THE NOTORIOUS R.O.B.

THE NOTORIOUS R.O.B.

Conversations about the Real Estate Industry

When the Clouds Part

  Rob and I were supposed to be in Wilmington, NC today to present some new sessions at the State REALTOR Conference, Xchange. We watched as Hurricane Florence gained strength…

 

Rob and I were supposed to be in Wilmington, NC today to present some new sessions at the State REALTOR Conference, Xchange. We watched as Hurricane Florence gained strength across the Atlantic with estimated landfall near Wilmington, and quickly realized that the event would be cancelled. In an email from the NC REALTORS staff today, I was told that they are “working like crazy to get funding and help and strategizing how we can get to work once we are able to get into the areas.” Of this, I have no doubt. In a quick email back to her, I mentioned a few things we learned after Harvey unleashed 30 trillion gallons of water on Houston.

This time last year, we had just gotten home after being trapped out of town for 11 days during Hurricane Harvey. While we were away we watched paralyzed, not knowing what to do or what we’d come home to. That kind of anxiety stops you in your tracks. And once we were back in Houston, that paralysis continued.

Now that Florence has wreaked her havoc on the Carolinas, we are feeling that same sense of paralysis. What do we do to help? How can we best serve those who have lost everything?

 

A hurting person is in a storm. They are cold, wet, shivering, and scared. Preaching, platitudes, and advice will not get them out of the storm. Don’t tell a person in a storm that it’s a sunny day. There will likely come a day when the clouds part, but it’s not today. It’s not your job to pull them out of the storm. It’s your job to get wet with them.

– Adam S. McHugh

 

With our knowledge of last year’s catastrophic flooding and aftermath, there are some things we learned that I want to share with you. Because I know there are so many who want to help, but don’t know where to begin. And because so many that are impacted don’t know what lies ahead.

For the Helpers

Here are some simple things you can start collecting now … because trust me, they will be hard to come by once the waters recede and clean-up begins.

  • Bleach
  • Mildew killer
  • Scrub brushes
  • Spray bottles
  • Box fans
  • Dust masks
  • Work gloves
  • Contractor brooms
  • 50 gallon trash bins
  • Home Depot / Lowes gift cards (Ok – these aren’t hard to come by. But, man, they are appreciated.)

Really?!? That’s what people will need? Yes. Absolutely. And most importantly, show up to help with the work. You don’t need a skilled trade to help with the clean-up. And the first few days after the flooding has stopped are critical. Mold and mildew set in quickly.

For Those Who Are Hurting

If your home was flooded or damaged by fallen trees, there is no doubt your community is rallying around you and asking what you need. But here’s the thing … you don’t know yet. And while you are so very grateful for their support, you don’t know what to ask for. You don’t know what will be salvageable and what is lost.

My small advice in this time of overwhelm, start an Amazon Wish List.

I don’t mean to sound trite, but you will also want to document everything … and I mean everything. As you haul things out to the curb for eventual pick-up, take photos and detailed notes. The work will seem overwhelming, but it will be so helpful when filing with your insurance company. With the amount of devastation across the region, it will take time for insurance adjusters and FEMA to get to everyone.

Little did we know, but looters would come out in the evenings and take things from debris piles in front of homes. They took appliances, furniture, cabinets … basically anything of value, even though it was water damaged. I watched it happen every night as I drove through neighborhoods. If you have pictures to document your belongings, it will help in the event that this happens in your area.

Be patient. Acknowledge that it will take time to rebuild your life. But remember that a day will come where you will start to feel normal again. Your life will go on. And you will come out of this stronger than you can imagine right now.

There will be a day when the clouds will part. But in the meantime, we are here to get wet with you.

-Sunny

 

*** UPDATE *** 

I received a list of resources from NC REALTORS. There are links for a needs assessment, volunteer opportunities, updates on relief efforts, donations, etc. Also, if you have a short-term rental near the impacted areas of NC/SC, please let me know and I will get you in touch with the staff at NC REALTORS.

Feel free to share these links!

 

Updates on relief efforts – this page will be updated daily, or as new information comes in:

https://www.ncrealtors.org/disasterreliefupdates/

 

If you have been impacted by Hurricane Florence and needs assistance, please fill out this quick survey: 

https://tinyurl.com/NCRneeds

 

To volunteer, please complete this survey: 

https://tinyurl.com/VolunteerNCR

 

To make a donation to the NC REALTORS® Housing Foundation:

https://tinyurl.com/FlorenceNCR

 

 

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What Should Zillow and Realtor.com Charge for Leads?

