We can all agree that the real estate industry is evolving quickly. Is there any way to predict who the winners in the space will be over the next few years? Brad Safalow has done nine years of research surveying hundreds of real estate agents on the housing market in general, online lead generation, marketing and technology. Curious what all that data might tell us about the future of industry players like Zillow, Redfin and Realogy? What about the potential market share of the growing iBuyer model? Or how independent brokerages might respond to the competition?
Brad is the founder of Please Act Accordingly Research, an independent research firm providing investment ideas to professional money managers and high-net-worth individuals. He began his career in the leveraged finance group at JPMorgan before joining RiverEdge Capital, a global equity hedge fund, where he specialized in small/mid cap stocks and short idea generation. Brad has been serving clients through PAA since 2009, generating 6+ action-oriented investment ideas annually, with high absolute return potential.
Today, Brad joins Rob and Greg to share a high-level overview of his report on the real estate industry. Brad shares his take on the challenges Zillow is facing with the backlash against Premier Agent 4 and its foray into the iBuyer market. Rob highlights the concentration of power in real estate and its influence on Zillow’s continued success, and Greg asks about the pros and cons of the iBuyer model and its potential share of the marketplace moving forward. Brad also shares his experience working with Redfin versus a traditional brokerage, and they offer insight around how Redfin’s national ad campaign might prove to be a seminal moment in the industry. Listen in to understand how independent brokerages like Keller Williams and Realogy are responding to the iBuyer threat and a potential shift in commission structure—and get Brad, Rob and Greg’s predictions around the winners and losers in the space over the next three years.
What’s Discussed:
The PAA annual survey of real estate agents
A high-level overview of Brad’s report
The reasons why Zillow’s stock is taking a hit
How Zillow’s growth depends on agent teams
Why Zillow launched Premier Agent 4
How Zillow responded to backlash against PA4
The concentration of power in the industry
Why Zillow is pursuing the iBuyer model
The iBuyer’s potential share of the market
How Zillow may profit as a mortgage business
Efforts to improve the consumer experience
Redfin vs. the traditional brokerage experience
The impact of Redfin’s national ad campaign
The effects a shift in commission structure
The fear/panic among independent brokerages
Gary Keller’s understanding of the iBuyer threat
Realogy’s doubling down on traditional strategy
Resources:
Connect with Brad:
Connect with Rob and Greg:
Perhaps the most compelling piece of theatre in recent real estate history, Gary Keller’s interview at the Inman Connect Conference laid out his argument around the future of the industry. Keller’s approach is to own his own data and develop a software platform unique to Keller Williams, and a number of other franchises are buying up technology companies in order to build their own exclusive data platforms. But is this obsession with technology and controlling the data distracting brokerages and franchisors from what really matters?
Rob and Greg are on the line to discuss real estate technology and data ownership. Greg explains W+R’s focus on creating a kickass experience for agents and consumers alike and describes the company’s approach to aggregating data rather than trying to build a proprietary platform.
Rob and Greg cover the growing competition in real estate software and address who is responsible for providing agents with a technology suite. They debate the merits of designing an exclusive platform versus integrating franchise data with a particular software package to create a custom data solution. Listen in for insight around the US vs. THEM mindset around building technology and learn why Rob and Greg are calling for a renewed focus on agents—and giving them the tools to shine!
What’s Discussed:
The overarching theme of the 2018 Inman Connect conference
Gary Keller’s aim to create his own ‘platform for innovation’
How W+R seeks to democratize the iBuyer experience
The role of AI and machine learning in a technology platform
W+R’s approach to making data useful for the end user
Greg’s take on the notion of data ownership
How Zillow has evolved to generate its own data
W+R’s focus on improving an agent’s listing presentation
Cloud Investor Connect’s value prop for investors
- High intent, high volume
Who is responsible for providing agents with a tech platform
The consistent improvement of real estate software
The opportunity to integrate software with franchise data
The MLSs role as a tech platform vs. data provider
The definition of a technology platform as an end-to-end solution
Rob’s insight around focusing on the agent rather than technology
Sponsors:
Resources:
Inman Connect—San Francisco 2018
Brad Inman’s Tech Platform Opinion Piece
Connect with Rob and Greg:
Today’s consumer is used to pushing a button and having magic happen. (Thank you for the insight Jeremy Waxman.) And more often than not, we are willing to pay an extra fee for things like convenience and certainty. For this reason alone, the iBuyer phenomenon is here to stay, and the real estate industry would do well to consider how traditional agents might participate in the changing market.
Rob and Greg are back to offer a different perspective on the iBuyer movement, discussing how the industry is misunderstanding the phenomenon. Greg explains how organized real estate might address the consumer experience by partnering with a large financial institution to ‘be the bank’ and Rob shares his take on FSBOs and iBuyers as opposite ends of a spectrum—with the traditional REALTOR experience in the middle.
Rob and Greg address fiduciary duty, describing the conflict of interest that occurs when agents have the capacity to make on offer on a prospect’s home. They cover the difference between iBuyers and traditional house flippers, describing the considerable capital behind companies like Offerpad and Opendoor and the significance of Zillow’s recent acquisition of a mortgage lender. Listen in for insight around iBuyers moving into high-dollar markets and learn how agents fit into a future world where iBuyers are the default.
What’s Discussed:
How the industry is misunderstanding the iBuyer phenomenon
How MLS and association execs might consider the agent experience
Greg’s proposal around NAR partnering with a financial institution
Rob’s prediction that the iBuyer movement is here to stay
The conflict of interest agents face in offering to buy a client’s home
Rob’s take on FSBOs and iBuyers as opposite ends of a spectrum
The potential ‘buyification’ of the brokerage business
Why iBuyers are not as vulnerable as traditional house flippers
The significance of Zillow’s acquisition of Mortgage Lenders of America
The tipping point when iBuyers become the default for consumers
The significance of iBuyers moving into high-dollar markets
The value in agents learning to pitch investor offers to sellers
Sponsors:
Resources:
Inman News: Agents can show sellers iBuyer offers with new Cloud CMA feature
Brad Inman: In real estate’s tech platform race, I’m betting on an underdog
Connect with Rob and Greg:
1-2 cha-cha-cha. 3-4 cha-cha-cha. DOJ. NAR. FTC. MLS.
