Bill Fowler recently resigned from Zillow to become Compass Inc.’s Sr. Director of Industry Relations. Bill had previously held positions at dotloop and Solid Earth, Inc. Congrats Bill!
Industry Relations: Spiderman, Spending Controversy & the Same Old NAR?
As Peter Parker will tell you, great power comes with great responsibility. And there is little doubt that NAR has a great deal of power. With Bob Goldberg at the helm, many have anticipated a ‘kinder, gentler NAR,’ an organization that rules with a warm embrace rather than an iron fist—serving its membership with open discussion and greater transparency. Does the recent drama over the dues increase demonstrate a more-of-the-same-old approach from NAR leadership? Or is the perceived crisis around the budget an overreaction? Is there evidence that the culture at NAR is really changing for the better?
Rob and Greg are back in the ring on the heels of the REALTORS midyear legislative meeting, going toe to toe over the recent controversy around NAR spending. They start with an overview of what went down, beginning with the Houston Association of REALTORS opposition piece in Inmanand the subsequent op-ed credited to Jim Harrison of MLSListings. Rob and Greg walk us through the retractions, rebuttals and apologies that followed as well as the board of director’s vote in DC.
Rob offers his take on NAR budget priorities, sharing the questions he has around spending on things like zipLogix, RPR and advertising to protect the REALTOR brand. He goes on to discuss the way NAR handled the spending controversy, framing it as a missed opportunity to embrace opposition as a catalyst for discussion rather than ruling with an iron fist—which may discourage membership from speaking up in the future. Greg offers his defense of NAR, pointing out that the SMART Budget Initiativeis clearly outlined NAR’s website and citing member engagement as an incredibly complex issue. Listen in for Rob’s insight around NAR’s responsibility to its members and decide whether NAR is, indeed, using its power for good.
What’s Discussed:
The Houston Association of REALTORS’ opposition to the dues increase
How the controversial op-ed credited to Jim Harrison went too far
The questions around NAR’s spending on zipLogix, RPR and advertising
The line items Rob would like to see NAR prioritize in its budget
– Advocacy
– Professionalism
Greg’s perspective that there is no evidence of an NAR crisis
How NAR might have handled the spending controversy differently
– Could have offered ‘warm embrace’
– Opposition as catalyst for discussion
NAR’s postponement of the 2.5% annual dues increase
Rob’s take that NAR’s iron fist will discourage others from speaking up
Rob’s concern about the lack of explanation regarding NAR spending
Greg’s defense of NAR as being more transparent than ever before
– SMART Initiative outlines spending objectives
– Elizabeth presented proposed budget at T3
– Communication with membership is difficult
Rob’s belief that NAR’s power gives them a higher level of responsibility
Resources:
Houston Association of REALTORS Member Survey
HAR’s Dues Increase Opposition Piece in Inman
HAR’s Clarification and Apology
Rob’s ‘Crisis and Opportunity’ Blog Post
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Email gregrobertson@gmail.com
Compass acquires N.A.R.
WASHINGTON D.C. and CHICAGO, IL , Apr 1, 2019 /PNewswire/ — Compass, the real estate technology company, announced today that the National Association of REALTORS (NAR), a 100 year old trade Association of real estate professionals with offices in Chicago and Washington D.C. , will be joining Compass. NAR has over 1.3 million members and one of the largest trade associations in the world. With the addition of NAR, Compass’ national team will represent all real estate transactions in the country going forward. Bob Goldberg, NAR’s current CEO will now head Industry Relations for the company.”
THE REAL DEAL
It was only a matter of time
Industry Relations: The Dance in DC on Commissions in Residential Real Estate
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’
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Industry Relations: T3, iBuyers and the Zillow Flip
Is Zillow getting into the house flipping business to make a profit buying and selling real estate? Of the users who submit an Instant Offer request, one-third sell their home within 90 days—and 10% of that third take an investor’s offer. Zillow’s main play here may just be seller lead generation.
Today, Rob and Greg talk T3, iBuyers and Zillow. Greg shares his takeaways from the T3 conference, including praise for Stefan’s keynote address and an eye-roll over the ‘no corporate sponsors’ sentiment. Our hosts discuss the recent bombshells around Dale’s departure from RPR and Zillow’s expansion of Instant Offers. Rob walks us through the details of Zillow’s announcement, explaining how sellers will now get an offer from Zillow itself when they use the Instant Offers platform. Rob and Greg share surprise at the lack of backlash around the announcement, examining the benefits for an agent representing Zillow as well as the drop in stock price in light of the news.
