For every tech platform that sets out to disrupt real estate, there’s a story of slow evolution to working with brokers and agents. And while companies like Zillow, Opendoor, and Offerpad have brought about minor changes to the home buying process, they always end up morphing into our traditional system. Why is it that these so-called disruptors just can’t change the way we do real estate?

In this episode of Industry Relations, Rob and Greg are exploring why would-be disruptors have such a hard time changing real estate. Greg walks us through his five-stages-of-grief analogy around how tech platforms always end up working with brokers and agents, and Rob compares real estate with the auto industry, reflecting on how little buying processes have changed despite advancements in technology. 

Rob and Greg go on to introduce the idea that the human connection is what prevents tech disruptors from succeeding in our industry, speculating that agent teams have been the biggest disruptor in real estate in recent years. Listen in for insight on how human knowledge and connection factor into making tech platforms successful and learn why the human need for approval is not disruptable. 

What’s Discussed: 

Rob’s take on the two possible reasons why disruptors have trouble in real estate

–System has been perfected over time

–Entrenched infrastructure (need billions to play)

Greg’s five-stages-of-grief analogy re: how disruptors end up working with agents

The similarities and differences between real estate and the auto industry

–Way we buy + sell changed little in spite of technology

–Remember dealership but not broker (agents ≠ employees)

How technology has expanded consumer knowledge around price, inventory, etc.

Greg’s insight that real estate tech disruptors struggle because they lack human connection

Why agent teams have been the biggest disruptor in real estate in recent years

How Zillow has evolved its Zestimate algorithm to include human knowledge

Why Rob believes that our human need for approval is not disruptable 

What makes Zillow the most likely platform to cause true disruption in real estate

The Tom Ferry study around top agents living paycheck to paycheck

Connect with Rob and Greg:

Rob’s Website

Greg’s Website

Resources:

Rob’s Blog on Innovation in Real Estate

TrueCar’s No-Haggle Price

Notorious ROB on Facebook

Our Sponsors:

Cloud Agent Suite

Notorious VIP

It’s our CMLS Conference Pre-Show Podcast!  In an effort to curb the rampant growth of Coming Soon listings, NAR’s Multiple Listing Issues and Policies Committee has issued a proposal to clarify the Clear Cooperation Policy. But will the guidelines actually put an end to pocket listings? Are the rules a good compromise? Or should the MLS die on the hill of all-or-nothing, requiring members to list there first?

On this episode of Industry Relations, Rob and Greg discuss NAR’s draft MLS Policy Statement 8.0, exploring whether the guidelines go far enough in preventing exclusive listings. Rob explains why the 24-hour submission window and the concession around office exclusives are a problem, arguing that the MLS must take a stand NOW to establish itself as the primary marketplace for property listings.

Greg challenges Rob’s view that the MLS is not already the primary marketplace, applauding the 24-hour window as a reasonable and clever compromise and arguing that pocket listings are a breach of fiduciary duty. Listen in to understand Rob’s proposal to extend the all-in IDX rules to MLS membership as a whole and consider how Policy Statement 8.0 will (or will not) impact the pocket listing strategies employed by large national brokerages. 

What’s Discussed: 

Rob’s take that NAR MLS Policy 8.0 doesn’t go far enough

– 24-hour submission window
– Office exclusives not prohibited 

Whether the MLS is the marketplace or a data repository

The potential confusion around one-to-one communication

What does and does not qualify as marketing under 8.0

Greg’s view of the 24-hour window as a clever compromise

How Rob defines a primary marketplace as first-in-time

Greg’s challenge that 70% of deals qualifies as ‘primary’

Why Greg sees pocket listings as a code of ethics issue

Extending IDX all-in rules to MLS membership as a whole

How exclusive listings benefit large national brokerages

Connect with Rob and Greg:

Rob’s Website

Greg’s Website

Resources:

CMLS Annual Conference

NAR MLS Policy 8.0

MLS Technology and Emerging Issues Advisory Board

Rob’s Post on MLS Policy Statement 8.0

Sam Debord’s Response to Rob’s Post

Rob’s Follow Up Post on MLS Policy Statement 8.0

NAR 2019 Home Buyers and Sellers Generational Trends Report

2019 Zillow Group Consumer Housing Trends Report

Our Sponsors:

Cloud MLX

The Red Dot

We can all agree that the real estate industry is evolving quickly. Is there any way to predict who the winners in the space will be over the next few years? Brad Safalow has done nine years of research surveying hundreds of real estate agents on the housing market in general, online lead generation, marketing and technology. Curious what all that data might tell us about the future of industry players like Zillow, Redfin and Realogy? What about the potential market share of the growing iBuyer model? Or how independent brokerages might respond to the competition?

