Nov 7, 2009
The Coming Civil War in Real Estate: The RPR Saga Begins
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.
RPR In A Nutshell
I got off the preview webinar earlier today with my head spinning. With the video choppy, I confess I missed a good 20 minutes at the end, so if anything I write/speculate below is totally incorrect, I’d be happy for corrections.
(UPDATE: The entire webinar/webcast is available here: http://webcast.streamlogics.com/audience/index.asp?eventid=35680788. The RPR Fact Sheet (PDF) is available here: CLICK FOR PDF.)
Based on what I heard — and I’m going off of notes here since I have neither a transcript or the webinar recording to review — RPR is a national database with 140 million property records, both residential and commercial, with the vision of becoming the resource for anything real estate related.
LPS (a division of Fidelity) will provide the base property data — some 265 million residential and commercial assessment, sales, and mortgage records. That is north of 90% coverage; through future unspecified investments into an unspecified company (or companies), RPR plans to increase that to 100% coverage. On top of that, RPR will add in all of the on-market and off-market data from MLS’s, including notes and annotations by individual REALTORS, to create what will be the most accurate source of real estate data in the country.
There will also be 850K distressed property records in various stages of foreclosure with complete address, owner, and mortgage info updated every month. It is unclear where this data is coming from.
125K elementary, middle, and high school information (both public and private schools) together with detailed data and parent reviews will be available via RPR. I assume one or both of Education.com or Greatschools.net is providing this data; if someone else, that makes things even more interesting.
Neighborhood demographic data (I assume the census, employment, etc. type of data that companies like my former employer Onboard Informatics specialize in) will be provided through RPR. But RPR will also feature psychographic data — consumer spending habits, consumption habits, etc. — of the variety available from companies like Nielsen Claritas with its PRIZM product.
Very cool mapping tools will be available through RPR; from what Marty Frame (more on this below) said, it sounded a bit like RPR will offer some level of GIS functionality through RPR.
Oh yeah, and RPR offers some of the coolest, slickest property search, annotation, comparison tools I have seen yet for real estate professionals along with customizable reports including CMA’s, Property Profiles, and others.
Finally, RPR will offer a custom AVM (Automated Valuation Model) a la Zillow’s Zestimates. Except that RPR will bring in actual MLS data, notes, annotations, and opinions of individual agents to create the REALTOR Valuation Model or RVM. This RVM will be, according to NAR, the gold standard for data accuracy and quality. Then on top of the uber-database, RPR plans on layering on heavy-duty data analytics to slice and dice for even more custom datasets.
I know I’m leaving things out, but bottomline is that RPR is a dream user interface for REALTORS. It’s better than anything I’ve seen from the Big Tech companies like Trulia, Zillow, Roost, Homegain, Cyberhomes, even Redfin.
Oh yeah… RPR is not only a database… it’s a company. It will be a wholly owned subsidiary of NAR, but separately staffed, separately created as an Illinois LLC, and run as a startup. The new CEO is Dale Ross, the founder and former CEO of MRIS, the largest MLS in the country. (Full disclosure: MRIS is a client of 7DS.) The President is one Marty Frame, formerly of Cyberhomes, and once described to me as “the smartest guy in real estate, period.” Those are heavyweights.
In answer to Brian Larson’s question about business models for RPR, there are two.
First, RPR has already been in discussions with government organizations such as Fannie Mae, the Federal Reserve, OFHEO, and others about providing them with far more accurate data on housing trends, pricing, etc. Washington (and I imagine state and local governments) responded with enthusiasm, suggesting that had RPR been available five years ago, the whole subprime mess might have been avoided.
Second, it sounded to me like LPS will be granted an exclusive license to distribute/sell the various data products that RPR will spit out, from the RVM to the various data analytics products of the sort that Wall Street hedge funds might care about.
Other than that, the entire system is free to REALTORS, and it sounded like it would be free to MLS’s and Associations.
So Why the Negativity?
Based on the above, if you thought that RPR was the greatest thing since sliced bread to hit the real estate industry, you would be forgiven. In a way, it is.
