Home Brokers & Agents We Need A Little More Honesty on Upstream: A Response to Sam...

We Need A Little More Honesty on Upstream: A Response to Sam Debord

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Longtime readers know I have a wonderful yet odd relationship with Sam Debord. I love the man! He’s one of the best guys in the industry, smart, capable, caring, a true REALTOR who serves as the President of his Association, and a really fun guy to hang with at events. But then you also know that we love to argue with each other about industry topics, including things like “the broker sphere“.

His most recent work on Inman is entitled “Why the real estate industry loves to cast shade on Upstream” and he tries at once to defend and extol the virtues of Upstream, and position anyone who questions Upstream, criticizes it, or even questions it as some sort of a retrograde self-serving cabal of people desperate to stop progress:

And this boils down to an uncomfortable truth in our industry: There are those whose power and influence are greater in a world without Upstream. There are those whose value may be diminished in a world with Upstream.

They’re casting shadows as long as they possibly can on the initiative. The tension creates an unfortunate situation that pits broker against MLS, and MLS against the National Association of Realtors, when we should be united in our pursuit of progress relative to outside forces.

It’s a wonderfully written article, and one worthy of debating and discussing. And so we shall.

Because as wonderfully written as it was, Sam’s article is a masterpiece of misdirection, obfuscation, and rhetoric that simply ignores or refuses to acknowledge some truths and open questions about Upstream. Perhaps the whole brouhaha would benefit from a little more honesty, that everyone involved kind of understands and acknowledges, but refuses to say for a variety of reasons.

I guess somehow it falls to me to force the honesty, seeing as how somehow, I don’t appear to care about continuing to have a career in the industry.

The truth is that there are at least three major unacknowledged, unanswered, and undiscussed issues with Upstream as it is structured today. Until we deal with those three issues, we’re just going to have this political nonsense continue.

While we’re at it, we might as well address the Hastur the Unspeakable “He Who Shall Not Be Named” issue with Upstream. I mean, if we’re gonna get real, might as well get real, right?

Public Justifications of Upstream

First, let’s reiterate and revisit the public justifications of Upstream. Because Sam mentions them all.

There are brokers, nationwide, who will benefit from Upstream’s ability to reduce their costs of data input, normalization, delivery and storage. Instead of another set of Band-Aids, it delivers a cure for the mish-mash data delivery system the industry now employs.

From Upstream’s own website:

Upstream cross references a broad set of real estate data extending beyond listings.  It creates a single entry point and seeks to eliminate duplicative data entry costs.  Upstream then gives brokers full control to distribute their data simply and efficiently.  Every day, the same listing is entered into multiple MLSs, portals, real estate tools, back office accounting systems, etc.  Upstream gives brokers the technology leverage required to manage their data assets and free up resources to innovate and serve their customers. [Emphasis added]

Now, let’s be perfectly clear about this. And if you doubt me, go ask your own MLS CEO. Go ask the Board members at your local MLS.

Every single person involved with the MLS or with MLS technology supports those goals. Go ahead, try to find some MLS CEO somewhere who says, “No, no, I really would rather my brokers have to enter listing data seventeen times.” I myself have said publicly on every occasion that I support 100% the goals of Upstream. Here’s a post of mine from August of 2015:

I asked it because I believe in Project Upstream as a concept, as a philosophy. I believe in the idea of broker control over listings 110%. I believe in the efficiency gains that brokerages want to achieve 110%. Everything that Project Upstream wants to achieve, I support wholeheartedly. But the way that the Upstream people have chosen to achieve those goals raises a major concern that simply has not been raised yet in the industry. It’s time to raise it.

Quite contrary to Sam’s assertion that there are these nefarious self-serving pricks who want to throw shade at Upstream because their salaries depend on stopping progress, every single person I know in the MLS industry, in the MLS technology industry, and in the Association world support the goals of Upstream.

So what’s the problem?

Problem One: The Upstream Database

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The first and biggest problem which I have raised ever since the first details about Upstream were made public is that Upstream wants to create its own database of property listings outside of the MLS.

I keep asking, Why?

Sam doesn’t address this. I’ve asked Alex Lange, CEO of Upstream, Cary Sylvester, the architect of Upstream and a Board member, and everyone else who would actually speak to me about this Database issue, and… well… the answers are unsatisfactory.

