Notorious R.O.B.

Judgment Day Cometh

Agent ratings are back in the conversation, thanks to this scintillating op/ed by Kris Berg (link is for Inman premium subscribers only) who is one of the best writers in real estate today.  I have written about this topic before (here and here) and it continues to fascinate and puzzle me still.

Kris’s point essentially boils down to the fact that providing real estate brokerage service is one fraught with emotion, with unpredictable clients who don’t know what it is that a realtor actually does for them, who cannot make rational evaluations of how good or bad an agent really is.  Quantitative metrics don’t provide accurate ratings, in Kris’s view, because those focus on production rather than service.  Customer surveys are flawed because customers are ignorant on the one hand, and nuts on the other hand, and are too often influenced by how the transaction itself went down rather than how the realtor performed.

All of her points are, I think, valid and true.

Sadly, they are all irrelevant to some extent.

Fact is, agent ratings are already here in places like Yelp and Angie’s List.  Consumers will talk, will evaluate, and will rate realtors (as they do every other service provider) on their FaceBook pages, on blogs, on websites, and with each other in person.  It’s going to happen whatever the merits of such ratings.

The real issue, then, isn’t whether such rating systems are good or bad or inaccurate or legitimate, but who will do the rating and how they will do it.

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It’s Thanksgiving, and despite our culture’s continuous pull to rename this day Turkey Day or some such and shift the focus to the feasting, I’d like to keep the focus on the actual point of the day: giving thanks to the Almighty, and to family, friends, and others for the life we have.

First, I give thanks for my family and for my two wonderful, happy, rambunctious boys who are sure to drive their mom and dad to premature grey, potential alcohol abuse, and poverty as they eat us out of house and hearth.  The joy they give me is unparalleled, and watching them go from mewling human-larvae to little boys is a profound experience that gives meaning to each and every day.

I give thanks that I am an American and live in the United States.  Even as we march steadily towards European-style socialism and decay, there is still no doubt that this is the greatest country in the history of human existence.  It’s something that people who haven’t lived elsewhere don’t fully appreciate.  In no other country on earth could I have started a company as easily and as quickly as I have here, and been given the opportunities that I have been given this year.  Freedom, sweet Freedom… every single American owes thanks that we enjoy a life that the rest of the world only dreams of.

Which means, of course, that I am grateful to the men and women of the American military.  It is not the Constitution that guarantees our freedom: it is our military.  It is not the lawyers and community activists who provide us with freedom: it is our military.  It is not the politicians, the journalists, the pundits, the cosmopolitan know-it-alls who would guide us to a “better future” who give us freedom: it is the poorly paid, oft-maligned soldiers who the elites think are idiots and morons who do.  The greatest human rights organization in the history of the world is the United States military; they have freed more people from bondage, brought liberation and equality to more men and women, and saved the lives of more human beings than all other so-called human rights organizations put together.  They stand on the wall, face the dangers, and pay the ultimate price so that the rest of us can be blithely ignorant of how dangerous and cruel the world really is.  I am thankful for them, and grateful to them.

I am grateful to the clients of 7DS Associates, my little fledgling venture.  All of them have taken chances with a brand new company, on a guy with an unproven track record as a strategy consultant, and I am profoundly grateful to each and every one of them.  We won’t let you down.

I am thankful for my partner, Jeff Corbett, who is often the yin to my yang, and who puts up with thunderous snoring on the road and a constant stream of dumb ideas.  We will build greatness, my friend.

And of course, I am grateful to each and every one of you, the readers of Notorious R.O.B.  I never dreamed when I started this blog in January of 2008 that I would have even a dozen readers.  I figured this is where I’d just scribble about random things on real estate, technology, and marketing and maybe get a few other weirdoes commenting or going back and forth with me on esoteric topics.  Instead, many of you have slogged through things like a 15,000 word essay on military counterintelligence doctrine and its applicability to real estate sales, and some of you have provided invaluable insight and argumentation that have helped me learn and challenge my own thinking.  NROB is still not the highest trafficked blog by any stretch of the imagination — I think I get about 500 visitors on an average week — but I daresay the Notorious community is one of the most engaged, most educated, most insightful, and most active in the RE.net.  You guys all rock!  Thank you.