There was a dance of sorts held in DC on Tuesday, June 5, when the Department of Justice and the Federal Trade Commission hosted a ‘workshop’ to discuss competition in residential real estate. But while NAR and industry players prepared for the fox trot, bringing their best arguments for maintaining the status quo around data access, the DOJ put on a little salsa music and shifted the discussion to commission transparency and coupling.
Rob and Greg are reversing roles this week, as Greg spins conspiracy theories regarding the government’s intentions and the potential consequences of its intervention in the real estate industry. They speak to organized real estate’s nothing-to-see-here approach to the discussion and review the range of views shared in the Developments in Real Estate Fee and Service Models panel.
Greg explains why decoupling would effectively end the MLS, and Rob covers the paper prepared by the National Bureau of Economic Research suggesting conflicts of interest due to coupling. They address who would benefit if buy-side commissions went away, how such changes would impact portals like Zillow, and the surprising number of industry players who support decoupling. Listen in to understand why Rob and Greg are calling for NAR or CMLS to move on this and start leading the dance to develop solutions around commission transparency.
What’s Discussed:
Organized real estate’s nothing-to-see-here stance at the DOJ/FTC workshop
The Developments in Real Estate Fee and Service Models panel
Greg’s take that the industry was caught off guard
How decoupling cooperation and compensation would end the MLS
The NBER paperon realtor commissions and conflicts of interest
The theory that real estate commissions are high due to coupling
Rob’s concern that the DOJ has already made up its mind
Why the industry needs to move on commission transparency
Why real estate is the only industry in which the seller pays the buyer’s rep
How the potential changes might impact portals like Zillow
Who would benefit if buy-side commissions went away
The leadership opportunity for NAR, CMLS to address DOJ/FTC concerns
The surprising number of people in support of commission decoupling
Public response to the previous NAR budget transparency discussion
Resources:
DOJ Residential Real Estate Workshop
Rob’s Blog on the DOJ/FTC Workshop
Brian Boero’s Buzz Saw Blog Post
‘Conflicts of Interest and the Realtor Commission Puzzle’
Our Sponsors
Connect with Rob and Greg:
Email gregrobertson@gmail.com
Critics of Zillow bash the accuracy of the Zestimate, but the fact is that a home’s worth hinges on what the market is willing to pay. And with the advent of Instant Offers, Zillow is backing up the Zestimate with a check. Consider the fact that Zillow has a platform to help themselves sell homes quickly and it is easy to see how Instant Offers is a game-changer with the potential to create a ‘market-maker system’ of real estate.
Rob and Greg are back to discuss the recent GeekWirepieceon Zillow’s first home purchase in Chandler, AZ. They comment on the irony of the agent’s intention to lean on Zillow for branding as well as the company’s original business model as an auction site. Rob explains the concept of an insta-flip and how it benefits Premier Agents, and Greg offers his take on the one thing that is still missing from the Instant Offers model.
Rob and Greg speak to Zillow’s data around the number of shoppers in a particular zip code and the target market for the Instant Offers model. They address the potential profit Zillow might generate from Instant Offers, the listing lead flow the program will generate, and the possibility of discounted as-is purchases on the platform. Listen in to understand how Instant Offers is likely to foster competition in the space and learn how Zillow continues to change the game of real estate.
What’s Discussed:
Zillow’s first home purchase in Chandler, AZ
The agent’s intention to lean on Zillow for branding
Greg’s questions around double-ending and fees
How Zillow is creating a ‘market-maker system’ of real estate
Zillow’s original business model as an auction site
The concept of an insta-flip and how it benefits Premier Agents
Greg’s take on what’s still missing from the Instant Offers model
How Zillow’s Instant Offers further validates Opendoor
The target seller for Zillow’s Instant Offers model
How Instant Offers differs from We Buy Ugly Houses
The listing lead flow Zillow will generate through the program
What traditional brokers should do in light of Instant Offers
The potential for a discounted as-is purchase through Zillow
Rob’s insight on the possibility of Zillow offering seller financing
How Instant Offers is likely to foster competition in the space
Resources:
‘An Inside Look at Zillow’s First Home Purchase’ on GeekWire
‘Opendoor is a Bigger Deal Than Zillow’ in Inman
Our Sponsors:
Connect with Rob and Greg:
As Peter Parker will tell you, great power comes with great responsibility. And there is little doubt that NAR has a great deal of power. With Bob Goldberg at the helm, many have anticipated a ‘kinder, gentler NAR,’ an organization that rules with a warm embrace rather than an iron fist—serving its membership with open discussion and greater transparency. Does the recent drama over the dues increase demonstrate a more-of-the-same-old approach from NAR leadership? Or is the perceived crisis around the budget an overreaction? Is there evidence that the culture at NAR is really changing for the better?
Rob and Greg are back in the ring on the heels of the REALTORS midyear legislative meeting, going toe to toe over the recent controversy around NAR spending. They start with an overview of what went down, beginning with the Houston Association of REALTORS opposition piece in Inmanand the subsequent op-ed credited to Jim Harrison of MLSListings. Rob and Greg walk us through the retractions, rebuttals and apologies that followed as well as the board of director’s vote in DC.
Rob offers his take on NAR budget priorities, sharing the questions he has around spending on things like zipLogix, RPR and advertising to protect the REALTOR brand. He goes on to discuss the way NAR handled the spending controversy, framing it as a missed opportunity to embrace opposition as a catalyst for discussion rather than ruling with an iron fist—which may discourage membership from speaking up in the future. Greg offers his defense of NAR, pointing out that the SMART Budget Initiativeis clearly outlined NAR’s website and citing member engagement as an incredibly complex issue. Listen in for Rob’s insight around NAR’s responsibility to its members and decide whether NAR is, indeed, using its power for good.