The answer I most often get is something like, “Upstream is about so much more than listing data. It’s all the other broker data, like customer information, like transaction management data, that have nothing to do with listings. Listings are just a small portion of Upstream’s database, and that’s why we need our own database.”

This post from Alex Lange on Upstream’s blog is exemplary:

Upstream’s goal is to help brokerages be more efficient and deliberate with their data assets enabling them to be more nimble running their business. Restricting the conversation to listings is myopic. It’s a fraction of the data that is core to running a successful brokerage. Efficiency is important and reducing points of entry, and leveraging standards will get us there. But it’s not more important than deliberately managing the use of your asset or extending and adopting standards to be more vendor agnostic.

Upstream is more akin to Google Drive than MLS related software. As a document owner, I can share it with you. I can share the entire folder with someone else. As the owner, I can control that access anytime. Google only provides the ecosystem that enables the sharing. They don’t touch, manage, police or use your documents. Only the owner and those entitled have access.   It’s not just for documents just as Upstream isn’t simply about listings. The parcel, roster, and vendor data just happen to be where we are starting. Data use agreements are between the broker and the entitled recipient. Any existing agreements between brokers, vendors, and their MLS remain intact. Again, Upstream is closer to Google Drive for real estate data than MLS related software. Brokers determine who gets access, what fields are available and what frequency the data can be pulled. [Emphasis added]

Except that we live in 2016, not 1970, when the whole concept of proprietary walled-garden databases is not exactly progress. In fact, it’s exactly the opposite of progress.

Think about it. Your IDX website probably has a map search on it, or at least displays properties on a map. Are those map files in your own database? Unless you have a truly crappy website, they’re not. No, those map files, the controls, all of that data lives in Google Map’s database and are fed via API to your IDX website as-needed.

The Twitter widget on your blog, or the Facebook widget — think that data lives in your database? Of course not.

Fact of the matter is, if listings are only a small portion of the Upstream Database, there is absolutely no reason for Upstream to insist that it have a listing database at all. The MLSs are fully capable of sending a real-time API-driven feed to Upstream, and even allow Upstream to be the front-end Add/Edit module.

Sure, have all the CRM data, all the transaction management data, all the agent roster data you want in Upstream. Add listings to the MLS from Upstream, then pull whatever listing data you need for your backoffice, for your accounting, for marketing, and what-have-you. Upstream can do all this without needing a separate listings database. (If Upstream can’t, might I recommend hiring competent developers then?)

“But Rob, the MLS technology sucks so bad that they can’t give us what we need!”

Fair point — but let me address that below when I talk about Hastur the Unspeakable.

Truth is, quite a few people knowledgeable about the MLS who support the goals of Upstream — single point of entry, data management, eliminating data duplication and data errors, and even total broker control over distribution — scratch their heads and wonder why Upstream is so insistent on having the listing data from Upstream brokers stored in its own listings database and then fed “downstream” to the MLS.

[In fact, here’s a suggestion for Alex and the Upstream folks. If Upstream really is nothing more than Google Drive or Dropbox for brokerage data, might I suggest that you start with the CRM data, the roster data, all of the data other than listing data to show the industry how that would work?]

What could be the possible explanation for insisting on a separate database? What indeed?

The Nuclear Option

What never gets mentioned in public anymore by anyone connected to Upstream is that Upstream began life as the “nuclear option” against the recalcitrant MLSs who were making life miserable for the big brokerages and national franchise companies who are backing Upstream.

Every single person who has been in the MLS space for longer than three years still remembers CMLS 2013 in Boise. I wrote about it, because it was the most interesting 30 minutes in the history of real estate conferences:

The immediate cause of this sepulchral atmosphere was the panel discussion entitled, “Eliminating MLS & Broker Conflict” featuring Gregg Larson of Clareity, Brian Donnellan of MRIS, and the star of the show, Craig Cheatham, CEO of The Realty Alliance.

Bottom line, Craig Cheatham made it clear that The Realty Alliance intends to Do Something about the MLS, which he said was the biggest pain, the primary focus of concern and the biggest source of frustration for his members. Those members, in case you aren’t aware, are some of the largest brokerages in the United States, including such names as HomeServices of America, Long & Foster, Howard Hanna, Crye-Leike, Ebby Halliday, Prudential Fox & Roach, Baird & Warner, Coldwell Banker United, etc. etc., and the list goes on.

