THE NOTORIOUS R.O.B.

THE NOTORIOUS R.O.B.

Conversations about the Real Estate Industry

It’s Time to Let the Agent Decide on IDX Participation

One of the things I missed while finishing up the July Red Dot was this well-done interview of Redfin’s Glenn Kelman in Inman. Andrea Brambila doing her rockstar thing again….

One of the things I missed while finishing up the July Red Dot was this well-done interview of Redfin’s Glenn Kelman in Inman. Andrea Brambila doing her rockstar thing again.

I’m thinking through what Redfin wants to see happen, but one passage in particular caught my attention. At one point, talking about incentives for agents to put the listing in the MLS, Glenn says:

And the question is, given that the listing agent did photograph the house, did talk to the seller, did the work, if we’re going to put someone’s name up there, shouldn’t it be that person’s name? Because we are putting someone’s name up on the website. It just isn’t the listing agent’s name that appears most prominently.

Talking to Sunny, this remains an emotional sore spot for quite a few agents when it comes to the portals. They did the work, they got the listing agreement signed, they paid for the photography–and then there’s some random buyer agent’s name and face next to their listing on a website. It just pisses them off.

I get that, of course, and like I said, I’m processing what this “plain HTML link” proposal ultimately means.

But… in the meantime… it seems to me that at the same time NAR takes up the issue of requiring a link back to the listing broker or agent, NAR should take up the issue of IDX. Specifically, NAR should move the decision to participate in IDX down to each individual subscriber, rather than forcing that decision at the participant brokerage level.

Let me explain.

13 Comments on It’s Time to Let the Agent Decide on IDX Participation

Thoughts on OfferDepot, Opendoor, Zillow

Mike Delprete, the man behind Adventures in Real Estate Tech, recently sent out an email newsletter (I can’t find the article on his website) about OfferDepot: A Keller Williams team…

Mike Delprete, the man behind Adventures in Real Estate Tech, recently sent out an email newsletter (I can’t find the article on his website) about OfferDepot:

A Keller Williams team in Phoenix recently launched OfferDepot, an instant offer play, to “help with all the confusion with cash offers vs bringing your home to market.”

Why it matters: This is the first move from a traditional real estate company into the instant offers space.

If you’re not subscribed to Delprete, you’re missing out. Sign up for his newsletter. He is seriously smart. I’ll have to quote from the email liberally as I can’t find a link to a post on his site, but I wanted to engage in some freeform thinking. And as I’ve often said before, I don’t know what I think until I’ve read what I’ve written. So… here goes.

UPDATE: MikeD has published the article on his website. Go read the whole thing.

10 Comments on Thoughts on OfferDepot, Opendoor, Zillow

Where’s the Peak?

Blogging has been very light (well, non-existent) because I’m putting the finishing touches on the July Red Dot on MLS of Choice, and… as I’m sure you’ve noticed, a site…

Blogging has been very light (well, non-existent) because I’m putting the finishing touches on the July Red Dot on MLS of Choice, and… as I’m sure you’ve noticed, a site redesign! So due apologies to everyone.

Then again, there hasn’t been a whole lot of news worth discussing either… until now.

According to a new report from Department of Housing and Urban Development, making $117,400 a year qualifies you for low-income housing in San Francisco. The story from Fortune, and the key graf:

In San Francisco, a family earning just under $120,000 a year is considered “low income.”

That’s according to a new report from the Department of Housing and Urban Development, which calculated that figure according to the median price for a single-family home in the Bay Area, which is now at $947,500.

Further down, the story notes that only 15% of San Francisco county residents could afford a median-priced home.

Thing is, I was recently on a conference call with prospective clients who are a major national real estate company. One of the executives asked a question I wasn’t expecting: “How does this concept work when the market turns?” Even though I had written a lengthy post about the market turning, I wasn’t expecting the question because I didn’t think senior executives at major real estate companies had that issue on their minds. Apparently, they (you all) do.

So let’s chat about this briefly. Where is the peak? What does that actually look like?

4 Comments on Where’s the Peak?

Brief Reflections on the DOJ/FTC Panel

It hasn’t even been 24 hours since the joint DOJ-FTC workshop on competition in real estate ended. I’ve heard quite a bit, and although one would think listening to panelists…

It hasn’t even been 24 hours since the joint DOJ-FTC workshop on competition in real estate ended. I’ve heard quite a bit, and although one would think listening to panelists in a controlled environment talk about what ought to be truly mind-numbing topics to regular humans, I wasn’t bored at all. Not sure what that says about me, but I hope it’s relatively positive.

In any event, here are just a few rambling thoughts on what I heard. I don’t have a transcript or anything, so any quotes are likely paraphrased and from memory (and Sunny can attest that my memory is just awful). When the DOJ/FTC release the video of the event, you can check for yourself.

Also, Inman has reported extensively on the event, and you can find coverage on the first panel, second panel, and third panel on the Inman News website.

For the TL;DR crowd: The event lived up to (admittedly low) expectations, especially for the first workshop. I think it set the stage for future workshops or hearings or what-have-you, and for the most part, it doesn’t look like anything dramatic is going to happen anytime soon. However, if you’re inclined towards conspiracy-theory level paranoia (of which I have been accused, from time to time), then there are a couple of areas of real concern. We’ll see what future events bring.

