I have a feeling we’re going to be talking about a whole variety of things that went down at NAR Legislative Meetings & Trade Expo (aka, “Midyear”) this year for months and years to come. It’s been a great week, but rough on the sleep schedule, so these are not exactly deeply-thought-out opinions here. It’s more of a “flash impression” of where my head’s at right now, while I hurtle through the air at 350MPH.
Overall theme of the week… I’m going to say “contradictions”. A lot of the decisions that were made, including the big one everyone will be talking about (RPR-Upstream-AMP), sort of have this inconsistency going on that makes it very hard to know where the industry is headed.
As my readers know, RPR-AMP is something I’ve been personally pushing — and worked with RPR on — for years. So yes, a part of me is absolutely thrilled that the industry, at least as represented by NAR’s Board of Directors, approved the project. The current form of RPR-AMP isn’t 100% what I want or envisioned, but hey, it’s a huge step forward for the state of MLS technology in real estate. To all those who told me wonderful things like, “if you were a real insider in the MLS world, you’d understand why that’s impossible” and “it’ll never work” and “yer crazy”… I’d like to say…
Again, all credit to Tim Dain and to SIRMLS for believing and investing when no one else would.
Having said that… I’m puzzled by the RPR-Upstream move. And even more puzzled that apparently, the two projects have been combined into RPR-Upstream-AMP.
Upstream Was About Power Over the MLS…
Maybe things have changed since 2013, when The Most Interesting 30 Minutes In Real Estate happened. If so, I’d like to hear from the folks who know (Craig Cheatham?) as to what changed and how and why. But I wrote back then:
Before we can get into what the Realty Alliance is likely to try, it’s useful to try and guess at what it is they want.
Some of the people at CMLS — who are experienced, knowledgeable, and wise — thought this whole brouhaha was about the MLS public website. Recall that at Midyear, NAR approved a policy which allowed the MLS to classify the public website as a Basic Service, which allows the MLS to use member dues to finance the creation, maintenance, and promotion of the public website. (See my post on that for more.)
As I’ve written before, I don’t think the conflict is about that one issue, or any one issue. I think it’s about settling the question of Who Shall Rule. Keep in mind that the fracture came into view a couple of years ago, when Realty Alliance and Leading RE came out strongly against Franchise IDX. I do know that there were serious meetings being held and plans being laid down during that fight, but the brokers mostly won that round, so I thought they had stood down. Well, maybe they never disarmed, but used the intervening years to tool up more completely.
So when Cheatham said at CMLS that his brokers did not feel that they would work “within the system”, and further elaborated that his people feel they have less influence even though they are the largest and most important brokerages in various markets, what I hear is that this whole thing will ultimately be about power. And what the Realty Alliance wants is the power to cut away all of the MLS ancillary services they find offensive, and to keep the MLS restricted to the “core function” of providing clean data to participants. (See this Letter from Realty Alliance to the MLS Policy Committee.)
Upstream wasn’t about technology; it never was. It was about power to compel the MLS when the (broken) governance system of the MLS went against the wishes of the Big Brokerages. As Ken Jenny said at T3 Summit this year, the problem for the Upstream folks is that some rinky-dink broker with five agents has the same number of votes on his local MLS Board as does Wes Foster.
As a matter of principle, I happen to agree with that philosophy. Size does and should matter. It matters with our federal system of government, where population of a state dictates how many House members it gets, and I see little reason why it should be different for the MLS/Association world.
At the same time… for Upstream to select NAR/RPR as its technology partner, and for NAR to choose to support Upstream is… simply bizarre to me. I know politics makes strange bedfellows but… this one’s a headscratcher. Follow along with me, if you’d like:
- MLS was born out of local Association of REALTORS
- Local Associations of REALTORS own the MLS
- Governance of the MLS, under NAR Model By-Laws, is tightly under the Association (note: I’m not a big fan of this governance model, but still….)
- Association represents all REALTORS (in theory)
- NAR owns RPR, which is funded with member dues from all REALTORS
- Big Brokerages are unhappy with the MLS, which they see as doing too much to “level the playing field”
- As per Ken Jenny, the Big Brokerages are starting to wonder about “mandatory cooperation and compensation” as well as IDX.
- RPR will help Big Brokerages with their little MLS problem
- This will be good for all REALTORS.
Maybe after I’ve slept more and thought about this more, I’ll understand how buyer agents and smaller firms benefit from this.