Some other things I am thankful for:

• 2009 New York Yankees
• The entire REBarCamp movement
• Robin Skouteris
• Female vocalists, especially in techno/trance music
• Blip.fm, for creating the single most distracting “social media” toy ever
• Dunkin Donuts coffee
• Whoever invented fantasy football
• The engineers at Apple
• Mike, Wendy, and Jeff for one unforgettable (even if you tried, and I have) evening
• The RPR, for providing me with the highest three day traffic total ever
• Mark Steyn, for writing and continuing to write
• Glenn Reynolds
• The Lucky Strike Social Media Club and the regulars who show up, even from California
• City of Philadelphia, for inventing the cheesesteak sandwich
• City of Buffalo, for y’know… the wings
• Mark Sanchez, for reminding me of the limits of expectations on a rookie
• Matt Ryan and Joe Flacco, for reminding me that one year does not make a trend
• The Discount Yacht Supplies store somewhere in Newport Beach area for exemplifying irony
• The Hughes brothers for an interesting angle on real estate brokerage business models
• Verizon Wireless, for not being AT&T

Thank you. Thank you. Thank you.

-rsh

The science is SETTLED, I say!

If you live in the United States, and rely solely on Pravda New York Times or similar for your news, you’re probably unaware of Climategate.  Basically, the entire premise of the global warming/carbon footprint craze of the past few years turns out to be totally bogus.  From the RealClearPolitics.com overview:

Global warming “skeptics” had unearthed evidence that scientists at the Hadley Climatic Research Unit at Britain’s University of East Anglia had cherry-picked data to manufacture a “hockey stick” graph showing a dramatic-but illusory-runaway warming trend in the late 20th century.

But now newer and much broader evidence has emerged that looks like it will break that scandal wide open. Pundits have already named it “Climategate.”

A hacker-or possibly a disillusioned insider-has gathered thousands of e-mails and data from the CRU and made them available on the Web. Officials at the CRU have verified the breach of their system and acknowledged that the e-mails appear to be genuine.

For even more damning evidence of a conspiracy to defraud the world, pervert the scientific process, and cover things up, check out this post from Australia.  Because they still have, you know, “journalists” interested in investigative journalism there.  One day, we might import some of these useful fellows from Australia to the United States….

While Climategate is a scandal of the first order, and all Americans (indeed, all humans) should care about it, as real estate people, we need to take a look at how Climategate will impact the industry.

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Your SEM Dollars At Work!

From the Search Engine Land site comes news (h/t: Duke Long, @dukelong) that Google has built out what amounts to the start of a national real estate search website:

The real estate listing place pages include property information, photos, map placement, Street View imagery and functionality, nearby public transit details, and even AdWords ads. Google has added links for “Directions” and “Search nearby,” as well as a “Send” link that opens an outgoing email with the place page link embedded inside. The property details in the example above are sourced from two separate Prudential Real Estate web sites, and from NWSource.com, which is the Seattle Times’ web site. It’s all presented just as you’d see on any standard MLS web site, though it lacks some of the deep information (such as square footage of individual rooms) available in a typical MLS listing.

Whee!  By the way, in case you think the Flickr image above is a Photoshop job, here’s the link to the property in question on maps.google.com: 8801 Fauntleroy Way SW, Seattle, WA. And here’s an announcements of sorts from Google Australia:

So here’s what we’ve been cooking up – in the past, if you wanted to view real estate listings on Google Maps, your best bet was to select “Real Estate…” from the “More” menu at the top of the map.