Greg offers insight on potential abuses of the iBuyer model, considering how predatory lenders might target seniors, the uneducated, or the poor, and they cover the impact of Zillow’s shift on other players in the iBuyer space. Listen in as Rob and Greg address the windfall Zillow is likely to earn in the form of seller leads and learn how the company could solve the affordable housing crisis—and gain invaluable PR in the process!
What’s Discussed:
Greg’s takeaways from T3
The rumors around RPR and Zillow
Zillow’s announcement of the expansion of Instant Offers
The surprising response to Zillow’s plans to flip houses
Greg’s concerns about the iBuyer model
The recent drop in Zillow’s stock price
Why flipping is not a change in Zillow’s business model
The prospect of Zillow making a fortune on seller leads
Greg’s casino analogy for Zillow’s home-flipping venture
Rob’s take on how Zillow could solve affordable housing
Zillow’s impact on other players in the iBuyer space
Resources:
‘Opendoor Founders Subtweet Zillow’s New Home Buying Service’ in Inman
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Industry Relations: Backing Up the Zestimate with a Zillow Instant Offer Check
Critics of Zillow bash the accuracy of the Zestimate, but the fact is that a home’s worth hinges on what the market is willing to pay. And with the advent of Instant Offers, Zillow is backing up the Zestimate with a check. Consider the fact that Zillow has a platform to help themselves sell homes quickly and it is easy to see how Instant Offers is a game-changer with the potential to create a ‘market-maker system’ of real estate.
Rob and Greg are back to discuss the recent GeekWire piece on Zillow’s first home purchase in Chandler, AZ. They comment on the irony of the agent’s intention to lean on Zillow for branding as well as the company’s original business model as an auction site. Rob explains the concept of an insta-flip and how it benefits Premier Agents, and Greg offers his take on the one thing that is still missing from the Instant Offers model.
Rob and Greg speak to Zillow’s data around the number of shoppers in a particular zip code and the target market for the Instant Offers model. They address the potential profit Zillow might generate from Instant Offers, the listing lead flow the program will generate, and the possibility of discounted as-is purchases on the platform. Listen in to understand how Instant Offers is likely to foster competition in the space and learn how Zillow continues to change the game of real estate.
What’s Discussed:
Zillow’s first home purchase in Chandler, AZ
The agent’s intention to lean on Zillow for branding
Greg’s questions around double-ending and fees
How Zillow is creating a ‘market-maker system’ of real estate
-Provides mechanism to help sell fast
-Every home could have bid, ask price
Zillow’s original business model as an auction site
The concept of an insta-flip and how it benefits Premier Agents
Greg’s take on what’s still missing from the Instant Offers model
How Zillow’s Instant Offers further validates Opendoor
The target seller for Zillow’s Instant Offers model
How Instant Offers differs from We Buy Ugly Houses
The listing lead flow Zillow will generate through the program
What traditional brokers should do in light of Instant Offers
The potential for a discounted as-is purchase through Zillow
Rob’s insight on the possibility of Zillow offering seller financing
How Instant Offers is likely to foster competition in the space
Resources:
‘An Inside Look at Zillow’s First Home Purchase’ on GeekWire
‘Opendoor is a Bigger Deal Than Zillow’ in Inman
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Inman Connect Las Vegas – Recap
I’ve had a chance to somewhat recover from a whole week in Las Vegas. Frankly coming home on Friday (after a 4 hour delay, hell I could have drove back in less time) I was exhausted. While I didn’t “go big” on the first night I did on a few of the others. So here’s my take on Inman Connect’s first conference in Las Vegas. The good, the bad and the ugly.
The Good
Brad started off a little different this year, he turned the tables on himself. So instead of giving a inspirational speech or throw out a wild goal, he was interviewed and shared with everyone some of the origin stories of Inman News and his best and worst interviews. Interesting to hear that Barbara Cochran had him on his heels. As for the rest of the show I can’t remember when we had such great speakers. Both mornings (Wednesday and Thursday) were just great. Unlike other interviewers Brad isn’t afraid to ask difficult questions. At one point he asked Rich Barton, CEO of Zillow, since Zillow now seems to have broker licenses in all 50 states, “How can anyone trust you anymore? Yikes.
