Industry Relations

As the real estate industry has evolved, we’ve been trained to focus on who owns the data. And Zillow’s acquisition of ShowingTime has many concerned about sharing their data with the proptech giant. But what if hoarding your data is not the only way to compete with a company like Zillow? What if it’s not really about access to the data but what you do with it?

Nick Bailey is the Chief Customer Officer at RE/MAX. With nearly 25 years of industry experience, Nick served as an agent, broker and proptech vendor before becoming the head of a major real estate franchise. On this episode of Industry Relations, Nick joins Rob and Greg to share his take on Zillow’s acquisition of ShowingTime and what’s behind the industry’s emotionally-charged reaction.

Nick offers insight on how the data Zillow acquired was already publicly available, explaining why that information doesn’t necessarily give the tech company a competitive advantage and reminding us that it’s not unusual for companies at scale to offer various products and services to the industry at large. Listen in for Nick’s perspective on what we can do to improve the process of buying or selling a home for consumers and find out why you shouldn’t panic about Zillow’s acquisition of ShowingTime.

What’s Discussed:  

Nick’s background as an agent, broker, tech vendor and head of a major real estate franchise

Why Nick sees Zillow’s acquisition of ShowingTime as one tech company acquiring another to make the process of buying and selling homes easier for consumers

How ShowingTime’s market share influenced the industry’s emotionally-charged reaction to its acquisition

Nick’s argument that the data Zillow has acquired was already publicly available

How Nick addresses the objection that the ShowingTime acquisition forces agents and brokers to provide Zillow with a competitive advantage

How it’s not unusual for companies at scale to offer various products and services (e.g.: RE/MAX’s acquisition of Motto Mortgage)

What Nick is doing to educate agents around the spirit of cooperation in the industry

How Nick thinks about whether Zillow is a RE/MAX competitor

What the real estate industry can do to improve the fragmented process of buying or selling a home

Nick’s insight on what differentiates RE/MAX in a competitive industry that includes a growing number of iBuyers

The trend toward a greater concentration of power among fewer agents and how that might contribute to the panic around Zillow

Nick’s advice for MLS, franchisor and large brokerage CEOs on using data to identify trends and create contingency plans accordingly

Connect with Nick:

Nick at RE/MAX

Nick on LinkedIn

Connect with Rob and Greg: 

Rob’s Website

Greg’s Website

Resources:

ShowingTime’s Press Release on Its Acquisition by Zillow

Nick’s Video on Zillow’s Acquisition of ShowingTime

Market Leader

Rob’s Post on Zillow, ShowingTime & Paranoid Realtors

First App

Steve Murray at REAL Trends

Motto Mortgage

NAR Code of Ethics

We Are RE/MAX on Facebook

Brad Inman’s Piece on Zillow & ShowingTime

Gary Keller’s 2021 Family Reunion Vision Speech Recap

The Art of the CMA: Win Hearts, Minds, and Loyalty by Mastering Real Estate’s Most Versatile Tool by Greg Robertson 

Dave Liniger at RE/MAX

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Zillow’s Economic Research Team just released its forecast for 2021, and they expect it to be the best year for home sales since 2005. In fact, Zillow’s number crunchers believe that a whopping 6.8M existing homes will close next year, marking the biggest one-year gain in sales (nearly 22%!) since the early 1980’s.

Jeff Tucker is a Senior Economist at Zillow Research where he studies the causes and consequences of changing supply in the housing market. On this episode of Industry Relations, Jeff joins Rob and Greg to discuss the inputs his team used to make its predictions for 2021 and describe how current growth differs from what we saw at the height of the bubble in 2005.

Jeff offers insight around the demographics of who’s buying and selling homes right now, sharing his take on why the low millennial marriage rate may not impact the housing market as much as we think and how feasible it is for young, working-class Americans to afford homeownership. Listen in to understand how COVID facilitated the single-family home inventory crash and get an economist’s perspective on why the housing market will stay hot through 2021.

