Is It Time to Stop Solving Yesterday’s Problems?

Over at the WAV Group blog, Marilyn Wilson ponders whether it is time for a National IDX:

Today, we have robust rules in place that allow a broker to share their active, pending and in some cases, sold listings with their fellow practitioners via a local IDX policy.

What if we took that idea to another level? What if a broker could become part of a NATIONAL IDX feed where listings from MLSs from all over the country could be displayed on a local broker’s website? The same rules of engagement could apply. Brokers could opt any of their listings out of the national IDX feed just like they can with a local IDX feed.

Then a broker could display listings from all over the country on their website to encourage more traffic and engagement and allow for referrals to listings all over the country.

She ends the article by asking, “Thoughts?”

Well, I’m happy to oblige, since we have no shortage of thoughts around here. 🙂

Say My Name, Say My Name

First, let us be clear and say the word “Upstream” since Marilyn’s post appears to be a fairly straightforward argument for Upstream… again. That’s completely understandable, of course, since WAV Group has been involved with and been a strong booster of Upstream from day one.

The concept of Upstream being a good one, I don’t have an issue with making all sorts of arguments for Upstream, including the idea of a National IDX. Once CoreLogic releases its version of Upstream, I’m sure it will include all of the technology to make National IDX a reality, so that franchises and brokerages can save time and energy and money on doing national property search websites. So go for it if you want.

If local MLSs want to, as Marilyn put it, “feed their local listings into a national database that could be leveraged by brokers and agents across the country to build relevance, engagement, and traffic to their own websites and mobile apps,” well, that’s their decision. If local brokers want to pressure their local MLS to do that, that’s their decision as well.

So let’s not be coy and pretend that this post isn’t what it is: a case for Upstream. Which is neither good nor bad, but say the name.

Zero Impact

Once you’ve said the name, though, it seems pretty obvious that National IDX really makes no difference to Upstream or to brokers and agents.

On Upstream, I just can’t imagine National IDX would change that many peoples’ minds. Either you think Upstream is a wonderful broker utility, or you think it’s a backdoor attack on the MLS. Not a lot of people I talk to think, “Well, Upstream is all right, I guess… if it only had something like National IDX….” So I don’t see this idea making any difference for Upstream, which will succeed or fail on its own merits.

As for brokerages themselves… I just don’t see it. Local brokerages with all of the local listings are getting their asses handed to them by Zillow, Realtor.com and of course by Redfin, which is a local brokerage with all of the local listings and sold data and whatever else. Local brokerage websites aren’t competitive, but it isn’t because they don’t have listings from other parts of the country; it’s because of website design, usability, speed, etc.

I’m pretty sure that WAV Group’s own research in the past has shown that when local brokerage websites succeed, it’s because they’re hyperlocal and have great name recognition in their local markets. So why Marilyn now thinks that adding listings from outside the local market would help “build relevance, engagement and traffic to their own websites and mobile apps” is not clear to me.

Plus, it isn’t as if we don’t already have national brokerage websites. ColdwellBanker.com exists, as does ReMax.com, and Century21.com and so on. They have just about all of the listings from across the country via IDX. And they’re not competitive with Zillow, Realtor, and Redfin. Again, see above re: website design, usability, speed, etc.

So, what would change?

Finally, I am deeply skeptical of the idea that real estate agents would be happy to get a referral to a buyer from their own hometowns from an agent across the country, in exchange for a 25% fee. If it’s the result of a relocation, so the buyer asks his former agent to find him a local agent, that’s one thing; if it’s the result of an IDX website halfway across the country, I’m not seeing it. But hey, some of you readers are brokers and agents, so you tell me: how happy would you be to pay 25% referral fees to an agent from six states away for a buyer from your backyard who found that agent through a National IDX website?

The Deeper Issue

If this post were only about smiting the idea of a National IDX as Jules Winnfield might on those who would attempt to poison and destroy his brothers, this would be brief indeed. But there is a deeper issue worth discussing here: the constant attempt by the real estate industry to focus on yesterday’s problems, instead of today’s issues.

Two years ago, I wrote a post titled, “Please Stop Fighting the Last War.” That post was also about IDX, and I wrote:

Until brokerages solve the problem of agent-centric recruit-and-retain business models, nothing else much matters. That’s the next war, today’s problem, not the last war and yesterday’s problems.

Today, we have the general partner of Andreessen Horowitz proclaiming to the world that we will all buy homes from and sell homes to, companies. And pretty much the entire investing community listens with great interest. Real estate agents won’t go away, according to Alex Rampell, but they’ll all work under the rubric of a company. Watch the entire video if you haven’t done so already.

