Does Thanos, I mean, RealScout Want a War?

As many longtime readers know, Andrew Flachner is a good friend of mine, and a wonderful young technology executive. I like Andrew, I respect Andrew, and I thought both of those things while not singing drunken karaoke with the man.

That is not to say that we haven’t had our (intellectual) disagreements. I find that I tend to have spirited disagreements with my friends. So for example, when RealScout announced its New York Buyer Graph initiative, I wrote:

Let me see… the seven largest and most powerful brokerages in NYC who have significant “market power” have combined, agreed, coordinated… one might even say conspired (a term filled with legal meaning under the Sherman Antitrust Act)… to create a “groundbreaking cooperative” that will be a total game changer. One of the explicit promises, a core value proposition, of this cooperative is that it will “lock down” buyer data and prevent “leakage” into the portals.

No, that doesn’t sound problematic at all, said no antitrust attorney ever who wasn’t paid to say such a thing.

I’m going through deja vu, as Andrew just published an article first on Inman and then on LinkedIn that is getting a ton of attention. Its title is “How Market Share is Creating Competitive Superpowers in Real Estate” and I do recommend you read the whole thing.

Well, in my first post, I wrote, “May you find what you are seeking” which is one of the three ancient Chinese curses, which can be translated as “Be careful what you wish for, as you might get it.” This is another such a case.

Are RealScout and the brokerages who are working with RealScout really looking for a civil war within the industry in pursuit of this “competitive superpower”? Because that’s where y’all are headed.

If the various MLSs and the brokerages who make up the vast majority of the “market share” today allow RealScout and its band of super friends take over and build this superpower to put all of them out of business, well, then they deserve every bit of what’s coming to them. On the other hand, if self-preservation is an instinct you possess, then all of you various MLSs and brokerages who are not part of the RealScout Superfriends Network should seriously consider whether you will act now, today, or wait until RealScout has gathered all of the Infinity Stones and can kill half of you with the snap of a finger.

Either way, it’s civil war in residential real estate. Is this really what you’re looking for?

Let’s do this.

Competitive Superpower

Frankly, as erudite as Andrew’s examples of how market share leads to “competitive superpowers” are, they are almost completely irrelevant to real estate… except perhaps as unintentional object lessons. The point, though, behind those entertaining and interesting anecdotes is to push something that Andrew and RealScout have been pushing for a while now: the benefits of “network effect” in which the presence of sellers brings buyers which then brings more sellers which then brings more buyers, etc. etc. This is really what RealScout has been selling the past couple of years, to some success, and God Bless!

As Andrew puts it:

To reach a position of dominance and compounding growth, companies must first reach a tipping point in market share which enables two critical superpowers:

  • Superpower #1: With enough market share, companies can literally make the market because they control so much of it.
  • Superpower #2: Dominant market share also enables a company to leverage data to differentiate and dominate.

Those superpowers are activated when a company achieves some “Minimum Viable Liquidity” which Andrew defines as, “the amount of supply and demand that you have to control to be able to make the market by yourself.”

I have to admit that I’m completely confused as to the use of the phrase “make the market” in this context, since it brings to mind actual market makers who set the prices on both the buy and the sell side, providing liquidity to the entire marketplace. That makes sense for an iBuyer, but I just don’t understand how “making the market” applies to either AirBnB (which does not “make the market” in any sense of the term) or Google Assistant (which is just a competitor to Alexa, and does not “make the market” in any sense of the term) or real estate brokerage….

If the article ended there, I would have just moved on and said, “Self, you just don’t understand what Andrew is talking about.” But it didn’t end there. It continued.

Andrew on Real Estate

First, Andrew points out that due to the existence of the MLS, residential real estate hitherto had not seen the creation of an AirBnB or a Google or similar dominant company, but that dominant company can emerge because of buy-side data:

The real estate industry hasn’t yet encountered a company that’s captured enough market share to reach the market share tipping point. One key reason is that the MLS has leveled the listing data playing field so that no one has been able to gain a competitive advantage with data. In other words, supply side is visible to everyone.

The demand side, on the other hand, has been largely invisible, because consumer behavior is either not captured by the brokerage community (see below)–or, when it is, it remains proprietary.

It goes without saying that RealScout’s core business is somehow helping brokerages gather, leverage, and use this proprietary and invisible demand side data. Not a coincidence, I imagine.

