2014 is off to a fast start. You won’t believe some of the top stories from the first three months of this year. There is no doubt that the Industry is at a crossroads, as we prepare for the expansion that always follows recession. Here are the most noteworthy stories of the first quarter of 2014, once again, “calling it as we see it.”
Board of Choice – State of Choice:
In 1993, to create more competition among associations, in an effort to provide more and better services to members, at a lower cost, the National Association of REALTORS (NAR) enacted a policy known as Board of Choice for local associations. The enactment of Board of Choice ended the days of geographical boundaries being the single, determining factor of an individual’s affiliation with a local board or association. Today, there is a loud and persistent call from some at the local level who want State of Choice. So loud is this cry that the NAR Board of Directors has placed it on the Agenda and will consider it at the REALTOR Party Conference in Washington DC in May.
Department of Justice and Organized Real Estate:
The Department of Justice (DOJ) has filed suit against NAR challenging the Code of Ethics Article 12 advertising policy that grants the listing broker the exclusive right to place a For Sale sign on the listed property. Arguing that the majority of sales result from the efforts of cooperating brokers, the DOJ concluded that the exclusivity policy was anti-competitive and resulted in unnecessary delays in the marketing of a home. The DOJ referenced the fact that cooperating brokers can advertise other broker listings under IDX rules, therefore they should be able to use the power of their signs to attract buyer eyeballs as well.
Legal Actions Resulting From Off MLS Listings
Along with the proliferation of the so-called OFF MLS listings have come an increase in legal cases surrounding these listings. In the first case, one of the participating brokers in the select group of top producers introduced a buyer who eventually contracted directly with the seller who was listed under an Exclusive Agency agreement. The procuring broker filed suit against the seller, the buyer and the listing broker. In another case, a group of prominent black business owners filed complaints under both the Sherman Anti-trust Act and the Federal Fair Housing Act claiming that a certain real estate broker routinely obtained listings on hot properties and delayed listing them in the MLS until they first provided access to an inner circle of top producing brokers in the area who all just happened to be white and charged the same fee. Frequent panelists on the Off MLS listings issue, Robert Bailey and Jim Harrison, could not be reached for comment.
The Coming together of two industry monsters, Google and Trulia
Google and Trulia have teamed up using the landing page of Google as Google launches into home search with Trulia. Trulia now reinforces its position in the market with a major capital infusion from Google, without resorting to its RealEstate.com/IDX Strategy…as the unthinkable becomes thinkable in a billion dollar chess game being played by the biggest in the Space.
Google’s recent acquisition of Auction.com has raised concern over Google entering the real estate brokerage space allowing the sellers to sell their properties through Google without the use of a real estate licensee. Google intends to assemble a series of related local services (pool, inspection, title, closing, home warranty, etc) under their banner using a new Google map application. Rumor has it that Google has their eye on acquiring the overnight sensation online taxi service Uber.com and promoting this one-stop real estate service as Guber.com
War of the Worlds – Just when you thought Zillow had the upper hand…
REALTOR.com/MOVE closes Listhub
In a stunning move, MOVE, the operator of REALTOR.com has decided to shut down Listhub, the largest real estate listing syndication company in the US, effective today.
Listhub has the largest listing real estate syndication network in the US, and is the supplier of more than 50% of the “residential property for sale” inventory to most of the major real estate portals, except REALTOR.com (also owned by MOVE), which receives direct (individual) data feeds from the over 800 MLSs.
MOVE acquired Listhub in August of 2010. At the time it was seen as a way to “level the playing field” between REALTOR.com and its competitors, by controlling the flow of the most prized of real estate for sale data, and in some cases sold data – we’re referring to that data aggregated from the over 800 Multiple Listing Services across the country.
By owning Listhub, REALTOR.com finds itself in a position to slowly tighten the rules of data distribution, bringing the modern day portals more in line with some of the restrictions placed on REALTOR.com by its contract and relationship with NAR, which over the years, made REALTOR.com less competitive. REALTOR. com went from being the number one, most visited real estate website for 11 years, but has, over the last few years, fallen to third.
This move by MOVE will deny at least 50% of the “property for sale inventory” to real estate sites such as Zillow and Trulia, and help propel REALTOR.com back to the number one position as the most visited real estate website in the world, almost overnight. This is not a new idea and was ventured by a few of the industry prognosticators.
“It makes sense, “said Steve Berkowitz, CEO of MOVE. “The Listhub Team is great, but it is an underperforming asset in a very hostile environment, and we are often blamed for all that is wrong with listing data on the web. We are simply going to get out of the syndication business. Let these guys go collect the data themselves…it is not easy and it is expensive.”
Berkowitz continued…”And, Turnabout is fair play. This is war. Zillow took our top executives a few weeks ago when they hired away Errol Samuelson and Curt Beardsley, both bold moves on Zillow’s part. Trulia is partnering with Google…They all need to know, the world needs to know, that REALTOR.com is not defenseless, that we will move to protect our business. We will take away their oxygen – the listings Listhub provides to our major competitors – and that includes the majority of the listing content on Zillow and Trulia.”
NAR and REALTOR.com, in an equally game-changing move, announced today that the data on REALTOR.com will be enriched by integrating the wealth of data currently housed in Realtor Property Resource (RPR). This will be done locally and with discussion and consideration in each MLS and Association market.
To date, Realtors have not effectively used the RPR data. The plan is to use the RPR data on behalf of the Realtor members to catapult the new Realtor.com into the spotlight as the premier source of robust and accurate real estate information in a consumer-friendly format. Dale Ross and Marty Frame could not be reached for comment. (oh oh, does Zillow have them now?)…
Reaction from Zillow
Inman news reporters caught up with Zillow’s Spencer Rascoff during his filming of a new $5 million ad featuring Beyonce and Jay Z buying several homes via Zillow. In the ad, Spencer comments that the couple found their homes thanks to Zillow. He was then quick to denounce the move, by MOVE, to shut Listhub as being a “pretty low blow, reprehensible, and not playing fair.”
“I would have thought NAR would have come to me first before going public with this sneaky move. Adding RPR content to REALTOR.com, along with the closing of the Listhub pipeline, makes me think there is a conspiracy here to monopolize the industry. My next call is to Antitrust Divisions of the Department of Justice and Federal Trade Commission – at Zillow, we have new counsel with great expertise in this area and with the inner workings of NAR.”
“What makes me even madder,” he continues,” is that I am really very pro-agent. At Zillow, we make tools that help REALTORS become the real estate professionals of tomorrow, worth every penny of the 6% commission earned in that transaction. They remain integral to the process! My feelings are hurt!”
Zillow is preparing to launch a $50 Million Dollar advertising and marketing campaign in China this month. Current monthly unique visitor counts on Zillow are nearing 70M, and it is expected to surge to over 1 Billion Unique Visitors per month by the end of April, generating over 500M leads for Zillow Agent Customers. For May, the target country is India, where Zillow intends to add another 1 Billion Unique Visitors per month. Listing brokers should take steps to handle the expected overflow of Open House visitors this summer.
Back to MOVE…
This move by MOVE (closing Listhub), could have major implications for Point2 Technologies; the number 2 syndication provider in the industry, a company that offers deep and varying degrees of control of one’s listing data, collected at the source.
In addition, International organizations, seeing huge profits in this sector, are ready to take on the current goliaths of the real estate online space in attempts to quickly create a “neutral data repository“ for the real estate Industry, looking for the technology and networks…a data rights management data distribution (syndication) platform and destination network that builds an eco-system of innovation around the data, protecting and monetizing that data.
Zillow and Trulia are currently exploring the antitrust implications of this move, by MOVE. In response, Zillow has hired past NAR General Counsel of 30 years, Laurie Janik. As NAR’s GC, Laurie was intimate with all of the details of the many antitrust cases against NAR, and especially the data settlements between the DOJ and NAR in 2008.
Other Recent Industry Hires
They’ve done it again!
Zillow has hired Pete Flint (fresh from the Google/Trulia Partnership) as the new CEO of Zillow. Spencer Rascoff will assume the position of Chairman of the Board, and Rich Barton is moving on to disrupt the taxi and other industries with a heavy investment in the Uber – Google venture mentioned above. Pete Flint commented that he has “always admired and looked up to Spencer, as a role model.” This is the most incredible executive team ever assembled” added Spencer. “Now add Errol Samualson and Curt Beardsly, and you can see why I am so excited about the future of Zillow.”
Greg Schwartz has taken the CEO position at Trulia, a position which Greg states he has aspired to for years. “Finally, being able to do it my way,” were the only words we could get out of Greg.
Sami Inkinen is slated to become Chief Financial Officer of Zillow upon his return from a 2400 mile rowboat trip from San Francisco to Hawaii with his wife to raise awareness of the danger of sugar and processed carbohydrates.
REALTOR.com gets the ok from NAR to hire a chief economist. Word on the street is that, David Lereah past NAR Chief Economist, is a shoe-in for the position.
REALTOR.com is looking for an exceptional Internet Evangelist to take the new Realtor.com message to the street. Someone with Portal Experience.
Steve Ozonian keeps bouncing back. He’s eyeing the slot opening up with the move of Zillow’s Greg Schwartz to Trulia…or maybe another run running REALTOR.com?
After conferring over the weekend with Rob Hahn, his personal consultant, Dale Stinton submitted his resignation as CEO of NAR. Dale, a past recipient of the National CEO of the Year award, will likely become the Executive Director of the National Association of Chief Executive Officers.
It’s a Movement…
The Federation of Multiple Listing Services (TFOMLS) and the Senior Advisory Team (SAT)
In addition to closing Listhub, MOVE is building a Senior Advisory Team (SAT) with the mission of “winning the hearts and souls of the Industry, at all levels, for REALTOR.com…doing what it takes, and taking the “Message to Garcia” for all stakeholders…Agents, Brokers, Associations, MLSs, and consumers, and monetize the efforts of the data provided by the industry to do no less than provide for the cost of the data pipeline to consumers.” This will be done within a new organization, The Federation of Multiple Listing Services (TFOMLS).
This Senior Advisory Team is the group charged with founding and guiding the organization through its early years. Part of the plan is to develop a national database of listings along the lines of Bob Hales’s HAR.com (Texas) and Art Carter’s CRMLS (California) to be funded from advertising generated by a national media conglomerate. Each local MLS and/or association that participates in this Federation of MLSs will be provided a branded, world class portal with their local data (portal provided by Point2 for those that want to take advantage themselves of this free service), provided by the Federation, or not, and a link to the national site (REALTOR.com), should the consumer want to play and dream online. REALTOR.com paying per click from the local sites.
Part of the plan calls for lifting the restrictions on the use of the data that have hampered Realtor.com for years as a competitor of Zillow and Trulia. In fact, and here’s the biggest news, the data will be enriched by integrating the wealth of data currently housed in RPR. To date, Realtors have not effectively used the RPR data. The use of the RPR data on behalf of the Realtor members to catapult the new Realtor.com into the spotlight as the premier source of robust and accurate real estate information in a consumer-friendly format, is just another of the winning moves, by MOVE.
The influential REALTOR.com Senior Advisory Team comes from a cross section of the Industry — they are all at the “Top of their Game” and ready to move the Industry in the direction that makes everyone a winner, each with their specific skillsets, relationships, and mission within the mission.
- David Charron – CEO MRIS
- Bob Hale – President HAR,
- Russ Bergeron – CEO MRED,
- Walt Baczkowski – CEO San Francisco AR,
- Art Carter – CEO CRMLS,
- Kathy Condon – President & CEO MLSPIN,
- John Mosey – President & CEO Regional MLS Minnesota,
- Cameron Paine – CEO CTMLS.
- Carl DeMusz – CEO NORMLS,
- Merri Jo Cowen – CEO My Florida Regional MLS,
- Rebecca Jensen – CEO Wasatch Front Regional MLS
- Tom Phillips – CEO TREND
- Gregg Larson – CEO Clareity,
- Greg Robertson – CEO W&R Studios,
- Brad Inman – Founder Inman News,
- Brian Larson – Attorney,
- Darryl MacPherson – EVP RisMedia,
- Craig Cheatham – President & CEO The Realty Alliance,
- Lennox Scott – CEO & Chairman, John L Scott Real Estate ,
- Matt Cohen – CTO Clareity Security
- Victor Lund – CEO RE Technology
- John Reilly – Attorney,
- Ann Bailey – Consultant
- Kevin McQueen – Consultant
The Governing role of the Federation will be assumed by CMLS. It may require one or two more levels of bureacracy to accomplish its yet to be articulated role.
NAR’s Large Broker Committee has endorsed the plan and has joined forces with the Realty Alliance in support of the movement to re-unite Realtors and take back our future.
“This aggregated real estate, in today’s information hungry world, should generate at least enough capital to pay for the infrastructure. This is a movement to recapture a lost future. Brokers, agents, associations, and MLSs are gearing up for the battle to come.”
Government Closing Down Real Estate Portals
In response to consumer complaints about the inaccuracy of property for sale on the so called real estate portals, the DOJ, in conjunction with the FTC and FCC, has decided to shut them down, with the exception of REALTOR.com, which received a stay based upon its over 800 direct feeds from individual MLSs across the US. The complaint also called out the portals as responsible for:
1. Data duplication
2. Stale, inaccurate and outdated information
3. Corrupted Searches – Search based on portals financial model and not the consumers desire for relevant results.
4. Data Abuses
5. Copyright violations
6. Agent bait and switch schemes.
Walt Baczkowski, CEO of the San Francisco Association of REALTORS, announced his engagement to ice skater Christi Yamaguchi. No date has been set, but it will be after the lawsuit with the City of San Francisco is resolved. And that’s the long and short of it!
The first Quarter of 2014 has been a doozie, and I don’t know about you, but I could use the next Quarter to recuperate!
However, and where ever you decide to spend the future, you will always hear it here first.
Saul and John
April 1, 2014.
Some of most memorable real estate events seem to happen on April 1. For a recap of past events, check out these links in Realtown.com:
For the latest news in the real estate community be sure to sign up for RealTalk on Facebook