What’s Discussed:
The Houston Association of REALTORS’ opposition to the dues increase
How the controversial op-ed credited to Jim Harrison went too far
The questions around NAR’s spending on zipLogix, RPR and advertising
The line items Rob would like to see NAR prioritize in its budget
Greg’s perspective that there is no evidence of an NAR crisis
How NAR might have handled the spending controversy differently
NAR’s postponement of the 2.5% annual dues increase
Rob’s take that NAR’s iron fist will discourage others from speaking up
Rob’s concern about the lack of explanation regarding NAR spending
Greg’s defense of NAR as being more transparent than ever before
Rob’s belief that NAR’s power gives them a higher level of responsibility
Resources:
Houston Association of REALTORS Member Survey
HAR’s Dues Increase Opposition Piece in Inman
Rob’s ‘Crisis and Opportunity’ Blog Post
Our Sponsors:
Connect with Rob and Greg:
Email gregrobertson@gmail.com
If Rob and Greg are cute when they fight, then our co-hosts are particularly adorable on this edition of Industry Relations as they take on the current controversy over the new NAR logo: Is #Logogate indicative of an alarming disconnect between NAR leadership and its members? Or did NAR leadership take the appropriate steps to engage constituents in the decision-making process—and it simply didn’t work out?
Today, Rob and Greg begin their discussion with a review of the Information Technology & Innovation Foundation forum in DC on using technology to make real estate more competitive, describing the lack of understanding demonstrated by the moderator and the defensiveness of the industry players on the panel. They go on to address #Logogate, and Rob shares his take that the controversy demonstrates a flaw of governance, while Greg argues that a logo is subjective—and leadership may havesolicited member input during the process.
Rob offers insight on the ‘culture of confidentiality’ he has observed among association leaders, while Greg contends that the current leadership is more transparent and proactive than ever. They wrap up with dialogue on how Zillow may be raising the bar in real estate by entering the iBuyer space, choosing the best of its Premier Agents to represent the company in selling its inventory. Fasten your seatbelt and listen in as Rob and Greg clash on ITIF, #Logogate, and the best agents in real estate!
What’s Discussed:
The recent ITIF forum on using tech to make real estate more competitive
The defensive posture of real estate representatives on the ITIF panel
David Kelley’s focus on broker reaction to competition as opposed to data
Rob’s call for a more collaborative approach vs. playing ‘hide the ball’
The current controversy over the new NAR logo
The disconnect between NAR leadership and its members
Rob’s take that #Logogate is indicative of a larger communication issue
Greg’s view that member engagement is the bigger problem
NAR’s proposed dues increase and assumption of budget approval
Rob’s view on the culture of confidentiality at NAR
How Zillow may ‘raise the bar’ for real estate agents
Greg’s argument that the best real estate agents aren’t on Zillow
Resources:
Information Technology & Innovation Foundation
Connect with Rob and Greg:
Our Sponsor:
Is Zillow getting into the house flipping business to make a profit buying and selling real estate? Of the users who submit an Instant Offer request, one-third sell their home within 90 days—and 10% of that third take an investor’s offer. Zillow’s main play here may just be seller lead generation.
Today, Rob and Greg talk T3, iBuyers and Zillow. Greg shares his takeaways from the T3 conference, including praise for Stefan’s keynote address and an eye-roll over the ‘no corporate sponsors’ sentiment. Our hosts discuss the recent bombshells around Dale’s departure from RPR and Zillow’s expansion of Instant Offers. Rob walks us through the details of Zillow’s announcement, explaining how sellers will now get an offer from Zillow itself when they use the Instant Offers platform. Rob and Greg share surprise at the lack of backlash around the announcement, examining the benefits for an agent representing Zillow as well as the drop in stock price in light of the news.
Greg offers insight on potential abuses of the iBuyer model, considering how predatory lenders might target seniors, the uneducated, or the poor, and they cover the impact of Zillow’s shift on other players in the iBuyer space. Listen in as Rob and Greg address the windfall Zillow is likely to earn in the form of seller leads and learn how the company could solve the affordable housing crisis—and gain invaluable PR in the process!
What’s Discussed:
Greg’s takeaways from T3
The rumors around RPR and Zillow
Zillow’s announcement of the expansion of Instant Offers
The surprising response to Zillow’s plans to flip houses
Greg’s concerns about the iBuyer model
The recent drop in Zillow’s stock price
Why flipping is not a change in Zillow’s business model
The prospect of Zillow making a fortune on seller leads
Greg’s casino analogy for Zillow’s home-flipping venture
Rob’s take on how Zillow could solve affordable housing
Zillow’s impact on other players in the iBuyer space
Resources:
‘Opendoor Founders Subtweet Zillow’s New Home Buying Service’ in Inman
Connect with Rob and Greg:
Would the woes of the real estate industry be resolved if agents were employees rather than independent contractors? At Inman Disconnect, Rob posited that shifting from the 1099 to a W-2 model would give brokers more control and allow them to address several of the fundamental issues in the space, raising the standards of professionalism by eliminating incompetent or toxic agents—without risking their livelihood.
Today, Rob, Greg and Sunny debate Rob’s proposal, discussing the challenges brokers face in mandating trainings and mentoring for new agents who are independent contractors. Greg argues that leadership is at issue rather than employment status, contending that employees and independent contractors alike are only motivated by leaders who inspire buy-in. Rob, Greg and Sunny address the broker’s responsibilities around professionalism in the industry and weigh in on whether or not brokers can afford to fire top producers who are toxic to the business.
Rob breaks down the revenue structure in a brokerage, explaining how the shift to a W-2 model would give brokers more autonomy and abate the head-count-driven model that fuels a lack of professionalism. Listen in as Rob and Greg come to an unprecedented agreement on the role of leadership in raising industry standards and learn how the law firm model—with its division of employee-associates and partners—might be adapted for real estate.
What’s Discussed:
Rob’s proposal that the 1099 is the cause of many industry woes
The history behind the shift to agents as independent contractors
Sonny’s take on the broker’s challenge in mandating trainings
Greg’s argument that the issue is leadership vs. control
The broker’s responsibility around agent professionalism
How great leaders attract great talent
Why it’s difficult for agents to move brokerages
Why brokers are hesitant to fire toxic agents
The breakdown of revenue in a brokerage
How the W-2 structure would give brokers more control
What triggers the head-count-driven model
How the law firm model might be adapted for real estate
Resources:
Connect with Rob and Greg:
Our Sponsor:
Observe. Orient. Decide. Act.
The OODA loop is a tool for decision-making developed by military strategist John Boyd. At the Inman Disconnect Conference in Palm Springs, organizers focused on the Orient piece of the process, collaborating with attendees to design a set of principles to govern the industry moving forward. The question becomes, how might those principles influence decision-making in real estate? And will such a manifesto inspire industry players to look inward and take the necessary action?