But RPR is a trojan horse to the MLS industry, which is the foundation of the real estate industry in the United States, and a giant middle finger to some very significant players such as MLS technology vendors (e.g, First American, MarketLinx, Rappatoni, etc.), data providers not named LPS, almost all of the major brokerages, and a few others besides (Dear Mike Simonsen: I wouldn’t make any large purchases anytime soon.)
The MLS
Brian Boero writes:
For MLSs
This is where it gets really thorny. As Brian Larson pointed out in his excellent post examining the potential business models for the RPR, there are lots of potential overlaps between a national property data site and what Realtors already get from their MLS. Some MLS operators think the NAR has no business doing this and perceive it as the precursor to a national MLS – a cataclysmic prospect from their perspective. Others – usually those who are relatively innovative and thus less insecure about their own value proposition – welcome the potential disruption.
Some will be convinced much as they were during the days of Homestore options and Gold Alliance dollars by the prospect of some upside. Others will be won over by NAR/RPRs insistence that there will be no offer of compensation in the RPR.
Whose ox gets gored, who benefits, and where the money flows is anybody’s guess at this point. But what I can safely say is that this is a significant shock to a system that needs it.
Will MLSs play ball? As with most things in this space, the outlook is unclear.
I think I can answer this, Brian. The outlook is unclear, but all of the signs point to war. The ox that gets gored is obvious, and where the money flows is also not a secret. (Unless I’m missing something crucial here….)
First, look at the incentives. Try as I might, I can’t see a single good reason why an MLS might participate in RPR unless there is some contractual obligation on the part of MLS’s to provide its data to RPR or to NAR. I am assured by industry executives that there is no such obligation. Once its members start using RPR’s rather amazing user interface for all of their needs — except the entry of the listing information in the first place, which incidentally is not required since RPR has all of the property information in the country so all you have to do is go into the system and flip its status from “Unavailable” to “Listed” — they might reasonably ask, “Why am I paying the MLS this $20/$40/$60 a month again?”
At the very minimum, we’re looking at significant pricing pressure since the value being provided is so much less in the World with RPR. And in many cases, the MLS will simply go bankrupt. Turns out, MLS’s employ rather lots of people, including executives who are drawing a very nice income from heading up said MLS’s. Are we to believe that these people will voluntarily march down to the unemployment line so that RPR can make millions?
The $25 – $50 million in savings to MLS’s and Associations that Dale Ross threw out is presumably the bait. Some MLS executives will jump at that, then watch in puzzlement as their membership numbers dwindle down to nothing.
The “offers of compensation and cooperation” is significant, sure. I can think of no reason why NAR could not make that a rule as well. Of course, NAR has sworn up and down not to do such a thing to forestall the fear of the national MLS. However, the “offers of compensation” as nice as that is, is unnecessary to create a national MLS in all but name: case in point = Loopnet.
What further amazed me is that RPR openly admitted that it will pay $12M to LPS for its public records data, but left out any mention of any sort of payment to be made to the MLS for its far-more-difficult-to-obtain data. Was this simply an oversight? If not, the financials of RPR, LLC are going to look rather different. Public filings information, after all, is available from other players — specifically First American. MLS data is available only from the MLS itself, or directly from its member brokers and agents.
So when Brian talks of “some upside”, I’m not sure what he’s referring to. Because I didn’t hear anything about any upside to the MLS.
Those who are “more innovative and more secure” ought not to be so secure. Innovative how? A public facing website, as HAR has? Since RPR is not (yet) a public facing website, but a backend website for the real estate professional, once HAR’s data is being fed into RPR, I find it extraordinarily difficult to believe that a REALTOR in the Houston area would use anything other than RPR for his day to day business.
The inclusion of CMA’s, of reports, of notes and annotations — this is extremely significant from this perspective.
Fact is, once RPR is in your market, every REALTOR will use it. It’s that good. There isn’t an MLS in the country (yet) that can release a competing product. Over time — and a rather short period of time at that — every member of that MLS will wonder why he is paying those MLS fees.
Human nature dictates it.
The Technology Vendors
That RPR is a gauntlet thrown down to the companies that supply the backend technology to MLS’s cannot seriously be disputed. What RPR will provide is better than any MLS system on the market today, period, full stop, end of story.