Now, simply searching for “real estate” will return, well, real estate (try it)! You could also try “homes for sale sydney” or “homes for rent adelaide“. Or while you’re at it, check out “apartments for sale brisbane“, or “homes for rent near perth“. The idea is to make it really easy for you guys – you tell us what you want, and we get it back to you! Of course, we’ll continue to work to return the best results for all your Google Maps queries, whether you’re looking for local businesses, geographic features, or your perfect home.

We also wanted to tell you about the integration of real estate listings with Place Pages. Now clicking the “more info” link next to a listing takes you to a faster, easier-to-read page that gives you all of the information we have about a listing: photos, inspection times, videos, details, a Street View preview and nearby public transit information if available, allowing you to quickly find the listing you want and click through to the sources of the listing.

The initial responses range from delighted to worried.

This is from Kathleen Buckley (@kvbuckley), a broker in Massachusetts:

From Todd Carpenter (@tcar), Social Media Manager for National Association of REALTORS:

From Bob Wilson (@bob_wilson), a real estate marketer and technologist:

There’s lots to speculate on, lots to think about, and lots to debate and argue about here.  But in a way, it’s as if the other shoe has finally dropped.  Many of us in the real estate industry have been wondering what Google plans to do with real estate, as the boys and girls from Mountain View have been moving towards something like this for a while with Google Base, Google Maps, etc.

So let’s get into the speculation.

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[UPDATED 11/20/09: More facts added.]

Earlier this week, Reggie Nicolay (@ReggieRPR), the Director of Social Media for the REALTORS Property Resource, LLC, wrote:

I happen to agree 100%.  Also, a commenter on one of my earlier posts by the name of Kris Goodfellow wrote:

Rob,
I’ve got to say, that there is much in the way of speculation and little in the way of “facts” here. DOA, really? That’s pure conjecture. Marty got a standing O today from the 2000 leaders from every state and local associations. In the big broker’s session, the comments included “WOW!” and RPR was compared to Neil Armstrong walking on the moon.
I might be just an old fashioned, ex-newspaper journalist, but I’ve got to say that a year this post is going to look as silly as the “Dewey Defeats Truman” headline. Tell the story, man, don’t try to be a fortune teller.

So let’s say I agree with both Reggie and Kris.

My take is that you kill drama and hype by showing the facts, not by calling questions and opinions “drama and hype”.  So in the interest of moving the conversation along, and also to emphasize once again that I am no opponent of RPR, I have put together all of the facts as I know them with sources, along with questions about what we do not know.  This way, anyone who is interested might be able to discern for himself what is real and what is drama.

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RPR! We hardly knew ye!

Without a doubt, the topic of conversation at this year’s NAR National Convention has been the REALTOR Property Resource (Link: PDF) or RPR, the ambitious $20mm program rolled out with much fanfare by NAR.  You couldn’t avoid talking about RPR even if you tried.  And I wasn’t really trying that hard, because RPR is a fascinating product, an awesome user interface, and one where the team led by Marty Frame deserves a whole lot of credit for pulling such a great product together in such a short period of time (roughly 4 months).  Despite my concerns that RPR will trigger a civil war in the real estate industry, I thought (and continue to think) very highly of RPR.

However, it is now time to bury RPR.  It is dead on arrival in its current incarnation.

Suspicious Minds

Having presented at, and then having sat through the presentation of Dale Ross and Marty Frame on RPR, at the MLS Executives Meeting at NAR yesterday, I believe that the general mood of the MLS operators ranges between open hostility to cautious neutrality.  The larger MLS’s are biding their time, to see what some of the details are, possibly to see what is being offered by RPR for early adopters.  (Full disclosure: a large MLS, MRIS, is a client of 7DS, but I am writing this post, as I have every post on this topic, based on what I personally saw and heard, and public information, as opposed to anything discussed with them.)  The smaller MLS’s are worried what RPR could mean for them, and miffed that there is no revenue sharing arrangement for the sale of “their” data.

Brokerages are not bursting over with enthusiasm either.  They also wonder what’s in RPR for them, since they feel that the data that the MLS is supposed to provide RPR belongs to them.  The broker-owned MLS’s can’t make a decision without getting their shareholders on board, and the mood appears dark, to say the least.

