Industry Relations

Opendoor recently announced a merger with special purpose acquisition company (or SPAC) Social Capital, a venture fund headed by rockstar VC Chamath Palihapitiya. This partnership puts the pioneering iBuyer on the same playing field with Zillow. And the battle between the two will be epic.

On this episode of Industry Relations, Rob and Greg are discussing what the competition between Opendoor and Zillow means for consumers, real estate agents, and the industry in general. Rob explains Zillow’s advantages in terms of customer acquisition and monetizing seller leads, and Greg describes Opendoor’s leverage when it comes to operational excellence (otherwise known as ‘eating BPS for breakfast’).

Rob and Greg go on to consider how Opendoor might catch up with Zillow when it comes to lead flow, either through an additional acquisition or by working with the industry. Listen in for insight around how this battle of the market-makers will make it easier to buy and sell houses and lower transaction costs—and how that will impact the real estate industry as a whole.

What’s Discussed: 

The benefits of a merger between Social Capital and Opendoor

What competition between Opendoor and Zillow means for consumers

Zillow’s advantage in terms of consumer audience and monetizing seller leads

Opendoor’s advantage when it comes to operational excellence

Rob’s prediction that Social Capital might also acquire either Redfin or Realtor.com

How Opendoor might work with the industry to generate lead flow

How competition between Opendoor and Zillow is likely to impact real estate as a whole

--Easier to buy and sell houses (mobility)

--Much lower transaction costs

How MLSs might change if transactions double while commissions are cut in half

Greg’s take on why it’s a great time to be a real estate agent

Connect with Rob and Greg:

Rob’s Website

Greg’s Website

Email [email protected]

Resources:

‘Yelp: Nearly 16,000 Restaurants Have Permanently Closed Due to COVID’ in QSR

Social Capital

The Social Dilemma

Opendoor’s Merger with Social Capital

Rob’s 2014 Blog Post on Opendoor

iBuyer Connect

Stratechery’s Interview with Rich Barton

Social Capital’s 2019 Investor Letter

SimilarWeb

Opendoor’s September 2020 Investor Presentation

Rob’s Thought Experiment on Real Estate Agents & Productivity

The Art of the CMA by Greg Robertson

Our Sponsors:

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Notorious VIP

For every tech platform that sets out to disrupt real estate, there’s a story of slow evolution to working with brokers and agents. And while companies like Zillow, Opendoor, and Offerpad have brought about minor changes to the home buying process, they always end up morphing into our traditional system. Why is it that these so-called disruptors just can’t change the way we do real estate?

In this episode of Industry Relations, Rob and Greg are exploring why would-be disruptors have such a hard time changing real estate. Greg walks us through his five-stages-of-grief analogy around how tech platforms always end up working with brokers and agents, and Rob compares real estate with the auto industry, reflecting on how little buying processes have changed despite advancements in technology.

Rob and Greg go on to introduce the idea that the human connection is what prevents tech disruptors from succeeding in our industry, speculating that agent teams have been the biggest disruptor in real estate in recent years. Listen in for insight on how human knowledge and connection factor into making tech platforms successful and learn why the human need for approval is not disruptable.

What’s Discussed: 

Rob’s take on the two possible reasons why disruptors have trouble in real estate

--System has been perfected over time

--Entrenched infrastructure (need billions to play)

Greg’s five-stages-of-grief analogy re: how disruptors end up working with agents

The similarities and differences between real estate and the auto industry

--Way we buy + sell changed little in spite of technology

--Remember dealership but not broker (agents ≠ employees)

How technology has expanded consumer knowledge around price, inventory, etc.