If companies like MarketLinx want to stay in business, they’re going to have to spend a rather large sum of money to create a competing product. Oh yeah, and find data. Oh, and find a way to monetize that data, as RPR plans to do. And guess what? LPS ain’t gonna be playing with you no more.
Are we to believe that all of the executives and employees of these various companies will happily march their way to the unemployment line so that RPR can make millions? I seriously doubt it.
At a minimum, I would expect various MLS technology companies to suddenly discover that the RETS data standard simply doesn’t work at transmitting data accurately, adding months upon months of cost in order to make data import/export feasible. Or that certain things, like photographs, can only be transmitted by blind messenger pigeons with diabetes.
Actually, I expect that these executives are currently banging the phones a la Jerry Maguire immediately after he’s been fired, calling every single MLS client to convince them not to participate in RPR. The battle lines have been drawn.
Plus, should we expect that the good people at First American, at whichever school information provider who wasn’t chosen, at whichever foreclosure info provider who wasn’t selected by RPR, and other such companies are quietly updating their resumes?
I rather think they are sharpening their swords and polishing their muskets.
Speaking of Data Monetization…
What businesspeople and other evil villains quickly realize is that RPR, as a for-profit venture of NAR, isn’t offering all these wonderful tools for the betterment of humanity. They’re doing it to make millions of dollars from data sales.
Companies currently making money from selling data to governments and to Wall Street might reasonably inquire how they might forestall having to file a Chapter 7 bankruptcy.
MLS’s and Associations might reasonably wonder if they might bypass the middleman of RPR and sell their data directly to Fannie Mae and others by hiring a data analyst or three.
These two might find each other in the next few months and discover many topics of mutual interest to discuss. The battle lines are being drawn.
Speaking of which, via Twitter earlier today, I had an interesting exchange with an industry guy who’s really quite smart. He was all jazzed about RPR because now, there’s a single source of data from which he can pull information. Except that neither Dale Ross nor Marty Frame breathed a single word about “free data access”. I heard nothing about a RPR API; nothing about RPR web services; nothing about exporting the data out of RPR… unless you’re Fannie Mae, Wall Street, or… oh yes, customers of LPS! In fact, RPR is relying on the sales and marketing prowess of LPS to monetize the data products. Who might LPS be selling such data to? You don’t really need that many salespeople to sell to a dozen government agencies and Wall Street firms, do you?
Maybe I’m wrong; maybe RPR does plan to make a free API available. I can’t see it, since that would more or less destroy its business model.
Therefore, I have to conclude that RPR will offer the user interface, the tools, the RVM, the reports, and all of these wonderful things to the REALTOR at no charge… but charge rather handsomely for any sort of a data feed that isn’t tied up with a huge list of restrictions on display, usage, and derivative products (a mainstay of RPR’s business model).
The Brokerage
While Brian Boero saw RPR as a big boon for brokerages, I rather think differently. Already, big brokers are under pressure for not doing enough to provide value to its agents. Independents are popping up everywhere as the big brands continue to lose meaning in the consumer’s mind.
One of the benefits that large brokerages could provide to its agents is a sophisticated, sexy backend tool that provides things like accurate data, custom reports that provide a competitive advantage, and beyond-the-MLS information.
After RPR, every single member of NAR will have the best backend agent tool ever created. If you’re a Coldwell Banker agent, there will be little reason to go to CREST or to the CB Extranet site to get tools and data. RPR will have it for you.
The mapping tool on RPR kicks the bejesus out of anything I’ve seen offered by any major franchise or major brokerage. And the local mom and pop will have it, just as your agents will, except that the local guy will be paying 90/10 splits since he doesn’t have the overhead you have.
Think your big brokerage office will be attracting or keeping more top agents? Based on what?
The Civil War
With the incentives as lined up above, civil war within the industry is virtually inevitable. Brian believes that NAR will simply go direct to brokers and agents if the local MLS does not cooperate. I wonder if he has considered the possibility that the local MLS will withdraw from NAR.
As far as I can tell, each MLS is a private business enterprise that has no legal or financial relationship with NAR, a trade organization. As far as I can tell, each local Association is a private organization, rather than a chapter of NAR, that is affiliated with NAR and allowed to use the REALTOR name and logo. But since licensing of real estate is at the state level, I’m not sure I see the downside for (let’s say) the Houston Association of REALTORS to change its name to the Houston Association of Real Estate Licensees.