Brad is the founder of Please Act Accordingly Research, an independent research firm providing investment ideas to professional money managers and high-net-worth individuals. He began his career in the leveraged finance group at JPMorgan before joining RiverEdge Capital, a global equity hedge fund, where he specialized in small/mid cap stocks and short idea generation. Brad has been serving clients through PAA since 2009, generating 6+ action-oriented investment ideas annually, with high absolute return potential.

Today, Brad joins Rob and Greg to share a high-level overview of his report on the real estate industry. Brad shares his take on the challenges Zillow is facing with the backlash against Premier Agent 4 and its foray into the iBuyer market. Rob highlights the concentration of power in real estate and its influence on Zillow’s continued success, and Greg asks about the pros and cons of the iBuyer model and its potential share of the marketplace moving forward. Brad also shares his experience working with Redfin versus a traditional brokerage, and they offer insight around how Redfin’s national ad campaign might prove to be a seminal moment in the industry. Listen in to understand how independent brokerages like Keller Williams and Realogy are responding to the iBuyer threat and a potential shift in commission structure—and get Brad, Rob and Greg’s predictions around the winners and losers in the space over the next three years.

What’s Discussed:

The PAA annual survey of real estate agents

A high-level overview of Brad’s report

The reasons why Zillow’s stock is taking a hit

How Zillow’s growth depends on agent teams

Why Zillow launched Premier Agent 4

How Zillow responded to backlash against PA4

The concentration of power in the industry

Why Zillow is pursuing the iBuyer model

The iBuyer’s potential share of the market

How Zillow may profit as a mortgage business

Efforts to improve the consumer experience

Redfin vs. the traditional brokerage experience

The impact of Redfin’s national ad campaign

The effects a shift in commission structure

The fear/panic among independent brokerages

Gary Keller’s understanding of the iBuyer threat

Realogy’s doubling down on traditional strategy

Resources:

The Red Dot Report

Cloud Agent Suite

W+R Studios

Connect with Brad:

PAA Research

PAA on Twitter

Connect with Rob and Greg:

Rob’s Website

Greg’s Website

There was a dance of sorts held in DC on Tuesday, June 5, when the Department of Justice and the Federal Trade Commission hosted a ‘workshop’ to discuss competition in residential real estate. But while NAR and industry players prepared for the fox trot, bringing their best arguments for maintaining the status quo around data access, the DOJ put on a little salsa music and shifted the discussion to commission transparency and coupling.

Rob and Greg are reversing roles this week, as Greg spins conspiracy theories regarding the government’s intentions and the potential consequences of its intervention in the real estate industry. They speak to organized real estate’s nothing-to-see-here approach to the discussion and review the range of views shared in the Developments in Real Estate Fee and Service Models panel.

Greg explains why decoupling would effectively end the MLS, and Rob covers the paper prepared by the National Bureau of Economic Research suggesting conflicts of interest due to coupling. They address who would benefit if buy-side commissions went away, how such changes would impact portals like Zillow, and the surprising number of industry players who support decoupling. Listen in to understand why Rob and Greg are calling for NAR or CMLS to move on this and start leading the dance to develop solutions around commission transparency.

What’s Discussed:

Organized real estate’s nothing-to-see-here stance at the DOJ/FTC workshop

The Developments in Real Estate Fee and Service Models panel

– Reps from Realogy, Purplebricks, Glass House & TRELORA

Greg’s take that the industry was caught off guard

-Prepared for data access and transparency

-Discussion of commissions, decoupling

How decoupling cooperation and compensation would end the MLS

The NBER paper on realtor commissions and conflicts of interest

The theory that real estate commissions are high due to coupling

Rob’s concern that the DOJ has already made up its mind

Why the industry needs to move on commission transparency

Why real estate is the only industry in which the seller pays the buyer’s rep

How the potential changes might impact portals like Zillow

Who would benefit if buy-side commissions went away

The leadership opportunity for NAR, CMLS to address DOJ/FTC concerns

The surprising number of people in support of commission decoupling

Public response to the previous NAR budget transparency discussion

Resources:

DOJ Residential Real Estate Workshop

Videos of DOJ Residential Real Estate Workshop

Rob’s Blog on the DOJ/FTC Workshop

Brian Boero’s Buzz Saw Blog Post

‘Conflicts of Interest and the Realtor Commission Puzzle’

Our Sponsors:

The Red Dot

Cloud Agent Suite

Connect with Rob and Greg:

Rob’s Website

Greg’s Website