Notorious POD: Episode 11 — Kathy Dryden of Allre.com

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Wow, it’s been a long time, eh? I apologize for the lapse, but as I sort of explain in the podcast itself, I’ve been busy, and there hasn’t been that much going on that makes me want to record one of these.

But… that’s changed with the introduction of Allre.com, a new startup based in San Diego, CA, that really, actually wants to disrupt the industry. Here’s the video presentation from TechCrunch Disrupt:

 


The initial reaction from real estate folks has been… as expected. Just check out the comments to that TechCrunch post above.

I figured, rather than slinging mud, maybe we should get to know the company a bit better, so I asked Kathy Dryden, the Founder & CEO, for an interview. And she granted it. So this episode is about Allre, about disruption, and about my thoughts and opinions based on our conversation.

Many thanks to Kathy for the interview, and for agreeing to reschedule them a couple of times, despite the thousands of emails in her inbox, and a zillion things to do after the TechCrunch debut.

Thanks!

-rsh

Listhub Acquires Point2; I Think of TS Eliot

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[EDIT: Please see the clarification posted below.]

I’ve been hearing rumblings about a big game-changing deal for a couple of days, and this morning, it’s been confirmed. Listhub, a Move entity, has acquired Point2 from Yardi, bringing all listings syndication in the United States under one roof.

From Celeste Starchild, General Manager of Listhub:

Move has acquired the Point2 U.S.-based syndication business to further our shared vision of delivering a single listing aggregation, storage and distribution service.  As one of our key partners, we wanted to make sure that you were among the first to hear this good news.

Point2 realized the benefits to the industry of having a single platform, and ultimately worked with ListHub to help bring it to fruition.  The ListHub vision is to provide the industry with a single platform to improve data synchronization between systems, organize appropriate data licensing provisions for participants, and solve for the fragmentation and duplication of efforts that occurs throughout our industry today. Combining the Point2 and ListHub technologies into a single platform is a giant leap forward in reaching these goals.

Benefits to the industry of the single platform include:

  • Better access to listing data for thousands of brokers and franchises who operate across multiple MLSs
  • Increased accuracy for online listings, as agent-entered listings will be transitioned to MLS-connected solutions wherever possible
  • Enhanced customer service to the industry through a single help desk
  • Ability to better measure the results of online marketing across sites and across MLS markets 
  • Leading data protections for all brokerages through ListHub’s comprehensive publisher agreements
  • Ability for software and website technology companies to focus efforts on innovation for REALTORS®, not managing data from multiple sources

How will the acquisition work?

  • The ListHub platform technology will be provided to all of Point2’s previous MLS customers (in the U.S.)
  • ListHub and Point2 will work collaboratively with each MLS to cutover all of Point2’s U.S. based MLS customers to ListHub over the next six months.
  • The MLS-connected Point2 syndication service will operate unchanged for each MLS market during the period prior to their ListHub cutover date to ensure no disruption in service.
  • Once an MLS market is transitioned, the Point2 syndication service will cease operations.

NOTE: While it’s nice of Celeste to say I am a “key partner”, I assume this was a blast email that went out to their actual key partners. :) As the main thing I partner with Listhub on is karaoke with their people, I doubt the phrase applies to me.

In any event… a couple of thoughts.

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So, About This “Our Listings” Business…

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I saw a post on a Facebook group that references this Inman News story about Zillow having no plans to raise prices. The Facebook author (Miriam Bernstein) thought the key graf from the story was this:

“As long as we’re partners in success, we’re happy,” Liniger [CEO of REMAX] told Rascoff in front of the audience of approximately 1,000 Re/Max broker-owners, predominantly from the U.S. and Canada. “If we become competitors (if Zillow starts making moves as a real estate firm rather than a media company), you won’t get any more of our listings.”

“I hear you loud and clear,” Rascoff said. [Emphasis mine]

Then of course, like most things on Facebook, the rest of the commentary quickly dissolved into various “I R Hate da Zillow” stuff. But that phrase by Dave Liniger makes me wonder about something.

When Liniger says “our listings”… what exactly does he mean by that?

I mean, yes, I understand that it’s a figure of speech referring to the feed that REMAX corporate, the franchise company, sends to Zillow. So if Zillow pisses REMAX off, REMAX will stop sending that feed. Okay, that’s obvious. But we hear brokers and franchise leaders say these types of things — our listings, our data, our, our, our — all the time.

Three reasons why I’m asking.

1. REMAX is a franchise; its customers are brokerages. It has no copyright or ownership over any listing of its franchisee brokerages (unless such a thing is written into the franchise agreement, which it may be).

(If the answer is, Yes, those copyright assignments do exist, then my followup question is whether every franchise has such assignments, and if they do, whether those are nonexclusive licenses or actual transfer of ownership. But now we’re entering legalese land.)

2. Even if such an assignment did exist, we have the Edina Realty issue. No one denies that Edina Realty is a brokerage, with full copyright ownership over all of its listings. We also know that Edina pulled out of syndication a couple of years ago. But roughly 50% of its listings are still on Zillow, because Edina agents can choose to post listings themselves. Allowing agents to make that decision is actually Edina’s policy.

Does REMAX have more control than the actual brokerage does?

3. Perhaps the usage of “our listings” here means something like: “We have so much influence over our franchisees and their agents that they will do what we tell them to do.”

In fact, think of the issue this way: imagine for a moment that every single agent and broker affiliated with REMAX decides not to advertise their listings on Zillow. It seems obvious that REMAX corporate could not still keep sending a feed to Zillow. Those listings are not “ours” to send over the objections of the agents and brokers, who actually own and control the listing, right?

