Where Real Estate Gets Its Dirt

Rob Hahn to host Webinar on Commission Lawsuits

My Industry Relations co-host and friend the Notorious ROB will be hosting a webinar on Commission Lawsuits. A great opportunity for any ORE peeps to get a good perspective on where things stand.

Webinar on Commission Lawsuits

Topics to be Covered

The rough outline for now:

-The likely outcome of Sitzer/Burnett v. NAR (the first lawsuit up) and why-Monetary damages
-“Co-Conspirator” status and why that matters
-Weak vs. Strong injunction
-Copycat lawsuits
-Bankruptcy issues
-Settlement?
-The DOJ and FTC
-The environment post-apocalypse and strategies for:
-Q&A and Discussion

For cost and registration click here -> Webinar: What Now? Real Estate Industry After the Commission Lawsuits

Authenticity, CoStar and the craps table.

If you haven’t caught our last episode of Industry Relations that just dropped today you hear Rob talk about the desire for industry entities such as NAR to stop the corporate word salad and speak authentically. This conversation made me think about an article and podcast that caught my attention. It was in relation to the letter (email?) Andy Florance, CEO of CoStar, sent regarding a few statements made at NAR NXT. The entire letter is available (and link to the podcast) so you can go read it here at:

COSTAR CEO SENDS MESSAGE TO WSJ & REALTOR.COM

In the letter Mr. Florance make a few statements:

He calls out Bob Evans, VP of Industry Relations at realtor.com, for making false statements “that Homes.com was working against real estate agent“.

He (Andy F.) takes full responsibility for CoStar News naming Sitzer/Burnett plaintiff attorney Michael Ketchmark, “newsmaker of the week” and states “It will not happen again.” [Small quibble; Ketchmark was named “Person of the week”]

He also points out the fact realtor.com and the WSJ is owned by the same company and then makes a damn good point. Here’s a quote from his letter:

“Many people mistakenly believe that Realtor.com is part of NAR. In fact, it is not, it was sold years ago and is now owned by News Corp. The Wall Street Journal and Realtor.com are sister companies. They work together closely. The folks that call the shots for The Wall Street Journal and Realtor.com are one and the same.

The Wall Street Journal has been prolifically writing more than most about theSitzer/Burnett class action lawsuit and the NAR defeat. They have published article titles such as “Home Sellers Take On the Realtors Cartel”, “Almost No One Pays a 6% Real-Estate Commission-Except Americans”, “The Upending of One of America’s Most Popular Professions”, “The Way You Pay to Buy or Sell a Home is About To Change”, “Jury Finds Realtors Conspired to Keep Commissions High”, “Real-Estate Commissions Could Be the Next Fee on the Chopping Block”, “Realtors Face an Antitrust Reckoning” and more.“

Letter from Andy Florance, CEO & Founder of CoStar

Zing! Pow! Authentic enough for you yet? Love him or not Andy Florance is not in his box seats, he is on the field, and I’m here for it.

As a prolific player of craps I have an analogy for you. In the game of craps you have the concept of “right way” and “wrong way” bettors. In simple terms “right way bettors” are betting on the shooter, and “wrong way bettors” are betting “against the shooter”. When a hot craps game is going on and a “wrong way bettor” shows up at the table everyone gets pissed off. They think having a “wrong way bettor” at the table brings “bad juju”. CoStar, in my view, has been perceived by the industry as a “wrong way bettor”. This was due to the fact that CoStar’s business model does better with the elimination or neutering of buy side compensation. And guess what? It’s looking like Andy made the right bet.

“7 OUT!”

Here’s the thing as these so called “portal wars” heat up. There are many things that we can argue about regarding the business models of all the portals. Dual agency, agent responsiveness, etc. But the Sitzer/Burnett ruling and all the copy cat lawsuits are making it very clear that the game has changed. CoStar isn’t the wrong way bettor any longer.

We need to move on. CoStar, Zillow, Realtor.com are all going to have to adjust. We as an industry are going to have to adjust.

We aren’t play craps anymore. Feels to me more like poker.

Industry Relations Episode 64: A New Approach to Antitrust Regulations—with Michael Wurzer

The DOJ pulling out of its antitrust settlement with NAR seems like bad news for the industry.

But what if it could be an opportunity?

Michael Wurzer is the CEO of FBS, the leading innovator of MLS technology. Prior to FBS, Michael spent seven years practicing law in California and Minnesota, working in corporate law, litigation, and serving as Assistant General Counsel for Aveda.

