of the MLS is tied solely to buyer’s compensation.
Justin and Ryan describe the work they do to ensure that listing agents follow data compliance guidelines, explaining how the MLS has evolved to become a catalyst for the adoption of technology and a distribution mechanism among agents and consumers. Listen in for insight on why compensation is usually offered even when it’s not required and learn about the MLS’s role in building technology that facilitates cooperation.
What’s Discussed:
Justin & Ryan’s argument against the assertion that the value of the MLS is tied solely to buyer’s compensation
The work MLSs do to ensure that listing agents follow data compliance guidelines
Why MLS teams need to know the areas they’re serving
How the MLS has evolved to become a distribution mechanism among agents and consumers
Why Rob suggests that MLSs need to invest in developing their own technology if compensation ends
The MLS as a technology provider vs. catalyst for the adoption of technology
Why compensation is usually offered even when it’s not required
The relationship between compensation and the steering problem in real estate
The potential to add reverse auto prospecting and rental data to the MLS
How NAR’s focus on the distribution of data provides an opportunity for MLSs
The MLS’s role in building technology that facilitates cooperation
What we need to do to prevent the government from making the MLS a public utility
Connect with Justin:
Lexington-Bluegrass Association of REALTORS
Connect with Ryan:
Cape Cod & Islands Association of REALTORS
Connect with Rob and Greg:
Resources:
What if Mandatory Compensation Goes Away? on Industry Relations EP066
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Does everything have to be so fast? Shouldn't some things take time?
Especially if it's the largest purchase/sale of your life?
On this episode of Industry Relations, Rob and Greg sit down with Brian Boero of 1000watt, to discuss his recent blog post, "Pushing Buttons". Join this high-level discussion and talk about the future of online real estate.
Does everything have to be so fast? Shouldn't some things take time?
Especially if it's the largest purchase/sale of your life?
On this episode of Industry Relations, Rob and Greg sit down with Brian Boero of 1000watt, to discuss his recent blog post, "Pushing Buttons". Join this high-level discussion about the future of "push button" real estate.
What‘s Discussed:
The consumer experience with pushing buttons
Redfin's 400 step process
The genius of Zillow's "Super App" marketing messaging
Greg talks "Zuber"
Keeping up with the consumer
What does a "better" real estate experience look like?
Connect with Rob & Greg:
Rob’s Website
Greg’s Website
Resources:
Brian's "Pushing Buttons" blog post
1000watt's website
Amazon's Day One Philosophy
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Who owns the data associated with a house?
As it stands right now, the listing broker is in control. But what if a buyer doesn’t want a floor plan or 3-D walkthrough of their new home available online?
There is growing public concern around data privacy in big tech, yet few are talking about how this translates to the real estate industry.
On this episode of Industry Relations, Rob and Greg sit down to discuss the complexities around who owns real estate data, considering whether homeowners should have ownership rights to the data for their property.
They explain the current privacy laws around street photography and explore the expectation of privacy in public records—including MLS databases.
Listen in to understand how privacy policies might impact different players in the real estate space and learn how to think about who should own property data once the SOLD sign goes up.
What‘s Discussed:
The ruling in the VHT v. Zillow case re: copyright in real estate photography
Who currently owns the data about a house and why it’s such a complex issue
Whether homeowners have ownership rights to the data for their property
The safety concerns associated with making property data available online (for buyers and sellers)
The current laws around photography and privacy
The expectation of privacy around public records and Rob’s take on why the MLS is not a private platform
How Apple’s App Tracking Transparency policy impacts real estate vendors
How privacy policies might affect Compass’ business plan
How we rely on open data to value homes
How the privacy issues surrounding big tech might translate to real estate
Connect with Rob & Greg:
Resources:
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On January 19, 2022, Fannie Mae announced a desktop appraisal option that goes live in Desktop Underwriter in March, making it possible to do an appraisal without a physical inspection.
So, what motivated this change in the rules? Why is it important?
What does a desktop appraisal option mean for appraisers? And how will it impact the real estate industry in general?
NIck Conteduca is the Senior Vice President of Tech Innovation and Subject Matter Expert at Opteon, a global real estate appraisal firm working toward the bold vision of same-day turn times.
On this episode of Industry Relations, Nick joins Rob and Greg to discuss Fannie Mae’s announcement, explaining what a desktop appraisal entails and the rules around who (or what) provides the information.
Nick weighs in on why there are only 75,000 appraisers in the US, describing how challenging it is to become a licensed appraiser and why the appraisal industry has a love-hate relationship with the new rules.
Listen in to understand why it’s unlikely that lenders will start using AVMs over appraisers and learn how the appraisal industry is evolving—and what technology can do to support appraisers, not replace them.
What‘s Discussed:
What motivated Fannie Mae’s new desktop appraisal option and why it’s a big deal
What a desktop appraisal entails and the rules re: who provides the information
How information for a desktop appraisal can be verified through virtual inspection technology
Why there are only 75,000 appraisers in the US and how they’re compensated
The appraisal industry’s love-hate relationship with the new desktop appraisal option
Why it’s unlikely that lenders will start using AVMs instead of appraisers
Why real estate data in public records and on the MLS is so inaccurate (and how appraisers correct the data in Fannie Mae’s Uniform Appraisal Dataset)
How challenging it is to become a certified appraiser as opposed to a licensed REALTOR
The relationships among appraisers, REALTORS and home inspectors
How the appraisal industry is evolving and how tech improvements might affect it
Connect with Nick:
Connect with Rob & Greg:
Resources:
Fannie Mae’s Desktop Appraisal Option Announcement
Fannie Mae’s Desktop Underwriter
Fannie Mae’s Desktop Appraisal FAQ’s
Fannie Mae’s Uniform Appraisal Dataset
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Realogy caused a kerfuffle earlier this month when the real estate industry learned, in unsealed court filings, that brokerage president Ryan Gorman is opposed to NAR’s mandatory compensation rules.
What’s behind Gorman’s stance on compensation? What does it mean for the MLS if the rules change? How would it impact brokers and agents?
On this episode of Industry Relations, Rob and Greg discuss how the value of the MLS would shift in the absence of mandatory compensation, looking at Northwest MLS as a case study around what happens when compensation is optional.
Rob predicts government regulations to eliminate the possibility of steering and Greg reflects on how the conversation around compensation might change in a buyer’s market.
Listen in to understand why optional compensation favors big brands and find out what MLS boards, brokers and agents should be doing to plan for a world where compensation is optional.
What’s Discussed:
What’s behind Realogy’s opposition to mandatory compensation rules
How the value of the MLS would shift in the absence of mandatory compensation
How compensation is optional at Northwest MLS but most offer it anyway
What buyers’ agents would lose by getting booted from the MLS
The prevalence of steering and why Rob predicts regulations to eliminate the possibility
Greg’s take on how the conversation around compensation might change in a buyer’s market
Why optional compensation privileges bigger brands (and hurts small, independent brokerages)
How compensation works in the world of commercial real estate
Why MLS boards should prioritize investments in data and technology
Connect with Rob and Greg:
Resources:
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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?
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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
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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
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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
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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
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**** 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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