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MLS Conversions and Zillow Hate

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I’ve been engaged on a project that is both interesting and important for a large regional MLS the last couple of months. As part of that project, I’ve spoken to dozens of people — brokers, agents, Association leadership, MLS leadership, etc. — about a variety of topics, which has been, to quote Tony the Tiger, grrrrreat!

One of the side benefits is that I hear about people’s concerns, and one of those got me thinking. Here’s my thesis:

MLS conversion angst and Zillow hate both come from the same place.

Say what? Let’s dive in.

Sturm und Drang of MLS Conversions

Ask any MLS executive about the most stressful times of their careers, and chances are, you’ll hear about “MLS conversion”. Moving from one MLS platform to another is one of the most difficult, most challenging things one can do. There are a lot of reasons why, but the dominant reason is member resistance.

A broker who is the President of a REALTOR Association explained it to me. (I’m totally paraphrasing, of course.) The average age of a REALTOR is something north of 55; a huge chunk of the membership is over 60. They’ve been in business for years, and sometimes decades. They’re not “digital natives” or whatever the term-du-jour is for the younger people who grew up taking things like the cellphone and the Internet for granted. They remember when the MLS was a bunch of paper delivered to the office. They remember struggling to learn MS-DOS based systems, then Windows, and so on.

Once an agent has gone through the pain (and it IS a pain) to learn how to use a new MLS platform, and can do just about everything she needs to service a client on that platform, the absolutely last thing she wants to do is to learn some new way of doing the exact same thing.

At the same time, these older REALTORS are worried and anxious that they’re becoming obsolete. They’re from the Industrial Age, but live in the Information Age. They see consumers, especially new buyers, get younger and younger each year with new demands and new expectations that they’re not all that comfortable with. They see younger agents enter the business, knowing next to nothing about how to convert a lead, how to service a client, how to negotiate a deal, etc. but looking awfully sharp and professional with their iPads and mobile apps and social media savvy and all that. They worry.

At some level, these older agents recognize that the new MLS platform is superior to the one they’re leaving behind. It’s more powerful, more capable, easier to use (once you learn how), with more features that will make their lives easier. But they have to learn something new, sitting in front of a computer, or goddammit on some newfangled mobile MLS app they had to install yesterday before the class. Meanwhile, clients are expecting answers to questions, and these agents are having to dick around with trying to figure out where the button is to do a CMA instead of giving the clients those answers.

Feeling outdated, feeling like the world has somehow slipped by, feeling like somehow, they woke up in a whole new country… yeah, they worry.

Could this same emotional reaction be why so many people simply hate Zillow?

Zillow Hate: More Than a Touch of Irrationality

Here’s why I think there might be something there. A friend of mine is a top agent who fits the demographic profile to a T: late 50’s, decades in the business, very successful. She told me that she gets a 10X ROI on her Zillow spend. (That happens to be the number that Spencer Rascoff has publicly spoken of often: Zillow’s agent advertisers get ten times their spend.) Her Zillow profile has dozens upon dozens of positive reviews from her past clients, which then helps her generate more and more business — especially on the listing side.

She hates Zillow. Despises Zillow. Thinks Zillow is trying to put her and brokers and everybody out of business. Zillow raised her prices by a lot and she’s absolutely incensed, and starts down the traditional talking points: selling my leads back to me, using my listings to make money, yadda yadda yadda. Thing is, even after the price increase, she’s looking at maybe 8X ROI or 5X ROI. The client reviews that generate so much credibility in listings (sellers do know how to use Google, it appears) are free.

Why the hate?

In fact, I don’t know for sure, but I’m willing to bet a large sum of money that she made more money from Zillow than she did from her brokerage (which she loves). 10X ROI means for every dollar spent, she got ten back. There isn’t a brokerage in the country that can claim such a thing.

So why the hate? There’s more than a little touch of irrationality in all the Zillow hate.