On this episode of Industry Relations, Michael shares his unique perspective on the DOJ withdrawal, discussing the Biden administration’s intent to refocus on antitrust principles and the need for smaller, independent businesses to ensure competition in any sector.

Michael explains how organized real estate might engage with regulators, describing how MLSs could serve as labs of experimentation to promote transparency and competition in the industry.

Listen in to understand the challenge of overcoming what Rob calls the regulatory mindset and find out how real estate can take an offensive posture with the FTC, working together to innovate around Brandeis and Patman’s antitrust ideals.

What’s Discussed:  

The intent of the Biden administration to refocus on antitrust principles

Why industries need smaller, independent businesses to ensure competition

How the competitive nature of the MLS benefits NAR in negotiating with the DOJ

Why Michael sees an opportunity for the industry to engage with regulators

How MLSs might serve as labs of experimentation to promote transparency and competition

The concerns around Ben Harris’ advocacy for delinking of commissions 

How a willingness to experiment would be a good defense for government intervention

Rob’s concern that the regulatory mindset won’t allow for such a nuanced approach

Why Michael doesn’t see NAR or large MLSs as Goliaths to be broken up

Connect with Michael:

FBS

Michael on Twitter

Connect with Rob and Greg: 

Rob’s Website

Greg’s Website

Resources:

FBS Summit

Justice Department Withdraws from Settlement with the National Association of Realtors

Goliath: The 100-Year War Between Monopoly Power and Democracy by Matt Stoller

Chicago School of Economics

‘Amazon’s Antitrust Paradox’ by Lina M. Khan

Robinson-Patman Act

Biden’s Executive Order on Promoting Competition in the American Economy

REX on Industry Relations EP055

‘Anticompetition in Buying and Selling Homes’ by Roger P. Alford and Benjamin H. Harris

Rob’s Post on Ben Harris

Michael’s Presentation on the Expanding MLS

British Columbia’s Shadow Flipping Controversy

Our Sponsors: 

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My prediction #sitzerburnett

With the risk of letting one more tiger in to the ring I’m going to make a prediction. I first have to thank Andrea Brambila of Inman News for her live updates. Also Austin Alanzo from Real Estate News.

While it would have been ideal to be in the courtroom and see the reactions of the jurors to testimony I’m going to make my prediction based upon a couple precepts.

  1. The issue is more complicated than it seems.
  2. The vote must be unanimous.

So, what’s my prediction? Drumroll please……

NAR wins.

Now, I’m unsure if the jury votes on the corporate defendants separately (KW and BHHS) and I don’t know if the jury’s instruction includes a “per se” messaging (you’ll have to listen to the last few episodes of Industry Relations to understand what that means).

But based upon what I’m hearing from people inside the courtroom and the summaries I’m reading this wasn’t a “slam dunk”. So if there is any hint of uncertainty, that means an unanimous vote is unlikely.

Now I believe this is a pretty bold prediction. You’ve got a home town lawyer (Ketchmark) who apparently was close to tears in his closing arguments (tears? really? really?) and the cliche of the “greedy real estate agent”. But did they prove an industry-wide conspiracy? I don’t think so.

New bidder emerges in REcolorado sale

The plot thickens!

I just learned via an email that MRI Software, a private equity firm a privately held company, is putting a bid in to buy REcolorado. Here’s the excerpt from the email’s “Official Statement”.

“MRI Software, the parent company of CTM eContracts, has submitted an Indication of Interest (IOI) for the purchase of REColorado.

We decided to take this action after learning of the potential sale of REColorado, when it was reported publicly.

Many of you are already familiar with MRI Software, but for those who are not, here is some background: MRI provides the CTM eContracts to nearly 40,000 subscribers in Colorado.  The software was first introduced in 2003.  MRI, a U.S.-based leader in real estate technology, has been in business since 1971. You can learn more more about MRI and about our open-and-connected approach to software integrations here.”

MRI Software

You can read the full statement here.

Just to catch everyone up, it was first reported that a single person, Joseph Burks, was buying the MLS organization. Under the name of MAZL, LLC. From my research Joesph Burks is, “one of the largest shareholders in the early creation of CTM eContracts, a widely used contract software for real estate transactions.’ was a large shareholder in CTM eContracts, which was sold to MRI Software in 2019.

Denver Metro Associaiton of REALTORS (DMAR) wrote an “FAQ” on their blog back in June 30th stating,

“MAZL is not a private equity firm, nor is a private equity firm a funding partner in the proposed sale.”

DMAR

Now it appears that a private equity firm has offered to purchase REcolorado MLS. Rob and I went over in detail on our Industry Relations podcast how a private equity firm might approach running an MLS organization.

