Category Archives: Real Estate

RPR-Upstream and Personal Liability for NAR Directors

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I’m still at the NAR Midyear Legislative Sessions and heading out to meetings soon, so this will be brief. By now, you know that NAR’s Finance and Executive Committees have approved RPR to become the platform for the hitherto-mysterious Project Upstream. Inman News has coverage of the decision.

Thing is, this decision highlights precisely what is problematic with governance of Organized Real Estate entities, both Associations and particularly MLSs. NAR’s DANGER Report released yesterday highlights governance as a major threat, and I know from talking to various attendees that governance and the decision-making process are two major complaints from rather powerful and influential people in the industry.

If I were one of the 800-ish Directors of NAR, I would seek legal counsel from my personal attorney on what personal liability issues arise from my voting to approve or disapprove the RPR-Upstream project. Let me explain, briefly.

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More on Trim Tab, RPR, AMP and the Future of MLS Technology

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I see… mass customization of the MLS!

Now that I’ve been liberated from some of my confidentiality constraints (see my previous post, which required permission from various companies I had non-disclosure agreements with, as well as permission from a client to discuss work I had done for them), I can opine more freely about the topic of RPR, Advanced Multi-List Platform (“AMP”), and the future of MLS technology.

Let’s start by a fair criticism of RPR leveled by a level-headed guy. Brian Boero of 1000watt, emerged as a reluctant critic last Friday, writing this in his post “Friday Flash: The Last RPR Critic“:

RPR is going to get into the business of providing MLS “Back-end” services – the database/data management/heavy lifting sort of stuff – so that more MLSs and MLS subscribers can implement their own “front-end of choice.”

The bottom line is that a lot of money has been spent on an initiative for which the market has provided no convincing validation. And now it seems poised to expand into an entirely new dimension.

I don’t get it. I really, honestly, don’t. It was a noble idea put forth by well-meaning, intelligent people. But now it seems to me like the driving force is saving face, not saving member dollars.

I think this is a very fair criticism, if what you assume RPR is doing is pivoting to becoming a MLS vendor. Since I believe (well, hope, since I’m no longer advising RPR) that RPR is doing something completely different, I think people should take another look at least at the concept of AMP.

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Project Trim Tab: From Dream to Reality

[NOTE: This is a post I wrote for a client, SIRMLS, and decided to cross-post to my blog because it tells so much of my personal involvement in it. Thanks to Tim Dain and to SIRMLS for the opportunity to tell the story, and granting me permission to cross-post to my blog.]

Project Trim Tab Team

Has it been a full year already?

“Something hit me very hard once, thinking about what one little man could do. Think of the Queen Mary — the whole ship goes by and then comes the rudder. And there’s a tiny thing at the edge of the rudder called a trim tab.

It’s a miniature rudder. Just moving the little trim tab builds a low pressure that pulls the rudder around. Takes almost no effort at all. So I said that the little individual can be a trim tab. Society thinks it’s going right by you, that it’s left you altogether. But if you’re doing dynamic things mentally, the fact is that you can just put your foot out like that and the whole big ship of state is going to go.

So I said, call me Trim Tab.”

— Buckminster Fuller

Introduction

The dream of fundamentally improving the MLS technology platform has been one that the industry has talked about for years. We have seen a surge in credit-taking amongst the “thought leaders” within the industry in recent weeks, as RPR has started to shed light on their Advanced Multi-List Platform, aka AMP™. But the concept of a flexible MLS, powered by modern API’s (Application Programming Interface), which allows for flexibility and innovation has been around since at least the mid 2000’s when technology companies like Google, Facebook, and Salesforce debuted the concept of API’s and “mashups”.

As is said, success has many fathers. But in this case, many of those were absentee dads at best. The real story of what is possibly the biggest advance in the MLS industry since the advent of the Internet itself cannot be told without mentioning the central role of SIRMLS.

As I was the author and architect of this overall effort, I know better than most just how valuable SIRMLS and its leadership have been, and remain. I know that we would not be discussing AMP, RPR, and the overall concept of the modular MLS had it not been for SIRMLS, its Executive Director Tim Dain, the Presidents Brad Krueger, Rick Lauschke, and Lindsey Egner and the Boards they led. Without the courage to take risks, to support, and to invest in moving forward when everyone else wanted to wait and see, there would be no story to tell.

We thought it was worth laying out the journey from the start to where we are today. The future makes sense only in the context of how we arrived at the present.

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The Truth About OfferGen & Telephonophobia

Telephonophobia

For the Gen-Y readers: that round thing with holes in it is called “the dial”. I know you’ve never seen one in the wild.

I recently had the pleasure of talking to Andrew Flachner of RealScout, who penned this article on Inman recently:

The answer to me, and to many real estate veterans, is obvious. A strategy that directly focuses on producing more transactions, while providing more value to the client, is far more rewarding, both financially and professionally.