Compass the Bogeyman

Andrew’s first example is Compass, which has been on a market share land grab tear using the money it has raised from investors like Softbank:

Compass has realized that market share makes their brokering power bigger. With more listings and more buyers, they can bolster your exclusive “coming soon,” “off-market,” and “in-house” transactions that the competition can’t match, creating a “FOMO” (“fear of missing out”) effect in both customers and agents.

If you’re a consumer or an agent looking at the screen below from compass.com, which shows Compass’ exclusive off-market and coming soon listings, how could you not work with Compass?

These tactics fuel the incentives for buyers to work with Compass because Compass has the exclusive listings. And that means sellers have to work with Compass because they have all the active buyers working with their brokerage. And finally, agents will have to work with Compass because that’s where the action is. Boosting agent recruitment then brings in more listings and buyers, fueling that superpower growth loop.

Interesting. What else?

Independents, Unite!

The second “example” Andrew provides is a naked sales pitch to the brokerages in Miami to follow what brokerages in Orange County, CA, and New York City have done by partnering with RealScout to “pool their network and data”:

Now, the big question is: How can smaller brokerages, who don’t have the same level of financial resources as their venture capital-backed peers, compete effectively? To answer this question, let’s shift our focus across the country from San Francisco to a very different market: Miami.

Miami presents a very different picture from San Francisco. No individual brokerage has more than 10% of the market. So what’s the right growth tactic in this case?

As we’ve seen, Airbnb used the Craigslist growth tactic and Google used the GOOG-411 growth tactic to propel their company/service to the tipping point. The most practical growth tactic for smaller market players is to pool their network and data with others in their market to get to the minimum levels much faster. You — in concert with other firms in your market — already have the market share. That’s your advantage. You just have to take advantage of that advantage.

Huh, I see. Andrew brings up Realogy, but just to note that Realogy brands have 25% market share in San Diego. I don’t know what Realogy is supposed to do with that, but okay, that’s cool. We already knew Realogy was big, especially in San Diego.

What’s the Goal?

What’s the point of all this hand-wringing about market share, superpowers and demand aggregation? Helpfully, Andrew tells us:

To know when you’ve achieved the Minimum Viable Liquidity that unlocks the market making superpower, two key things have to happen:

  1. Clients/agents feel you have enough in-house buyers and exclusive listings to switch to your brokerage.
  2. Sold prices for proprietary listings are comparable to those sold on the open market. [Emphasis added]

Izzat so? And while these companies partnering with RealScout are busy creating in-house buyers and exclusive listings, and putting together a sold database for proprietary listings that will one day be “comparable” to those sold on the open market, the rest of the industry will be doing… what exactly?

Andrew seems to believe there are only two options for brokerages. They can join forces (i.e., work with RealScout) or watch others join forces:

You can watch it happen, as big players make their moves to rapidly acquire agents and brokers, companies, and market share to become dominant players.

Or, you can make it happen by joining forces with other brokerages. When brokerages come together in new ways, they can unlock value for agents and consumers that no new entrant into the market is capable of.

Either Andrew does not think there’s a third option, or believes that brokerages and MLSs and the rest of the real estate industry would not be ready, willing or able to take that third option: brokerages can join forces to kill this superpower-making initiative before it gets going.

Pro tip: If you’re going to fight Thanos, you might want to do that before he gathers all of the Infinity Stones. Similarly, if I’m an MLS, I have to look hard at strangling RealScout in the crib, now, today, before it grows into a market share superpower-commanding arch-nemesis.

The MLS Is Not a Birthright

I’d hate to point out the obvious, since it is something that simply doesn’t occur to anybody in the real estate brokerage industry, but… membership in the MLS is not a right. Brokerages are Participants, and they’re used to thinking that the MLS is by them, for them, and of them. The struggle over membership in the MLS is the struggle between brokerages and “them” — those third-party interlopers, like Zillow or Opendoor or Redfin (despite the fact that Redfin is a brokerage like everybody else) or franchises or what-have-you. But a licensed brokerage? Why, the MLS is a birthright of having a brokerage license!