This is one session I wish I had videotaped, since Cheatham’s comments were jaw-dropping, even though he delivered them with consummate grace and diplomacy. Words and phrases like “nuclear option”, “push the red button”, “don’t plan too many more of these CMLS events into the future”, and of course, “You have ten days” are… shall we say… attention-grabbing? Perhaps the CMLS website will have the video available soon. But you can check out the companion post to this one from Notorious B.O.B. (Bemis) for what went down, as well as some fantastic historical perspective. I’m sure we’ll have other reports of what went down from various sources soon as well.

Sure, it took a bit longer than ten days, but given the companies and the people behind Upstream, is there any doubt that Upstream is meant to be the “nuclear option”? That it is the “red button” that brokerages would push if the MLS got uppity?

Is it really that unreasonable for an MLS CEO to be a bit ah… shy about Upstream and wondering what that’s all about given that history? I don’t think so.

Have the brokerages behind Upstream — particularly the Realty Alliance and LeadingRE — ever publicly stated that their beef with the MLS was done, over with, and behind them? That thanks to the conversations that the “You’ve got ten days” and “Don’t plan too many more of these CMLS events into the future” sparked, they’ve buried the hatchet, smoked the peace pipe, and sang kumbahya with the MLSs?

If they have, I missed it.

So, the truth is that Upstream needs its own database to serve as the nuclear option against the MLS. Having its own database makes it possible for Upstream, and its brokers, to cut off the problematic MLS so that its listing count goes from 100% of a given market to something like 50%, thereby rendering it more-or-less useless.

It’s the only possible explanation for why Upstream insists on having its own database. If you can come up with a different explanation, I’d love to hear it.

Why I’m Opposed to the Multiple Database Strategy

Now, my issue with this dual-database strategy for the sake of having a nuclear option is simple: real estate is far too important a pillar of the economy. We already have some problems with data accuracy coming out of the MLS, and that’s when we already have a “single source of truth” in the MLS database.

We in the industry are used to thinking about listing data from our own vantage point: buying and selling homes. Advertising them on portals. “Distribution” of the listing data and sold data and so on. What we’re completely forgetting is that real estate and mortgages are more-or-less the bedrock of the global financial system. That’s why when the Bubble burst in 2008, the entire economy went into a tailspin.

Real estate data is used not just by brokers and agents and websites and marketers, but by giant Wall Street banks packaging up and pricing multi-billion dollar RMBS portfolios. Do you really think that they would tolerate a disruption to the flow of accurate real estate data? Or have to deal with chaos in the marketplace trying to figure out if the MLS has the data or if Upstream has the data or Joe Blow has the data or….

If Upstream ever pushes that red button, resulting in chaos within the real estate market, there isn’t a shred of doubt in my mind that the CEO of Goldman Sachs would pick up the phone, call whoever is the President, and say, “You owe me!”

If you think the government is shy about coming in, telling all of us, “OK, playtime is over kids! Grownups are here to take charge!” then you don’t know enough government people.

Multiple sources of truth results in a national MLS. It just won’t be called that. It will be called something more like “National Property Registry” operated by HUD and CFPB. And that’s why I’m concerned and opposed.

Problem Two: Who Upstream Is In Bed With

The second unspoken-yet-everybody-knows problem with Upstream is its choice of vendor. We now know that just about every company who is a player in the MLS technology space submitted proposals to Upstream to build the technology. Included in that number were companies like CoreLogic and MRIS. That’s right, MRIS, the second largest MLS in the country, has its own technology team and bid on the project.

Upstream chose RPR, the subsidiary of NAR, as its technology partner.

Now, I have written about RPR in these pages before, and I should disclose that they were a client of mine and I’ve done some work for them. I happen to really like RPR and all the people there. Marty Frame is a really, really smart technologist, and people like Dale Ross and Jeff Young are very capable leaders, and Bob Bemis is one of my closest friends in the industry. So I have nothing but love for RPR that way.