So a couple of weeks ago, we got news that Move (the parent of Realtor.com) agreed to acquire Opcity for $210 million. Since that means Realtor.com will be taking a…

So a couple of weeks ago, we got news that Move (the parent of Realtor.com) agreed to acquire Opcity for $210 million. Since that means Realtor.com will be taking a percentage of the agent’s commission as referral payments, I figured it’s just a matter of time before Zillow walks through the doors that Move has opened. I was not disappointed.

A couple of days ago, Greg Schwartz of Zillow announced in a blog post that Zillow will be experimenting with taking a percentage of the commission as well:

Which is why we’ve decided to test a new payment model for our Premier Broker program called Flex Pricing.

The test, which is launching in Florida in October, will meet the need for more flexible payment options for our broker partners and introduce a “performance advertising expense” payment model.

As part of this model, participating brokers and their agents will receive a limited number of connections to home shoppers at no upfront cost. If you make a sale from a connection we deliver, a percentage of that – the performance advertising expense – is due only when the transaction closes.

Predictably, the paranoid zHaters crawled out of the woodworks. See the comments on this Inman article, for example.

But the entirely predictable Zaterade is uninteresting. What is interesting is this question:

What should Zillow and Realtor.com charge for these leads?

A recent conversation with the sage of the industry, Steve Murray of Real Trends, put that question in my head. Let’s get into it.

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Some Answers About KWRI’s Virtual Brokerage

On August 26, Rob Hahn, Founder of the blog, Notorious R.O.B, asked for some answers to his post “Some Questions About KWRI’s Virtual Brokerage.” I’m happy to oblige. As a…

On August 26, Rob Hahn, Founder of the blog, Notorious R.O.B, asked for some answers to his post “Some Questions About KWRI’s Virtual Brokerage.” I’m happy to oblige.

As a Market Center owner (Operating Principal) and one of the many architects of Keller Williams (KW) Expansion, I am committed to ensuring KWRI’s virtual brokerages are a win-win for both Market Centers and Expansion business owners. I will preface my responses by reminding everyone, that KW’s virtual brokerage model is still under construction. I don’t have any definite answers, nor does KWRI. What we do know is that the real estate industry is shifting and KWRI’s virtual brokerage will simply be another option for our Expansion business owners. In the following response, I will do my best to offer some insight on Rob’s questions and always welcome more discussion. You can reach me directly at [email protected].

Who Actually Owns This Virtual Brokerage?

It’s been implied that KWRI will own the KWRI virtual brokerage. Not the Expansionists. Not franchise owners.

Who Does Oversight? 

This one is a little more complex, as KWRI is still working out the details.

First and foremost, the KWRI virtual brokerage will have a principal broker in each state. In addition, I think each Expansion business owner who plugs into the KWRI virtual brokerage could have their own managing broker. This might look a bit different depending on the size of the state. For example, in little ole’ Vermont, we may have one principal broker for the KWRI virtual brokerage and one managing broker that some number of Expansion businesses share. In larger or more complex states, we may have one principal broker, with each Expansion business working with their own managing broker to offer additional oversight and layers of protection for the brokerage, agents, and most importantly, the consumer.

It’s also important to note that the millions of dollars being invested into KWRI’s technology is already providing additional oversight with up to the minute data and reporting, real-time purchase and sale information, and daily compliance checks. The larger the team (by agent and transaction count) the more oversight and compliance needed, which often calls for a full-time specialist overseeing compliance and reviewing documentation. I would think an Expansion business owner would gladly make that hire. Not only will the KWRI virtual brokerages have a principal broker, in most cases, there could be a managing broker and compliance oversight as well. More oversight, not less.

Why Is This Good for Current Franchise Owners Again?

I think the biggest thing we need to clear up here, is that while KWRI virtual brokerages will take on the liability and oversight for the Expansion business owners, it is not being established as a competitor of Market Centers, nor will the virtual brokerages be profit centers.

The catalyst for the creation of KWRI virtual brokerages was for large Expansion business owners to be able to conduct business seamlessly and grow. The KWRI virtual brokerage caps (while perhaps smaller than what Market Centers are accustomed to), will be paid to the Market Center, not the virtual brokerage. Expansion business owners may pay a small fee to the virtual brokerage for their oversight, but they will still be paying company dollar to their local Market Center for utilizing all of the systems, models, training, and technology that KW Market Centers provide. Together, KWRI virtual brokerages and KW Market Centers retain KW market share.

Next Step in the Evolution of Real Estate

I also want to provide some clarity on teams vs Expansion businesses.