For the broker/agent in Houston, then, the choice will be: (a) join NAR and get access to RPR, but only with listings other RPR members have put in, or (b) stay with HAREL, deal with crappier interfaces (at least until HAREL’s MLS tech vendor gets its upgraded product to market), but get all of the listings.
Some brokers may choose RPR and NAR; others may choose HAREL. And now we have civil war.
Every single vendor, every data provider, every company that was not chosen by RPR as its partner has all the incentive in the world to line up with the Rebel Alliance against the LPS-RPR Empire.
Yes, I’m probably being overly dramatic. Probably. Right?
Blessed Are The Peacemakers
The sad part is, I suppose, that this did not need to happen. And since RPR is not yet fully launched, war may yet be avoided. How?
It’s actually quite simple.
First, get rid of the RPR website. Offering that user interface alone makes NAR/RPR the enemy of every MLS tech vendor and of every MLS in the country. Instead, sell that interface technology to someone… like say LPS, which owns a MLS tech company, or put it into the public domain as open source code to spur innovation throughout the industry.
Then focus on making RPR a database in the true sense of the term: MLS’s put in data, and they get back data. The members continue to rely on the MLS for the user interface, for the reporting, for tools, resources, etc. The more innovative MLS’s will partner with better tech vendors to create innovative interfaces; the bad ones will get taken out by the good ones.
Second, the revenues from data sales must be split with the MLS, which can then pass on the savings to its member brokers/agents, or use the money to improve services and products. If the interests of NAR/RPR are not aligned with the interests of the organizations it is relying on to provide hyperlocal and hyper-valuable data, I see no way to convince them to give it up. This will make RPR’s financial projections worse, but on the other hand, they don’t have the cost of developing out sexy user interface either. And NAR doesn’t face the prospect of losing members by the hundreds of thousands.
I believe I have just now done more for peace than Barack Obama has. I await the phone call from Sweden.
Conclusions
Do keep in mind that I wrote this off of hastily taken notes and first impressions. Maybe I missed something big that renders my whole post completely wrong. Also keep in mind that maybe I’m dead wrong about what motivates people and organizations and companies. I doubt it, but the possibility exists.
Having said that, what I heard and saw today on the webinar is nothing short of a declaration of war by NAR on the rest of the real estate industry. By extending RPR past a national database into the best user interface/MLS software in existence, RPR has threatened the survival of the organizations that make up the infrastructure of domestic real estate: the MLS. I believe this is a mistake on NAR’s part, and one that they will end up regretting in relatively short order.
There will be blood.
See here, Mr. MLS Executive... I DRINK YOUR MILKSHAKE!
Interesting insights particularly:
“What further amazed me is that RPR openly admitted that it will pay $12M to LPS for its public records data, but left out any mention of any sort of payment to be made to the MLS for its far-more-difficult-to-obtain data. Was this simply an oversight? If not, the financials of RPR, LLC are going to look rather different. Public filings information, after all, is available from other players — specifically First American. MLS data is available only from the MLS itself, or directly from its member brokers and agents.”
I found out about this late this afternoon, but this morning was talking to an attorney/broker about the copyright status of our listing data. He believes the copyright goes to the broker and it changes the rules on how and who can syndication listing data.
Any thoughts?
Bob, better find an attorney with a better understanding of the MLS.
@Bob -
I can’t really say, though I’d love to get Brian Larson’s take on that issue. But I might take a look at the Terms of Use for your MLS; maybe you’ve granted some rights to the MLS by using their system.
-rsh
Rob, It is high time that we take some ownership as an association and provide better tools to our members rather than being run over by hundreds of companies selling our data back to us while we put up with 2nd and 3rd rate tools as the real estate professional.
And yes, this will benefit the everyone that is a REALTOR – the little guy will be able to compete on a level playing field with the big brokerages – who are having more and more problems convincing anyone of their value proposition.
Hooray for NAR! Should make for some interesting conversations in San Diego.