A big shout out to Clelia Peters who did a lot of interviewing on stage, she did an outstanding job. Hope she comes back again. I think the line of the show when she was interviewing Ryan Gorman, CEO of NRT, Inc. who is suing Compass over alleged illegal recruiting practices. Peters opined that such practices might be aggresive, but maybe not illegal. Ryan, shot back, “It’s a fine line between shopping and shoplifting”, which the crowd just loved.
I really enjoyed Cheih Huang, CEO of Boxed. His talk on “how I built my company” was great. He told a personal story of starting his business with a lot of emotion and humor. Good stuff.
While San Francisco is my favorite city of all time, I did enjoy having the conference in Las Vegas. You had so many options. The best restaurants, shows, etc.
So overall, as for the conference itself, the exhibit booths, startup alley, and General Sessions Inman Connect scored a 9 out of 10.
The Bad
The “bad” weren’t necessarily in control of anyone or a failing of the conference organizers, just compromises.
Having to huff back and forth between the conference area and your hotel room or bars was a pain in the ass. Not having everything in a central location was missed. But not every hotel is set up like the Marriott Marquis.
Your hotel room key only got you to the floor you had your room on. I’m told this was a security precaution since the concert shooting in Las Vegas. This made it very difficult to attend any parties or get customers up to your suite for private meetings.
Not having one central location (aka a single lobby bar) was also a bummer. With everything being so spread out there were people I didn’t see until Friday.
The Ugly
The General Sessions started at 8:30AM. And it doesn’t get anymore uglier than that when you were up till wee hours of the morning. How about 9:30am? 10? Pretty please, with sugar on top!
Other Highlights
While I didn’t win the Inman Innovator award ( you can see a list of award winners here) for either of my podcasts (Listing Bits and Industry Relations) I was very pleased to see Sam DeBord win the Nate Ellis Award. As Inman News put it….
“Sam DeBord…Embracing the role of the agent and the brokerage, he has pushed the industry forward with his credible voice, his relentless advocacy and his unmatched smarts about the real estate business.”
I knew Nate, and the spirt of this award was exactly right. Congrats Sam.
My thanks to Brad, and the rest of the Inman News team for a fun week.
Industry Relations: Solving for Professionalism in Real Estate with the W-2
Would the woes of the real estate industry be resolved if agents were employees rather than independent contractors? At Inman Disconnect, Rob posited that shifting from the 1099 to a W-2 model would give brokers more control and allow them to address several of the fundamental issues in the space, raising the standards of professionalism by eliminating incompetent or toxic agents—without risking their livelihood.
Today, Rob, Greg and Sunny debate Rob’s proposal, discussing the challenges brokers face in mandating trainings and mentoring for new agents who are independent contractors. Greg argues that leadership is at issue rather than employment status, contending that employees and independent contractors alike are only motivated by leaders who inspire buy-in. Rob, Greg and Sunny address the broker’s responsibilities around professionalism in the industry and weigh in on whether or not brokers can afford to fire top producers who are toxic to the business.
Rob breaks down the revenue structure in a brokerage, explaining how the shift to a W-2 model would give brokers more autonomy and abate the head-count-driven model that fuels a lack of professionalism. Listen in as Rob and Greg come to an unprecedented agreement on the role of leadership in raising industry standards and learn how the law firm model—with its division of employee-associates and partners—might be adapted for real estate.
What’s Discussed:
Rob’s proposal that the 1099 is the cause of many industry woes
The history behind the shift to agents as independent contractors
Sonny’s take on the broker’s challenge in mandating trainings
Greg’s argument that the issue is leadership vs. control
The broker’s responsibility around agent professionalism
How great leaders attract great talent
Why it’s difficult for agents to move brokerages
Why brokers are hesitant to fire toxic agents
The breakdown of revenue in a brokerage
-Don’t make money on top producers
-Earn on 60/40 agents (five deals/year)
How the W-2 structure would give brokers more control
What triggers the head-count-driven model
-Companies compensate for recruiting numbers
-No cost to keep agent who does two deals/year
-Brokers make LESS from superstar top producers
How the law firm model might be adapted for real estate
Resources:
Connect with Rob and Greg:
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Industry Relations: Does the NAR Logo Controversy Suggest a Failure to Communicate?
If Rob and Greg are cute when they fight, then our co-hosts are particularly adorable on this edition of Industry Relations as they take on the current controversy over the new NAR logo: Is #Logogate indicative of an alarming disconnect between NAR leadership and its members? Or did NAR leadership take the appropriate steps to engage constituents in the decision-making process—and it simply didn’t work out?