But one of the most read posts on this blog is the one where I talked about the announcement of RPR back in 2009. Yes, it was rather laden with hyperbole… it’s how I write… so sue me. What I didn’t even mention in that post, however, is that the origins of RPR was in a NAR Presidential Advisory Group that seriously discussed the creation of a single national MLS under NAR’s control and ownership. Their ultimate recommendation was somewhat short of that, but read between the lines and you can see why the MLS people might be a bit nonplussed about this “Gateway” that ultimately took form as RPR:

Current and historical data about all real property will be immediately and easily available directly from the gateway or through participants’ service provider of choice. Properties available for purchase, lease or exchange will be “flagged” according to status (with the owner’s or principal’s consent). Properties listed with brokers will be distinguished from unlisted properties on the market (“FSBOs”).

In the initial stages the gateway’s database will include information about all real property in the U.S.

Information available to participants and subscribers will be:

  • Comprehensive
  • Timely
  • Relevant
  • Accurate
  • Objective
  • Secure

Service providers will offer participants access, value-added tools, and other enhancements to real property information, at prices determined by the service provider. Participants will be able to choose whether they will input / access real property information directly through the gateway or through the service provider of their choice.

Participants will cooperate with each other in the manner anticipated by Article 3 of the Code of Ethics.

Participants will have the opportunity to offer compensation for cooperative services. Offers of compensation, if any, can be customized.

Access to information will be subject to participants agreeing to arbitrate contractual disputes with other participants.

Participants will be able to register their buyer-clients, including their real property search criteria.

Let’s see… a property database with all real property, that is accurate, timely, comprehensive, and Participants (a term laden with meaning in the MLS space) will cooperate with each other, and offer compensation, and agree to arbitration, and even register their buyer-clients and the search criteria…

I don’t know about you, but if that’s not an MLS, I don’t know what an MLS is.

RPR partnering with Upstream to the MLS looks like a backdoor strategy to create this “national gateway” from the 2006 PAG which differs from the MLS not at all. A rose by any other name….

Just why Upstream chose to partner with the worst possible technology vendor they could pick, if they wanted the MLS to feel safe and secure about working with Upstream, is beyond me. Ergo, I must conclude that Upstream isn’t all that concerned about the MLS feeling safe and secure, and as long as they maintain the My Precioussss strategy of the Database, it’s really difficult to blame the MLS people for being more than a little bit wary.

I asked this question on stage at CMLS Las Vegas this year to a room full of MLS executives and MLS leadership:

“If Upstream had chosen Corelogic or MRIS as its technology partner, would any of you here have a problem with Upstream?”

Not a single hand went up.

So let’s be honest here. The reason why the MLS is hesitant about Upstream isn’t because they’re trying to keep the industry in the dark ages so as to keep their jobs. The reason the MLS is hesitant is because Upstream partnered with a company whose origins were in eliminating the MLS.

Now, you can say that the MLS should just suck it up and go out of business for the good of the industry… but then say that! Be honest for a change! Ken Jenny did; you should too, if that’s what you want.

Problem Three: There Ain’t No Broker Sphere

Third, you have the inherent problem when Upstream and its supporters — like Sam — want to position Upstream as a “broker initiative”. In the paragraph I quoted above, Sam suggests that the “tension” pits broker against MLS and MLS against NAR.

Thing is, that grouping of “broker vs. MLS vs. NAR” ignores the obvious fact which triggered Sam’s article in the first place: that Realogy doesn’t much care for Upstream:

At a private conference this week in Houston, Realogy Franchise Group CEO Alex Perriello questioned Upstream’s value proposition and whether the bifurcation of listing distribution could stifle innovation and add unnecessary costs because not all brokers and MLSs will participate. [Emphasis added]

How could that be? Not all brokers participating in Upstream? I thought Upstream was a broker initiative, and could speak for all brokers everywhere!

Sure, Alex was very politic saying the ultimate decision is up to the individual franchisee broker, not up to him as the franchisor. But are we to forget that the largest franchisee of Realogy Franchise Group is one NRT? The single largest brokerage in the entire country by orders of magnitude, which handles almost one out of four transactions in America? And are we to just pretend that Alex and Bruce Zipf, CEO of NRT, do not report to the same guy: Richard Smith, CEO of Realogy? Should we just assume that the RFG people and the NRT people, who all work in New Jersey at Realogy’s corporate headquarters, just never talk to each other?

We can, I suppose, if we want to be stubborn about continuing to position Upstream as something that all brokers everywhere want and support….