Ch-ch-ch-changes

I think the hate comes from the same feeling of dislocation that an MLS conversion causes. Once I think of it that way, it all makes sense. In a way, I don’t even think these agents and brokers hate Zillow per se. I think they hate the Internet and all of the massive changes that the Internet forced on the industry. Zillow is simply the representation of the Internet for many people in the industry. If Realtor.com had maintained its dominance in online real estate, I suspect that people would be drinking deep from the Realtor.com haterade jar as well.

Thing is, neither Zillow nor Realtor.com is really at the source of the hate. Google might be, though. The idea that an anonymous buyer or seller can find information on you without you knowing… that’s a scary thing for a reputation-based business like real estate. The idea that an anonymous buyer can spend weeks and months researching neighborhoods and houses and property tax rates and mortgage financing process and so on and so forth without once needing to pick up the phone and call you… I mean, that has to be profoundly dislocating for someone who still remembers the MLS book. And that dislocation produces anxiety. Anxiety is funneled into hate.

It’s ultimately the same feeling that evokes the angst over MLS conversions. Brokers and agents who have spent 25 years serving buyers and sellers know what they’re doing. The tools they’ve been using have been good enough for years and years and years. But the pace of change in technology is just… blistering. Finally get used to using email, and bam! It’s text messaging or else. So you go out, buy one of these newfangled smartphones, get used to texting clients, and bam! It’s now Facebook private messaging. Finally get used to that, and bam! It’s Snapchat or else. (Or so these agents are told over and over and over by consultants, gurus, and #vendorwhores). And all along the way, you’re seeing younger brokers and agents who haven’t yet learned the details of the business that you’ve forgotten years ago parade around with their gadgets and their apps and you can’t help but feel like they might be taking business away from you.

I’d be pissed too. Wouldn’t you? I’d want a stop to all the ch-ch-ch-changes, because when you’re 65 and used to a certain way of doing things, there ain’t much hope in all that change.

Subconscious Understanding

Thing is, thinking this way, I have a lot of hope for the industry. Because the Old Guard isn’t a bunch of Luddites who just hate everything new. They recognize, at some deep level, that their time is coming to a close, and that it’s time for the next generation to take over. Maybe not today, maybe not tomorrow, but soon.

Think about all the support across the industry for things like YPN (Young Professionals Network), and strat planning session after strat planning session at Associations and MLSs and brokerages where leadership who are AARP members constantly try to think of ways to get the younger REALTORS more involved. Think about the attention being paid to succession planning across companies in real estate. (I’d like to think I had some small part to play in that conversation, since I wrote the chapter on Succession Planning in last year’s Swanepoel Trends Report….) Think about the slow, grudging, angst-ridden acceptance of Zillow as a fact of life; no matter how grudging, it’s still acceptance.

Technology has to do its part, of course. Longtime readers know I’ve long been pushing ideas like the Modular MLS because I’m not impressed by high technology until it’s been made profoundly simple. Arthur C. Clarke once said, “Any sufficiently advanced technology is indistinguishable from magic.” But magic that is accessible only to professional wizards is not useful to anybody else. It has to become something, like broadband-over-LTE, that people simply take for granted and integrate easily into their day to day lives.

If real estate has a failing, it’s making that easy integration possible. And companies like Zillow, love ’em or hate ’em, have set a new standard for how magic should be brought to the non-magicians.

But here’s how I see things right now. If the angst over MLS conversion and the Zillow haterade both come from the same emotional place, from the feeling of profound dislocation, then technology can also help address that by making tools easier and easier to use and through deep personalization. That day is coming. And at the same time, those people who are feeling all that angst recognize at some deep level that the new tools, new technology, new ways of doing things that they’re not used to are simply better than the old ways. They might not like it, and they might feel disadvantaged in this fast brave new world of ours, but they recognize it.

And many of them are recognizing and preparing themselves to hand over the reins to the next generation. That’s proper. That’s how it should be. That’s progress.

-rsh