Tag Archives: RPR

REALTOR Dues to Pay for RPR? (UPDATE: CONFIRMED! Plus More!)

 

As a blogger, rather than a “credentialed journalist” (whatever that means), I have the freedom to just pass on rumors, as long as I label them as such. Well, consider this one of those rumors I have not confirmed yet. [UPDATE] I just got a second person to confirm the rumor. Two people saying the same thing now moves this past the realm of rumor into a confirmed report. More detail below..

I’ve heard from a reliable source earlier this evening that there are some major changes afoot at NAR. The biggest upshot of the changes is that starting in 2012, portions of the dues from NAR members will go towards supporting RPR, REALTORS Federal Credit Union, and other so-called “Second Century” Initiatives. A few minutes of Googling suggests that the original Second Century Initiatives program — which included a line item for “The creation of a national gateway for real estate information, not a national MLS” — was funded by a $16 increase in dues in 2008.

But from the start, RPR was presented as a wholly-owned for-profit business unit of NAR that would be self-sustaining, after the initial investment of roughly $25 million to buy the Cyberhomes assets from LPS and a few million for LPS data. The idea was that the data generated by RPR would be very valuable when sold to financial institutions, government agencies, and the like, and the operation would throw off enough cash not only to continue providing the system to REALTORS at no charge, but also to generate enough profit to pay back NAR.

For reference, here’s a report of a Q&A session with Dale Ross, CEO of RPR, back in March of 2010:

Why should Second Century need to be paid back?

NAR’s Second Century fund is a venture capital fund which must paid back for its investments. However, that’s not the source of RPR’s funding. RPR money comes from an NAR technology fund set up with $100 million fund (from investments); NAR’s Finance Committee stipulated that monies must be paid back to replenish fund.

Since you’re providing RPR for free, where is money coming from? What happens if your revenue models are way off?

Three scenarios: app doesn’t work, we shut down; app works and rev model works, win-win; app works but rev model off. We project we’ll need $50 million/yr to run it… if it is valuable and not generating cash, we’ll figure up another funding source. If members want it and NAR Directors decide that is best way, that could be a member dues increase. I have never seen pro formas work; I have pushed the numbers around based on a 36-month breakeven. We’ll see. (Underline added for emphasis)

Well, if the rumors that member dues will start paying for RPR starting 2012 are true, then I’m gonna take a wild stab and suggest that the 36-month pro formas were way optimistic. Since we’re looking at a dues increase in two years (launch in 2009, dues funding decision in 2011 to take place in 2012) to support RPR.

A few questions arise. The first of which is, “So uh, is this true?” I’d love for anyone who can confirm or deny the rumor. Please feel free to contact me privately via email, twitter, Facebook, phone, whatever. My contact information is on the About page. More questions follow, all of which assume this rumor of dues funding for RPR and other Second Century Initiatives is indeed true.

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Shiva Ranks! (A Way To Rate Innovations)

Recently, I mused on the nature of innovation and how it goes hand-in-hand with destruction.  The key thought, as pointed out by a savvy commenter, in that post is:

Or thought of another way, when you look at the innovations in the industry today — whether mobile apps, CRM technologies, social media, RPR, or whatever — you might ask, “What part of the industry does this innovation destroy?”

If the answer is “none”, then that thing, whatever it is, is not innovation.  It is, rather, incremental improvement; a marginal gain in efficiency.  It isn’t the automobile, but faster horses.

It seems to me that the corollary of “if it doesn’t destroy, it isn’t innovative” is that the degree of innovation is related to the degree of destructive potential.

So where would some of the recent much-discussed innovations rank on the “Shiva Scale” — the degree to which said innovation would destroy one or more parts of the real estate industry?  Let’s say the Shiva Rank goes from 1 to 10 where 1 might be “as harmless as a baby bunny” and 10 might be “thermonuclear bombardment from orbit”.  Where would some of the recent innovations rank?