Today, Rob and Greg debrief the Inman Disconnect Conference, applauding Brad Inman’s investment in engaging the industry. They discuss the history behind the Ahwahnee Principles, a new approach to urban planning developed by mavericks in the space in the 1970’s, and how Brad is working to emulate the design of a similar manifesto for real estate. Rob offers insight around the impact of developing a set of principles and how that might translate to action and policy change moving forward, and Greg explains how big gains can be made by people in a community changing small habits over time. Rob and Greg touch on some of the principles addressed at the conference, including low-income housing and big data. Listen in as they share their top takeaways from Inman Disconnect and how the principles can serve as a device to communicate about the way we do business.
What’s Discussed:
The intent behind the Inman Disconnect Conference
Brad Inman’s investment in engaging the industry
The history behind the Ahwahnee Principles
Brad’s aim to develop a set of principles for real estate
The real estate establishment vs. industry ‘rebels’
The controversial issues discussed at Inman Disconnect
Rob’s insight around the impact of principles
Greg’s take on the impact of small changes
Greg’s view on big data and privacy
How the principles might translate to action
Resources:
The Parker Principles: A Real Estate Manifesto
Connect with Rob and Greg:
Our Sponsor:
Data is the new oil—and the one with the most insight wins.
As technology becomes more and more important to the industry, many brokerages are justifiably concerned that real estate will go the way of travel and eCommerce, eventually doing away with the agent altogether. Gary Keller is uneasy about the current shift from tech-enabled agent to agent-enabled technology, and that is where he is drawing a line in the sand. But his controversial ‘KW First’ solution has a lot of us scratching our heads…
Rob and Greg are camped out in the lobby of the 2018 MLS Executive Workshop to talk about Gary Keller’s polarizing vision speech at the recent Keller Williams’ Family Reunion. They are joined by Sunny Lake, official wrangler of Rob Hahn and partner in charge of brokerage consulting with 7DS Associates. Tim Dain, President of MARIS, the regional MLS serving Greater St. Louis, wanders into the conversation as well.
Rob, Greg and Sunny walk us through the crux of Gary Keller’s speech, explaining his fear of the shift from tech-enabled agent to agent-enabled technology. Rob explains his take that Garry correctly identified the problem but is misguided in his solution to paint real estate vendors and MLSs as ‘unsafe’ and move to control and protect their own data. They discuss the contrasting ‘better together’ approach being taken by Re/Max and Realogy, addressing why KW would be better served to embrace other players in the fight against agent-enable technology, and Tim explains why the MLS cannot legally ‘sell out’ brokerage data to platforms like Zillow without their permission. Listen in for debate around how much of Gary’s speech may have been theatre meant to ‘rally the troops’ and how his message might impact the upcoming DOJ/FTC talks on real estate data.
What’s Discussed:
Gary Keller’s polarizing vision speech
The pressure on brokerages as profit margins continue to shrink
Rob’s take that Gary identified the problem but misidentified the cause
How much of Gary’s speech was theatre to ‘rally the troops’
Why KW won’t be able to do predictive analytics
Agent hesitation to share data with the brokerage
Why KW’s ‘go it alone’ approach is misguided
Re/Max’s acquisition of booj
Tim’s insight around the legal restrictions on ‘selling out’ data
The ‘open platform’ approach of Realogy, Re/Max
The fantastic culture at Keller Williams
How Gary’s speech might impact the upcoming DOJ/FTC talks
Resources:
“Did KW Just Say FU to Vendors?” on Vendor Alley
“In Which Keller Williams Completely Confuses Me” on The Notorious ROB
“The Keller Williams Vision Speech: Followup and Further Thoughts” on The Notorious ROB
“Keller Williams Sheds ‘Traditional Broker’ Shell for New Data-Driven Model” in Inman
Connect with Rob and Greg:
After seven months in office as CEO of the National Association of REALTORS, Bob Goldberg has made some bold moves with regard to AMP and RESO-compliance. He’s also scored big on Capitol Hill, lobbying last-minute changes to the tax reform bill. And he’s cut the NAR budget by 20% and made some significant staffing changes. But should we be celebrating Bob as a change agent just yet?
Rob and Greg come to you live from the 2018 MLS Executive Workshop in Scottsdale to argue both sides. Yes, Bob has done more in seven months that we have seen from NAR leadership in quite some time, but there is a low bar for change in the association world. The scope of Bob’s success depends on your basis for comparison, and as you may have guessed, our hosts have very different takes on the issue.
Rob and Greg take on other hot topics in real estate as well, covering the major challenges in making Upstream work, the upcoming Department of Justice and Federal Trade Commission workshops around real estate data, and how a set of national standards would impact vendors. Listen in for Rob’s take on potential government mandates and Greg’s insight on the ‘holy grail’ of real estate tech—marrying data standards with permission to sell.
What’s Discussed:
Bob Goldberg’s bold moves as NAR CEO
The low bar for change in the association world
How NAR dodged a bullet with Trump’s tax reform
How the governance model affects the pace of change
How cutting the NAR budget by 20% may impact jobs
The standardization required for Upstream to work
The challenges around MLS vendors and unfunded mandates
The upcoming DOJ/FTC workshops re: real estate data
Rob’s take on making RESO standards law
Greg’s insight on how national standards would impact vendors
Marrying standards in real estate data with permission to sell
Connect with Rob and Greg:
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What’s in store for the real estate industry moving forward into 2018?
Some might consider this a supplement to Rob's article on Inman News, 7 predictions 2018: Disco Fever. But it was recorded before the article was published. In this episode Rob and Greg try their hand at anticipating what’s ahead, offering predictions around the outlook for the MLS, Bob Goldberg and the NAR, the housing market, brokerages, technology and the culture of the industry. They begin with the ‘Blame the MLS’ debate caused by Bob’s response to the Inman Upstream article and Greg’s subsequent South Park blog post. Next, they offer an overview of leadership changes among major industry players and work through the big mystery surrounding RE/MAX’s failure to report Q3 earnings.