The fatal flaw of RPR, I think, is the lack of revenue share.  Brokers, MLS executives, and Association executives might all look with favor or at least interest on a proposal that promised revenue streams that would allow them all to either make greater profits, or reduce the cost of service to their members.  Dale Ross made it crystal clear to the MLS executives that there is no revenue share for them; he urged them, in fact, to cooperate and collaborate with RPR for the good of the members because RPR will provide tools to help the members of MLS’s become better practitioners.  Ross’s concession that maybe five years down the line, after RPR’s revenues and profits are stabilized, he may consider revenue share did not, it seemed to me, to go over all that well with the audience.

Trouble is, those types of answers do not appear to assuage the suspicion on the part of MLS executives and brokerages that what NAR intends to do with RPR is to create a national MLS.

Into this environment of suspicion comes a critical piece of information.

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Dale Ross

Dale Ross takes the podium; he’s an imposing man.

He says it took 4 months to negotiate with LPS/Cyberhomes.  There are seventeen separate agreements, which cover topics like license terms, source code ownership, and so forth.

Ross stresses that while RPR has partners, they are partners via contract rather than by having equity shares in RPR.  RPR is 100% owned by NAR.

He says NAR put in $20mm over 5 years.  The business model is data sales to government and Wall Street.  Ross says LPS came to NAR and said, “there’s a way to use derivative analytics data products”; LPS has these relationships already set up, and has a huge marketing arm.

He feels there seems to be a need in the market for RVM, a value for each of the 147mm properties in the country.

1. Take the LPS records
2. Take the MLS data, and merge it together to form RPR record
3.  Then do analytics
4.  Create derivative data product; sell that product

$250mm spent by Wall St. on real-estate related data; LPS believes that in the 4-5 yr cycle, $60-90mm market for the analytics product; split is 50/50 between LPS and RPR.

License agreements what RPR can and cannot do with the data.  Ross stresses that no raw data will be given to anyone; only custom, derivative datasets.

No fee to MLS for the public records; but there will be a fee for integration.  (Wonder what this means?  Integration of the public data will be custom by MLS?  No API access?)

Ross says RPR is NOT exclusive with LPS.  (So in theory, First American or Claritas can sell RVM or RPR data to corporate clients?  Could Altos be licensed to sell RPR data to agents and brokers?)  He notes that RPR’s license with MLS is also not exclusive.  (Hmm — what does it mean that RPR’s license with the MLS is also not exclusive?)

Ross says there will be no revenue stream back to the MLS.  The benefit to MLS is that RPR believes it can help the MLS cut some of the costs on public data.  Plus, the toolset (the website) will help MLS save money, and Ross thinks RVM will be popular with agents and appraisers

Marty Frame

Marty Frame sounds tired.  And bored.  It’s as if he’s been giving this presentation over and over and over again to dozens of people and groups.

WHOA! RPR will provide an API for VOW technology vendors.  That’s news.

Member Contacts and Networks built into RPR — why exactly is this tool here?

Expert moderated discussions???  What could Marty mean by this?  Who moderates?  Who are the experts?

Q&A

I’m not going to cover every question, or every word of the answer here.  But these are what I find interesting, and the answers I think are interesting.

Question is what is the critical mass for RPR.

Ross says rollout will be by regions.  So if California is first, then RPR will do California first.  The way he phrased it is interesting: “If REALTORS want it, then the MLS’s cooperate, then we can do California”.

They have a plan of action; they know who the largest MLS’s are; they are talking to everyone and will be contacting MLS’s with live demonstrations and how the system will work.

Question: Will a REALTOR have access to the entire country?

Ross: Yes, the whole country.  But business rules are being worked out.

NON-REALTOR members get less access.  (I didn’t know they would get ANY access.)  I guess these would be the appraisers and such?  Or simply Licensees.

Question: I should give you my Sold Data because…

Ross: It’s not for you, but for your membership.  Because RPR will give your members tools to make them better practitioners.