So in January of this year, I wrote the 2018 Year End Review with the subtitle, “The Dawning of the Age of Capital.” Let me quote from it:

There will come a day at some point in the future when we will look back on 2018 as we look back on 1973 today and say, “That’s when everything changed.”

2018 is when we can say definitively that the old way was replaced with a new basis of competition.

The old basis of competition was based on headcount, which meant that recruiting and retention was the key to success. Everything that brokerages, MLS and Associations, and technology companies in real estate have done for the past 45 years was based on and around creating advantages for recruiting and retention.

The new basis of competition is based on deploying huge amounts of capital, which means that access to capital is the key to success. Everything that the companies that will dominate the future of real estate will do will be based on and around acquiring and deploying large amounts of capital.

Is there anything about IDX, about brokerage websites, about MLS policy, or National IDX that would help brokerages acquire and deploy large amounts of capital? No.

Does constantly repeating, “The brokerages are the ones who curated and contributed the listings to the MLS!” help any brokerage anywhere acquire and deploy large amounts of capital? No.

Would the creation of a national database of listings, whether for IDX or whatever other purpose, help one whit with either (a) driving the margin-destroying agent splits in the other direction, or (b) acquiring and deploying large amounts of capital? No and no.

Yesterday, Today, and Tomorrow

In 2019, we have giant public companies who have acquired billions of dollars in capital and are deploying that capital to solve the age-old problems of uncertainty, inconvenience, and long transaction times. Technology alone could not and cannot solve those problems; it takes the application of huge amounts of capital to make a dent.

Back when technology was making an enormous impact, the industry was talking about “belly to belly” and “this is a personal relationship business” and office size. So now that things have shifted to capital, we’re naturally talking incessantly about technology and data.

Look, I completely understand. I get the desire to hold back the years, thinking of the fears you’ve had so long. It is a perfectly natural human response to want to keep holding on, so tight. But the real world (that is, the consumer who has to buy and sell homes) doesn’t care about your feelings or your fears or your wishes. It simply is what it is.

This is why it is so important for brokerages, MLS and Association leadership, and tech company executives to be cold-eyed (although warm-hearted) about today’s problems and today’s possible solutions. While we’re obsessing about using AI to target marketing to homeowners who are likely to move in the next 90 days, or some new technology to auto-message a bunch of potential buyers on Instagram or something, the real players are obsessing about helping buyers make all-cash offers using their money, or paying 99% of fair market value in cash, to eliminate most of the consumer pain around the home buying and selling experience.

What’s more, CEOs of various companies and organizations need to be thinking about tomorrow’s problems and tomorrow’s possible solutions, because well, that’s kind of what a CEO has to do that no one else can. But let’s leave tomorrow aside for now and at the very least focus on today, instead of yesterday.

It might or might not be time for a National IDX. It most certainly is time to stop trying to solve yesterday’s problems with yesterday’s solutions and find today’s solutions for today’s problems.

-rsh

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17 Comments

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  1. Hate not to be coy here Rob, but the intention of my National IDX article has NOTHING to do with Upstream. I wasn’t even thinking about Upstream when I wrote the article. The article was inspired by a broker I was speaking with who asked a sound question – why is it that third parties can display national MLS-supplied listing information and brokers are restricted to their local market. It wouldnt be difficult to ask a broker to opt-in.out of a national IDX just like do for a local IDX feed. Brokers are asking the logical question that if they curate a listing, why can’t they leverage it to attract national eyeballs and potentially generate referral business to me. Seems like a logical question to me…..which has NOTHING to do with Upstream. A more notable analogy that a broker brought to my attention is the Broker Public Portal. They said since I have a broker- branded version of Homesnap, they believe they have, in effect, created a national platform for them to attract potential interested buyers and sellers from across the country since there 130 MLSs representing nearly 1 million agents on the platform today. Combine that with a nationwide footprint of public records, BPP is probably the closest example of the vision of a national IDX we have today. In the future, if you would like to what my intention of an article is, feel free to give me a call and I will give you the real story.

    While your opinion is that IDX is not a viable strategy any longer, I would suggest that you speak to brokers, including that have raised millions/billions of dollars recently band ask them their opinion. The idea of a national database curated by those that actually know what’s going on in real estate is very interesting to VC’s around the globe that I have spoken to. If it wasn’t I wouldn’t get the regular calls asking for a way to access those nationwide datasets that you believe are not monetizable.

    1. I’ll take your word for it, Marilyn, that your post had nothing to do with Upstream. My apologies for misunderstanding that, but… in my defense, I don’t think it was that much of a leap. And I didn’t call you because, well, I think when there is a public blogpost, the appropriate dialogue is public, like we’re doing right now. 🙂

      As for this:

      “While your opinion is that IDX is not a viable strategy any longer, I would suggest that you speak to brokers, including that have raised millions/billions of dollars recently band ask them their opinion. The idea of a national database curated by those that actually know what’s going on in real estate is very interesting to VC’s around the globe that I have spoken to. If it wasn’t I wouldn’t get the regular calls asking for a way to access those nationwide datasets that you believe are not monetizable.”