Rob and Greg speak to Facebook’s entry into real estate, discussing the differences between the social media powerhouse and Zillow as well as the potential for a syndication deal with Facebook in the coming year. They cover how MLS of Choice is likely to affect the industry, the continuing trend toward the tech-enabled brokerage model, and how NAR’s success in making changes to the tax plan might play out in the 2018 campaign season. Listen in for Rob and Greg’s insight on how the cultural phenomenon that is #MeToo might rock real estate and who will make the biggest splash in the technology space this year.
What’s Discussed:
The tendency among industry players to ‘blame the MLS’
The mystery around RE/MAX’s failure to report Q3 earnings
Facebook’s entry into real estate
The potential for a direct syndication deal with Facebook in 2018
Real estate as the ‘last frontier of disruption’
Greg’s insight around the rise of virtual MLSs
How MLS of Choice could trigger the first ‘hostile takeover’
The likelihood of non-contiguous consolidation activity among MLSs
Rob’s take on how HAR could leverage MLS of Choice
NAR’s big win on Capitol Hill regarding the tax plan
NAR’s increase in political spending in 2018
The trend of brokerages to adopt a tech-enabled model
Mergers and acquisitions in the vendor space
The probability that #MeToo will rock real estate in 2018
Who is apt to make the biggest splash in real estate tech this year
Resources:
Andrea’s Upstream Article in Inman
‘Blame the MLS’ on Vendor Alley
Everybody Wins: The Story and Lessons Behind RE/MAX by Phil Harkins and Keith Hollihan
Mike’s Breakdown of Facebook vs. Zillow
Inman Article on Using Facebook for Lead Gen
Connect with Rob and Greg:
Take a moment to reflect on the past year in real estate… What were the hot topics of 2017? The appointment of a new NAR CEO is probably on your list, along with Zillow jumping into the iBuyer game and Redfin going public. Maybe the Upstream pivot came to mind, or one of the many stories around venture capital and private equity investing in tech-enabled brokerages.
Rob and Greg are taking the time to look back at 2017 and discuss the top five issues that rocked residential real estate this year. They start with the appointment of Bob Goldberg as the new leader of NAR, evaluating his performance so far and how the proposed tax bill will test him in this role. Rob and Greg go on to cover 2017 as the year of the iBuyer, explaining how the model is yet to be profitable and the circumstances under which platforms like Opendoor and OfferPad might become more mainstream.
Rob offers his take on the dynamics between Redfin and Zillow, discussing why he considers the Redfin IPO to be the biggest thing in real estate this year. Greg raises the issue of SoftBank’s investment in Compass, speaking to the influx of capital pouring into the space and the many examples of consolidation in the industry. They walk through the impact of MLS of Choice and what might change as a result of the new policy as well as the question of what success looks like for RPR as Upstream appears to lose relevance. Listen in for Rob and Greg’s overview of the hottest stories in real estate this past year and their insight on what’s to come in 2018.
What’s Discussed:
The appointment of Bob Goldberg as NAR CEO
How the tax reform bill will serve as a test for Bob
What made 2017 the year of the iBuyer
How market conditions and margins impact the popularity of iBuyers
Why Rob considers Redfin going public the biggest event of 2017
Redfin’s employee-agent model and culture of consumer focus
The influx of capital pouring into residential real estate
- SoftBank’s $450M investment in Compass
- Consolidation and tech-enabled brokerages
The significance of ‘MLS of Choice’
The proposal to shut down RPR
Upstream’s apparent loss of relevance
Resources:
“Why Does Compass Keep Winning?” in Inman
Connect with Rob and Greg:
Hang around the hotel bar at CMLS2017 long enough (we’re looking at you, Greg), and you will overhear conspiracy theories about ‘MLS of Choice’ somehow leading to a national MLS. The MLS community has long feared that NAR is looking to get into the MLS business, and the rhetoric ‘of choice’ raises alarm bells in the industry. What is NAR’s intent in changing MLS Policy Statements 7.42 and 7.43? Could RPR eventually evolve into a national MLS?
Today Rob and Greg dig into the ‘MLS of Choice’ debate with Sam DeBord and Jeff Young. Sam is a member of the MLS Technology and Emerging Issues Advisory Board that revised 7.42 and 7.43, and he will serve as the Vice-Chairman of MLS Policy for NAR next year. He also serves as the managing broker for Seattle Homes Group and VP of Strategic Growth for Coldwell Banker Danforth. Sam writes for a number of real estate news outlets, and he was named to SP200’s Top 20 Social Influencers and Inman’s Top 101 in Real Estate.
Jeff Young is the Chief of Operations for Realtors Property Resource (RPR), an NAR resource providing comprehensive data, powerful analytics and client-friendly reports for each of NAR’s constituencies. Jeff has been a REALTOR since 1996, serving in various NAR leadership positions including President of the Michigan Association of Realtors in 2008.
On this episode of Industry Relations, Greg, Rob, Sam and Jeff walk through the details of ‘MLS of Choice,’ discussing how the policy change will offer greater flexibility for brokers and agents in the MLS marketplace. They explore the MLS community’s skepticism around NAR’s intent, and whether there is any merit to the theory that this new policy might eventually lead to RPR becoming a national MLS. Listen in to understand the arguments for and against ‘MLS of Choice’–tin foil hat optional.
What’s Discussed:
The broker pain points that led to changes in MLS Policy Statements 7.42 and 7.43
The role of the MLS Technology and Emerging Issues Advisory Board
The current jurisdictional rules around MLS dues
How ‘MLS of Choice’ provides greater flexibility for brokers/agents in MLS marketplaces
Why the previous policy was endorsed
The arguments for and against ‘MLS of Choice’
Sam’s response to industry fear of NAR establishing a national MLS
The rumors that RPR could become the national MLS
Jeff’s rebuttal concerning the rumors around RPR
The confusion around ‘MLS of Choice’ as a naming convention
The concept of which MLS not if MLS
How the policy change will adversely affect MLSs that don’t provide value
CMLS’s response to the ‘MLS of Choice’ policy change
Resources:
Sam at Coldwell Banker Danforth
‘MLS of Choice’ Article in Inman News
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Stakeholders from every facet of the real estate industry are calling for change. Problem is, that’s about the only thing they can agree on. So what happens when you put a broker, a vendor, a consultant, and NAR leadership in the same room to talk about all things MLS? A sometimes uncomfortable, yet revealing discussion around consolidation, data standardization, MLS fees, and the policymaking process.