I also posted a thread on Twitter (X) titled, “So you are a PE firm and wanna get in to the multiple listing services (MLS) game? Here a thread of how I would do it. A thread.“

So far no word from DMAR or SMDAR.

***THIS POST HAS BEEN UPDATED AT 7:57AM 7/25/24. MRI Software is not a private equity firm, but a privately held company. I also clarified information regarding Joesph Burks (previous) ownership stake in CTM eContracts.***

Miguel Berger joins TrustFunds

TrustFunds Hires Miguel Berger as VP of MLS and Industry Relations

“Miguel has a deep understanding of the industry and changes the real estate market is experiencing right now,” said Lynn Leegard, Owner and President of TrustFunds. “His relationships and experience in the industry will be a tremendous asset in continuing TrustFunds mission to provide best-in-class electronic payments.”

Congrats Miguel!

Some personal news

Today, Friday, July 28th will be my last day at Lone Wolf Technologies. Going forward, they have asked me if I would serve as a senior advisor to the company, and I am happy to do so. Despite the market setback, I strongly believe Lone Wolf is on the right track in regard to product and strategy.

I want to also personally thank Jimmy Kelly, CEO of Lone Wolf for his patience, and trust and for creating a place for me and everyone else at W+R to learn and grow.

As you get older your circle of friends tends to grow smaller. Luckily, that has not been the case with me.  I have met so many great and talented people at Lone Wolf. I will continue to call upon them in the future and will miss working alongside them every day.  And thanks for the nice write-up. 😁

I am also very proud of the team we brought over from W+R.  It fills me with great pride to see W+R people continue to advance, take on key leadership positions at Lone Wolf (and other companies), and watch their influence propel the industry forward.

For the next chapter I plan to decompress a bit, maybe write another book, focus on my blog (Vendor Alley) and podcasts (Industry Relations and Listing Bits), invest, and give back to the industry that has given me so much.  I also have three teenagers in the house, so there’s that.

In the future, you can reach me at gregrobertson@gmail.com or 714.240.3895.

Introducing Giant Steps Advisors

Industry veteran, Greg Robertson, launches Giant Steps Advisors to help entrepreneurs, real estate companies and leaders accelerate their success. 

COSTA MESA, FEB. 26 – Greg Robertson announced today the launch of Giant Steps Company, LLC a new company poised to help navigate the new real estate landscape. With a vision centered on innovation, growth, and collaboration, Giant Steps Advisors is set to become the go-to advisor for visionaries ready to take on new challenges.

“Having co-founded my first real estate software company in 1992, I’ve had a front seat to the arc of innovation in the organized real estate industry for the last 30+ years.  My goal with Giant Steps is to give back and share those experiences with our clients to help them reach their goals faster,” stated Greg Robertson, Founder & Principal Advisor.

Giant Steps Advisors believes you need to start from the end and work backwards to help you arrive at the best solutions.  Whether you are developing a product, a go-to-market strategy, M&A, or planning for the future, thinking about the outcomes of your choices first, will help you arrive at your goals quicker.

Staci Wood, Executive Advisor, has joined Robertson to expand the breadth of expertise.  Staci started her career at RE/MAX playing a critical role in the evolution of real estate portals. Staci then moved to one of the largest MLS organizations in the country, REcolorado.  While at REColorado Staci was their VP and Chief Product Officer for over 9 years. With this duo of seasoned experts at the helm, Giant Steps Advisors brings a wealth of experience and a fresh perspective to the table. 

“I met Staci over 20 years ago.  Her broad experience is a perfect addition, and I’m excited she has chosen to join me on this new endeavor,” Robertson said.

For more information about Giant Steps Advisors and its services, visit www.GiantStepsAdvisors.com or Greg@GiantStepsAdvisors.com.

About Giant Steps Advisors

We are here to help entrepreneurs and real estate companies accelerate their journey to success.

Greg Robertson co-founded his first real estate software company in 1992. He is an author of the book, ‘The Art of the CMA’, and publisher of the industry technology blog, “Vendor Alley”. He also publishes two industry podcasts, “Listing Bits”, and is co-host of “Industry Relations”. Greg was the co-founder of W+R Studios, creators of Cloud CMA and the rest of the Cloud Agent Suite. W+R Studios was acquired by Lone Wolf Technologies in December of 2020. 

Contact

Greg Robertson

Founder/Principal Advisor

Giant Steps Advisors

Greg@GiantStepsAdvisors.com

www.GiantStepsAdvisors.com

Industry Relations Episode 062: The DOJ Reneged on Its Settlement with NAR—What Happens Next?