But put Realogy aside for a moment.

In every MLS in the country, the vast majority (I’m talking 70+%) of the Participant brokers are not HomeServices of America, NRT, or giant brokerage firms that belong to Realty Alliance. They are mom-n-pop shops with zero to five agents. They don’t work cross-market. They don’t have “overlapping market disorder” problems. They don’t worry about flow of data into their back office systems, because they don’t have a back office system.

In what conceivable way are these mom-n-pop brokerages in the same “broker sphere” as the one Sam keeps insisting exists?

Now, you can validly say these tiny ma-n-pa shops shouldn’t exist. You can say they should just go away and go out of business, and let the Big Boys take over. But as of today, the reality is that the “broker sphere” looks a lot more like a bunch of little tiny independents than it does the big companies working big deals with NAR. The “broker sphere” that Sam talks about looks a lot more like a small elite minority who would love nothing more than to put the little guys out of business, since, well, again, if we’re going to be honest about it… they all compete with each other for agents, for deals, for customers.

The single biggest complaint from large brokerages with the MLS in recent years is that the MLS “levels the playing field” enabling these little tiny guys to compete with them, even though the big brokerages spend millions on their technology, their websites, their programs. I happen to agree with the big brokerages in this particular area, but that doesn’t change the fact that the largest brokerage in the world competes with the smallest brokerage in the world for agents, deals, and customers.

So for the sake of honest discussion, it would be helpful if Sam and the other supporters of Upstream in its current form were to stop characterizing it as a “broker initiative” and correctly characterize it as a “big broker and national franchise companies initiative”.

Problem Four: Hastur the Unspeakable

In Cthulu mythology, Hastur the Unspeakable is a mysterious evil Elder God also called “He Who Must Not Be Named”. Well, in the context of Upstream (and possibly in real estate industry in general), that role belongs to Zillow, “He Who Must Not Be Named”. [DISCLOSURE: I have a business relationship with Zillow, but obviously, they have nothing to do with this post or these opinions. I sell my time, not my opinions. In fact, I may get in trouble with them for this post….]

The uncomfortable, unspoken truth about Upstream is that it is part of an overall strategy by the largest brokerages and national franchise companies to “take back power” from Zillow.

I’m not privy to how that strategy is supposed to work but I can guess.

  • Create Upstream, get wide adoption;
  • Spank the crap out of MLSs that have direct syndication deals with Zillow (“the red button”);
  • Force Zillow to agree to various terms “set” by each individual broker but guided by “standard forms” and “standard agreements” that Upstream will produce, not to mention the “certification process” that Upstream will oversee;
  • Simultaneously, launch the Broker Public Portal (the same companies are behind both efforts) and/or strike sweetheart deals with NAR’s preferred portal, Realtor.com, to try to take Zillow down a notch.

Or some such thing like that; like I said, I have no special information or insight into what the true strategy is or could be. I’m just putting two and two together.

In this context, let’s revisit Alex Lange’s blogpost paragraph from above:

Upstream is more akin to Google Drive than MLS related software. As a document owner, I can share it with you. I can share the entire folder with someone else. As the owner, I can control that access anytime. Google only provides the ecosystem that enables the sharing. They don’t touch, manage, police or use your documents. Only the owner and those entitled have access.   It’s not just for documents just as Upstream isn’t simply about listings. The parcel, roster, and vendor data just happen to be where we are starting. Data use agreements are between the broker and the entitled recipient. Any existing agreements between brokers, vendors, and their MLS remain intact. Again, Upstream is closer to Google Drive for real estate data than MLS related software. Brokers determine who gets access, what fields are available and what frequency the data can be pulled. [Emphasis added]

“Brokers determine who gets access, what fields are available and what frequency the data can be pulled.”

Now, let’s be honest here. [Boy, I’m saying that a lot in this post….] Is determining what fields and frequency the data gets pulled really critical to the broker as it comes to the printing company doing Just Sold postcards? Do brokers today have a major problem with CRM companies like Boomtown or Contactually constantly pulling data, and all of the fields, instead of just a few that the brokerage would like Contactually to have? Is the major headache of brokerages the problem of Lone Wolf pulling too many fields too often to populate the back office program?

To ask the question is to answer it.