Except it isn’t. Here is the NAR MLS Handbook §2, which defines “Participant”:

Mere possession of a broker’s license is not sufficient to qualify for MLS participation. Rather, the requirement that an individual or firm offers or accepts cooperation and compensation means that the participant actively endeavors during the operation of its real estate business to list real property of the type listed on the MLS and/or to accept offers of cooperation and compensation made by listing brokers or agents in the MLS

I could easily argue that engaging in widespread “coming soon” or “exclusive listings” and “in-house buyers” in a programmatic way is not “actively endeavoring to list or to accept offers or cooperation and compensation.” And if I could do it, I guarantee that the President of MLS XYZ who isn’t part of RealScout’s private club of Superfriends can make the same argument.

The MLS is Not a Suicide Pact

Furthermore, while the MLS tries very hard to be fair and neutral to all Participants, tries very hard not to engage in anticompetitive activities (or it gets smacked down by government authorities who are watching the MLS like a hawk), the MLS is not a suicide pact. There is no requirement that the other brokerages who make up the MLS continue to allow those brokerages who want to create what is effectively a separate MLS (“Sold prices for proprietary listings are comparable to those sold on the open market?” What the hell else would you say that is?) to continue to be part of said MLS.

Let’s use Compass as an example, since Andrew used it. Compass now has 36% of the market in San Francisco, which Andrew thinks is close enough to the tipping point for its superpowers to be triggered. Okay, but that means the brokerages who aren’t Compass have 67% of the market, and there is no duty, no requirement, no obligation of those brokerages to continue to allow Compass and its agents to have access to the MLS while they keep their listings in-house and off-market in a programmatic way.

If you look at that and just shrug and say that well, there’s nothing you can do, because Coming Soon is a valid strategy and the MLS can’t do anything about it… just understand that you are choosing to commit suicide. There is nothing in the structure or rules of the MLS that says you can’t do anything about it. You’re just choosing not to do so for whatever reason.

The MLS is concerned with fair play and fostering cooperation amongst competitors. It is not a suicide pact.

Similarly, RealScout is a vendor to many an MLS because of its core product: a brokerage website that has listings (from the MLS, from all these other brokerages) that generates all this buyer activity and buyer data that it wishes to leverage on behalf of the superfriends to unleash their superpowers. Again, there is no requirement anywhere that the MLS continue to allow RealScout access to its data, to its brokerages, to its subscribers, in order to help RealScout create a separate institution that will weaken and destroy it.

Given the plentiful advance warning that Andrew has provided about the ultimate endgame of its Buyer Graph initiative, of its attempts to leverage buyer data, of its attempts to create superpowers by leveraging market share… well, the MLS and the brokerages who aren’t part of the superfriends network are well within their rights of survival to decide not to let those companies play ball.

Is this what you were wanting?

The MLS Guarantees Fair Play, Not the Right to Form a Conspiracy

Finally, when the MLS has gotten into trouble in the past with antitrust, it’s because it overstepped its proper bounds: a cooperative venture by competitors who want to derive mutual benefit by ensuring fair play in sharing data and sharing commissions. Prohibiting brokerages who don’t have physical office space from joining the MLS is a no-no because the motivation behind that was to protect the incumbents. Preventing new and novel business models of individual companies is not about fair play.

I think that calculus changes when we’re talking about a conspiracy, rather than an individual company or its business model. And yes, that’s exactly what RealScout and its Buyer Graph initiative is — a conspiracy in the antitrust sense of the term. From the United States Department of Justice:

Conspiracy or Agreement: The conspiracy or agreement to fix prices, rig bids or allocate markets is the key element of a Sherman Act criminal case. In effect, the conspiracy must comprise an agreement, understanding or meeting of the minds between at least two competitors or potential competitors, for the purpose or with the effect of unreasonably restraining trade. The agreement itself is what constitutes the offense; overt acts in furtherance of the conspiracy are not essential elements of the offense and need not be pleaded or proven in a Sherman Act case. [Emphasis added]

Maybe “unleashing superpowers” and “dominating” and acquiring “competitive advantages that the rest of the market can’t replicate” won ‘t be considered by the DOJ or the courts as “unreasonably restraining trade.” If I’m the MLS litigation counsel, I’m willing to take that question to court.

But whatever the courts might say, if I’m the MLS, I say that I can’t and won’t discriminate against individual brokerage company’s business model, but I don’t have to enable a conspiracy amongst two or more brokerages in concert with a third party technology company who is a vendor to my system, to help crush the rest of my Participants. That is very much within the bounds of the principles of fair play and neutrality that the brokerages who make up the MLS want.