What’s Discussed:  

The inputs Jeff’s team used to predict that 6.8M existing homes will close in 2021

How current growth differs from what we saw at the height of the bubble in 2005

The decrease in the share of income spent on mortgages since 2018

Why the iBuyer’s mission to create a frictionless experience is so important moving forward

Jeff’s insight around the demographics of who’s buying and selling homes

The distinction between family and household formation

Why the low millennial marriage rate may or may not impact the housing market

How COVID facilitated a single-family home inventory crash

Why Jeff sees appreciation slowing down by the end of 2021

Jeff’s take on the feasibility of homeownership for working-class millennials

How the skyrocketing US money supply might impact the real estate market

Connect with Jeff:

Zillow Research

Jeff at Zillow

Jeff on Twitter

Connect with Rob and Greg: 

Rob’s Website

Greg’s Website

Resources:

Lone Wolf Technologies

Zillow’s Forecast for 2021

NAR Data on Single Women Home Buyers

Pew Research on Millennials & Marriage

Our Sponsors: 

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Not too long ago, REALTORS were unified, often claiming to be neither Democrat nor Republican but members of the REALTOR Party. Today, however, the polarization in our country is reflected in the real estate community. And the recent changes to the NAR Code of Ethics, specifically Standard of Practice 10-5, seem to have pushed us even farther apart. So, how are these changes likely to affect REALTORS in practice? Can we be more inclusive without favoring one political party over another?

Laura Farley serves as General Counsel at the Virginia REALTORS Association, and she has more than 10 years of experience handling and supervising professional standards cases. Prior to joining the state association, Laura was an attorney for the Northern Virginia Association of REALTORS. On this episode of Industry Relations, Laura joins Rob and Greg to provide an overview of the three major changes to NAR’s Code of Ethics and offer insight into how those changes might impact real estate professionals now that the professional standards apply to everything a REALTOR does, real estate related or not.

Laura explains why NAR’s list of protected classes in Standard of Practice 10-5 is more inclusive than a lot of states and addresses the subjective nature of determining intent as well as the concerns that 10-5 gives some REALTORS more speech rights than others. She also discusses the significance of removing the word ‘willful’ from NAR’s definition of public trust, introducing us to the concept of disparate impact—and why it may or may not apply to Article 10. Listen in for Laura’s insight on how 10-5 has further polarized the REALTOR community and get her take on the best possible outcome around the revised Code of Ethics.

What’s Discussed:  

Laura’s decade of legal experience with professional standards cases

Laura’s overview of the 3 major changes to the NAR Code of Ethics

Why NAR’s list of protected classes is more inclusive than most state lists

The significance of the word ‘use’ in Standard of Practice 10-5 (REALTORS must not ‘use’ harassing speech, hate speech, epithets or slurs)

The controversy around how 10-5 gives some REALTORS more speech rights than others

The subjective nature of determining an agent’s intent to harm, hurt or harass

How Laura thinks about the concerns of REALTORS on the political right re: implicit bias

The significance of removing the word ‘willful’ from the definition of public trust

The concept of disparate impact and why it may or may not apply to Article 10

How the change to 10-5 has further polarized the REALTOR community

Connect with Laura:

Virginia REALTORS

Laura at Virginia REALTORS

Connect with Rob and Greg: 

Rob’s Website

Greg’s Website

 Resources:

Laura’s Code of Ethics Update Video

Virginia REALTORS Code of Ethics Resources

NAR Code of Ethics Changes

NAR’s Code of Ethics & Standards of Practice

Rob’s Post on an Alternative to the New Speech Code

Virginia REALTORS Diversity & Inclusion PAG

Rob’s Post on Disparate Impact

Norwood v. Harrison

Railway v. Hanson

Jenna Ryan

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The November 2020 DOJ-NAR settlement requires that buyer’s agent commissions are apparent to consumers. But that transparency is just a first step in a push to divorce real estate commissions entirely. Should the other DOJ lawsuits succeed, home buyers will negotiate buy-side commissions directly with the buyer’s agent. So, what happens if the disruptors calling for these changes (like Jack Ryan) get their way?