Rob – Killer post. I’d be shaking a bit (understatement) if I was an MLS right about now. That being said, they should have seen this coming…from anyone BUT NAR. In my opinion, this was a no-brainer by the NAR in an effort to remain relevant into the future, and finally provide some SIGNIFICANT value to their membership. They’re probably the only organization that can pull something like this off, but as you’ve outlined, some monstrous hurdles will need to be overcome……or just plowed down with brute force.
Great insight Rob, I think I might just grab a big tub of popcorn and watch this one battle out.
I have never been a fan of any of the valuation systems, and feel that no matter what algorithm one chooses to use, or what system you put in place you can not possibly succeed, it will be proven in the downfall of a few big boys, but with such diversity in our market places you can’t nationalize this. The scale is too large, the goal is too ambitious… it will only serve to draw a deeper line in the sand between the consumer and their need for the experienced REALTOR. I am tired of fighting that battle day in and day out as the consumer perceives the value of a Zillow in my market (can’t work, won’t work, I will say that till the day I die), I have a standard addendum to present on my listings to exclude from the AVM on our MLS. On that alone… I can not even imagine how it could succeed. Yes REALTOR.com offers something, but is it valid, is it useful, or is it something that waves a shiny little diamond in front of a prospect who clicks a link and finds their way to my in-box where they are greeted by me the experienced REALTOR who can guide them, it doesn’t give them ALL the information… maybe I don’t get it, but I think this is a little too idealistic, too grand, and likely will fail, or be chopped into smaller pieces… We need a nationalized database, we need a pool to get information from, but perhaps the presentation should be different?
It is too big, too ambitious. You know what happens to giants don’t you? Lets just keep it local, and specialized.
Excuse me while I grab a chair and some popcorn… I like a little entertainment, and while I watch I will do a few MLS searches…
I can imagine some brokers sidestepping the local mls entirely and dealing directly with RPR with the licensing of their listing data.
This was one of the key points from the very beginning of the RPR’s conception – it was imperative that neither of these be offered. That said, I’ve heard minor waffling over the years …
Inman ’07
That said, the tools offered by the RPR blow away anything and everything offered by my MLS.
If nothing else, the RPR could render public (Associations’) MLS sites irrelevant. If Realtors get feeds through the MLS that allow distribution of all of this information, why would we need a local MLS site?
As I understand it, the MLS are not intended to go away as they will still be needed to input the listing information. But … will there still be a market demand for 900+ MLS? I can’t see how that’s possible.
What’s not so clear yet is Move.com’s role in all of this. What will happen to realtor.com and Move’s “in perpetuity deal” with NAR? There are a number of cans of worms that are about to be opened.
Move loses the contract in the next year or so… they already know it is coming and are scrambling in new directions. I spend nearly $500 a month on REALTOR.com… happy to refocus that money.
Maya-
Why do you think they will lose the contract? That contract literally allows them to continue to offer it forever. See word for word from the 10K of Move, Inc.
Although the REALTOR.com ® operating agreement is a perpetual agreement and it does not contain provisions that allow us to terminate, NAR may terminate it for a variety of reasons. These include:
• the acquisition of us or RealSelect by another party without NAR’s consent;
• if traffic on the REALTOR.com ® site falls below 500,000 unique users per month;
• a substantial decrease in the number of property listings on our REALTOR.com ® site; and
• a breach of any of our other obligations under the agreement that we do not cure within 30 days of being notified by NAR of the breach.
do you think they would let any of that happen?
I don’t believe they will kill MLSs. Keep in mind that most MLSs are owned by Realtors and their corresponding associations. I believe that most MLSs have a requirement to share data with the National Association of Realtors. (I.E. to fulfill the parts of the agreement with Move, Inc. for Realtor.com)
The biggest issue facing MLSs right now isn’t this, instead in the uprising that will come over their lack of standards and their inability to share information with those that provide and pay for it, their members. One day when enough members know that allowing you to show Foreclosure information on your website (which currently a few MLSs don’t allow including the one in my hometown, St Louis) they will enforce changes. If the leaders of the MLSs don’t chage, they’ll find other ways.
Furthermore, I question, will there be leads captured on these sites? How will they be passed on? Being involved in brokerages nationwide will I now need to pay Move, Inc. for Realtor.com and then also LPS / RPR for these leads?