The only companies that brokerages want to limit in terms of what fields and how often are public facing portals, and number one on that list, with a giant bullet (and a target on its back), is Zillow.

I’ve always though the whole “syndication war” was silliness on steroids, years and years ago. Do an archive search if you’d like. But the Affaire d’Upstream has brought things into focus. Let me explain why.

Retsly, Bridge and Data Technology

If what brokerages really wanted was single point of entry, ease of data management, and ability to control data distribution, they did not need RPR and $12 million and a multi-year development cycle. Just about everything that Upstream brokers say they want has existed and exists today in the technology assets of Zillow Group.

Zillow has owned Retsly since 2014. What does Retsly do? Here’s Techcrunch, not a real estate media company, describing it:

Real estate site Zillow today announced that it has acquired Retsly, a Vancouver, B.C.-based startup that helps developers access real-estate data from multiple listing services (MLS). The service takes the data from these sites and normalizes it so developers can more easily use the data in their own applications. The financial details of the acquisition were not disclosed.

In addition to its service for developers, Retsly also provides MLSs with tools to manage software applications in their market and ensure that their content is being used appropriately.

I go on the Rets.ly website and find this nugget:

retsly-brokers

Imagine that. A data management solution that would help brokerages not have to deal with getting data from multiple MLSs into their CRM, CMA, Accounting, Back Office platforms and gives them total control over data sharing.

Sounds… just like Upstream! But what about the single point of entry piece?

Say hello to Bridge Interactive, which Zillow just acquired. What does Bridge do?

bridge_-_rets_driven_software_for_mls_and_brokers

Even before Zillow acquired Bridge, they had the capability and the technology to provide a single point of entry and direct data distribution. Bridge was working with a number of MLSs prior to the acquisition; I suspect Bridge is trying to reassure those clients now that it has become part of He Who Must Not Be Named. But anyhow…

Between Retsly and Bridge, every stated goal of Upstream and its brokerages can be met by the MLS, not a year from now, but today simply by working with Zillow.

  • Single point of entry, check
  • Control access to data, check
  • Direct data distribution, check
  • Developer API’s so CRM vendors, back office vendors, etc. can access real-time data from multiple MLSs, check

Oh, and if you need data storage, I understand Amazon Cloud is really cheap.

Should some esoteric data capability not covered be necessary, well, Zillow spends about a quarter-of-a-billion-dollars every year on Technology and Development ($67.2 million in Q2 of 2016). I’m sure they can spare a few developers and coders to solve whatever problem the brokers and MLSs might have with data management.

say-anything-1-435x580
Just love me, pleeeeease!

And you know what? Knowing the Zillow guys, I’d bet they’d do all of that for free if they could get access to listing data to power their advertising business.

So why hasn’t this happened already? In fact, when Upstream was putting out bids, Zillow already had Retsly in its fold. Were they asked to bid on the project? I mean, we’re only talking about the largest technology company in the real estate space, right?

The answer is obvious. If solving data entry, data management, and data distribution were the real motivation for Upstream, Zillow would be the ideal partner. Zillow is desperate to have brokers and MLSs like them, quite like some desperate nerd trying to get the Homecoming Queen to notice him. But those aren’t the real deep motivations for Upstream, are they?

Put It Together, Be Honest, Stop the Propaganda

So let’s put it all together, because once you assemble the pieces, it all makes sense.

If the ultimate problem to be solved is Zillow and its growing power in the industry, and you’re a big broker or a national franchise who’s pissed off at how valuable Zillow is becoming to your own agents, how can you attack Zillow?

Starve the beast, of course, of the food it needs — real estate listings.

But Zillow goes and strikes deals with the MLS, because the local MLS is comprised not of a few very large brokerages who share the sentiment, but comprised mostly of hundreds of mom-n-pop shops who not only don’t care about data management problems, but actually want the MLS to handle syndicating listings to Zillow for them. A lot of the Board members who control the local MLS are exactly these mom-n-pop brokers or their agents. So how to solve that?

Well, you gotta smack down the MLSs that insist on feeding the beast. In order to do that, you need some sort of weapon against the MLS itself, a nuclear option, a red button that you can push when the MLS crosses the line.

In order to have that nuclear option, you must have a database of listings that sit outside of the MLS itself and can be used as a credible threat against the recalcitrant MLS. That explains the My Precioussss strategy right there.