The Object Lesson of Craigslist

Finally, let me return to the object lesson of Craigslist which Andrew cited as an example of how AirBnB grew to its dominant market share superpower position. As Andrew relates:

As an early-stage company, Airbnb’s dominance was by no means assured. Growth was slow at first, and the company commanded a sliver of market share compared to competitors.

On the contrary, Craigslist had a massive user base in those early years. Further, Craigslist was the place where people who wanted alternative accommodations (besides hotel rooms) looked for listings—which is Airbnb’s exact target market. So, Airbnb performed what has now become a legendary growth tactic by creating a bot that automated posts on Craigslist, unbeknownst to Craigslist and contrary to its terms of service. The ploy worked, helping Airbnb quickly grow its listings and users at almost no cost on its rapid rise to the tipping point.

So AirBnB broke the rules of Craigslist to grow, and now that it has captured the traffic and leveraged network effect, it’s a “Look how smart we were!” I’d bet that if Craigslist could go back in time, it would do some things differently as it came to AirBnB.

Well, the MLS and the rest of the brokerage community has now been adequately warned. Notice has been served. You are in the Craigslist position, and RealScout and its superfriends are in the AirBnB position. If you do nothing, then you deserve everything coming your way. Your call, your choice, but the object lesson of Craigslist should be lost on nobody.

Is this what you wanted?

Be Careful What You Wish For….

I imagine that Andrew and RealScout have not thought this far in advance, because frankly, Andrew is a really nice guy. He’s not quite as cynical or as tactical as I might be. Maybe he figures that this is a cool article, and if it helps sell a few more licenses to RealScout, why, that’s fantastic business development! And besides, the MLS is a birthright of brokerages, and these major brokerages with significant (but not enough) market share would love to unleash superpowers and grow explosively, right?

All I can say is, be careful what you wish for, as you might get it. What Andrew and RealScout are wishing for is to grow their network of brokerages joining forces to aggregate buyer data, so as to create insurmountable competitive advantages for those companies.

Well, you just might get what you wish for. But I’ll ask again, is this what you want?

-rsh

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13 Comments

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  1. “that it will “lock down” buyer data and prevent “leakage” into the portals.”
    What portals… Zillow and affiliates? The vast majority of sellers would never agree to list their home without exposure on those sites. The fastest way to ruin your brand is to show your customers that selling their home for the most amount of money possible is secondary to your self interests. Of course, at the end of the day, Realtors are sales people whose first concern is making the most amount of money possible. They aren’t asset managers, and they aren’t paid in proportion to the value they create. But even a scumbag Realtor knows they need to disguise their self interest by giving homeowners exposure across all the portals. What is going on now is a flagrant and shameless display of self interest. This is how you ruin your brand and let homeowners in on the dirty little secret that all they is a means to an end. The only reason people pay 5 and 6% commissions is because they think they have to. When consumer centric firms like Homie, Trelora, Home Bay, Reali, and Door are available in every market, we will get to see how aware sellers are of these games traditional Realtors and brokerages play by counting how many people abandon their Realtor. My guess is it will be half.

  2. A few clarifications here.

    1. “RealScout’s private club of Superfriends” is an inaccurate description of the Buyer Graph initiatives, since it implies there’s an exclusionary, exclusive group. In truth, every time we go to a market, we reach out and speak to every brokerage that will lend us an ear, and welcome any company to join, and that includes Compass.

    Our Nov 18th, 2018 press release on the SF Buyer Graph states: “The SF Buyer Graph, much like other Buyer Graph initiatives around the nation, is open to any brokerage that wishes to join the initiative.” That’s been our philosophy all along.

    2. As our approach above illustrates, the purpose of the Buyer Graph initiatives is not to create a divided market, but to create incentives for cooperation and transparency. The idea is not to create a competitive collective to punish a player pushing an exclusionary strategy, but to pull them back into the open ecosystem by creating a productive reason for them to do so.

    Rob is right in pointing out that RealScout relies on our relationships with the brokerage ecosystem, the MLS ecosystem, and the industry in general to succeed. We also believe that the tech transformation of real estate isn’t a zero sum game. For these reasons, we’re trying to build a non-zero-sum vision for real estate, where the industry benefits from technology through a more cooperative model, instead of a tit-for-tat future that will inevitably be destructive.