Stakeholders from every facet of the real estate industry are calling for change. Problem is, that’s about the only thing they can agree on. So what happens when you put a broker, a vendor, a consultant, and NAR leadership in the same room to talk about all things MLS? A sometimes uncomfortable, yet revealing discussion around consolidation, data standardization, MLS fees, and the policymaking process.
Live from CMLS2017 in Austin, Rob and Greg are joined by James Dwiggins and Sam DeBord. James is the CEO of NextHome, a progressive real estate franchise with consumer-focused branding, technology and marketing. Prior to founding NextHome, James served as Chief Strategy Officer and VP of Realty World Northern California & Nevada. Based in the San Francisco Bay Area, James’ impressive resume also includes VREO, a groundbreaking company he co-founded in 2000 to develop web applications for agents and brokers.
Sam is both the managing broker for Seattle Homes Group and VP of Strategic Growth for Coldwell Banker Danforth. In addition, he is a member of the MLS Technology and Emerging Issues Advisory Board, and he will serve as the Vice-Chairman of MLS Policy for NAR next year. Sam writes for a number of real estate news outlets, and he was named to SP200’s Top 20 Social Influencers and Inman’s Top 101 in Real Estate.
Listen in as Greg, Rob, James and Sam search for a little common ground when it comes to the future of the MLS. James shares his concern regarding a lack of non-REALTOR members in NAR decision-making bodies, and Sam offers his take on the future of the industry. They cover the political barriers that prevent true collaboration in the industry, how the not-for-profit mandate hinders MLS progress, and the value of vendor-inclusiveness.
What’s Discussed:
James’ message at the CMLS event in Austin
The ongoing conversation among NAR, brokers and MLSs
The continued consolidation of MLSs
NAR’s focus on broker co-op
The vast differences in how MLSs are run
The challenges around a lack of data standardizationFactors that prevent a common data share
The brokers’ contribution to the technical barriers
How a common MLS feed might affect membership
How members of the MLS Technology and Emerging Issues Advisory Board are selected
-Vetted by leadership
-‘Standard of experience’James’ concern regarding a lack of non-
REALTOR members NAR’s effort to bring in advisors/speakers from other industries to inform the advisory board
Why having your heart in the right place doesn’t mean you are a qualified decision-maker
The challenge of overcoming politics to engage in true industry collaborationNAR’s role in fostering cooperation
How CMLS is setting the standard of vendor-inclusiveness
Rob’s argument that the nonprofit mandate is the biggest issue hindering MLS progress
The pros and cons of raising MLS fees
The excessive fees vendors pay for access to IDX feeds
The benefits of MLS consolidation:
-Less overhead, more profitable for MLS
-Broker costs decrease
-Vendors can reinvest money saved
The painful loss of jobs that would result from MLS efficiency
James’ prediction that it will take outside forces to facilitate change
The value generated by a very small number of agents -Zillow market cap at 7.6B -80,000 agents
Sam’s take on the future of the real estate industry
-MLS will be part of equation (dependent on data)
-Fewer MLSs
-Realtor will remain at center of transaction
Greg’s A Few Good Men analogy
Rob’s theory about the future MLS breakdown
The top barriers to change:
-Politics
-Lack of data standards
Sam and James’ advice to MLS execs moving forward
-Focus on broker priorities
-Be flexible, innovative in delivering
-Discuss pain points with vendors
-Work with other MLSs on same process
Resources:
Connect with Rob and Greg:
We can all agree that raising the level of professionalism in the real estate industry is a good thing – absolutely necessary, even. But how do we get there? And who’s responsible for elevating the REALTOR brand? With Bob Goldberg assuming leadership of NAR on August 1, there is much discussion around what he can do to be an agent of change in the industry.
The gloves come off today as Rob and Greg debate the validity of the NAR CEO selection process and the best way to go about ridding the industry of incompetent, unethical agents. They discuss the strengths Bob brings to the table, how his leadership may facilitate cooperation among key players, and the likelihood of substantial policy change with Bob at the helm.
Listen in as Greg and Rob get fired up arguing who’s responsible for making the REALTOR brand meaningful. It is up to NAR to raise standards and differentiate between REALTORS and licensees? Or do brokers need to be held to a higher ideal when it comes to recruiting, hiring and training agents? Whether you’re Team Rob or Team Greg on this one, Bob has his work cut out for him as he takes over NAR this month.
What’s Discussed:
Greg’s experience working with Bob through eNeighborhoods
NAR’s decision to choose someone from inside the organization
Greg’s sense of Bob as a leader
Rob’s take that hiring Bob may have been a ‘done deal’
Greg’s argument that employing a world-renowned recruiting company is ‘thorough’ as opposed to ‘clueless’
Why Rob contends that NAR should have named Bob as successor two years ago
How the NAR membership might have reacted to naming Bob as successor without selection process
How the interview process affords the opportunity for upfront conversation
Greg’s belief in the validity of the selection process
Why a succession plan is more feasible in the corporate world vs. a member-driven organization
Rob’s frustration with the lack of transparency demonstrated by NAR leadership
Greg’s assessment of how things will change with Bob at the helm of NAR
Rob’s assertion that conflict in the industry is about policy rather than tone
Rob’s skepticism re: the probability of change in NAR policy
The relationship between personnel and policy
Greg’s assertion that bureaucracy comes from the association side rather than staff
The challenges Bob faces moving forward
Greg’s position that brokers are complicit in hiring unqualified agents
Rob’s counter that agents are not employees
Why Rob finds it remarkable that any brokers institute standards
How NAR’s code of ethics runs counter to their acceptance of anyone with a license
Rob’s proposal regarding policy changes that would make the REALTOR brand meaningful
-MLS access no longer tied to membership
-Association staff allowed to take part in ethics hearings
-Remove 1099 exemption for real estate agents
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Resources:
Rob’s Response to Bill Brown’s Comment
Connect with Rob and Greg:
It’s the quiet ones you have to watch out for…
Redfin has been quietly dominating since its inception in 2004, and no one in the real estate industry seems all that concerned. We dismiss Redfin as a discount brokerage and debate what to call it – Tech company? Brokerage? Something else entirely? Whatever label you put on it, Redfin is disrupting the way real estate works. And with its S-1 filing, we can finally see just how well the company has been doing. With a sales volume of $16.2B and a 31% gross profit margin, Rob is justified in saying that Redfin has the potential to ‘eat the industry.’