      I would be thrilled to ask those brokers who have raised millions/billions of dollars with IDX. Could you tell me who these brokers might be? Especially the ones that raised billions of dollars, which would break Compass’s record to date.

      1. also – Upstream has nothing to do with IDX. It is a place for brokers to create, store, and share their listings and company records with technology applications and portals. There is no data share or IDX or National IDX type thing with Upstream. I think Marilyn was more than a bit sensitive because she has nothing to do with Upstream, and also understands enough about Upstream to appreciate that National IDX would not be anything that could be powered by Upstream. It’s an MLS idea I suppose.

  2. Zero interest here in displaying out-of-area properties within our real estate search applications and websites.

    We use creative solutions like blog posts categorized “What Can You Afford in Other States?” and actively participate in national real estate conversations so that we are regularly generating inbound and outbound referrals for our agents.

    What we truly need is better access to our own brokerage and MLS data so that we can continue generating assets for our salespeople that induce and augment conversations with customers and marketing within their network.

    We don’t have simple things. Real-time feeds of our own listing status changes. A map view of our buy-side pending deals. Sortable roster performance data that includes showings performed per buyer agent or per listing, etc.

    It’s great to be distributing lead opportunities to agents generated from digital advertising and IDX search products today, but we have to find new, more certain ways to help them acquire listings and purchasers tomorrow.

    Today iBuyers remove sell/buy risks with an amount of capital equal to or near the home value on the open market.

    Another implementation might be a lightweight financial instrument that doesn’t require the acquisition of a half million dollar asset in the form of a literal house on a piece of land, but enables the same functionary benefits like removing most/all contingencies for homeowners next purchase (via the instrument) and also gets the listing into turn-key condition for bringing it to market (via services like minor repairs, cleaning, staging, and self-touring, etc.) I’d be ecstatic to be armed with such a product that our agents could deploy within their networks and prospects.

    Otherwise, we’re left with: listings on consignment terms + bounty-hunter buyer agency as our only services.

    1. “What we truly need is better access to our own brokerage and MLS data so that we can continue generating assets for our salespeople that induce and augment conversations with customers and marketing within their network.”

      This is interesting; what data would you need access to in order to do this? Andrew Flachner is watching. 🙂

      1. Always watching.

  3. Please, lady. It’s your generation behind ‘consulting’ groups like WAV that are the prime culprits of the downfall of organized RE. Pitching yet another outdated idea like ‘gee, has anyone thought of doing this? Contract us as consultants, and we’ll bend the ear of the stooges at NAR’.

    WAV has been doing this for the last decade. You have no vision or fresh ideas.

    1. Well said Eric!

    2. Thanks for the vote of confidence Eric. WAV Group has significant involvement in supporting the adoption of the Real Estate Standards Organization too make MLS data easier to manage; supports the Broker Public Portal and it’s joint venture with Homesnap that is now one of the top search sites in America and delivering an amazing mobile app solution for over 1 Million Realtors (owned by the industry); WAV Group has worked with Brokers and Franchises to develop the Upstream Concept that will allow brokers to collaborate on a solution to create, store, and transport their broker data assets more efficiently; WAV Group works with with the industry to suggest major improvements in MLS Rules and Policy; WAV Group supported the effort to develop the fair display guidelines. Step up and tell me how these things have contributed to the downfall of RE, and step up and provide your vision and fresh ideas. Heck – you throw hate at someone in your comment and do not even have the courage to share your name – Eric Who?

      1. “significant involvement in supporting the adoption of the Real Estate Standards Organization”

        Wow. Really? You think this would have been a no brainer to do 15 years ago. What took you so long for standards with data? I mean….. they still do not have absolute compliance on that, nationwide do they?

        “Homesnap that is now one of the top search sites in America”

        Questionable. Because a realtor pushed them that direction. I have not checked ZG’s stats today…. but I’m going to take a guess consumers are still hitting ZG more on a regular basis.

        “WAV Group has worked with Brokers and Franchises to develop the Upstream Concept”

        Sure. That dumpster fire ( Let’s not even get into RPR…) that NAR passed on to CoreLogic?

        “WAV Group has worked with Brokers and Franchises to develop the Upstream Concept”

        Did you actually ‘code’ any of that…. or did you collect a consulting fee to talk it up to less tech literate brokers and agents, and try sell them the pipe dream? How does that old saying go? Get rich in real estate by SELLING something to a realtor. $13 million from NAR, and another $13 million from brokerages? I think that’s what some of the numbers were. I’m willing to stand corrected, those numbers were just from loose memory from an article here. ‘Who’ were you really consulting for, is what I have to ask at this point. Corelogic sure came out ahead, not realtors. Again.