On this episode of Industry Relations, Rob and Greg discuss Sam DeBord’s passionate Tweetstorm in response to their recent interview with Jack Ryan of REX, clarifying the arguments made by both Jack and Sam and considering how transparency around buyer’s agent commissions is likely to reduce the population of agent-facilitators and drive market share to the true realtor-counselors in the space.

Rob and Greg describe how a rule ending cooperation and compensation would impact the industry long-term, exploring a possible transition from a buyer’s commission to a flat fee or hourly model. Listen in for insight into the questions industry disruptors raise with regard to the role of the MLS, the brokerage, and the agent in the absence of cooperation and compensation.

What’s Discussed:  

Lone Wolf’s acquisition of W+R Studios and how Greg & Dan are sharing $1M of the proceeds with their team

Sam DeBord’s passionate Tweetstorm in response to our interview with Jack Ryan of REX

What makes a real estate agent a facilitator vs. a counselor

How transparency around buyer’s agent commissions could significantly reduce the agent population

How Jack Ryan’s background in politics and high finance informs the way he thinks about making real estate better for consumers

How the end of cooperative compensation is likely to disrupt real estate referral networks

The opportunity for vendors to help buyer’s agents demonstrate their value

Why Rob thinks there could be a transition from buyer’s agent commissions to a flat fee or hourly model

What agents and brokers might do to take advantage of the required disclosure of buyer’s agent commissions

The questions Jack Ryan’s line of attack raises re: the value prop of the MLS or the real estate brokerage in the absence of cooperation and compensation

Connect with Rob and Greg: 

Rob’s Website

Greg’s Website

Resources:

Lone Wolf Technologies

Lone Wolf’s Acquisition of W+R Studios

Greg’s Post on the Lone Wolf Acquisition

Sam DeBord on Twitter

Sam DeBord’s Tweetstorm on Jack Ryan

Jack Ryan on Industry Relations EP055

Spencer Rascoff & Austin Allision on Industry Relations EP056

HousingWire’s Acquisition of REAL Trends

Jeff Corbett’s Post on Divorcing Real Estate Commissions

The NAR-DOJ Agreement on MLS Rules

Buyside

Biden’s Proposed First-Time Home Buyer Tax Credit

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What happens when real estate tech royalty get together to brainstorm business ideas? Not surprisingly, a general discussion of underutilized assets lends itself to a new proptech venture. 

Spencer Rascoff (former CEO of Zillow) and Austin Allison (co-founder of dotloop) are the Cofounders of Pacaso, a startup working to democratize access to second homeownership. On this episode of the podcast, real estate tech OGs Spencer and Austin join Rob and Greg to discuss how Pacaso solves the problem around the underutilization of second homes and explain how consumers, agents, and brokers alike benefit from the service.

Spencer and Austin describe how Pacaso manages scheduling and dispute resolution, sharing what differentiates their product from a timeshare or the traditional DIY co-ownership model. Listen in for Spencer and Austin’s insight on current events in the industry, including the radical acceleration of tech adoption through COVID, the long-term impact of the DOJ lawsuit against NAR, and CoStar CEO Andy Florance’s attack on Zillow.

What’s Discussed:  

How Pacaso solves the problem around underutilization of second homes

How consumers, agents, and brokers benefit from Pacaso

What differentiates Pacaso from a timeshare

How Pacaso handles scheduling and what happens if one owner uses the home much more than the others

Why Spencer & Austin don’t see Airbnb as competition

How Pacaso manages dispute resolution and governance of a property

Why friction among owners is less likely with Pacaso vs. the DIY model

Spencer & Austin’s response to the idea that Pacaso is ‘rich people solving rich people problems’

How COVID has inspired a demand for co-ownership in city centers

How the digitization of real estate has accelerated through the pandemic and what that means for the industry