Also they better offer us APIs because once again I make the same argument as the MLSs…. as a member of NAR we own it. We should be able to use it right? I took this for granted earlier, maybe I shouldn’t. I would love to hear from someone at NAR if this will be the case.
I do look forward to innovation being delivered to the real estate industry the way RPR will. If it bankrupts my MLS so be it. I will move from one monopoly to the other, all while still relying on old fashioned customer service to make money.
I do fear this will somehow cost me more to operate.
Thanks for your thoughts.
You can pay for mine then, because I will go kicking and screaming. =) Thanks Scott!
@Eric -
I know that the Board-owned MLS’s may have some legal obligation to send data. But here’s where things get tricky.
Based on what I know, most Associations (aka, the REALTOR Boards that own the MLS) make most of their money from the MLS. Even if the MLS is a benefit of membership, most of the members join the Association solely for access to the MLS.
Now, suppose RPR comes along and eviscerates the value of the MLS, which I think it does. Because to the member, the MLS is a professional tool for work; what RPR’s user interface and data provides is the best tool bar none for that day to day work.
Keep in mind that RPR already has all of the property info; you don’t need to input anything except maybe price, make a few corrections, etc. Maybe update an old photo. For an example of how this works, check out CoStar in commercial real estate.
In that world… what would the member actually want to pay for Association dues? Say today, they’re paying $40 a month. Do you really believe that members would not question that, given how little value they’re getting from the “MLS” and how much they’re getting from NAR/RPR?
Suppose the MLS has to cut its fees to $20/month; what does that do to the various people who have jobs working at the MLS? What does that do to the various Association Executives who are drawing a salary from the Association, funded by the MLS?
So you think it’s more likely that Association Executives will voluntarily take pay cuts and lay each other off, rather than trying to find ways to disassociate from NAR to save their jobs? Maybe you’re right.
RPR will force MLS’s to change; but thinking that all of the change will be positive and uplifting, I think, underestimates the pull of fear and greed on human beings.
Incentives dictate outcomes.
-rsh
Rob-
First of all, I’m intrigued to hear that you think most make their money from MLSs. Keep in mind that about $300 of my yearly dues stay locally. I pay $17 a month for MLS access. So I’m going to suggest they probably bring similar gross income for the Associations.
I go back to the fact that NAR in some capacity is involved with all the Realtor MLSs since their local affiliates own them. If they hurt their local associations, WHY would the local associations stay affiliated and funnel the $82 up to NAR from a million members?
NAR isn’t going to bite the hand that feeds it.
Perhaps the greatest enemy will be staff intent on furthering their (perhaps now obsolete) existence. That, combined with my guesstimation that fewer than 15% of Realtors care/understand/pay attention to this means that the evolutionary path may be slow.
Can’t say I understand all of it but it sounds kind of Orwellian big brotherish to me.
I caught part of the webinar yesterday. I got there a bit late, but saw a good look through the basics, before things went buggy on me.
I am willing to bet that if I mention “RPR” to most agents I know, I’ll be faced with a “Huh?” Jim’s got a great point there.
The whole time I was watching I kept wondering – what will happen to the MLS. Why would an agent want to use that, when they have 10x the power in the form of RPR? I didn’t even think of half of the points Rob made.
I definitely can’t wait to take it for a hands on spin to see what’s really happening (a webinar full of slides only does me so much good). Will I use it? Hell yes if it makes me more productive and gives me more of the data I want and need to help my clients.
I definitely think this will have some real estate related companies scratching their heads over the next few months.
Intriguing (and thanks Matt for tweeting this AM re: this post).
I’m great with the concept of a one-stop shop for Rs to gather and provide info, to dovetail with our Associations. It won’t make local/regional MLS extinct, however. The reason is integrity of data.
In areas like mine (NW AZ) that are being built, rebuilt and regentrified continually, our considerably techy County can’t keep up with the changes–and they’re paying attention! A 2 year old, 310 platted lot subdivision still shows as bare land in their records.
How can/will accurate data be the result of such an ambitious undertaking?
Who will know when a new subdivision is built or rezoned, or about newly surveyed lot splits?
Will the grand oracle know whether the sewer lines were ever completed, or if there’s an abandoned well, or if the next door neighbor granted the owner an easement that won’t run with the property, or if the next door neighbor to that waterfront McMansion is a 1958 Airstream?