Rob writes:

Adam say that inside a Market Center you may have 200-300 agents, with 15 large teams with 20 team members each. So is he saying that Market Centers will now only “house” these Elite Agent Teams, collect nothing in the way of commissions splits, but get paid for the use of the physical space, and a platform to build off of?

Teams are here to stay in our industry, we know this. However, almost all teams are not Expansion teams/businesses, therefore those non-expansion teams will not have access to or need to use the KWRI virtual brokerage. If there end up being 40-50  teams in a Market Center, perhaps 5-15 of them could be Expansion businesses, the rest being local teams who have chosen not to expand. Some agents will join an Expansion business for their next opportunity, but the vast majority will definitely remain as single agent businesses. Agents will continue to do what is best for them, their career, and their business. KWRI virtual brokerages for Expansion business owners is simply another option.

Just as Keller Williams championed teams in the 90’s for those who wanted to build a sales business they are now championing Expansion for those who want to take their sales business to multiple locations. This isn’t new. KW started teaching and supporting Expansion almost seven years ago. The Virtual part was suggested almost three years ago by Ben Kinney and KW has been watching to see if it was necessary. It seems like it might be, thus they reopened the conversation.

As is typical of KW, they will ask lots of questions, engage lots of dialogues and feedback before moving forward. The culture of this company is alive and well. The real estate industry is under a serious restructure that is about to change the way consumers, vendors, business owners, and agents have “done” real estate. Keller Williams created Expansion over seven years ago. The real estate industry, and now the world at large, is ready for the next evolution in real estate. It’s our duty to our Market Center owners, our agents, Expansion business owners, and consumers to step up and deliver. Virtual brokerages are one solution to closing the gap.

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On the Opendoor Acquisition of Open Listings

Just thought I’d drop a brief (well, for me) note here about Opendoor’s acquisition of Open Listings, in between preparing for hurricane Florence…. Inman News has the story: Flush with hundreds…

Just thought I’d drop a brief (well, for me) note here about Opendoor’s acquisition of Open Listings, in between preparing for hurricane Florence…. Inman News has the story:

Flush with hundreds of millions in venture funding, the fast-growing home-buying and selling startup Opendoor is making its first acquisition: Open Listings, a discount brokerage with a team of salaried in-house real estate agents that offers homebuyers a 50 percent rebate on a buyer’s agent’s commission. Neither of the private companies disclosed the purchase price.

“By integrating Open Listings with Opendoor’s mortgage, title and home services, the company will make it as easy to buy, sell or trade-in a home as it is to hail a ride, book a flight, or shop online,” Opendoor said in a press release announcing the deal.

The deal is potentially as significant to the wider real estate industry as Zillow’s $3.5 billion purchase of rival listings portal Trulia in 2014 — if not more so.

This is big news, yes, but uh… let’s slow down there a touch, sparky. This deal is important, yes, but it isn’t anywhere close to as significant as Zillow’s acquisition of Trulia in 2014.

Subscribers to The Red Dot should read this post as an add-on to all of the things I covered in the August and September issues. This is House Opendoor making a big play to be The Platform, but it reveals weakness rather than strength. Plus, this move serves as further validation of the idea of convergence.

Let’s get into it.

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When the Market Turns: Redfin

Reader Ben Thompson asked me in a recent comment if I would opine on the topic of the impact of (and to, I would think) various companies in a buyer’s…

Reader Ben Thompson asked me in a recent comment if I would opine on the topic of the impact of (and to, I would think) various companies in a buyer’s market:

Sorry to trend off topic, but Rob kindly please consider writing a blog post on the impact of companies like Redfin in a buyers market. You have hinted at the topic previously. Any chance you will consider a full blog post? The markets changing…. how does this impact Realogy, KW, Compass, eXp, Redfin, Zillow, Opendoor, Purplebricks? Who wins?

If I knew the answer, I feel certain that I would make a lot of money in the stock market. And would not tell any of you, obviously, because then you all would buy and sell too and move the market.

But opinions? I can do that. Opining and speculating and questioning are kind of what this blog is built on, after all. Plus, I just finished writing the August and September Red Dot reports, which forced me to research a bunch and read a lot of earnings reports. So I have some basis for these opinions.

The whole list of companies is, well, too long. Maybe that’s a full Red Dot on its own. But I can opine on Redfin and see if you guys think that’s useful.

So, without further ado, let’s get into it.

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The Notorious ROB’s Shiva Award

I’m neck-deep in getting the September Red Dot on the Real Estate Platform out the door, but had to pause and poke my nose in to give an award for…

I’m neck-deep in getting the September Red Dot on the Real Estate Platform out the door, but had to pause and poke my nose in to give an award for a minute.