Let’s do this.

10 Comments on Brief Reflections on the DOJ/FTC Panel

A Note on eXp and Margins

Happy Friday, everybody. I’m deep in the heart of final edits on the June Red Dot report, tentatively titled “Zillow, Redfin, Realogy: The Shape of Things to Come” so haven’t…

Happy Friday, everybody. I’m deep in the heart of final edits on the June Red Dot report, tentatively titled “Zillow, Redfin, Realogy: The Shape of Things to Come” so haven’t been blogging as much. But in writing the June report, I looked at eXp in some detail as a comparable. In future reports, I may be able to go far deeper since eXp is now a full NASDAQ company.

And this morning, I see this profile of eXp and its founder and CEO, Glenn Sanford, on Inman News, written by Brad Inman himself, titled “Triumph of the nerd: how eXp Realty’s founder built a $1 billion business.” In it, I see this amazing section head: “Declining margins not an issue.”

I felt like I had to drop a brief post.

A few things: I know so many people at eXp and they’re all smart and wonderful people. Glenn and his lovely better half, Debbie, I’ve known for years. Glenn told me his idea about eXp years ago, and I remember sitting with him and his partner at a cafe in Washington DC before he launched it. My wife Sunny started in real estate with Debbie Biery lo these many years ago. They’re absolutely top notch human beings. Plus, I’ve known people like Mitch Robinson, Cynthia Nowak, and Scott Petronis for years.

Also, Sunny hangs her license with eXp and owns shares in it. So I have all kinds of reasons to love, root for, and support eXp.

Having said that… declining margins are not an issue? In what fantasy world? Maybe it’s because I’ve been writing the June Red Dot where margins are the issue that I feel compelled to say something.

Let’s get into it, shall we?

8 Comments on A Note on eXp and Margins

NAR and the MLS: the Elephant in the Room

Joe Rand is one of the smartest guys in the industry, not to mention one of the nicest. He’s an author, who wrote the book on how real estate can…

Joe Rand is one of the smartest guys in the industry, not to mention one of the nicest. He’s an author, who wrote the book on how real estate can deal with disruption. He’s also a terrific singer, in case you didn’t know.

In a recent Inman Op/Ed, Joe says that it isn’t NAR’s job to save the industry, and that it shouldn’t be. As he puts it:

It’s not that I don’t support the association. I pay my dues, and I contribute to RPAC. I just don’t see involvement in NAR as important to my daily work.

But here’s the thing: it’s not NAR’s fault that it’s not crucial to my daily work. It’s not supposed to be.

He then goes on to analogize NAR to other professional organizations, such as the American Bar Association (for lawyers) and the American Medical Association (for doctors). And like those other organizations, Joe thinks NAR has a limited role to play in the business of real estate.

Thing is, Joe leaves out the most important difference between NAR and the ABA or the AMA. Neither of those trade associations for lawyers or doctors control a local monopoly that is a required utility for the conduct of their day to day business. NAR and its local affiliates do.

That makes all the difference, and frankly undermines his conclusions. You can’t have it both ways. And once you take the Association control over the MLS into account, there are wholly different angles to Joe’s ultimate conclusions and recommendations.

Let’s get into it.

8 Comments on NAR and the MLS: the Elephant in the Room

NAR: Crisis and Opportunity

Chances are, if you read this blog on a regular basis, you’re already aware of the op/ed by Jim Harrison in Inman News titled “It’s time to stop ignoring the…

Chances are, if you read this blog on a regular basis, you’re already aware of the op/ed by Jim Harrison in Inman News titled “It’s time to stop ignoring the crisis at NAR“. That comes on the heels of a back-and-forth between HAR (still the Houston Association of REALTORS, even if their website stands for Homes And Realtors….) and NAR. Since Jim Harrison and Kenya Burrell-VanWormer are not your average uninformed MINO (Member-In-Name-Only) that constitutes some 85% of the so-called membership, but are the CEO of one of the largest Association-owned MLSs in the country, and the chairwoman of the second (or third?) largest local REALTOR Association in the country, with the RPAC contributions and gold pins to prove their REALTOR bona fides… this isn’t easy to ignore or dismiss as “pot-stirring” (as yours truly knows oh so well.)

And now Brad Inman, one of the most influential people in the industry, has waded in with an op/ed of his own in which he points out some of the abuses he has had to endure for criticizing/questioning NAR and suggests that there is a member revolt at hand without a culture change. Brad has some unusually blunt words of advice:

My advice from the cheap seats: Goldberg should reboot his reform movement. Slow down and carefully review his overall strategy and craft a plan to execute, test some things and do what works.

And here is my tough love: show courage and good faith with your rank-and-file members, and ditch the dues hike. Increasing dues may be the right thing to do, but you have done a sloppy job of communicating the benefits.

In the old world of NAR, getting board approval would be rigged and hailed as a win. Today, at best, it will be a hollow victory and come back to haunt the NAR leadership and further erode its credibility. Something is afoot out there in real estate land, and they had better take notice before it is too late.