Early this month, in an unprecedented move, the Department of Justice pulled out of its proposed settlement with NAR. And soon thereafter, President Biden issued an Executive Order on Promoting Competition in the American Economy. 

An executive order with a specific clause concerning ‘exclusionary practices in the brokerage or listing of real estate.’ So, what’s going to happen next?

On this episode of Industry Relations, Rob and Greg discuss what Biden’s executive order means for real estate, describing the kind of regulations the FTC might impose on the industry in 2022.

They address the influx of institutional capital in real estate in the last two years, exploring what that could mean for buyer’s agent commissions and why it actually might be good for NAR’s renegotiation with the DOJ. 

Listen in for insight on the need for price discrepancy between a good and bad buyer’s agent and get Rob and Greg’s opposing predictions on how the government might change the rules around cooperation and compensation—or not.

What’s Discussed:  

How the DOJ reneged on its settlement with NAR and why it’s a big deal

What Biden’s executive order on competition means for real estate

The ideas re: concentration of power behind the Bradeis movement

Why Rob thinks the real estate lobby is at its weakest right now

Greg’s prediction that mortgage banks will step in to keep buyer’s agent commissions the same

The influx of institutional capital in real estate in the last two years (and why that might be good for NAR’s renegotiation)

The number of new business models designed to help consumers buy, sell and finance homes 

Rob’s view that institutional investors will support the elimination of buyer’s agent commissions

The lack of price discrepancy between a good and bad buyer’s agent in real estate

Rob’s thought experiment re: whether the rich need buyer’s agents

Rob’s prediction that the FTC will issue proposed regulations for real estate

Connect with Rob and Greg: 

Rob’s Website

Greg’s Website

Resources:

Blockchain and Real Estate on Notorious POD EP022

Propy

Justice Department Withdraws from Settlement with the National Association of Realtors

Rob’s Post on the DOJ Pulling Out of Its Settlement with NAR, Part 1

Rob’s Post on the DOB Pulling Out of Its Settlement with NAR, Part 2

Biden’s Executive Order on Promoting Competition in the American Economy

‘Amazon’s Antitrust Paradox’ by Lina M. Khan

‘BlackRock Is Not Ruining the US Housing Market’ in The Atlantic

Rob’s Response to The Atlantic Article

Knock Home Swap

Orchard

Tomo

Rob’s Post: Do the Rich Need Buyer’s Agents?

Our Sponsors: 

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Industry Relations Episode 63: A Heated Debate on the Political Power of NAR (Or Lack Thereof)

The Department of Justice pulled out of its proposed settlement with NAR and President Biden has issued an executive order addressing ‘exclusionary practices’ in real estate. Now, more than ever, NAR will need to exercise its political power to fight off FTC regulations. But how much political pull does the organization really have?

On this episode of Industry Relations, Rob explains why he thinks NAR is the weakest it’s ever been politically, discussing how changes to the Code of Ethics harmed the organization’s unity and what that might mean for contributions to RPAC.

Greg offers the counterargument that NAR’s record-high membership is a reflection of its political capital, and our hosts explore the concerns professional staff and academics in DC have raised around real estate for the last 20 years. 

Listen in to understand how the insanity of the 2020 housing market might influence the way the public thinks about real estate and learn what you should be doing to combat potential government regulations or plan for lower commissions moving forward.

What’s Discussed:  

Why Rob thinks NAR is the weakest it’s ever been politically

Greg’s counterargument that NAR’s record-high membership is a reflection of its political capital

What a conversation between an NAR lobbyist and the chief of staff for a senator might sound like

How changes to the NAR Code of Ethics harmed the organization’s unity (and what that might mean for RPAC contributions)

How NAR’s head lobbyist’s connection to the Trump organization might impact her ability to get the REALTOR agenda through

The concerns professional staff and academics in DC have raised re: real estate for the last 20 years

How the insanity of the 2020 housing market might influence the way the public thinks about real estate

Rob and Greg’s challenge to listeners to engage their membership in conversations around potential regulations

The benefit of contingency planning for lower commissions

Connect with Rob and Greg: 

Rob’s Website

Greg’s Website

Resources:

Justice Department Withdraws from Settlement with the National Association of Realtors

Biden’s Executive Order on Promoting Competition in the American Economy

NAR Code of Ethics & Professional Standards Policy Changes

REALTORS Political Action Committee

Phillip Cantrell on The Notorious POD EP017

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