Inman reported on the 16 startups at the new Innovation, Opportunity & Investment Summit conference that NAR is putting on as I write this in San Francisco. One of the featured sessions was a “Pitch Battle” where startup companies would have 3 minutes to pitch a panel of judges on why they should win the $15,000 prize.

Here’s the list of companies in the Pitch Battle, according to Inman News. I have added brief descriptions/taglines taken from each company’s website.

    • Glide: A Safer, Faster Way to Prepare Real Estate Documents (i.e., forms)
    • CurbCall: Making Real Estate Safer, Smarter and Faster (by using an app for an unrepresented buyer to “summon” a nearby real estate agent)
    • ActivePipe: Simplify Your Email Marketing (has automation, “unique algorithms and interactive call to action pages” and so on)
    • RealSavvy: All-in-one Real Estate Platform for Agents, Teams & Brokers (i.e., “custom websites, CRM, IDX, mobile apps)
    • BoxMLS: Push the boundaries of your MLS — Finally, an alternative search that provides real-time, cross-MLS data and tools for agents, brokers, and their clients (from what I can tell, it’s a MLS front-end)
    • zavvie: Get HyperLocal. Get listings. (“zavvie – the world’s first HyperLocal marketing automation platform for real estate. We built a system that does it for you!”)
    • RealKey: Close loans faster and with less effort: A simple yet powerful solution to help you cut through the noise and pains of mortgage lending (some sort of fintech company with a software solution for loan officers and mortgage brokers?)
    • DocuSketch: AI-Powered 360 degree Documentation & Automated Sketches: Increase efficiency & reduce risk with DocuSketch, a scalable, affordable, 360-degree documentation & Automated sketching platform powered by artificial intelligence. For insurance claims management, property inspections, appraisals, home warranty & more.”
    • first: “You know Jessica loves Korean food. We know she’s thinking of selling: Win more listings with cutting edge data science.” (I assume it’s predictive analytics leadgen of some sort.)
    • kleard: Kleard is using technology to help create safer open houses and showings (agent security app, verifies buyer information)
    • Quigler: Simplified process: The buying and selling process gets more complex every year, But Quigler simplifies it. It’s like a personal GPS that guides you turn by turn, through the maze. It takes everything required of a real estate agent by federal/state law and the Code of Ethics, from A-Z, and organizes it into easy-to-follow “to Do’s.” It makes real estate real easy for agents, buyers, sellers and renters. (I think this is a to-do list for real estate app of some sort.)
    • W+R Studios: We craft simple software tools that make real estate agents look awesome in front of their clients. (We know and love Greg and Dan, and their company… hard to call these guys a “startup” in any sense of the word, but OK!)
    • gabbi.ai: Capture more leads and close more deals with an AI assistant that never sleeps (like it says, an AI assistant that can book showings, follow up with clients, and help agents manage tasks)
    • studeo: Studeo creates great-looking online presentations for property listings (from Inman, as the website is pretty sparse)
    • BoxBrownie.com: Your secret weapon for property marketing — High quality photo editing, virtual staging, floor plan redraws & renders at unbeatable prices (basically a photo editing/image manipulation agency)
    • Flow Labs: Smarter Water Management: Real-time water & leak monitoring for commercial real estate (exactly what it sounds like)

I just saw on Facebook that Box Brownie, the online imagine editing service out of Australia, won the prize. Congratulations to Box Brownie!

I thought it was a fun event to piggyback on to give my own award, which comes with no cash prizes, no investor interest, and really, nothing at all. It is for innovation, and is called the Shiva Award.

The winner out of that group of 16 is… BoxMLS. Congratulations on your Shiva Award!

Let me explain why.

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Some Questions About KWRI’s Virtual Brokerage

Two things. First, I’ve been busy with my September Red Dot, so I missed this news when it was announced: KW to launch virtual brokerages for expansion business owners. According…

Two things.

First, I’ve been busy with my September Red Dot, so I missed this news when it was announced: KW to launch virtual brokerages for expansion business owners. According to Inman News:

During last week’s Keller Williams Mega Camp, a company retreat for select Keller Williams leaders, Keller Williams CEO John Davis said the new business model will be available to 166 expansion businesses, representing 509 locations and 3,433 real estate agents. Expansion businesses closed 42,218 transactions in 2017, representing $12 billion in sales volume.

“What we’re seeing with our technology, what we’re seeing with our innovation, we’re preparing for the next 15-20 years down the road, and we’re really excited that technology is allowing us to do this,” Davis told Inman, when reached by phone on Monday. “We couldn’t be more thrilled with everything that’s going on.”