Greg’s insight that real estate tech disruptors struggle because they lack human connection

Why agent teams have been the biggest disruptor in real estate in recent years

How Zillow has evolved its Zestimate algorithm to include human knowledge

Why Rob believes that our human need for approval is not disruptable

What makes Zillow the most likely platform to cause true disruption in real estate

The Tom Ferry study around top agents living paycheck to paycheck

Connect with Rob and Greg:

Rob’s Website

Greg’s Website

Resources:

Rob’s Blog on Innovation in Real Estate

TrueCar’s No-Haggle Price

Notorious ROB on Facebook

Our Sponsors:

Cloud Agent Suite

Notorious VIP

Long-distance relationships are never easy. And if you’re part of the traveling circus that is the real estate conference circuit, you may be struggling to keep your professional relationships going in a virtual environment. Would being an orc help?

On this episode of Industry Relations, Rob and Greg are discussing the current pause in the real estate conference and trade show circuit and mourning the loss of chance meetings that don’t happen in a virtual environment. They explore why massively multiplayer online games (MMOs) like World of Warcraft work to create community and how real estate might replicate that always-on culture until the conference circuit comes back.

Rob and Greg go on to cover the challenge of sustaining long-distance relationships in an online world, explaining why we just can’t duplicate face-to-face interaction at virtual events. Listen in for insight on how going virtual is impacting MLSs, associations, and vendors and learn about the possibility for a 2020 MLS Proptech Symposium (which Rob wants to rename to the “2020 MLS Herd Symposium”) that would help sponsors make decisions about the feasibility of their own fiscal events.

What’s Discussed: 

The current halt to the real estate conference/trade show circuit

What Greg covers in his forthcoming book, The Art of the CMA

The chance meetings that don’t happen in a virtual environment

Why we can’t duplicate face-to-face interaction through virtual events

The challenge of sustaining long-distance business/personal relationships

Why MMO games work to create community + how real estate might replicate that always-on culture

When the real estate conference circuit will come back

The impact of going virtual for MLS and association communities

--Increased engagement and attendance

--Eliminates serendipity of networking

How new vendors might build trust in the absence of in-person interaction

What we can do to gauge circuit response to physical events

Connect with Rob and Greg:

Rob’s Website

Greg’s Website

Resources:

CMLS 2020

RESO 2020 Fall Conference

Inman Connect 2020

2020 NAR Realtors Conference and Expo

Cover Art Choices for Greg’s Book

Charles Warnock

VirBELA

Second Life

EverQuest

Asheron’s Call

MMORPG

World of Warcraft

Roblox

Overwatch

Discord

Dungeons and Dragons Online

ARMLS

GoToMeeting

Greg’s Draft Agenda for the 2020 MLS Proptech Symposium (with Rob's edits)

Our Sponsors:

Cloud Agent Suite

Notorious VIP

The Coronavirus forced many of us to work from home, leveraging technology to do our jobs remotely. Not only has this made us more comfortable with digital tools, it has us rethinking the need to commute to our offices on a daily basis. So, what do these changes mean for the real estate industry?

On this episode, Errol Samuelson, Chief Industry Development Officer at Zillow, joins Rob and Greg to share his top predictions around the post-pandemic future of real estate. He explores how commercial real estate is likely to change in light of COVID-19 and speaks to the potential to make transactions 100% digital moving forward.

Errol weighs in on how different geographies experienced the pandemic in different ways and how he thinks about the crisis’ potential long-term psychological impact. Listen in as Errol shares Zillow’s most recent stats on the changing consumer preferences for homes and learn how our growing comfort with virtualization will impact the way brokers and agents do business in the future.

What’s Discussed: 

Errol’s top predictions re: the post-pandemic future of real estate

How commercial real estate will change in light of COVID-19

The potential to make real estate transactions 100% digital

The accelerated consumer use of digital tools in the home search process

How Errol thinks about the possibility of virtual appraisals

How virtualization is likely to impact brokers and agents

Zillow’s stats on how working from home is shifting consumer preferences

How cities may look different in a post-pandemic world

The possibility for COVID-19 to have a long-term psychological impact

How different geographies experienced this pandemic in different ways

What sci-fi technology is likely to change real estate in the near future

How Zoom is driving changes in the way we communicate

Connect with Errol:

Errol on Zillow

@ErrolSamuelson

Connect with Rob and Greg:

Rob’s Website

Greg’s Website

Resources:

Dotloop’s 8 Predictions About the Post-Pandemic Future of Real Estate

The New York Times Article on Working from Home

CMLS Events

Books by Nassim Nicholas Taleb

The Atlantic Piece on the ‘Patchwork Pandemic’

Glenn Kelman’s Diary of a Pandemic Part 1

Glenn Kelman’s Diary of a Pandemic Part 2

Glenn Kelman’s Diary of a Pandemic Part 3

Cloud CMA Live

Our Sponsors:

Cloud Agent Suite

Notorious VIP

Last week, Rob & Greg imagined what the future of real estate might look like in the aftermath of the pandemic, pending a best-case scenario. Today, they get real about what’s ahead for the industry given the reality of our current circumstances. And they’re bringing on a number of industry stakeholders to offer their outlook as well.

On this episode of Industry Relations, Rob and Greg are leading a group chat around what’s next for real estate as the Coronavirus pandemic plays out. The group offers predictions on how the MLS landscape may change, debating whether it’s the number of MLSs or the number of MLS databases that really matters and offering examples of hybrid solutions that may serve as a model for the future.

Greg and Rob go on to solicit the group’s thoughts on the potential shape of the recovery curve and the possibility of a shift to a buyer’s market in 2021. Finally, they explain why an increase in property taxes is likely in the aftermath of the COVID-19 bailout and how that might impact buyer demand in the real estate market. Listen in for insight on Open House numbers in states where stay-at-home orders have been lifted and learn how those stats might be a good sign for other industries.

What’s Discussed: 

A review of what Rob & Greg covered in their best-case discussion

Greg, Clint Skutchan, & John’s predictions re: the number of MLSs by 2023

Why the consolidation of data is more important than the total number of MLSs

Tim Dain’s vision of a future with ten or fewer MLS databases that talk to each other

How the pandemic demonstrates the industry’s underutilization of telecommunication

Why Georgia is watching the commercial market for clues re: the future of residential

Georgia’s concept of a J-shaped recovery

Why Joshua Lopour is predicting a buyer’s market in 2021

Why Greg expects a best-case scenario uptick in buyer demand

Why property taxes are likely to increase and how that might impact buyer demand

The significant uptick in Open Houses scheduled in states where stay-at-home orders have been lifted

How Open House numbers may be a good sign for other industries

Connect with Rob and Greg:

Rob’s Website

Greg’s Website

Resources: 

MLS Grid

MLS Aligned

Northstar MLS CDP

MetroList

Great Recession + COVID-19 Bailout Comparison

ShowingTime Showing Activity Statistics

Our Sponsors:

Cloud Agent Suite

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Imagine a best-case scenario in which the Coronavirus is under control and the country is up and running by May 1. How have our social norms changed? What do these cultural shifts mean for organized real estate? And how is the industry different in a post-COVID-19 world?

On this episode of Industry Relations, Rob and Greg get relentlessly positive, discussing the post-Coronavirus landscape of the real estate industry should the best happen. They weigh in on the cultural shifts that are likely to occur in the aftermath of COVID-19, predicting which rituals will persist once the current restrictions have been lifted.

Greg and Rob go on to debate what open houses will look like in a post-pandemic world, why showings may (or may not) be restricted to serious buyers, and when we might be back to pre-COVID transaction levels. Listen in for our hosts’ best-case expectations regarding buyer demand as well as NAR membership and brokerage numbers come September—pending a V-shaped recovery. 

What’s Discussed: 

Rob & Greg’s parameters for this potential best-case scenario

• Vaccine or cure for virus (no resurgence)
• All restrictions lifted, back to work on 5/1

How the culture is likely to shift in the aftermath of COVID-19

What open houses will look like in a post-Coronavirus world

Why Rob believes showings will be restricted to serious buyers

When we might be back to pre-pandemic transaction levels

Why Greg expects a best-case scenario uptick in buyer demand

Rob’s prediction of a 20% drop in first-time homebuyers

Why Rob & Greg anticipate a 20% decline in NAR membership

How Rob & Greg differ around which agents will leave

The potential for 25% of small brokerages to join a larger team

Connect with Rob and Greg:

Rob’s Website

Greg’s Website

Our Sponsors:

Cloud Agent Suite

Notorious VIP

On the surface, the government’s effort to support homeowners through forbearance is a good thing. Many Americans have lost their jobs because of the Coronavirus pandemic and simply don’t have the resources to make a mortgage payment right now. But what does this mean for the servicing industry? Why are lenders concerned about the unintended consequences of Washington’s response? 