“Offer generation,” the strategy of systematically and scalably converting clients into transaction offers, is the direct result of this realization. It will benefit the industry to have the same thought leadership, financial investment and technological innovation garnered by lead gen to be redirected to “offer gen.” We need to focus more on generating offers and less on generating leads.

I couldn’t agree with Andrew more on the concept and the philosophy behind this “OfferGen Movement”. But I thought I’d write this to point out the obvious truth about OfferGen, and make a suggestion or two (that will go ignored by the Powers That Be, of course).

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The National Broker Public Portal — Not for everyone?

The National Broker Public Portal announced appointment of its initial board of managers this week. In the press release they state that the project is designed to fill “an unmet need in the online marketplace.” Unfortunately, don’t define what that need is, leaving many readers still scratching their heads wondering “Wha??” Have these folks divined a gaping hole in the Zillow/Trulia product strategy and set about to fill the vacuum before anyone else sees it? With hundreds of listing portals and tens of thousandsBroker Portal Logo of agent and broker IDX sites, how could there possibly be any “unmet need” remaining anywhere? We shall see what that means.

In their earlier information releases, the group described the project as “the Creation of a National MLS Consumer Facing Property Search website.” Apparently it evolved to a Broker website in the past 30 days which is most interesting given that it is to be funded by MLS dues to the tune of somewhere between $1 and $3 per MLS subscriber per month.

The funding basis was made possible by a redefinition by NAR some time ago of what Basic Services are in MLS land. Basic Services now includes public facing MLS websites which can be supported by dues paid by ALL MLS subscribers even though they may compete with SOME subscribers and their brokerages. Interestingly enough, the larger brokerages and franchises fought this change heartily. In May, 2013, The Realty Alliance wrote a letter to the MLS Policy Committee stating, “… since we are not in favor of MLSs establishing public-facing listings display websites, we certainly do not favor leaving only the words, “establish or maintain” in the authorization to use our dues/fees/reserves as it is too wide an authorization. Significant dollars of ours could be spent “maintaining” these sites, including marketing and promoting these in competition with broker IDX sites.”

Bob Moline, President and COO of Berkshire Hathaway Home Services and the first name on the announced list of newly elected managers of the Portal, wrote at the same time:

We have no doubt, based on proposals and communications of others of which you are, no doubt, aware, that some want to use the fees and dues collected by MLSs and Associations to actively market public-facing sites. Such expenditures–and the public facing websites themselves–would put MLSs and Associations in competition with many of their broker-members, specifically their larger broker-members.

Therefore, we strongly suggest that the proposed new language on advertising specifically exclude the use of MLS of Association dues or fees to market public-facing website. (emphasis added)

Yet, that’s exactly what happened. Despite the protestations, the NAR Board of Directors approved the MLS committee’s proposed rules change and included MLS public facing sites in the definition of Basic Services. Now the Realty Alliance and other major brokers are backing the biggest implementation so far of the new policy.

Please don’t misunderstand — I am not accusing any of the major brokers of doing a flip-flop on this issue. It actually makes great sense for the brokers and major franchisers to back such a move, even though they opposed the rule change that made it possible. From their astute perspective, it is easier to manage one national MLS portal than 600-800 small ones. By imposing the Fair Display Guidelines (see below) from the top down, they need not fight the multiple skirmishes that would surely arise from a bottom up approach.

Much conjecture and critique has been levied at the project and it’s not even off the drawing boards yet. But in all that’s been written about the Broker Public Portal, one question has not been asked that I think needs to be addressed before it goes further.

One of the core tenets of the project is the adoption of the Fair Display Guidelines that the Realty Alliance developed back in 2012-13. Guideline number four states, “ No Ads For Other Brokerages Or Agents Displayed On Or With A Brokerage’s Listing” and goes on to explain:

Only the actual listing broker and agent may be displayed on the property details page. No ads from companies that may compete with a broker’s affiliated business such as mortgage, title, or escrow companies will be displayed on an individual property listing page.

So only the listing agent and brokerage will appear on property detail pages. Buyers’ agents, who by definition do not have any listings, will not be given any exposure at the “point of purchase” – the moment when a potential buyer has a question but perhaps doesn’t want to ask it of the legal fiduciary of the seller for fear of disclosing something about his/her negotiating position. Those buyers agents are members of the same MLS that is supporting the Portal; they are paying the same dues as the listing agents; and $1 to 3 of their dues payments each month are going to fund this portal project. Yet they get nothing in return? How is it that no buyers’ agents have asked the magic question, “What’s in it for me?”

If the average MLS subscription fee is around $25 to $28/month, then somewhere between 4% and 10.7% of the gross revenues of the MLS are going to pay for a Portal that benefits only the small minority of agents who actually take listing contracts. That seems grossly and unfairly lopsided. I’m surprised someone hasn’t challenged that model yet.

~bb

This post also appears on Procuring Cause blog.