Given those motivations, who better as a technology partner than the other major power who fears and hates Zillow: NAR. (Remember, NAR just settled a lawsuit for like $130 million with Zillow, and kicked all Zillow people out of any official events, like Midyear and NAR Annual.)

Thing is, you can’t actually go public with these motivations, because the DOJ is likely to come down on you like a sledgehammer, and because not everybody fears and hates Zillow, so you need a cover story, a reason to do all of the above, without seeming like you’re doing it to take down Zillow. Data entry and data management and distribution! That’s the ticket!

You’re Dead Wrong, Rob

It is entirely possible — hell, I’ll even say it’s likely that I’m wrong for the sake of discussion. Upstream and the MLSs can prove me wrong very, very easily in a few steps.

  1. Tell all of your CRM, CMA, back office, Accounting vendors to start coding against Retsly. They’re your vendors; they have to do what you ask, or you’ll find another vendor who will.
  2. Go to the local MLS and tell them to install Retsly and Bridge.
  3. Ask Zillow to build a non-listings database for all of the data that Sam and Alex insist are far more important than listings data, and to do it for free, in exchange for access to data.

Voila! Single point of entry across multiple MLSs, data management, reporting, data distribution, control over data! Everything Upstream has said it wants, without upsetting the fundamental infrastructure of the real estate industry (the MLS), without creating a separate listings database as a “single source of truth”, and without spending tens of millions of dollars.

There, you have proven me wrong. Dead wrong. Completely misguided.

It’s Not Throwing Shade; It’s Justifiable Concern

So in conclusion, after lo these many words, let me suggest that the “industry” is not throwing shade at Upstream because certain powerful entrenched interests want to protect their sinecures and salaries and such. (Resisting consolidation is motivated by those things, but not resistance to Upstream.)

But once we get honest about what’s going on here, and get real about the unspoken, unpublicized issues behind the scenes, then I think we see that most of the “shade” is actually justifiable concerns on the part of people who don’t want to see the baby out with the bathwater.

Not to overly toot my own horn, but… I can’t help but note that my series on the Future of Organized Real Estate (which I began yesterday) might help solve most of the underlying issues here. Because the issues are not technological, nor are they even political to some extent. They’re financial. We can solve that. But that will have to wait for future parts (or you can invite me to address your Board of Directors or something crazy like that).

Okay, this got long enough. Actually, it got waaaay long. I apologize for the length, but hey… some things just have to be put out there.

And Sam? I still love ya, man. Thanks for fodder for great conversation.

Here’s to a little more honesty in the industry.

-rsh

23 COMMENTS

  1. Oh, Rob. I’ll first offer exhibit A for context:

    “There are viable arguments against Upstream and its potential for success, but they seem to be the exception.” – me

    I’ll put this novella in that exception category for now, until I get a chance to really dissect it. I’d love to hear more honesty from all sides of the industry, but that seems increasingly difficult. See you in Orlando.

  2. Rob,
    Have you been listening in on my office intercom? Your whole piece goes exactly to what we have been trying to resolve here in NJ. How does a broker or agent streamline their data entry processes when they must belong to at least 2 and often 4 MLSs to serve their market area?

    Zillow as large as it is, is much more nimble and able to bring technology to the industry.

    BTW: Who stripped the input/update piece out of RESO and the Web API mandate?

    • The situation in NJ can be solved in the short-term by currently available technology. If you are one of the irrational Zaterade drinkers, you can look at Trestle and the new Paragon for Brokers.

      Over the long-haul, the only solution is to free the MLS from the town-council style of governance coupled to the geographic monopoly of the Associations. Businesses must grow; towns do not have to.

      PS: I’m not a huge fan of mandates from “up-above” even if it is a great organization like RESO. But that’s a more complicated topic. 🙂

  3. Why in the world would the industry give that control to a competitor? Zillow is a competitor – not just a portal, but a brokerage.

    Rob, I dont see why you think Zillow would be upset with you writing this piece. More likely is that they will pay you more for shilling for them.

    • Oh Bob… this comment would make me laugh if it weren’t so sad. Could I recommend some counseling to find out where this irrational Zillow hatred comes from?