        With all of your ‘help’ rounding up support for the project…. have you apologized to realtors for encouraging the monumental waste of money on the project?

        Lol. Share my name?

        Victor, ‘Who’ I am, is not important. Words only matter.

        Realtors are having their lunch ate by every Wall Street/Silicon Valley/tech startup that decides to wade into RE…. and their model is pretty transparent. Have you pushed for any of the same with realtors/MLSs/listing d

      2. Hey guys – just a warning. I don’t mind vigorous debate even bordering on the offensive, but I do draw the line at unwarranted personal attacks. Please don’t cross that line.

  4. The first word that comes to my mind in considering allowing industry participants to have a National IDX feed on their sites is this one.

    Insanity. Pure and simple insanity.

    Is it not bad enough that agents and brokers advertise thousands of “products” (aka listings) in their MLSs on their web sites that they absolutely nothing about now? Let alone they have never seen? What if Amazon advertised things the way that we do? Zero specific product knowledge and just pretending to know something they do not.

    Would you shop there?

    Local IDX as used today is one of the World’s classic examples of false advertising. For a “cooperating broker or agent” to pretend and profess to know anything more than what the consumer does by reading the IDX information is embarrassing and insulting to the consumer.

    Consumers inquire on listings to get specifics, not generalities. And the majority of those that are advertising these listings have NO specifics about the properties without the need to “call the listing agent.” That is a pathetic consumer experience.

    Think about it folks. And I suggest you think hard.

    Maybe this is why Mercedes Benz USA does not advertise new Lexus or BMW vehicles on their site. Or wait a minute, maybe the reason for that is that they are fully capable of selling their own vehicles and they don’t need help from a competitor to “sell with they list!”

    Maybe the real issue here is one that we continue to refuse to address, A failing MLS industry with antiquated policies and rules who does and suggests crazy things like this one.

    And yes, that is a whole other subject and that subject is the one that is being openly discussed now in court rooms across the Country. “Now it gets interesting.”

  5. Real estate agents and their brokers care only on themselves, their commission checks and do not give a damn on the consumer. They hardly return phone calls, they lie on offers they received and never received, they are lazy on marketing and many know nothing about real estate.The word transparency scares them.So, I suggest that before all this IDX , national MLS or being data gate keepers conversations, they need to upgrade the requirements for getting a real estate license and to teach those agents to pick up the phone and to be 100% transparent with their clients.

    1. “they need to upgrade the requirements for getting a real estate license”

      And that’s going to do….what? Encourage a realtor, because it has taken them even longer to get licensed, to try to charge even MORE bloated fees for basically doing a whole lot of nothing? The 9o or so hours of training to become licensed has worked so far for the robbery through fees that has been pushed onto consumers.

      Lol, I for one, am excited to see the recent class action filed.

      When the actual ‘work’ involved in closing a transaction is laid out in court…. I think many realtors in retail real estate are going to have a lot of explaining, to friends/family/previous clients the fuckery they committed when they hit them with 3% per side on the transaction, or even tried to go the dual agency route.

      In MN, using Edina Realty as an example, most Edina Realty agents literally do not even know how to ‘enter’ a listing into Matrix.( sure, if they worked somewhere prev to Edina, they might…. but if they ‘start’ at Edina… yup. Edina likes them stupid like that… someone else at Edina is charged with doing that).

      1. “Edina likes them stupid like that… ”
        I am sure that not only in Edina you`ll find those stupid agents, they are all over the country.I will not argue on the commission fees since commission fees are negotiable and agents do need to make a living. To make a real change in this industry, you must start with the basic things like the offer process for example which is lack of transparency. Sellers and buyer are in the mercy of real estate agents with the way the current offer process. Sellers can`t know how many offers they got and buyers can`t know if their offer was actually presented in front of the seller. NAR is a monopoly and the MLS is a monopoly.

      2. Bingo Eric.

        I was recently told that offering a 1% fee to a buyer’s agent in the MLS was “unacceptable and not customary” in the market. The listing broker / agent refused to offer this fee to a buyer’s broker. In this case, that would have been an equivalent in compensation of $58,500.00 for what would have amounted to less than 60 days worth of work.

        I guess to these agents it’s”tough work if you can get it” or it’s easy to get if someone as foolish as me is forced by the “price fixing” policies of this industry to offer it.

        The time has come for dramatic change to the way the industry assesses fees to the consumer, how much is aid for what is delivered and who pays them. And it is not a second too early.

    2. Well said. We could operate with 20% of the current agents in our market.

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