Today Greg and Rob get into the impending Redfin IPO and the potential consequences of its success on traditional real estate. They cover Redfin’s phenomenal company culture and the advantages associated with having employee agents rather than independent contractors – and explain how its software has the ability to capitalize on repeat/referral business in a way that traditional brokerages do not.
Listen to understand why Rob believes that the industry should be more afraid of Redfin than Zillow, and hear Greg’s take on the relative importance of agent relationships versus company culture in shaping the consumer experience. Might there come a day when traditional brokerages would have to partner with (GASP) Zillow to compete with Redfin? As the company goes public, let’s talk about why Rob and Greg think industry leaders should start losing sleep.
What’s Discussed:
The importance of culture at Redfin
Redfin’s recent S-1 filing
-Shares in $12-14 range
-Company valued at $1B
The debate around Redfin’s identity
-Tech company
-Real estate brokerage
-Agent team hybrid
Why there is no backlash against Redfin’s IPO
Rob’s take on why the industry should be more afraid of Redfin than Zillow
How traditional brokerages throw shade at Redfin as ‘discount brokerage’
Rob’s theory that Redfin is going to ‘eat the industry’
Standout stats from the Redfin S-1
- $16.2B in sales volume, #5 in RealTrends 500
- 31% gross profit margin
How Redfin’s software capitalizes on repeat/referral business
Redfin’s focus on data
- Measures customer satisfaction via NPS
How the Redfin culture affects the consumer experience
The myth that only independent contractors can provide high-level service
Greg’s take on Redfin’s limited ‘boots on the ground’
The advantages of employee buy-in to Redfin company culture
Who might be considered Redfin’s competition
The what-if scenario around Redfin establishing a ‘sneak peek’ listing agreement
How Redfin generates traffic to its site
- SEO
- Targeted email
When the heads of large real estate companies should start losing sleep over Redfin
- Redfin offers lower commissions, agents paid based on satisfaction ratings
- Customer demand could force traditional brokerages to enact similar policies to remain competitive
How a company with a multi-brand strategy could incorporate Redfin into its business model
How traditional brokerages might need to partner with Zillow to remain competitive
How reducing costs through automation would allow brokerages to charge less for commission
The way capital acts as an accelerator in the tech world
How having employee agents allows Redfin to fully adopt its technology systems
Resources:
Redfin IPO: Tech Company, Real Estate Brokerage, or Something New?
Rob’s Redfin IPO Blog – Part 1
Connect with Rob and Greg:
If Zillow thought that the industry would thank them for reworking the Open Door model to involve agents in the process of Instant Offers, they underestimated what Rob likes to call Zillow Fever, the intense dislike so many in real estate have toward the company.
Today Rob and Greg are engaged in a rousing conversation about the rollout of the Instant Offers test program and subsequent uproar. They work through the source of the industry’s angst toward Zillow and whether or not it is warranted in this particular case.
Listen in as Rob and Greg discuss the arguments against Instant Offers, how the feature might lend itself to predatory behavior by investors, and how Zillow might have changed their messaging to avoid the blowback.
What’s Discussed:
The firestorm created by Zillow’s Instant Offers test program
Greg’s take on how a different naming convention would have tempered agent reaction
How the Instant Offers feature works
The weaknesses of the argument that Zillow is duping consumers
The hypocrisy/lack of awareness of agents criticizing Instant Offers
How agents can use Instant Offer as a tool to generate seller leads
The importance of establishing a sphere of communication
The vast number of tools available to help agents stay in touch with past clients
Instant Offers as a potential avenue for predatory investor behavior
Rob’s problem with the premise that consumers cannot make best decision for themselves based on circumstances
The potential monster success of the Instant Offers feature
The flaws in the argument that Zillow is trying to come between the agent and the homeowner
The way Zillow priorities the consumer over the agent
Whether Zillow has given up on trying to make people happy or if they were caught off guard by the negative reaction to Instant Offers
How other big web operators might respond to this innovation
Resources:
Greg Schwartz ‘We Come in Peace’
Connect with Rob and Greg:
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Just when you thought the Upstream shift might foster a new spirit of collaboration in the real estate industry, the guns were drawn again with NAR CEO Dale Stinton’s combative rhetoric, as NAR approved an additional $9 million in funding for the scaled back version of Upstream at the Realtors Legislative Meetings in D.C.
Today Rob and Greg talk about the fallout from the Upstream announcement and subsequent doubling down by Stinton at the board meeting that followed. As always, our illustrious hosts each have a unique take on the motives of NAR and how Upstream’s CEO might approach his role moving forward.
Listen in as they discuss the ambiguity around the project now that Upstream will allow brokers to enter their listings into their MLSs and how the change in tactics will affect particular industry players. Click to learn how the antagonistic framing of the big announcement further divided the vendors and MLSs from the brokerages, when it might have been an opportunity to mend fences.
What’s Discussed:
The three-part Upstream bombshell (dropped at NAR’s Midyear)
Rob’s theory re: the motivation for Upstream
NAR and Upstream’s missed opportunity to generate a spirit of collaboration
The purchase of ListHub as an alternative to Upstream
How eliminating a single point of entry makes Upstream a simple listing syndication dashboard
The industry skepticism around Upstream’s transparency and NAR’s motives
Why Upstream is a top priority for brokerages
How Upstream’s messaging has evolved over time
Why Zillow is feared by brokerages, MLSs and associations
Zillow’s capability to provide a data management solution
The inflammatory language used by the NAR CEO Dale Stinton (e.g.: vendors and MLSs as ‘cartel’)
The ambiguity of Upstream moving forward
The Upstream pivot as a win for Zillow
Why Zillow may have purchased Bridge Interactive
How Upstream drove MLSs into the arms of Zillow
The likelihood of a continued alliance between Zillow and MLSs to fight NAR
How Upstream CEO Alex Lange might approach his role moving forward
Post-pivot licensing issues for Upstream
Resources:
‘NAR Bets on Upstream with Additional $9M in Funding’ by Andrea Brambila
Connect with Rob and Greg:
If you ask Wiktionary, to swim upstream means ‘to opt for a difficult course of action when a simpler alternative is available.’ And if you ask Rob and Greg, real estate’s Upstream venture is a prime example of doing things the hard way.
