I figured that my post on the Broker Public Portal would create some conversation, and I didn’t figure wrong.
Brian Boero of 1000Watt discussed the BPP on their “Friday Flash” email newsletter, saying:
If you want to know all the reasons why a broker-controlled national listing site might not work, read this post from Rob Hahn. I don’t share his bleak perspective on this project, but I do admire his deep exploration of the matter.
And Drew Meyers over at GeekEstate wrote a post which was then copyright-violated across the Interwebz, saying:
As you can tell, I’m a skeptic. Brian at 1000Watt penned some thoughts on the broker portal project today as well. His were not as bleak as the opinion of Rob’s and mine. If someone involved wants to hear my thoughts on how to actually make this work, send me an email.
Thanks for the mention and the links, fellas, but um, let me correct the record in one small respect. I’m not bleak about the BPP. Nor did I post all of the reasons why the BPP wouldn’t work. I wrote one concrete suggestion (“buy, don’t build”) and two concerns based on my knowledge and experience of the organizational side of the industry.
Those concerns, which are almost entirely about governance and ownership issues, turn out to be on point with people directly involved with the BPP project. I’ve heard from enough of them to know they agree that governance and ownership are two difficult thorny issues they need to work through.
IF ownership issues can be resolved, IF clear mission objectives can be established, and IF the governance issues are handled… then now is a great time for BPP. Move is now a small part of a global media behemoth. The FTC approved Zillow’s acquisition of Trulia; the deal will close next week. Now would be a great time for a serious competitor to Zillow and News Corp to emerge.
For the record, I think I’m probably closer to Brian’s side of the Bleakness Divide than to Drew’s side, since I totally understand why the brokerages want to make Fair Display Guidelines the norm. But I don’t see my role as an advisor and industry observer to act as a cheerleader blowing sunshine up the valley of darkness.
Having said that, there are a couple of interesting things from both Brian’s post and from Drew’s post that are worth discussing further. Let’s get into it.
How To Understand This Phrase….
Brian’s Friday Flash laid out the emotional case for BPP with succinctness (something I struggle with) and eloquence:
Brokers took a bite from the portal apple when they were vulnerable. The idea of free listings exposure sounded great in 2007, just as we were headed into the abyss.
Then came the dark days. Brokers were bleeding money while the portals were raising money. They got their asses handed to them on SEO; they watched the mobile explosion from the sidelines; they saw their agents drift toward the siren call of technologies provided by others.
Pain. A good five years of it.
But the strong brokers survived. They’re still here, on the other side of what felt like armageddon. They’re standing back up, looking around, and wondering how to regain some of what they gave up.
Is that not rational?
Yes, making the national portal project work is a tall order. Getting Project Upstream to critical mass won’t be easy either.
But isn’t doing nothing riskier than any of that? Isn’t it reasonable to expect brokers to try and regain some leverage over MLSs and portals?
Of course it is.
Trouble is, there are some assumptions here that are historically inaccurate, and one assumption that needs to be looked at more carefully.
The inaccuracy is the statement that brokerages experimented with portals in 2007 when things were going to hell in a hand basket. Maybe it’s simply a sign of how irrelevant Realtor.com has become in industry discourse, but how soon we forget that in 2007, Move had been a public company for eight years (as it had gone public in 1999 as Homestore). For that matter, Move/Realtor.com was essentially created by NAR in the mid 1990’s as Realtor Information Network. Let’s also not forget that in 2007, when Trulia and Zillow were both startups, they were just that: startups, struggling to gain traction.
Also, in those early days, Realtor.com, Trulia, and Zillow all pitched themselves as alternatives to newspaper advertising, which had been gigantically expensive for decades. If brokers and agents gave this newfangled Internet thing a chance, it was because they were going to save beaucoup bucks by cutting back on newspaper ads. (To the chagrin of newspaper publishers across the globe, by the way….)
The more interesting observation/assumption is this phrase: “they saw their agents drift toward the siren call of technologies provided by others.” How do we understand this phrase?
Have brokerages ever provided actual technology to its agents? I mean before the Internet came along, or if you want to go further back, before the personal computer. Did brokerages actually provide technology to its agents? Or did they buy technology from vendors and then provided access to it on at shared cost? (Example I can remember from 1994 or so was how brokerages would go lease enormously expensive color laser printers, then charge agents $1.00 per printed page.)
What about today? Do brokerages today provide actual technology to its agents? Or do they simply resell/re-distribute third party vendor technology to its agents? I’m rather of the opinion that it’s the latter, except in very isolated cases like Redfin. Even giants like Realogy, which one could argue does provide actual technology it owns/has developed (e.g., LeadRouter, Powered-by-Zip platform, etc.), largely relies on redistributing third-party technology from vendors ranging from Docusign to Market Leader (now Trulia, and therefore, now Zillow).
For that matter, one never hears a broker complaining that his agents are out there buying their own CRM platform, or their own mobile phone, instead of using what the brokerage has provided. We only ever hear about Zillow, Trulia, and the portals.
Question is, why? Why aren’t brokers freaked out about the siren call of all technologies provided by others, but only about the siren call of technologies of the portals? I’d love to hear your answers as to Why, and perhaps I’ll provide mine in a future post.
Drew Is Too Pessimistic….
On the flip side, I think Drew Meyers is a touch too pessimistic. He writes:
If the brokerage industry wants a portal to work, you NEED to win the consumer. If you don’t win consumer mindshare, this will flop — and every penny thrown in will be a waste. There needs to be a core product differentiator to capture attention, and I’ve yet to hear one.
Ok, granted, we haven’t yet heard what the core product differentiator of BPP is yet. But I think he’s looking at this from the perspective of a Product Development guy (which he is). From a product features and benefits standpoint, yeah, it’s pretty hard to come up with a differentiator that could take on the incumbent. Property search is property search, right? And Zillow has pretty much nailed that sucker and spends tens of millions a year to keep nailing that sucker down.
My background, however, is in marketing. I do think there is an angle here for BPP. (Again, assume all of my caveats about ownership, governance, etc. etc.) It’s the one blind spot that the industry, and particularly brokerages have trouble seeing, but it’s right there if you want to see it: PRICE.
Offer the home seller a discount on the listing fee if he agrees to exclusivity on BPP. Buyers are often unaware of the cost of brokerage services, as it’s all wrapped up in the commission, but sellers are most definitely aware. Lower the cost of the transaction to consumers for using BPP, and there’s your “core product differentiator”.
Yes, traditional brokerages and Associations and MLSs despise “discount brokerage models.” Everybody seems to want to compete on everything other than price, and end up sounding the same across the board. But y’know… price does matter to every single consumer. I see nothing wrong with competing on cost.
And since government
intrusion oversight typically revolves around the issue of cost to consumers, by proactively lowering the cost of the transaction, any policy of the BPP is likely to be left alone by our lords and masters.
Who’s Down With BPP?
Every last homie!
Let’s keep it relatively short (1400 words only). If you want more in-depth thoughts on how to make BPP actually work, drop me a line. Otherwise, give me your answer to the “Why” question above. I’d love to see what the smartest audience in real estate thinks about that issue. I’ll followup with my answer afterwards.