The expansion business is for agents that have “mastered their local market,” and allows them to scale across to different market centers, states and international borders, according to Keller Williams’ website.

Welp, better late than never….

Second, I swear that I have nothing but respect and admiration for Gary Keller. I know some of you don’t believe me, because everything has to be tribal for you and “Us vs. Them” is a popular thing in real estate, but it’s true. I suspect I’ll still get some hate mail, but whatever.

This is such an interesting move by KWRI here, but there are some missing details that I can’t figure out. So maybe someone (like Adam Hergenrother maybe, who wrote an explanation of what this means on his blog) could answer some questions and help me figure things out.

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iBuyers Are Not House Flippers: Spencer Rascoff Edition

In the August Red Dot, The Truth About iBuyers, I made the point that the real estate industry fundamentally misunderstands what the iBuyer movement is all about: Perhaps because the…

In the August Red Dot, The Truth About iBuyers, I made the point that the real estate industry fundamentally misunderstands what the iBuyer movement is all about:

Perhaps because the pioneer of iBuyer was Opendoor, which focused on the selling experience at launch, the real estate industry has perceived iBuyers to be something like technology-powered house flippers.

This is par for the course in any industry where a disruptive challenger arises. The incumbents put the challenger into their conceptual framework so they can understand it. After all, automobiles were called “horseless carriages” at their introduction and Uber was and remains framed as a tech-enabled taxi service.

The real estate industry, therefore, looked at the direct-purchase model of Opendoor and immediately framed it as an investor flipping houses. That is a business model and an archetype that has existed for decades, after all, and the industry knows how to understand it.

I have been saying since the very beginning of iBuyer movement with Opendoor that this is a new thing. I’ve written about it, and given presentations on it. I talked about it on the Industry Relations podcast. But now, I no longer have to be the voice in the wilderness. Yay, me.

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Quick Reaction to Zillow News: Not Surprised

I’m still in recovery mode from thyroid surgery on Friday (it went great, thank you to all who have messaged me) but wanted to throw out a quick reaction to…

I’m still in recovery mode from thyroid surgery on Friday (it went great, thank you to all who have messaged me) but wanted to throw out a quick reaction to the news coming out of Zillow in its Q2 earnings report. Rest assured, I’ll be covering this in some depth at some point, probably.

For those who may have been living under a rock, the news is:

I think I can say that the Q2 announcements prove that Spencer Rascoff and Co. are among the smartest people in real estate, if not the smartest. Wall Street downgraded Zillow stock, and the stock price took a hit (about 15% as of this writing), which makes me think that Wall Street simply doesn’t understand real estate. Which is not news.

My biggest takeaway at this early, haven’t-thought-about-it stage, is that those who have read the June Red Dot on Zillow, Redfin, and Realogy’s Q1 results are not surprised in the least. They probably can (or should be able to) understand these moves. After all, the report was subtitled, “The Shape of Things to Come.”

Everyone else is probably puzzled and going, “What the hell is Zillow doing?”

So rather go too much into things, especially since I’m supposed to go ice my throat and watch TV, let me just copy and paste from the relevant part of the June Red Dot. Think of it as a free sample or something.

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Who Do You Love? Or, the Limits of Technology

A couple of months ago, I took a taxi for the first time in years. I was at an airport where the Uber pickup was a long walk away, while…

A couple of months ago, I took a taxi for the first time in years. I was at an airport where the Uber pickup was a long walk away, while the taxi stand was right there at the curb where one exits the terminal. I figured, what the hell – the cab is right here.

As I’m getting in, I notice that the cab has all kinds of ads all over the side, rear, and inside the passenger area promoting an app. Apparently, I can hail a cab using this app, use it to pay my fare, rate my ride, see a map… in short pretty much everything that Uber app does.

I do not have this app on my phone. I still have the Uber app on it. Why?

The cab smelled. I can’t identify precisely what the odor was, nor did I want to. But it wasn’t ylang ylang. The driver barely spoke English, and maybe he was a really nice guy, but he came off as surly and unfriendly. There was no small bottle of water in the back seat. No phone charger cable.

The taxicab app might have been awesome. Its features might have kicked Uber’s ass and taken names. Maybe it had advanced AI that predicted where I wanted to go without my having to tell the driver. Maybe it would have educated me on important global topics while I rode. I’ll never know, because I had such a terrible experience that the tech did not interest me in the least.

So, here’s the question: Did the taxicab company build that app for me? Or for the driver?

Whose experience was the taxi company who developed that app concerned with? Who do they love: me or the driver?

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