Today Rob and Greg discuss the MLS response to the brokerage community’s push for data sharing and the probability of Upstream’s success. They also cover other hot topics in real estate technology news, including Zillow’s new Millennial consumer brand announcement, the extraordinary capital raised by Placester, and Realogy’s recent changes in management.
Listen in as Greg explains how to think about the ‘real estate ecosystem,’ and Rob outlines the inevitable development of a new brokerage model.
What’s Discussed:
Zillow’s recent announcement regarding its launch of new consumer brand
Why Zillow is likely adding RealEstate.com as a search portal
The real estate industry’s ‘Millennial worship’
The stereotypes associated with Millennials vs. the reality
What a site designed for Millennials might look like
The staggering capital being poured into the industry
Placester’s recognition of the aspirational nature of real estate
Why Zillow focuses on ‘super agents’ and teams
Placester’s role in the ‘real estate ecosystem’
Realogy’s recent changes in management
How technology undermines the idea of a ‘real estate ecosystem’
The necessity for transformation of the current brokerage model
The mammoth undertaking that is Upstream
The feasibility of Upstream clearing all the hurdles it faces
How MLSs have responded to the brokerage community’s call for consolidation
Rob’s suggestion to add representatives from the broker community to the CMLS Board
Resources:
“Zillow Group to Launch New Consumer Brand” on RISMedia
“Placester Continues Growth with $50 Million Capital Raise” in HousingWire Magazine
Connect with Rob and Greg:
Industry Relations EP007
Greg Fischer Takes Us Back to the Future with NYC Brokers vs. Zillow
We’re feeling a little déjà vu at Industry Relations as controversy brews between Zillow and brokers in NYC. Everything old is new again with the launch of the premier agent feature on leading real estate marketplace StreetEasy. For the last ten years, agents across the country have dealt with syndication – and it seems New York real estate’s time has come.
Today’s guest, Greg Fischer, serves as principal broker at Fred Real Estate Group in Bend, Oregon, and author of the blog Next in Housing. His unique background also includes work in the tech industry with real estate software companies Move, Inc. in San Francisco and Doorsteps in New York City. This makes him uniquely qualified to discuss the bruhaha as NYC brokers decide whether to pay the Zillow tax or boycott it.
**Audio alert. Robertson's audio track has an echo effect that we couldn't get rid of in post. But Fischer and Rob audio (which handle the majority of the discussion) sounds great.***
What’s Discussed:
How NYC brokers reacted to the premier agent feature on StreetEasy
How StreetEasy GM Susan Daimler justified the change
The explicit language used by the StreetEasy product to suggest a buyer agent
Why NYC should seek the counsel of brokerages around the country who have dealt with syndication
How Manhattan real estate does business differently
REBNY’s request for an investigation into the legality of advertising an exclusive listing
The potential to create an MLS in NYC
The differences among IDX, VOW and StreetEasy’s premier agent
The danger of dual agency
Fischer’s take on leads generated via third-party websites
The evolution of Zillow’s playbook on generating revenue
Why brokerages need to get savvy on how ad tech works
The value of agents as local experts
Compass CEO Robert Reffkin’s concession to Zillow
Resources:
Greg Fischer’s Premier Agent Blog Post
The Real Deal’s Premier Agent Article
The Real Deal’s Premier Agent Video
Connect with Greg Fischer:
This is an odd one. Rob and Greg are back, and this time they are debating an unusual strategy real estate coaches and trainers might employ to establish credibility – using the techniques of the pickup artist community.
In researching the dating habits and family formation of millennials (for work – no, really!), Rob happened upon a company called Real Social Dynamics, the world’s largest dating coaching company. Among their promotional materials are YouTube videos called ‘infields’ in which their coaches demonstrate the company’s techniques for attracting women in real situations at parties and nightclubs.
This got Rob to thinking, “Why don’t we do that in real estate?” On this episode of the podcast, Rob and Greg explore the feasibility of real estate trainers generating similar footage to market their services.
What’s Discussed:
How infield footage lends credibility to the trainer
The legality and ethics of filming interactions with clients
How Hear It Direct sought to give professionals an understanding of the consumer point of view
Why data (# of transactions) may not be enough to establish a coach’s authority
The significance of training as a key value proposition for every association
The aspects of an agent’s work that could benefit from infields
Resources:
Real Social Dynamics YouTube Channel
Connect with Rob and Greg:
Rob and Greg are back with yet another spirited debate. This time they explore whether fiduciary duty extends to listing on Zillow. With Zillow’s current dominance, Rob argues that to provide maximum exposure for your seller client, listing on the platform is a must.
Rob and Greg get into the perception of Zillow as a threat as well as the issue of buyer agency. Listen and decide whether the responsibility to act in the client’s best interest means that a realtor is obligated to list on Zillow.
What’s Discussed:
The current dominance of Zillow
Rob’s argument that fiduciary duty requires listing on Zillow
The potential for lawsuits if agents don’t use Zillow
How the internet has changed the value proposition of the MLS from an advertising standpoint
Why the perception of Zillow as a threat is flawed
The core complaints against Zillow
Resources:
Connect with Rob and Greg:
Rob and Greg return with some news from north of the border and a discussion regarding what the real estate industry in the states might learn from recent regulations imposed in British Columbia.
Rob explains the dysfunction in the Vancouver housing market that led to disreputable behavior on the part of some realtors and the public outcry that followed. He and Greg also debate the likelihood of something similar happening here in the US. Listen in to understand the parallels between the systems in Canada and the US and how leadership in the industry could prevent an analogous government intervention here.
What’s Discussed:
The similarities between the Canadian and US systems
The Trump administration’s position on regulation
Why regulations are more likely to be imposed on a state (rather than federal) level
The impetus behind the public outcry in British Columbia
Why the standard form contract clause allowing a buyer to assign the contract to someone else without seller approval was added initially
How price fluctuations in the Vancouver market led to the practice of shadow flipping
Why government intervention is rarely precision reform
How British Columbia changed the way the regulatory body works
The steep fines agents and brokerages face if found in violation
The likelihood of a similar phenomenon happening in the US
How the real estate industry could maintain its privilege to self-regulate
Resources:
Connect with Rob and Greg: