Industry Relations

On episode 66 of Industry Relations, Rob and Greg discussed the potential repercussions of ending mandatory compensation. And Rob asserted that without cooperation and compensation, the value of the MLS lies solely in its data and technology tools.

How did those comments sit with MLS leaders?

Justin Landon is the CEO of the Lexington-Bluegrass Association of REALTORS, a 4,000-member MLS based in Lexington, Kentucky. Ryan Castle serves as CEO of the Cape Cod & Islands Association of REALTORS, a 3,000-member MLS serving Cape Cod, Martha's Vineyard, and Nantucket. On this episode of Industry Relations, Justin and Ryan join Rob and Greg to share their argument against the assertion that the value of the MLS is tied solely to buyer’s compensation.

Justin and Ryan describe the work they do to ensure that listing agents follow data compliance guidelines, explaining how the MLS has evolved to become a catalyst for the adoption of technology and a distribution mechanism among agents and consumers. Listen in for insight on why compensation is usually offered even when it’s not required and learn about the MLS’s role in building technology that facilitates cooperation.

What’s Discussed:  

Justin & Ryan’s argument against the assertion that the value of the MLS is tied solely to buyer’s compensation

The work MLSs do to ensure that listing agents follow data compliance guidelines

Why MLS teams need to know the areas they’re serving

How the MLS has evolved to become a distribution mechanism among agents and consumers

Why Rob suggests that MLSs need to invest in developing their own technology if compensation ends

The MLS as a technology provider vs. catalyst for the adoption of technology

Why compensation is usually offered even when it’s not required

The relationship between compensation and the steering problem in real estate

The potential to add reverse auto prospecting and rental data to the MLS

How NAR’s focus on the distribution of data provides an opportunity for MLSs

The MLS’s role in building technology that facilitates cooperation

What we need to do to prevent the government from making the MLS a public utility

Connect with Justin:

Lexington-Bluegrass Association of REALTORS

Connect with Ryan:

Cape Cod & Islands Association of REALTORS

Connect with Rob and Greg: 

Rob’s Website

Greg’s Website

Resources:

What if Mandatory Compensation Goes Away? on Industry Relations EP066

MLS Grid

Buyside

RealScout

FloPlan

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Does everything have to be so fast?  Shouldn't some things take time?  

Especially if it's the largest purchase/sale of your life?

On this episode of Industry Relations, Rob and Greg sit down with Brian Boero of 1000watt, to discuss his recent blog post, "Pushing Buttons".  Join this high-level discussion and talk about the future of online real estate.
 
Does everything have to be so fast?  Shouldn't some things take time?  

Especially if it's the largest purchase/sale of your life?

On this episode of Industry Relations, Rob and Greg sit down with Brian Boero of 1000watt, to discuss his recent blog post, "Pushing Buttons".  Join this high-level discussion about the future of "push button" real estate.
 
What‘s Discussed: 

The consumer experience with pushing buttons
Redfin's 400 step process
The genius of Zillow's "Super App" marketing messaging
Greg talks "Zuber"
Keeping up with the consumer
What does a "better" real estate experience look like?

Connect with Rob & Greg:
 
Rob’s Website 
Greg’s Website 

Resources: 

Brian's "Pushing Buttons" blog post
1000watt's website
Amazon's Day One Philosophy

Our Sponsors: 

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Who owns the data associated with a house?

 As it stands right now, the listing broker is in control. But what if a buyer doesn’t want a floor plan or 3-D walkthrough of their new home available online?

There is growing public concern around data privacy in big tech, yet few are talking about how this translates to the real estate industry.

On this episode of Industry Relations, Rob and Greg sit down to discuss the complexities around who owns real estate data, considering whether homeowners should have ownership rights to the data for their property.

They explain the current privacy laws around street photography and explore the expectation of privacy in public records—including MLS databases.

Listen in to understand how privacy policies might impact different players in the real estate space and learn how to think about who should own property data once the SOLD sign goes up.

What‘s Discussed:  

The ruling in the VHT v. Zillow case re: copyright in real estate photography

Who currently owns the data about a house and why it’s such a complex issue

Whether homeowners have ownership rights to the data for their property

The safety concerns associated with making property data available online (for buyers and sellers)

The current laws around photography and privacy

The expectation of privacy around public records and Rob’s take on why the MLS is not a private platform

How Apple’s App Tracking Transparency policy impacts real estate vendors

How privacy policies might affect Compass’ business plan

How we rely on open data to value homes

How the privacy issues surrounding big tech might translate to real estate

Connect with Rob & Greg:

Rob’s Website

Greg’s Website

Resources:

Orange County Proptech Mixer

Texas REALTORS Winter Meeting

CoreLogic MLS Executive Workshop

NARPM Broker/Owner Conference and Expo

Rob Hahn on The Tom Ferry Podcast Experience EP160

Nick Conteduca on Industry Relations EP067

VHT v. Zillow

Rob’s Piece on Real Estate Photography & Copyright

Apple’s App Tracking Transparency Policy

Fannie Mae’s Uniform Appraisal Dataset

Drone Laws in Nevada

NFT Your Property with Propy

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On January 19, 2022, Fannie Mae announced a desktop appraisal option that goes live in Desktop Underwriter in March, making it possible to do an appraisal without a physical inspection.