This tool isn’t built for you and me, but for Gen-Y; they’re entering the industry and they’re going to be consumers.  They’re used to having data, so we need to do this for them.

Question: What do people who are members of NAR (REALTORS), but not subscribers to the MLS, get?

IF you belong to NAR, but not to the MLS, then you get everything in the application, but NOT the MLS data.  They will, however, get the RVM.

So either way, even if MLS’s don’t participate,

Question: The MLS data is what drives this; but you said no revenue share for MLS.  Why is that?

(CLAPPING by audience; I think this group is more hostile to RPR than one might imagine.)

Ross says he’s willing to look at revenue share 5 years out, depending on what the revenue looks like.  I don’t think he won this audience over with that.

Marty Frame just said that RPR will do a bunch of data cleansing and data normalization on MLS data.  WOW.

Question: Can brokers opt out?  Can MLS’s opt out?

Brokers can opt out.

The MLS can opt out and terminate the license agreement if they choose.  Hmm.  I’d like to see the termination provision.

Adjustments to the system “stick” only to your individual change.

The Q&A ends.

Thoughts

That was quite a bit to try and take in.

The three or four key takeaways for me are these:

1.  RPR seems pretty deadset against revenue share.  The notion that MLS’s should cooperate even though there’s nothing in it for them, because there’s a great wonderful doodad for the membership seems… optimistic.  What’s truly amazing about this is that Dale Ross said several times that “we (RPR) can’t do it without you (MLS)”.  I have to wonder, okay… can they (MLS) do it without you (RPR)?

2.  RPR will provide a VOW API.  This strikes me as important, because it’s the first I’ve heard about a way to get data out of the system.  But at the same time, it strikes me as important because if broker/agent websites start pulling VOW data out of RPR instead of out of the MLS, that’s yet another customer touchpoint lost to the MLS.  If RPR can provide a VOW API, why couldn’t it provide an IDX API?

3.  People who are REALTORS (aka, members of NAR) but not subscribers to the MLS will get everything sans MLS data.  That means all of the public records, all the school info, all the demographic and psychographic info, etc.  Wow.  I’m trying to figure out how a smart REALTOR could leverage this to his/her benefit.  One consequence here is that companies like Onboard and eNeighborhoods simply have very little value in the post-RPR world.

4.  This group, the MLS executives, appeared to me to be largely hostile and at best skeptical.  If RPR really wants to launch this by April 1st of 2010, Marty and his team have their work cut out for them.  The civil war I predicted isn’t quite civil war… but this has the smell of the Missouri Compromise era.

-rsh

As many of you know, I wrote a wee little post the other day about REALTOR Property Resource or RPR.  That was the first post based on my impressions from a webinar held on November 6th.

With some further thought, and with the ability to review the actual webinar/webcast itself, I have some further questions.  And I’d like to keep each post to one question, so every post doesn’t end up being 3,000+ words.

So today’s question:  What else did LPS get besides $12mm to participate in RPR?

Read the rest of this entry »

On November 6th, at roughly 3:15PM Eastern Standard Time, the National Association of REALTORS declared war on the rest of the real estate industry.  To be fair, NAR probably did not realize that it did so.  Judging by the initial responses, it doesn’t appear to me that most people see what I saw.  But, probably because of my twisted nature and my penchant for focusing on the dark side of human nature, I am predicting nothing short of civil war in the real estate industry going forward unless REALTORS Property Resource (or RPR) in its current form is immediately scrapped.

What brings forth such hyperbole?

RPR, or REALTORS Property Resource, was a project shrouded in secrecy.  Brian Larson’s post of October 19th, 2009 is a pretty good pre-unveiling summary of the questions and concerns around RPR.  Brian Boero’s initial take is a very decent summary of the post-unveiling.  But since Brian is a much nicer, much sunnier, much more positive guy than I am, I believe what you’ll get from Brian is the “Glass Half Full” vision.

Strap in for the darker vision.

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