Notorious R.O.B.

The average denizen of the RE.net cybercafe — that includes you, since you’re reading this on a blog — knows that the hot topic du jour is syndication. I wrote about it here and here already, but frankly, have been talking about this issue for quite some time. And influential bloggers like Jay Thompson and Kris Berg have weighed in, and Facebook groups are all over this issue.

And I’ve gotten a couple of phone calls, a number of emails, and Facebook messages and such debating my one critical issue with me. I wrote that the issue here isn’t syndication, which is more or less dead in its current form, but IDX. And that one cannot be against syndication but for IDX. Jay Thompson agreed, while Kris Berg (to take but one example) disagreed.

So I’d like to explore this connection more, to clarify why the distinction between syndication and IDX does not, and cannot, hold. And what that then means for the future of the industry, by connecting a couple of dots.

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Another brief update, before my day of continuous meetings begin….

Regarding my post yesterday on the syndication brouhaha brought on by Abbott Realty Group… first, you need to read Jay Thompson’s take on the subject. He takes longer to articulate the issue than I did, and I think more clearly than I have:

If you feel syndicators are harming consumers by making it difficult to contact listing agents, they you must, MUST, also keep  your listings out of IDX distribution. The exact same issue of not reaching the listing agent that seems to bother so many in syndication also exists in IDX.

Trust me, we get calls and emails – seven days a week – from people searching on this very site who think we are the listing agent for the property they are viewing. Every. Day.

Don’t get me wrong. I **LOVE** IDX. It’s the lifeblood of my prospect generation efforts. 6,742 IDX search registrations in 2011 is a great thing. But if one of your main arguments for pulling your listings out of syndication is because potential buyers are confused and can’t reach the listing agent, then you MUST also pull out of IDX. The same problem exists in both systems. You can’t have your cake and eat it too. Pulling out of syndication but using IDX smacks of hypocrisy.

The “syndication debate” will not end with smacking down TruZiltor. It will ultimately end up being a debate about buyer agency, the purpose of the MLS, the purpose of data-sharing. I’ve been predicting we’ll be doing that by NAR Annual in November. Maybe it’ll happen sooner than that.

I think that’s a wonderful, needed debate within the industry. Bring it on, I say, and sooner the better.

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It was the best of times, it was the worst of times. The recently concluded NAR Convention in Anaheim that is. On the one hand, it was great to see old friends, make new friends, and engage in some wonderful conversations about everything from IDX Policy to branding to dating habits of college students. On the other hand, the entire convention was infused with an air of obstinate unreality, as if we all were jewel-bedecked revelers on The Titanic, dancing the night way sipping on champagne….

Based on hallway conversations, based on drunken whispers at industry parties, and based on what I’ve read and heard over the past few months, I believe there is an extinction-level event approaching the real estate industry. And all of the official groups, all of the powers that be, have failed to address it. So I will.

There is, I believe, a real chance that in the next three to six months, we will see the splintering of the foundation of the industry: the MLS and the Associations. The world that comes next, a world without the Multiple Listing Service, will be one filled with unintended consequences.

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The Syndication Hole

One of the most fun things about coming to a NAR event — whether Mid-Year or Annual — is the ability to connect previously unconnected dots and have an A-HA! moment. I had one such moment yesterday in the legal seminar put on by NAR. I thought I’d jot down a few thoughts, as the MLS Policy Committee meeting is tomorrow, and this particular issue should be discussed and adjudicated there.

I’ve written about the current MLS IDX Policy language before, noting that the key term is “control”. I believe that the latest version adds some clarification along the lines of “control means that you can comply with the IDX policy”. It’s a bit circular, but I get the idea.

Then yesterday, I’m attending the legal seminar where Gregg Larson presents to the assembled legal counsels for hundreds of Associations and MLS’s on the topic of syndication. And I have an A-HA moment.

Seems to me that there is a giant hole in the IDX policy, and it’s called syndication. We’re gonna need a far tighter definition of “control” to plug that particular hole.

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Yesterday, your faithful correspondent was part of an interesting session held by the Council of MLS (CMLS) here in Anaheim on branding or certifying MLS data. The basic premise with which the meeting began was something like the following:

• The MLS has a strong brand for trustworthiness and accuracy in the consumer’s mind
• Consumers assume that all real estate data is MLS data
• Third party data is crap
• Therefore, the MLS should brand and/or certify MLS data

Various speakers presented various pieces of evidence supporting the above. And if you accept the premise above, then branding the MLS data in some way is a no-brainer. The two methods proposed are (a) brand the destination as “MLS Trusted”, and (b) certify the listing data itself as “MLS Certified”.

But I have my reasons for wondering about the assumptions.