A million variables affect value.
Zillow’s like a free translation program. You can’t get the literal translation of ‘Marv’s Deli’ from English to Spanish and not be sure you didn’t tell someone you want to marry their goat.
RPR will be similarly ‘off’ in a lot of instances. And I don’t know if that can be corrected.
MLS, and the local users who ‘program’ and QC it, will need to stick around to keep behemoths like RPR ‘honest’.
It’s gonna be fun to watch.
“How can/will accurate data be the result of such an ambitious undertaking?”
Accurate data is what Cyberhomes brings to the table.
“Who will know when a new subdivision is built or rezoned, or about newly surveyed lot splits?”
Are not those actions reflected in the permit process? If so, Cyberhomes can provide that info.
“A million variables affect value.”
Correct, but at present most appraisers have easy access to far less data and mot dont use all the data that is available. This concentrates as muich info as possible in one place.
The future of the local mls is numbered. NAR knows this and RPR is their way to stay at the forefront. Expect deals with Bing and Google in the future. If not, you will see Google and MS create their own versions.
Sounds like NASA joining forces with the public libraries across the country.
Will land a realtor on the moon by the end of the next decade.
@Louis I would settle for just sending Yun there.
LOL!!!
LOVE The Juice! Great comments from everyone….I learn so much..
@Candice-
Thanks for the comment! But I think you missed the biggest point about RPR because you (like many realtors) are focused on Zillow-sucks-local-rules! RPR is local as your MLS, because it pulls the data from your local MLS.
So you’re right that Zillow may not know when the local sewer lines in NW Arizona are completed. RPR will, if we assume that your MLS will play ball and ship over that information.
-rsh
@Rob I think that you are over estimating that “having the data” wins the prize.
Remember cyberhomes “has the data” but Zillow has the eyeballs.
Also you are overestimating the value of “sewer data” (above) in a consumers’ mind in determining whether such consumer will visit the site or whether a Realtor having such septic knowledge really means he knows his sh*t!
@Louis (and others) -
A few things need to be clarified.
First, RPR is NOT (NOT!) a consumer real estate portal. All the talk about Zillow, Realtor.com, etc. is simply confusing the issue. RPR is NOT a consumer portal. So comparing RPR to Zillow is simply erroneous… at least for now. If RPR/NAR starts feeding data directly Realtor.com, along with all of the sexy tools, then that discussion becomes relevant. Right now, it’s a red herring.
Second, the value of “sewer data” is immense if you realize that the point of RPR is to provide the NAR Member with the best set of tools for their day-to-day work. RPR will make money by selling the resulting data to companies and organizations who use the data for decision support. (And I think RPR plans to make money by selling data to brokerages and agents for public display/usage, but that’s speculation.)
Today, there is only one source for that sort of “sewer data”: the local MLS. RPR’s business relies on having the local MLS supplement its 256 million records with information like “local sewer pipe just got finished” — that hyperlocal, industry-specific information gathered from millions of agents is what separates RPR’s data from other datasets.
Because the challenge with data is collection. Once it’s collected, there are lots of companies that can slice and dice and do analysis and aggregation; but collecting the raw data itself is the really expensive part. The 900+ local MLS’s are, arguably, one of the biggest un-exploited resources in the data business today; RPR wants to aggregate and exploit those resources.
Trouble is, the way that RPR has gone about doing it is creating a major threat to each and every MLS. Now, rather than cooperation, I believe NAR will face stiff resistance, which will require NAR to think about going around the MLS direct to brokers and agents, which in turn will force MLS’s to either (a) surrender, or (b) fight NAR for survival.
-rsh
PS: BTW, I love this sentence: “whether a Realtor having such septic knowledge really means he knows his sh*t!”
One question I think should be asked, I apologize if someone already asked it… WHY do we need this? HOW does this benefit us? What is the goal? Why is this what I need?
Maya,
You hit the nail on the head Maya. How many REALTORS NEED or even WANT national data when they have high integrity, comprehensive and up to date information from their local/regional MLS system and public records data?
There are some exceptions to this especially if there are natural trading areas in local markets that have not yet been consolidated. RPR may be a great impetus to put aside local politics and animosities and force local associations and MLSs to get their act together.