Today, Rob and Greg begin their discussion with a review of the Information Technology & Innovation Foundation forum in DC on using technology to make real estate more competitive, describing the lack of understanding demonstrated by the moderator and the defensiveness of the industry players on the panel. They go on to address #Logogate, and Rob shares his take that the controversy demonstrates a flaw of governance, while Greg argues that a logo is subjective—and leadership may havesolicited member input during the process.
Rob offers insight on the ‘culture of confidentiality’ he has observed among association leaders, while Greg contends that the current leadership is more transparent and proactive than ever. They wrap up with dialogue on how Zillow may be raising the bar in real estate by entering the iBuyer space, choosing the best of its Premier Agents to represent the company in selling its inventory. Fasten your seatbelt and listen in as Rob and Greg clash on ITIF, #Logogate, and the best agents in real estate!
What’s Discussed:
The recent ITIF forum on using tech to make real estate more competitive
The defensive posture of real estate representatives on the ITIF panel
David Kelley’s focus on broker reaction to competition as opposed to data
Rob’s call for a more collaborative approach vs. playing ‘hide the ball’
The current controversy over the new NAR logo
The disconnect between NAR leadership and its members
Rob’s take that #Logogate is indicative of a larger communication issue
Greg’s view that member engagement is the bigger problem
NAR’s proposed dues increase and assumption of budget approval
Rob’s view on the culture of confidentiality at NAR
How Zillow may ‘raise the bar’ for real estate agents
Greg’s argument that the best real estate agents aren’t on Zillow
Resources:
Information Technology & Innovation Foundation
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Industry Relations: Gary Keller’s Polarizing ‘KW First’ Vision Speech
Data is the new oil—and the one with the most insight wins.
As technology becomes more and more important to the industry, many brokerages are justifiably concerned that real estate will go the way of travel and eCommerce, eventually doing away with the agent altogether. Gary Keller is uneasy about the current shift from tech-enabled agent to agent-enabled technology, and that is where he is drawing a line in the sand. But his controversial ‘KW First’ solution has a lot of us scratching our heads…
Rob and Greg are camped out in the lobby of the 2018 MLS Executive Workshop to talk about Gary Keller’s polarizing vision speech at the recent Keller Williams’ Family Reunion. They are joined by Sunny Lake, official wrangler of Rob Hahn and partner in charge of brokerage consulting with 7DS Associates. Tim Dain, President of MARIS, the regional MLS serving Greater St. Louis, wanders into the conversation as well.
Rob, Greg and Sunny walk us through the crux of Gary Keller’s speech, explaining his fear of the shift from tech-enabled agent to agent-enabled technology. Rob explains his take that Garry correctly identified the problem but is misguided in his solution to paint real estate vendors and MLSs as ‘unsafe’ and move to control and protect their own data. They discuss the contrasting ‘better together’ approach being taken by Re/Max and Realogy, addressing why KW would be better served to embrace other players in the fight against agent-enable technology, and Tim explains why the MLS cannot legally ‘sell out’ brokerage data to platforms like Zillow without their permission. Listen in for debate around how much of Gary’s speech may have been theatre meant to ‘rally the troops’ and how his message might impact the upcoming DOJ/FTC talks on real estate data.
What’s Discussed:
Gary Keller’s polarizing vision speech
-Dangerous shift from tech-enabled agent to agent-enabled tech
-Data not safe with vendors, MLS
-KW will collect, protect own data moving forward
The pressure on brokerages as profit margins continue to shrink
Rob’s take that Gary identified the problem but misidentified the cause
How much of Gary’s speech was theatre to ‘rally the troops’
Why KW won’t be able to do predictive analytics
Agent hesitation to share data with the brokerage
-6-8% average agent adoption with Contactually
Why KW’s ‘go it alone’ approach is misguided
Re/Max’s acquisition of booj
Tim’s insight around the legal restrictions on ‘selling out’ data
-Broker decision, not MLS
The ‘open platform’ approach of Realogy, Re/Max
The fantastic culture at Keller Williams
How Gary’s speech might impact the upcoming DOJ/FTC talks
Resources:
“Did KW Just Say FU to Vendors?” on Vendor Alley
“In Which Keller Williams Completely Confuses Me” on The Notorious ROB
“The Keller Williams Vision Speech: Followup and Further Thoughts” on The Notorious ROB
“Keller Williams Sheds ‘Traditional Broker’ Shell for New Data-Driven Model” in Inman
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