So… I’m inclined to think that the actual translation of that phrase is #3: REMAX has so much influence over its brokers and agents that they will do what REMAX tells them to do. It isn’t so much that Dave Liniger decides one day to kill the feed to Zillow, and overnight, every REMAX listing would disappear. No, rather, it must mean that REMAX is so influential with the brokers and agents affiliated with REMAX that they would cease advertising on Zillow.

If this is the correct interpretation, then there are all kinds of odd dichotomies in our industry. Because on the one hand, it seems that brokers and franchises exercise so much influence that they can direct listing agents to send or not send listings to one website or another. On the other hand, how often do we hear brokers saying they can’t get agents to show up to training, or take better photographs of listings, or stay in touch with past clients, or return phone calls promptly, or… well, a hundred other things… because the agents are 1099 independent contractors?

Do brokerages and franchises exercise enormous influence on agents or do they not? Do they, in fact, more or less control those agents or do they not?

These are the times when I feel like this industry suffers from multiple personality disorder. Either REMAX (and other brands and big brokerages) exercises such control, in which case many of the ills of the industry that’s all over Raise The Bar and elsewhere can be laid at their feet, or they do not have such control, because agents are independent contractors who don’t have to listen to the broker or the brand, in which case this talk of “our listings” seems a bit overblown.

But it can’t be both… can it?

So which way do you lean? Do they have control? Or do they not have control?

-rsh

Dear Realogy: What’s Stopping You?

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This is a brief note that I would have put on Facebook or something, except that such things get lost in the tides of time and Facebook’s rapidly scrolling updates. I want to be able to refer back to this at some later point.

At the recent NAR Leadership Summit, there was a panel of major brokerages and franchises. All of the panelists apparently expressed dismay at the number of MLS’s there are in the United States. Then Alex Perriello (my old boss, back in my CBC days) suggested that consolidation happen through acquisition.

From the Realtor.org story on the event:

Talk of a common platform quickly segued into a discussion of how many MLSs each of the large brokers had to join—and each of the panelists, at some point in the discussion, expressed support for MLS consolidation.

“It certainly makes sense for MLSs to start consolidating,” Peltier said. He suggested several smaller MLSs from the same region could partner to create “a consumer site that does not pick winners and losers,” referring potential clients back to the listing broker’s site.

Perriello caused a stir in the audience when he suggested that MLS consolidation should happen “through acquisition,” with larger MLSs taking over smaller ones that aren’t able to adapt.

“It is an exit strategy for some of them,” he said. “People won’t voluntarily say, ‘Well I think we’ll just close up shop.’”

Perriello reminded brokers that they can leverage a history of cooperation that real estate professionals in other countries can only dream of.

“The majority of brokers around the world do not have the benefits of MLS,” he said. “Competitors don’t even talk to each other much less cooperate with each other.”

Well, as someone who has actually spent time and energy and taken major professional risks to drive MLS consolidation via acquisition, only to run into the brick wall that is MLS governance in the 21st century, I have a suggestion in the form of a question.

What’s stopping Realogy from making offers to MLS systems today?

In Q2/2014, Realogy posted $1.5 billion in net revenues, with $269 million in EBITDA and $68 million in net income. Realogy also posted $198 million in free cash flow in the three months from April through June. It’s also a public company, who can offer stock in any acquisition.

I’ve heard Alex and others from Realogy complain about the MLS, about how many there are, about the need to consolidate, etc. etc. for a few years now. So here’s my suggestion.

Start buying the MLS yourself.

You have the cash. You have stock to offer in any deal, so the seller (usually an Association) has upside to look forward to. You’re part of the industry. You have deep talent in managing businesses. Go make an offer, especially in those large metropolitan areas where the NRT is active.

Start with MRIS in the DC area, which is a for-profit entity owned by twenty-some Associations. Offer them $150 million in cash and another $150 million in restricted Realogy stock so that those shareholder Associations can enjoy the upside of Realogy’s stock price rising.

Why not? What’s stopping you?

To those who say that the MLS can’t be owned by a brokerage, since its competitors would flee… there are three major MLS systems I know of (and others likely exist) that are broker-owned: MLS PIN in the Northeast, FMLS in Atlanta, GA, and NWMLS in the Seattle area. All are broker-owned, and the competitors have not fled the system. But if competition is going to be an issue, that’s easy to solve as well.

Offer to sell to brokerages in the affected MLS area shares in a new company that owns the MLS. So Realogy invests $300 million (in the hypo above), forms RealogyMLS to own MRIS, then sells $200 million worth of shares in RealogyMLS to other brokerages. Done.

If you need someone with actual experience in trying to do such a thing, I’ll be waiting by the phone. Or not, as the likelihood of actual action is probably in the neighborhood of the Jets winning the Superbowl this season with Geno Smith at quarterback.

The fact that this seems fanciful should alert us all to just why MLS consolidation remains a favorite talking point, but not an actual action point. We might all wonder why that is.

-rsh

My God, I Love These Videos…

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Look, if you’ve been a regular reader, you know that I don’t do “blogging for clients” type of junk you’ll find elsewhere on the real estate web. My clients are my clients, I don’t talk about them, what I do talk to them about is between me and them, and this blog here is my personal thing where I get smart or ridiculous or whatever. But in this case, I think you can forgive me for writing about a client.

I’ve been working with TREPAC (Texas Real Estate Political Action Committee) for a while now on their consumer-facing efforts, and one of the concepts that the team came up with (credit to SGS) was to run a contest showcasing why Texans love their Texas homes. I must confess that I had very high expectations, but… some of these videos have exceeded all of them.

Let me share some of my personal favorites (I’m not a judge, so my opinion doesn’t mean jack diddly squat) and then make a couple of observations for the industry folks to think about.

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