      Zillow is not just a portal but a brokerage… based on… what exactly? All the statements by all of the Zillow executives and staff that they have zero interest in being a brokerage? #SMH

      And the “industry” can’t use Retsly and Bridge because that would be “giving control to a competitor” but should embrace the hell out of Upstream because all of the companies behind that are… what… not brokerages?

      Using a vendor for technology means “giving control” which means that the industry is currently controlled by Corelogic and Black Knight and FlexMLS? I mean, c’mon Bob, listen to yourself. 🙂

      I would like to advocate for *rational* hatred of Zillow. For example, “Zestimates killed one of my deals!” or “There’s another agent on my listing!” or something like that. Those are wrongheaded and illogical, but at least they’re not completely off-the-rocker irrational.

      • You are so correct Rob. No entity that is focused on making a profit would have as a part of its strategy to become a real estate broker. Franchises, relocation companies and especially the media portals stay as far away as possible from the highly competitive and low margin business of delivering brokerage services. Yes in real estate brokerage volume does cover up multitude of sin, but remove the volume and all you have left is a sinful ROI. Subject to trends of the real estate market cycles – make a fortune, and then lose the fortune – it is the plight of the real estate broker.

    • Great article, that. Sorry I missed it when it was posted.

      My biggest fear with all of this is government intervention. And you’re right — unless somehow the needle gets threaded, HUD/CFPB/DOJ/FTC are going to get involved.

  4. Rob. Without question, this is one of the most comprehensive works on the subject of Upstream. One fantastic job! Every broker in the Country should read this blog. This from the guy you have referenced here that believes that it is time to focus the need for dramatic change to that which needs dramatic change – namely the MLS. Honesty is always the best policy until there is the insertion of the agenda that defines the politics of organized real estate. Shhhhhh. I get it. Way too much is a stake here for organized real estate to allow the entry of a new data service provider intending to break the MLS monopoly. Massive change would result – along with a ground zero scenario for organized real estate would certainly occur. At every turn, and for reasons that are totally uncalled for, organized real estate calls out Zillow as the devil. Go figure. So as an industry injected full of fear, we are relegated to “marrying our cousins” – sourcing solutions for industry issues from only within – rather than engaging qualified outside resources and creating something that addresses the core – and still present – business issues the brokers have with the – say it – MLS. All of this incestuous behavior has resulted in the NAR providing funding (actually applied mostly to cover the cost of building the RPR-owned AMP technology), the application of NAR controls (it has directly influenced the Upstream Charter – not allowed to become an MLS), being powered by RPR (the failed “cousin” of NAR, now enter a fully-funded AMP) and a carefully architected plan for the continued co-existence (albeit for the meantime) with the current MLS industry that all now defines Upstream. And so I rest my case. Well at least for now.

  5. I’ve said from the beginning, if Upstream wants all listing data in one place, all MLS’s have the capacity to send the data to the Upstream utility, and if an MLS does’nt have that capacity it should not exist.
    The data is broker controlled in our MLS, want it to go to Upstream, check the box, it will be sent there! No need for a new data entry system for agents to learn, no issues with data replication, RESO compliant data is in force ….

    • It’s not just listing data. Most MLSs don’t accept a broker load, i.e. all of the other broker data fields associated with a listing that don’t need to go into an MLS. This is just one inefficiency that tools like Upstream, Bridge Interactive, etc. have been trying to solve.

      • I’m confused by this answer. Do you want the MLS to accept that broker load of non-listing data? If not, everyone is fine with Upstream being the single source of truth for non-listing broker data.

        Seems like a poor reason to setup a separate listings database. What am I missing Sam?

      • I’m merely responding to the comment that there are “no issues with data replication”, which ignores the other kinds of data that brokers are attempting to streamline as well. There’s a bigger picture.

  6. Rob – You completely nailed it 100%. You forgot part 5: who controls the leads? Didn’t I read some time ago that Upstream wants control of the data to sell the leads back to the agents? Follow the money.

    • No, Upstream has never wanted to sell the leads back to the agents. It has always been designed to help brokers and agents get more of the leads on their own listings. Upstream doesn’t control any of the consumer-facing platforms. That’s where leads are generated. The way brokers’ data is displayed on those platforms will determine if the lead comes back to the broker or is distributed elsewhere by the consumer-facing platform.

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