On this episode of Industry Relations, mortgage banking expert Rob Chrisman joins Rob and Greg to discuss what’s happening in the capital markets as a result of the Coronavirus shutdown. He walks us through how a mortgage functions as a product, explaining the relationship between the servicer and the end investor in a mortgage-backed security or MBS.

Rob C. addresses how government forbearance for borrowers will impact big banks as well as smaller, independent lenders and weighs in on Ginnie Mae’s promise to back nonbank servicers lacking the capital to pay investors. Listen in to understand how the Federal Reserve’s activity in the MBS market affects mortgage servicers and learn why the lending system is not broken despite the changes imposed by the health crisis.

What’s Discussed: 

Rob C.’s background in mortgage banking + understanding of capital markets

How a mortgage functions as a product manufactured and sold to a buyer

The relationship between a mortgage servicer and the end investor

How government forbearance due to COVID-19 impacts mortgage servicers

Ginnie Mae’s promise to back nonbank servicers lacking capital to pay investors

How current circumstances compare to the 2008 recession

The tens of billions of servicers will owe in margin calls due to the MBS price increase

The consequences of the Federal Reserve’s activity in the MBS market

Why the non-QM and jumbo loan markets are on life support

Why Rob C. is predicting a V-shaped recovery for residential lending

How underwriting guidelines have changed in light of the global shutdown

Why property values are unlikely to take a dive across the board

Connect with Rob Chrisman: 

Rob’s Daily Mortgage & News Commentary

Connect with Rob and Greg:

Rob’s Website

Greg’s Website

Our Sponsors:

Cloud Agent Suite

Notorious VIP

No one in the real estate industry planned for a global pandemic to hit in 2020. So, what does a black swan event like the Coronavirus mean for agents, brokerages, associations, MLSs and vendors? How does the potential economic effect of COVID-19 parallel the virus itself?

On this episode of Industry Relations, Rob and Greg are discussing the short- and long-term impact the Coronavirus is likely to have on the real estate industry. They explain how fear and uncertainty might hurt the housing market over the next several months and explore the opportunity the pandemic presents for models like Redfin and Opendoor as well as investors with deep pockets.

Greg and Rob go on to consider how the cancellation of real estate conferences will cause a domino effect through many other industries and which brokerages, agents and vendors won’t be able to survive this kind of pause in business. Listen in for insight on the serious flaws in our economic system exposed by the health crisis and learn how embracing a little of the prepper mentality can help us respond and adjust to a black swan event like the Coronavirus.

What’s Discussed: 

The short-term impact Coronavirus might have on the housing market

• Buyers take wait-and-see approach
• Retreat of first-time homebuyers

The potential opportunity for models like Redfin and Opendoor

How investors are likely to take advantage of low-interest rates

The cancellation of real estate events and its domino effect through other industries

How the economic fallout of the Coronavirus parallels the virus itself

The brokerages, agents and vendors who may not survive a pause in business

How the pandemic exposes flaws in our economic and healthcare systems

Rob’s insight around manufacturing necessities here in the US

The pros and cons of having the world’s reserve currency

Embracing the prepper mentality to survive unforeseen circumstances

Connect with Rob and Greg:

Rob’s Website

Greg’s Website

Resources:

Rob’s Post on COVID-19

President Trump’s March 11 Address

Nassim Nicholas Taleb

The Black Swan: The Impact of the Highly Improbable by Nassim Nicholas Taleb

Antifragile: Things That Gain from Disorder by Nassim Nicholas Taleb

Our Sponsors:

Cloud MLX

The Notorious VIP

What does organized real estate look like in 2030? Who is winning?