Why buyer side representation will not go away (despite the DOJ lawsuit)

Andy Florance’s attack on Zillow and how CoStar’s acquisition of Homesnap will impact residential real estate

Connect with Spencer & Austin:

Pacaso

Connect with Rob and Greg: 

Rob’s Website

Greg’s Website

Resources:

dot.LA

Zillow’s Q2 2020 Earnings Call

Jack Ryan on Industry Relations EP055

CoStar’s Acquisition of Homesnap

Brad Inman’s Interview with Andy Florance

The FTC Suit to Block CoStar’s Acquisition of RentPath

Tomo

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It has come to light in recent days that REX was the ‘power behind the throne’ in the Department of Justice’s lawsuit against NAR (and subsequent settlement). The suit alleged that the trade group’s rules on commissions artificially inflate the fees paid to real estate agents and put illegal restraints on competition in the market. So, what inspired the upstart firm to take its concerns to the DOJ?

Jack Ryan is the Cofounder and CEO of REX, the digital alternative to the residential real estate agent. REX uses big data and AI to provide consumers with a significant cost savings and an improved customer experience. On this episode of the Industry Relations, Jack joins Rob and Greg to explain why REX went to the Department of Justice and address the perception that his team is hostile to organized real estate.

Jack offers his take on why a commissions drop is not bad news, describing his libertarian vision of the future of real estate and how all involved would benefit—including MLSs, brokers, agents, consumers and communities. Listen in for Jack’s insight on eliminating the friction from the home buying process and find out what would have to change for REX to join the MLS.

What’s Discussed:  

Why REX went to the DOJ with NAR’s ‘illegal restraints’ on competition in the market

What differentiates REX from other residential real estate brokerages

What’s behind REX’s decision not to join the MLS

Eliminating repetitive, standardized activities to make the real estate transaction more efficient

What the REX workflow looks like from a buyer’s perspective

Why Jack is more concerned with changing the system than making money

Jack’s argument that a commissions drop is not bad news

How Jack thinks about eliminating the friction from buying and selling a home

How a seller benefits from working with REX in terms of cost savings and level of service

The perception that REX is hostile to organized real estate and what would have to change for Jack to join the MLS

Jack’s libertarian vision around the future of real estate

How REX’s AI continues to improve and Jack’s intent to make the tech available to other brokers and agents

Connect with Jack:

REX

Connect with Rob and Greg: 

Rob’s Website

Greg’s Website

Resources: 

Rob’s Piece on REX and the DOJ

Video of Jack on Vendor Alley

Jack’s Article on Real Clear

NAR Code of Ethics

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We are days away from the most important election of our time. Will Trump win reelection? Or will Biden take office? What factors influence the way people are voting? And how will the real estate industry be affected either way?

On this episode of the podcast, Rob and Greg are sharing their predictions around who will win the upcoming presidential election, discussing how the handling of the pandemic is likely to influence voting and whether Americans will choose a candidate based on self-interest versus moral integrity.

Rob and Greg reflect on the last four years in terms of the economy in general and real estate specifically, debating whether a modern leader should (or even could) inspire and unite us AND get things done. Listen in for insight on separating Trump’s behavior from what he has accomplished as President and learn how our hosts think about getting the US back to a place of normal political discourse.

What’s Discussed:  

Rob and Greg’s predictions regarding who will win the presidential election

Choosing a candidate based on self-interest vs. moral integrity

How the handling of the pandemic might influence voting

Whether the governor or President should have more influence over the states

Greg’s call for a leader that can inspire and unite us rather than stoke the fires of division

Rob’s take that it’s less important that a leader be an inspiring orator and more important that they get things done

Separating Trump’s behavior from what he has accomplished as President

How the last four years have been good for the economy in general and real estate specifically

Whether the Democrats will accept Trump as the legitimate President

Getting the US back to a place of normal political discourse

Connect with Rob and Greg: 

Rob’s Website

Greg’s Website

Resources: 

What’s the Matter with Kansas: How Conservatives Won the Heart of America Back by Thomas Frank

Termination of 2015 AFFH Rule

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Realtors are tasked with helping families make the biggest financial decision of their lives. To that end, NAR wants to preserve the idea of a realtor as an intelligent professional. And when an agent engages in conduct unbecoming of a realtor (like posting racial slurs on social media, having sex in an empty listing, or threatening the life of a broker who takes a job at Zillow), the association can and should protect the realtor brand and let that agent go.