Strong words, strong medicine.

Well, with Midyear just around the corner, I have some observations, thoughts and suggestions. They’ll get fairly specific. But for the TL;DR crowd… the overall message is this:

The current leadership team has inherited a bad situation. Trying to slow-play things to avoid shocks has backfired. A shock-and-awe campaign may work better.

Let’s get into it.

9 Comments on NAR: Crisis and Opportunity

Dynamex and Real Estate: Apocalypse Starts with ABC

I seriously thought about not writing this post. For one thing, this is complicated stuff, and I thought maybe it deserves to be a Red Dot Report in the near…

I seriously thought about not writing this post.

For one thing, this is complicated stuff, and I thought maybe it deserves to be a Red Dot Report in the near future. That might still happen, depending on how things play out over the next few months.

This is also one of my Black Swans coming home to roost, and I felt like maybe it’s a bit too much for me to be the one talking about it.

But ultimately, I decided to write it because no one else appears to be talking about this in the real estate industry. I just looked all over Inman, all over Housingwire, all over Realtor.org — and no one is talking about the Dynamex decision. Hell, I can’t find any mention of Dynamex even on the California Association of REALTORS website.

That’s just odd, since Dynamex just might be a neutron bomb on the real estate industry, at least within California, which has 185,000 of the roughly 1.3 million REALTORS in the United States. Plus, what the California Supreme Court just decided was in line with the rules of a number of other states (such as Massachusetts), one can easily see the reasoning of Dynamex spreading across the land, at least among ‘worker-friendly’ states, which also happen to be the most populous.

Then it’s zombie apocalypse time in the real estate industry.

So let’s talk about it. Briefly. Well, as briefly as possible.

11 Comments on Dynamex and Real Estate: Apocalypse Starts with ABC

Redfin, Ethics and Article 16

Over on the Book of Faces, in the Inman Coast to Coast group, there’s quite a discussion that erupted from something that Redfin does. You might not be able to…

Over on the Book of Faces, in the Inman Coast to Coast group, there’s quite a discussion that erupted from something that Redfin does. You might not be able to view it, although this is a public group, so go ahead and join it if you can’t.

Let me not bury the lede: I don’t think Redfin has done anything wrong. It’s certainly not tortious interference. And it’s not unethical, since Article 16 of NAR’s Code of Ethics is not a barrier to competition; if it were, there’s a very good chance that it would be unlawful. Not only that, I wish more brokerages and agents would do exactly the same thing that Redfin has done here.

Shall we?

28 Comments on Redfin, Ethics and Article 16

What Exactly Does A Market Shift Look Like Today?

I’ve been extraordinarily busy with the final edits on the inaugural issue of The Red Dot, my new premium newsletter offering. It should ship tomorrow to all subscribers, so they…

I’ve been extraordinarily busy with the final edits on the inaugural issue of The Red Dot, my new premium newsletter offering. It should ship tomorrow to all subscribers, so they can be ahead of the curve and avoid the $225 million lawsuit landing on their doorsteps. /salespitch

So blogging has been a bit light. Future issues, I hope, will not be as disruptive to my schedule… but we’ll see.

In any event, now that I’ve had a chance to peep out from under my rock, I noticed a news story on Inman today: “Half the cities on Case-Shiller are seeing all-time high home prices.” Key graf:

Bespoke Investment first pointed out the milestone over at the financial blog Seeking Alpha. The index as a whole showed a 6.3 percent year-over-year gain for home prices in February, released earlier this week. Home prices, according to the index, showed no sign of slowing and were similar to rising home prices in the 15 years before the financial crisis.

When you break those numbers down from the national to the regional level, the all-time highs are now standing in half of the real estate markets — reaching or exceeding levels seen before 2008.

But, we’re not in a bubble! Or so every economist related to real estate says, according to KCM Blog.

So fine, let’s say we’re not in a housing bubble. It’s all just supply-and-demand, no matter that the average worker can’t afford a median-priced house in 304 of the 404 counties (68% of the housing market) according to Attom Data Solutions.

What I’m curious about is this: What does it look like when the market finally shifts?

Keep in mind we’re talking about something that is as natural to real estate as beauty and seductiveness is to Grace Kelly. (I wrote that sentence just so I can use this photo by Howell Conant.)

Grace Kelly, 1955. Photographer: Howell Conant

Markets go up, and markets go down: the cyclical nature of the housing market has been a constant since Thog the Neanderthal tried to sell his cave in Mammothville. A strong seller’s market eventually turns into a buyer’s market — sometimes, that’s with a giant crash (as we saw most recently in 2008), and other times, it’s with a graceful decline and glide and turn.

We all know that the market will shift. I mean, think about how many recent conversations in real estate goes something like, “Yeah, well, it’s great that so-and-so startup is doing bangup business doing XYZ, but wait until the market turns!”

So what does it look like when the housing market finally turns, and we go into a buyer’s market for a change?

I have been thinking about the market for a while, and then had some great conversations at Inman Disconnect in the Desert a few weeks ago on this topic. I figure, why not have the conversation with you all?

2 Comments on What Exactly Does A Market Shift Look Like Today?

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