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So Zillow buys up IDX provider, Diverse Solutions.

First of all, congratulations to Justin LaJoie and the rest of the team at Diverse Solutions, as well as to Spencer Rascoff and the folks over at Zillow. I don’t know what the real motivations behind the acquisition were, but at a minimum, you can say that two great teams of real estate technology people are joining forces.

Second, I don’t have a whole lot of time to devote to deconstructing the Zillow acquisition of Diverse Solutions, but did want to present a quick reaction from three different perspectives: Friendly, Hostile, and Mine. I suspect most people’s response to the acquisition will fall into one of the first two buckets, while a very small minority (of one person perhaps) will fall into the third.

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I’ve been traveling more or less nonstop for a couple of weeks, and busy as hell in any event, so I kind of missed the controversy around Redfin’s Scouting Report. I’d suggest heading over to Jay Thompson’s blog to get his thoughts on the product, and the various responses from the real estate industry to it. I don’t have a whole lot to add to the controversy.

But there are at least a few things that most of the commenters are missing on this controversy. I’m far more concerned, actually, about the responses to Scouting Report and what they say about the industry than about the Scouting Report itself.

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“No servant can serve two masters.”

- Jesus Christ, Luke 16:13

Judith Lindenau, a consultant to MLS and Associations with decades of experience, recently wrote a post in which she took up my modest suggestion of making brokers pay for the MLS. It’s worth reading the whole thing, as she presents some countering views both to things I have suggested, as well as to things I have not suggested.

I thought it worth musing on some of her points — as well as the points raised in the comments by luminaries such as Gregg Larson of Clareity and Victor Lund of WAV Group, men who have been in this industry far longer than I have, whose opinions I always take seriously.

In her post, she lays out two main counter-arguments:

1. Making brokers pay doesn’t solve anything, and it’s been tried before and is being tried today by various MLS’s.
2. The problems facing the MLS requires dynamic solutions, tackling complex issues such as governance, vendors, NAR policies, and the like.

As Gregg Larson puts it succinctly in the comments, “This is a lame discussion.”

Well, as much as I’d hate to extend a lame discussion, there is something worth exploring here, so I’m gonna indulge myself and do just that.

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Over at 1000watt, there is a rather interesting debate going on with some heavy hitters contributing, on whether big brokers should or should not support innovations and tools by the MLS or Association. Go check it out if you haven’t already.

The general thrust is that Brian Boero and Marc Davison both believe that innovations are an unqualified good, and that big brokerages have no reason to oppose innovation wherever it occurs — even if that is at the MLS, at the local Association, or at NAR. As Marc writes:

If you share this belief, then I submit it would be impossible for you to ever stand in the way of any innovation or impede anyone from offering that innovation. Even an MLS.

If you share this belief, never fear a tool. And always proceed by having supreme confidence in what you could do with any tool versus others.

The basic idea is that the big brokerage, with its superior execution ability will benefit more from any tool or feature offered by the MLS/Association.

The counterpoint, articulated well by a few folks who are in a position to know, is that brokerages invest heavily in technology, in tools, and in innovation. And that the MLS or Association offering those same capabilities out results in an unfair leveling of the playing field. For example, here’s Pam O’Connor, CEO of Leading Real Estate Companies of the World:

Many brokers (and not just the largest ones) invest heavily in tools for their agents for the purpose of differentiation with consumers and attracting the best and brightest. It’s called competition. To have their local association or MLS then offer the same thing dilutes that investment and competitive edge.

It’s an interesting discussion.

Well, I have a concrete suggestion to every MLS that I think would go a long way towards solving this particular conundrum. I happen to think it’ll help some other conundrums as well.

The MLS should cease collecting payment from the agent/member; it should, instead, collect payment directly from the broker, and only from the broker. Change the customer of the MLS to be the brokerages, and some of these problems become easier to think through.

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The Future of the MLS?

Last week, at the Inman Connect conference, I got into a rather interesting — if dry and technical for non-lawyer types — discussion with Brian Larson about whether MLS could escape being classified as a public utility. I’m not going to go into that, since that discussion tends to have a lot to do with issues like anti-trust exemptions, regulation, various legislation throughout the years, etc.

Instead, let me ask a patented Notorious Dumb Question.

Why should not the MLS be a public utility?

Right now, I can imagine the readers of this blog divided into three groups. The first group is smiling acidly in incredulous bemusement, because they know what the hell it means for a MLS to be classified as a public utility. “You just don’t get it,” I can hear them say. To which I say, read the whole post, coz I think I do get it. The second group is going, “What the hell does that mean?” And the third group has already hit the BACK button. See ya!

For those remaining… a brief (I promise) detour.

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