On this episode of the podcast, Rob and Greg are discussing the series of speech code proposals made by the NAR Professional Standards Committee to prevent realtors from discriminating against the protected classes and using harassing or hate speech, epithets or slurs in both their personal and professional lives.

Rob and Greg go on to explore the problems with the committee’s proposal, explaining why it’s difficult to define what qualifies as harassing or hate speech and how the rules don’t address other kinds of unprofessional behavior. Listen in for insight on how a Conduct Unbecoming Clause would work as an alternative to protect the realtor brand from behavior that is ‘disgraceful, unprofessional and unbecoming’ of an agent.

What’s Discussed: 

An overview of the series of proposals made by the NAR Professional Standards Committee

--Policy Statement 29 applies NAR Code of Ethics to conduct outside of real estate

--Standard of Practice 10-5 prohibits harassing/hate speech, epithets or slurs of protected classes

--Definition of ‘public trust’ expanded to include all discrimination against protected classes

The problems Rob sees with the committee’s proposal

--Difficult to define what qualifies as harassing or hate speech

--Leaves out threats, harassment of unprotected classes

--Many conservative realtors feel targeted by changes

The benefits of Rob’s alternative Conduct Unbecoming Clause

How the history of race in America informs the way NAR is approaching the proposed changes

The value in protecting the realtor brand from conduct that is disgraceful, unprofessional and unbecoming of an agent

Connect with Rob and Greg:

Rob’s Website

Greg’s Website

Resources:

NAR’s Proposed Speech Code Regulations

Rob’s Post on the Proposed Speech Code Regs

The NAR Professional Standards Committee

‘NAR Proposes Ethics Changes to Crack Down on Social Media Harassment’ in Inman

‘NAR’s Proposed Ethics Changes Miss the Mark’ in Inman

Raise the Bar in Real Estate Facebook Group

Canadian Real Estate Association

CREA’s Conduct Unbecoming Clause

Rob’s Post on the Reputation of Realtors

Racism in Real Estate on Industry Relations EP052

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**** NOTICE:  We recorded this pod using Zoom audio but had a few technical issues. The audio quality wasn’t great and at some point, Zoom stopped recording all together.  We were able to piece together a good episode but not the whole conversation.  I’m super bummed, but we all agreed, even if its not the full conversation, it’s still something we wanted to put out there. ****

Systemic racism has its roots in housing. Government policies deliberately disadvantaged Black and Brown people, and that’s led to segregated communities, educational inequalities and a substantial wealth gap. So, what can we do as an industry to address these disparities and better serve ALL of our clients?

On this episode of Industry Relations, Emily Chenevert, CEO of the Austin Board of Realtors, and Kenya Burrell-VanWormer, SVP of Diversity Solutions at T3 Sixty, join Rob and Greg to discuss the history of race discrimination in real estate, explaining how practices like redlining have stunted the Black community’s capacity to build generational wealth and why industry organizations need to recognize and publicly denounce the racism of the past.

Emily and Kenya share how the industry has improved, describing NAR’s shift to prioritize diversity and inclusion and exploring what organized real estate might do to further educate association members around equity moving forward. Listen in for insight on tackling home ownership disparities and learn what is (and what isn’t) our responsibility to do as an industry to address racial inequality in America.