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Very Slow Live-Blog of #HARREIS

I’m going to try to do a bit of a stream-of-consciousness “live-blog” here at Houston Association of REALTORS Real Estate Investment Symposium.  I put that in quotes because (a) I’m distracted often, and (b) the bandwidth isn’t the best off my little MiFi device.

I’ve already missed a couple of the early presentations from Zillow, Google, and Move, but a couple of interesting things from this morning.

Sam Sebastian from Google suggests that the future of real estate broker is as an ‘information broker'; I asked if he could elaborate on that, since the experience of the past ten or so years is the opposite: information that used to be held by realtors is now all over the public via the Internet.  Isn’t the trend more and more towards realtors becoming customer service people rather than information brokers?

The answer — and it’s a good one — basically seems to be (at least interpreting Sam) that by “information broker” he meant something more like an analyst.  That the future of the realtor is as an interpreter of all of the information and data that’s all over the place on the Internet.

Interestingly, Google’s search on real estate terms is up 20% year over year, despite the terrible market.  Incidentally, I think that’s contradictory to the experience of the other big real estate websites (or at least used to be a few years back), but I haven’t seen recent stats.

[EDIT: This is getting very long, so it continues after the fold.  And forgive me for the ugliness of the post; it’s the nature of a “live-blog”.]

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Missing the Forest for the Trees: the RPR License

See that green pattern on the bark! That's 3.2(b)(iii) of the License!

Once again, I find myself in the curious position of praising the good folks at RPR while at the same time ending up on a negative note.  On the one hand, RPR’s posting their Content License Agreement (complete with redlined corrections) is by far the most transparent thing that I’ve seen a company do in real estate industry thus far.  Kudos not just to Reggie Nicolay, the Social Media director of RPR, but also to Marty Frame and to Dale Ross, the executives in charge of RPR.  These guys talk the talk, and walk the walk of being open and transparent.  Thank you guys, and I really mean that.

If you’d like to look at the entire Agreement, including the Terms of Use for the RPR Website, go to the Google Doc here.

Some of the critiques already on the web may be entirely valid, but I think they largely miss the point.  For example, Mike Wurzer’s post suggesting that the new License Agreement allows RPR to sell listing-level data to various customers may be accurate (or may not be, as Marty Frame points out in the comments), but… this falls into the category of missing the forest because you’re too busy looking at whether the tree is a douglas fir or a pine tree.

There are three major, fundamental issues that the License Agreement does not address — primarily because those issues stem from RPR’s business model and its basic value proposition.  If the goal is to nitpick the language of the Agreement in the hopes of finding a provision on which one can base a future lawsuit, I suppose the detailed analysis being done now is interesting.  If the goal, however, is to understand the fundamental challenge of RPR, then we need to raise our eyes up a bit.

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Reviewing RPR Demo, Part 2: Brokers and Agents

So how does this RPR thing affect us and our brokerage?

In part 1, I tried my level best to keep my opinions restricted to what RPR actually is, based on the demo.  And what RPR is is a fantastic piece of web engineering.  In this part, I get more into the opinionating and what Reggie Nicolay might term, “fearmongering”. :)

Let us examine the possible impact of RPR on brokers and agents, based on what we know thus far.

Caveat Lector: What We Know That We Don’t Know

One thing I learned at REBarCamp NYC that just happened last week, from Reggie himself, was that the Terms of Use for RPR have not yet been set.  And while the RPR has announced API’s, the terms of use on those have not been set or published.  We also don’t know what those API’s will actually do in terms of data provisioning over the API’s to third party tools or websites.

Therefore, one of the biggest pieces to the puzzle — the legal rights and responsibilities of RPR’s users — is as yet unknown, except in glimpses.  We also don’t know how flexible the RPR system will ultimately be.  It may be incredibly flexible, or it may be a closed system.

We don’t know yet whether brokerages (or even agents) can participate directly in RPR, or if they have to wait for their MLS to first sign up with RPR in order to utilize the full range of functionality.

For that matter, since all we’ve really seen is a video demo and some screenshots, we don’t really know at the end of the day what the finished product will actually look like and how it will work.

Enough caveats?  Okay, let’s get into this…

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