AMP vs. Upstream
Note that I’m a fan of AMP, and a fan of Upstream. I’m just trying to figure out how RPR can do both. At the same time.
The technology at RPR is impressive, as is its property-centric database. That helps the MLS modernize. AMP is a good step forward.
Upstream — as a concept that larger firms ought to have more say — is a necessary idea.
On the other hand… all of the participants in Upstream (like The Realty Alliance, LeadingRE, big national franchises, etc.) have in the past disagreed, sometimes vociferously to the extent of threatening lawsuits, with the decisions of one MLS Policy Committee of one National Association of REALTORS.
So… suppose that in 2016, the NAR MLS Policy Committee approves a change to the rules of the MLS that the big brokerages and national franchises find completely unacceptable. Upstream is now in place, so the big brokerages can elect to route their listings away from the problematic MLS (this is the “Big Club” right?). What happens then?
You know, now that I think about it, perhaps what needs to happen is that NAR get out of the MLS Policy business. No point in having the MLS Policy Committee when Upstream exists, right? Just let Upstream set the policies of the MLS and cut out the middleman. Not sure that’s a bad thing right now.
OK, I changed my mind. Maybe RPR-Upstream is an incredibly savvy, visionary move by NAR leadership to get out of the MLS Policy business, so that NAR and the REALTOR Associations can focus on its core competencies of Advocacy and Professionalism….
Upstream vs. REALTOR.com
Then you have the oddity of celebrating REALTOR.com on the one hand, and then deciding to power an entity that is decidedly unfriendly to REALTOR.com’s business practices.
“Realtor.com® connects buyers, sellers and renters with Realtors® and the tools they need to make informed real estate decisions,” said Move, Inc. Chief Executive Officer Ryan O’Hara. “Unlike other listing sites, realtor.com® is committed to serving the needs of the real estate industry. We’ve just launched some website and mobile enhancements that increase the visibility of brokers and Realtors®.”
And for what it’s worth… I have noted that the staff at Move have a new spring in their steps that I haven’t seen for the past few years. Y’all know who I’m talking about if you were at various after-hours events. 🙂
But then again… the main companies behind Upstream are also firm believers in Fair Display Guidelines… which essentially puts Move and Realtor.com out of business. Maybe that whole “unlike other listing sites” line is only in the mind of Ryan O’Hara.
Maybe this is a one-way love affair by Move, in love with a good timin’ man.
I admit I would love to be a fly on the wall when Ryan O’Hara has to report to Rob Thomson, CEO of News Corp, and through him to Rupert Murdoch, Chairman, that Move’s main partner in the venture just decided to power up the single biggest threat to Realtor.com’s revenue models in years.
Other contradictions/inconsistencies abound.
One MLS CEO told me that he’s absolutely thrilled that RPR-Upstream-AMP happened, saying it’ll be great for his members, and that since big brokers are happy with his MLS, he ain’t worried in the least bit. But then, another MLS CEO told me that the MLS’s stepped up big with contributions to RPAC this year. He expects this year to be the last one for that. Not a happy camper there.
The D.A.N.G.E.R. Report was released by Stefan Swanepoel and NAR, and it’s a really solid piece of work. It highlights the 50 biggest threats for the real estate industry, and it offered no solutions because the purpose of this report was to define the problems and then stimulate conversations and discussions about those threats. So good job to Stefan and to NAR there.
But… I can count on one hand the number of conversations I’ve had about said threats. I had longer and more substantive conversations about personal branding than I did about threats. Maybe it’ll take time for folks to read the report before conversations start happening but… well, let’s just say leaders had best start driving that conversation if we’re going to see anything resembling “solutions” anytime soon.
YPN folks ended up at Muzette karaoke (which, by the way, may be the worst karaoke I’ve ever been to) and the party was rockin’ all around. But… I think we need a webinar on proper karaoke behavior, because some things I saw go against the ethics of karaoke. Note: I’ll happily volunteer to run that webinar before the next YPN event. 🙂
As I said, this is a series of quick thoughts. Impressions, really, and me puzzling over things. Over the next weeks and months, as more facts and details become available, I suppose this little blog community will discuss these and other issues.
Oh, and one big shout-out to you, my readers. I asked one industry VIP what she thought about the DANGER Report. Her response: “I already knew all of those, since I read your blog.” Put a smile on my face. I have the best, most-educated, best-informed audience in real estate. (Who all remain silent because they can’t say jack shit in public.)
Until next time, and as always, your thoughts are welcome.