Incumbent brokerages are betting on the recruit-and-retain model that has worked for the last several decades, doubling down on the agent’s sphere as their primary source of leads. Disruptors are betting on a world where the agent matters less than the brand itself, where realtors are only responsible for service delivery and leads are generated entirely through the institution’s online platform. Who is your money on?

In this episode of Industry Relations, Rob and Greg are discussing the themes that came up at Inman’s CEO Connect and the confidence incumbent brokerages have in their ability to outlast market disruptors. They cover the advantages incumbents boast in terms of scale and profitability, exploring whether industry giants are truly all-in on technology and the iBuyer models—or if they’re adding those initiatives simply to overcome agent objections.

Greg and Rob go on to consider a potential decline in the number of agents by the end of this decade and explain why agent teams continue to pose the greatest threat to brokerages. Listen in for insight around how key players in other industries have leveraged the power of incumbency to compete with disruptors and place your bet on either the agent-centric incumbent brokerages OR the institution-focused disruptors.

What’s Discussed: 

The advantages incumbent brokerages have in terms of scale + profitability

Adopting new tech as a marketing ploy to bolster a brokerage’s value prop to agents

Why many brokerages chose to partner with rather than acquire iBuyers

Why successful brokerages can do everything right and still lose market leadership

How key players in the automotive industry have leveraged the power of incumbency

The fundamental difference between real estate incumbents and disruptors

• Agent-centric, focused on recruiting/retention vs. institution-centric
• Agents as lead source vs. service delivery only

How the future of real estate will continue to be dominated by agent teams

Why the number of agents is likely to drop to 400K by the end of the decade

Connect with Rob and Greg:

Rob’s Website

Greg’s Website

Resources:

Inman Connect

The Innovator’s Dilemma: The Revolutionary Book That Will Change the Way You Do Business by Clayton M. Christensen

The Straight Pipes on YouTube

John Campbell on The Notorious Interview

Our Sponsors:

Cloud MLX

Notorious VIP

At present, MLSs are run like nonprofits. And without a way to raise capital, industry executives limit their vision based on the resources at hand. But what if there were no constraints? What kind of Big Hairy Audacious Goals could MLSs pursue with funding from deep-pocketed venture investors?

In this episode of Industry Relations, Rob and Greg are challenging MLS execs to consider what they would do differently with access to significant capital. Greg weighs in on the discussions around implementing the MLS Statement 8.0 Clear Cooperation Policy (otherwise known as Ocho) that took place at Inman Connect, describing how the differences among individual MLSs will inform its implementation.

Greg and Rob go on to discuss how the challenges associated with switching MLS vendors benefit incumbents and why most MLSs adopt a system of choice approach to consolidation. Listen in for Rob’s take on how MLS execs constrain their vision based on the resources available and take up Greg’s challenge to think about what you would do differently with $5M, $50M or even $500M.

What’s Discussed: 

The discussion regarding how to implement the Clear Cooperation Policy at Inman Connect

How Ocho impacts Compass’ strategy for differentiating its listings

How the differences among MLS Coming Soon policies will inform Ocho’s implementation

The possibilities for interpretation around what qualifies as marketing

How the challenges associated with switching vendors benefit incumbent MLSs

What’s behind the system of choice approach adopted by most MLSs

Why Rob contends that MLS execs constrain their vision based on resources

NAR as a trade organization vs. the MLS as a tech product + service provider

Greg’s challenge for MLS execs to consider what they would do with access to capital 

Connect with Rob and Greg:

Rob’s Website

Greg’s Website 

Resources:

Inman Connect

MLS Statement 8.0 Clear Cooperation Policy

Homesnap Pro’s Predictive Analytics

Rob’s Post on the Clear Cooperation Policy

Rob’s Post on the Fundamental Problems in Real Estate

Business Insider Top 15 Real Estate Podcasts

Our Sponsors:

Cloud MLX

Notorious VIP