So, what motivated this change in the rules? Why is it important?

What does a desktop appraisal option mean for appraisers? And how will it impact the real estate industry in general?

NIck Conteduca is the Senior Vice President of Tech Innovation and Subject Matter Expert at Opteon, a global real estate appraisal firm working toward the bold vision of same-day turn times.

On this episode of Industry Relations, Nick joins Rob and Greg to discuss Fannie Mae’s announcement, explaining what a desktop appraisal entails and the rules around who (or what) provides the information.

Nick weighs in on why there are only 75,000 appraisers in the US, describing how challenging it is to become a licensed appraiser and why the appraisal industry has a love-hate relationship with the new rules.

Listen in to understand why it’s unlikely that lenders will start using AVMs over appraisers and learn how the appraisal industry is evolving—and what technology can do to support appraisers, not replace them.

What‘s Discussed: 

What motivated Fannie Mae’s new desktop appraisal option and why it’s a big deal

What a desktop appraisal entails and the rules re: who provides the information

How information for a desktop appraisal can be verified through virtual inspection technology

Why there are only 75,000 appraisers in the US and how they’re compensated

The appraisal industry’s love-hate relationship with the new desktop appraisal option

Why it’s unlikely that lenders will start using AVMs instead of appraisers

Why real estate data in public records and on the MLS is so inaccurate (and how appraisers correct the data in Fannie Mae’s Uniform Appraisal Dataset)

How challenging it is to become a certified appraiser as opposed to a licensed REALTOR

The relationships among appraisers, REALTORS and home inspectors

How the appraisal industry is evolving and how tech improvements might affect it

Connect with Nick:

Opteon

Nick on LinkedIn

Connect with Rob & Greg:

Rob’s Website

Greg’s Website

Resources:

Fannie Mae’s Desktop Appraisal Option Announcement

Fannie Mae’s Desktop Underwriter

Fannie Mae’s Desktop Appraisal FAQ’s

CubiCasa Floor Plan Software

Fannie Mae’s Uniform Appraisal Dataset

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Realogy caused a kerfuffle earlier this month when the real estate industry learned, in unsealed court filings, that brokerage president Ryan Gorman is opposed to NAR’s mandatory compensation rules.

What’s behind Gorman’s stance on compensation? What does it mean for the MLS if the rules change? How would it impact brokers and agents?

On this episode of Industry Relations, Rob and Greg discuss how the value of the MLS would shift in the absence of mandatory compensation, looking at Northwest MLS as a case study around what happens when compensation is optional.

Rob predicts government regulations to eliminate the possibility of steering and Greg reflects on how the conversation around compensation might change in a buyer’s market.

Listen in to understand why optional compensation favors big brands and find out what MLS boards, brokers and agents should be doing to plan for a world where compensation is optional.

What’s Discussed:  

What’s behind Realogy’s opposition to mandatory compensation rules

How the value of the MLS would shift in the absence of mandatory compensation

How compensation is optional at Northwest MLS but most offer it anyway

What buyers’ agents would lose by getting booted from the MLS

The prevalence of steering and why Rob predicts regulations to eliminate the possibility

Greg’s take on how the conversation around compensation might change in a buyer’s market

Why optional compensation privileges bigger brands (and hurts small, independent brokerages)

How compensation works in the world of commercial real estate

Why MLS boards should prioritize investments in data and technology

Connect with Rob and Greg: 

Rob’s Website

Greg’s Website

 Resources:

 ‘Realogy Calls on NAR to Eliminate Commission-Sharing Requirement’ in Inman

‘Agents Slam Realogy’s Call to End Mandatory Nature of NAR Participation Rule’ in Inman

Rob’s Post on Realogy’s Stance Against Buyer Agent Compensation

Rob’s Red Dot Report on CoStar’s Entry to Residential Real Estate

‘Conflicts of Interest and Steering in Residential Brokerage’ in the American Economic Journal

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What were the most important events in real estate in 2021? And how might those events change the industry moving into 2022?

On this episode of Industry Relations, Rob and Greg sit down to reflect on what they see as the most significant headlines of 2021, discussing the real reason behind Zillow’s abrupt exit from the iBuyer market and what Zillow 3.0 might look like.

Rob and Greg explore the significance of NAR’s apology for its racist past and policy changes around hate speech, describing how the ethics complaint against Pastor Brandon Huber reflects a growing division in the industry.