What’s Discussed: 

The history of race discrimination in real estate (i.e.: redlining, racist land use patterns)

How racism around housing has stunted the Black community’s ability to build generational wealth

The government’s role in creating a wealth gap in the US

Why organizations like NAREB exist independently from NAR

Greg’s call for industry organizations to recognize and denounce the racism of the past (and what that might look like)

The shift from diversity and inclusion as an afterthought to a need within NAR

How we might educate association members around issues of equity

The lack of diversity among the leadership in real estate associations and MLSs

Why 25 of the 26 agents caught steering on Long Island are still working

Kenya’s insight on tackling home ownership disparity by way of education, opportunity and resources

Emily’s experience with difficult conversations on race as Austin overhauls its land development code

What it’s our responsibility to do as an industry to address racial inequality (and what’s not in our lane)

Connect with Emily:

Austin Board of Realtors

Emily on LinkedIn

Scratch That Podcast

Connect with Kenya:

T3 Sixty

Kenya on LinkedIn

Connect with Rob and Greg:

Rob’s Website

Greg’s Website

Resources:

Michelle Mills Clement

The Color of Law: A Forgotten History of How Our Government Segregated America by Richard Rothstein

How the GI Bill’s Promise Was Denied to a Million Black WWII Veterans’ in History

Discrimination in Levittown

National Association of Real Estate Brokers

Richard Rothstein

Eddie S. Glaude Jr.

NAR Leadership Summit 2020

Bob Goldberg

The Chicago Association of Realtors’ Apology & Recommitment to Fair Housing

The Newsday Investigation on Steering

Fair Housing Act

1. Ryan Gorman

HAR Diversity and Inclusion Task Force

Austin’s Land Development Code Revision

NAR’s Code of Ethics

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Zillow started out as a listing portal or syndication site. But the company has evolved to become… Well, we’re actually not sure what to call it anymore. Perhaps ‘the Amazon of real estate’ is most appropriate. And on September 23, 2020, the company announced that it’s hiring employee-agents to streamline the iBuyer process. So, if Zillow is a brokerage now, what does that mean for the industry?

On this episode of the podcast, Rob and Greg are discussing Zillow’s decision to take its iBuyer operations in-house and how that move will impact other aspects of organized real estate. Our hosts explore how MLSs might respond to having Zillow as members and describe how access to MLS data could change the consumer experience on the Zillow site.

Rob and Greg go on to consider the impact of Zillow being part of NAR and state and local associations, weighing in on how their participation can be seen as a win for the industry. Listen in for insight on how Zillow’s announcement demonstrates their commitment to becoming an iBuyer-brokerage and learn how Zillow entering the system might lead to an improvement for everyone—or a ‘horror show.’

What’s Discussed: 

The evolution of listing portals into brokerage and iBuyer hybrid models

How Rob and Greg define brokerages differently

Zillow’s decision to use employee-agents to bring its iBuyer operations in-house

How MLSs are likely to respond to having Zillow as members

Rob’s theory on how Zillow might reposition its Industry Relations team

The potential impact of Zillow being part of NAR as well as state and local associations

How to access to MLS IDX data and VOW rules could transform the consumer experience on Zillow

The leverage Zillow has in getting information from smaller MLSs

What makes Zillow’s shift a WIN for humans (and organized real estate)

Connect with Rob and Greg:

Rob’s Website

Greg’s Website

Resources:

Opendoor vs. Zillow on Industry Relations EP050

Greg’s Blog Post on BPP

Rob’s Blog Post on Zillow

Stop Zillow Campaign

Greg on Twitter

CLAW’s Delay to Syndication Feeds

REALTOR Political Action Committee

NAR’s Rules on Virtual Office Website

The 2008 DOJ-NAR Settlement Agreement

‘It’s a Good Life’ Episode of Twilight Zone

‘A Trifecta! NAR Sued Again Over Buyer-Broker Commissions’ in The Real Deal

Thomas Jefferson’s Quote on Change in Laws and Institutions

Collateral Analytics

Greg’s Blog Post on Zillow

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