We see many markets around the country where MLSs in close proximity refuse to participate even though consumers move readily back and forth between the areas? Why isn’t Tampa and St. Petersburg, Florida for example in the same MLS? Real Estate Consumers move back and forth seamlessly between these two markets daily. There are tons of examples like them around the country. By not meeting the needs of REALTORS and their customers MLSs have again opened the door to competition – this time from within the “family”.
I hope that every local MLS and Association uses this opportunity to lay down the irrational swords they have been carrying around and get their local acts together.
I also hope that MLSs and Associations realize the real VALUE of their MLS data. If they decide to participate in RPR because their members want them to, then they need to be sure they are compensated for their valuable information just like public records companies are. Every time a MLS agrees to send their data to RPR the valuation of RPR goes up and the potential valuation of the local MLS goes down. I hope that every MLS takes this decision VERY seriously and does not move quickly because their associations are feeling a lot of pressure from NAR.
For those associations and MLSs that have resisted launching a consumer-facing website get over it and get it done! While RPR may not be public-facing YET, there is no reason that it won’t be in the future. Maybe NAR severed ties with Move so that it could compete with them down the road. In any case, I hope MLSs use the launch of RPR as a motivator to understand they play a critical role for their local members. In order to maintain that relevance they need to create tangible value for their members – there’s nothing more tangible than leads from real estate consumers to make you relevant. Money talks as they say.
I believe this will probably be the most interesting NAR conference we’ve seen in years! Strap on your seat belt and HOLD ON!
Terrific post Rob. I don’t know which I can’t stand more – the hyper-political, technology backwards MLSs or another behemoth that dominates everything.
I suppose I might trust Do-No-Evil Google to know everything about me, but having an organization like NAR which does more to prey on consumers than help them is troubling.
Credit Bureaus and their sloppy technology practices routinely trash families’ finances, while they mostly exist to sell consumers private data – oh yeah, and sell consumers monitoring services that basically monitor their own screw-ups. Some argue that Zillow has a similar negative effect on agents’ ability to sell homes. Blech.
At any rate, I AM all in favor of awesome tools and will enjoy the civil war. Smart tech entrepreneurs will just find ways to help agents use those tools, or focus on something else that agents need help with.
Helping agents explain on their websites to consumers WHY their knowledge of the local sewer system and communicating that through video, copywriting, etc…i.e. communicating of their Unique Value – is what agents seem to need the most.
Hooray for Kick-Ass, efficient tools! Perhaps this Darth Vader will find redemption.
Thanks for writing this interesting article. A change to more of a property-centric model like RPR is something that calREDD (owned by CAR and intended to be the statewide MLS for CA) has been working on for more than a year. Another interesting angle is how state associations will interface into this debate. I vote for the API to property-centric data. I prefer national standards that encourage competition and innovation.
I’m loving all the conjecture. Rob, one area where I can comment on and disagree with you about is the idea that Mike (Altos Research) is endangered by RPR. I don’t see how. Mike’s in the interpretation of data business. I just convinced my Mom to become a client.
I think Mike needs photos of your mom in a Data Geek shirt.
I visited NAR’s website and found the leadership team’s white paper (from May, 2008) on their RPR initiative:http://tinyurl.com/yczmrpb How much has changed from their intent of 1 1/2 years ago remains to be seen.
If the link doesn’t work go to the website and search RPR.
I’ll be kind and will only say it’s interesting what they intend to accomplish. That is to be “the “Lexis-Nexis” of the real estate industry.”
I only ask for whom?
And this is from NAR’s press release 2 days ago:
The RPR’s™ national demographic information, along with enhanced search capabilities, will allow a REALTOR® anywhere in the country to provide more information to their clients. The enhanced search features will allow nationwide depth of property searches, as well as market-to-market comparisons. Advanced User Profile Features and social networking components will help REALTORS® create referral communities, as well as reverse-prospect specialized property types, such as vacation and waterfront to REALTORS® throughout the U.S.
Honestly, there isn’t one feature of this new portal that will become available to us (as they describe now) that I, personally, have need for now. Nor, can I imagine needing in the future. NAR must be planning on making big bucks off of this. I’m just hoping it doesn’t come out of my pocket.