Listen in for insight on the impact of MLSs becoming technology companies and find out why it’s time for you to start learning about the blockchain and what this trend toward decentralization means for the future of real estate.

What‘s Discussed: 

Rob & Greg’s take on the most important events in real estate in 2021

The DOJ’s withdrawal from its settlement with NAR and Biden’s subsequent Executive Order on competition

How Zillow’s acquisition of ShowingTime changed the way vendors, MLSs and associations do business

The real reason behind Zillow’s exit from the iBuyer market and what Zillow 3.0 might look like

Rob’s prediction that Rich Barton will retire again in 2022 and why Greg thinks he’s wrong

The significance of NAR’s policy changes re: the transparency of listing data

Why NAR’s apology for its racist past matters and how it might serve as the first step toward reparations

The ethics complaint against Pastor Brandon Huber and how it reflects the growing division in organized real estate

How Greg thinks about MLSs becoming technology companies and what it means for vendors

Rob’s insight on how blockchain technology might impact real estate

Connect with Rob & Greg:

Rob’s Website

Greg’s Website

Resources:

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

The DOJ’s Antitrust Case Against NAR

The DOJ’s Withdrawal from Its Settlement with NAR

Business Insider Article on Zillow’s Project Ketchup

Rob’s Post on Zillow’s Project Ketchup

Ben Thompson on Zillow’s Decision to Exit the iBuyer Market

Rich Barton on the Stratechery Podcast

NAR Policy Changes on Transparency of Listing Data

Bloomberg Article on the NAR Formal Apology for Past Racism

Changes to the NAR Speech Code

Pastor Brandon Huber’s Lawsuit Against the Missoula Organization of REALTORS

The Bitcoin Standard: The Decentralized Alternative to Central Banking by Saifedean Ammous

The Bitcoin Standard Podcast

Saifedean Ammous on YouTube

Chris Dixon and Naval Ravikant on The Tim Ferriss Show

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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

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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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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?

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Zillow has been consumer-centric since its inception in 2006. And in the early days, the tech company didn’t pay much attention to agents. Now Zillow realizes that reducing friction for consumers means helping agents respond to online leads and schedule showings, for example. But is it too late to earn the industry’s trust?

Errol Samuelson is the Chief Industry Development Officer at Zillow Group. With 25 years of experience in proptech, he served in leadership roles at Realtor.com, Top Producer Systems and Move, Inc. before joining Zillow in 2014. On this episode of Industry Relations, Errol sits down with Rob and Greg to explain why Zillow is acquiring ShowingTime and explore what’s behind the industry’s volatile reaction to the announcement.

Errol discusses the real estate industry’s distrust of Zillow, acknowledging the frustration the tech company has caused over the years and assuring us that his team will not misuse ShowingTime data. Listen in to understand how Errol thinks about CoStar as a competitor and learn why he believes an industry without cooperation and compensation is not good for agents, brokers or consumers.

What’s Discussed:  

Why the real estate industry went apeshit over Zillow’s acquisition of ShowingTime

Zillow’s assurance that ShowingTime will remain an open platform with a strict privacy policy

What problem Zillow is trying to solve by acquiring ShowingTime

Errol’s insight on the rumor that Zillow bought ShowingTime to keep it out of CoStar’s hands

How Errol thinks about the fact that people assume Zillow is lying

Errol’s acknowledgement of the frustrations Zillow has caused agents over the years and how the company’s behavior may have amplified the industry’s distrust

The possibility that social class and age are a factor in the industry’s mistrust of Zillow

The focus of Zillow’s Q4 earnings call (Zillow Offers vs. streamlining the consumer experience overall)

Why innovation in the lending space is limited by federal regulations

The unique opportunity Zillow has to innovate around ownership models

Errol’s thoughts on CoStar as a competitor and why CoStar’s success hinges on the government putting an end to cooperation and compensation

Connect with Errol:

Errol at Zillow

Errol on LinkedIn

Errol on Twitter

Connect with Rob and Greg: 

Rob’s Website

Greg’s Website

Resources:

Rob’s Post on Zillow, ShowingTime & Paranoid Realtors

Zillow’s Press Release on Acquiring ShowingTime

ShowingTime

Steve Murray at REAL Trends

CoStar News

Greg on Twitter

Zillow’s Q4 2020 Earnings Call

Zillow Offers

Nick Bailey at RE/MAX

Gary Keller’s 2021 Family Reunion Vision Speech Recap

Trulia

Dotloop

Jay Thompson on Inman

Susan Daimler at Zillow

Rob’s 2020 List of the Seven Most Interesting People in Real Estate

Zillow Home Loans

Divvy

Federal Regulations on Mortgage Finance

REA Group

Andrew Florance at CoStar

Rob’s CoStar Red Dot Report

CoStar’s Q4 2020 Earnings Call

Rob’s Interview with Joe Rand

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