    3. The Buyer Graph initiative, and in fact RealScout itself, are still works in progress. While we’ve started to find like-minded partners around the country, the iterative and careful work of a more cooperative and transparent ecosystem is still in its infancy.

    What we say meantime is important, but what we do will be even more so. Our hope is that the products and services we present will hit that sweet spot of innovation without disruption, and it’s our responsibility to deliver on that mission.

    In the meantime, let’s keep the dialogue going, because we intend to build our business, and hopefully a future for real estate, with the industry and not in isolation of it.

    For reference, please see my published response. https://notorious-rob.com/2018/09/an-open-invitation-to-the-nyc-buyer-graph-a-response-to-rob-hahn/

    1. Thanks for the clarifications, Andrew! Now, let me ask you some questions….

      You say:

      “1. “RealScout’s private club of Superfriends” is an inaccurate description of the Buyer Graph initiatives, since it implies there’s an exclusionary, exclusive group. In truth, every time we go to a market, we reach out and speak to every brokerage that will lend us an ear, and welcome any company to join, and that includes Compass.”

      If it isn’t exclusionary, then what is the point of the competitive superpower? I mean, the whole point of this superpower is, to quote you, “to reach a position of dominance.” And when talking about Compass, you write:

      “If you’re a consumer or an agent looking at the screen below from compass.com, which shows Compass’ exclusive off-market and coming soon listings, how could you not work with Compass?

      These tactics fuel the incentives for buyers to work with Compass because Compass has the exclusive listings. And that means sellers have to work with Compass because they have all the active buyers working with their brokerage. And finally, agents will have to work with Compass because that’s where the action is. Boosting agent recruitment then brings in more listings and buyers, fueling that superpower growth loop.”

      How exactly does Compass gain this competitive advantage if EVERYBODY ELSE has the same superpower? What’s the point then? How do the brokerages who are in your Superfriends Network gain any kind of competitive advantage, that lets them boost agent recruitment which then brings in more listings and more buyers, if everybody else has the same thing?

      So one of two things is true. Either (a) this whole Buyer Graph thing is a pointless exercise that yields ZERO competitive advantage, and you’ve been selling a dream that isn’t quite true (which will come as quite a surprise to your clients, I imagine); or (b) this Buyer Graph thing IS a massive competitive advantage, in which case everybody else should be thinking really hard about strangling it in the crib.

      The fact that Buyer Graph is “open to everyone” is hardly a comfort. Ask Alex Lange and the folks over at Upstream how that strategy has been going, despite years of boosterism. Ask Zillow how the fact that putting listings on it for free is open to everyone has created peace and harmony in the industry.

      I don’t blame you or your clients for wanting a competitive advantage; that’s the whole point of competition. But I’m merely pointing out that competition implies competitors, who then are NOT in the Superfriends Network, and they have every incentive to do the “Avengers Assemble!” deal and go after you.

      Is this what you had in mind? Presumably not, because you write:

      “2. As our approach above illustrates, the purpose of the Buyer Graph initiatives is not to create a divided market, but to create incentives for cooperation and transparency. The idea is not to create a competitive collective to punish a player pushing an exclusionary strategy, but to pull them back into the open ecosystem by creating a productive reason for them to do so.”

      I’m not sure how to interpret these words. I think you’re saying that because of #1 (Buyer Graph is Open to All!), somehow that creates incentives for cooperation and transparency. Okay, but then could you explain this?

      “1. Clients/agents feel you have enough in-house buyers and exclusive listings to switch to your brokerage.
      2. Sold prices for proprietary listings are comparable to those sold on the open market.”

      That’s literally what you wrote is the tipping point at which superpowers are unleashed and limitless growth — by taking clients, listings, and agents away from competitors — happens. In what sense does the phrase “cooperation and transparency” apply to in-house buyers, exclusive listings, and a sold database outside of the open market?

      What you are proposing in effect is to destroy the MLS system by creating a separate network of brokerages that will leverage demand side data to create in-house buyers, exclusive listings, and sold data that the riffraff do not have access to. (Or if they are given access, the benefits of that system will flow disproportionately to those large brokerages who have market share.)

      That’s a fine goal, and I wish you and Realscout luck in building that business.

      But honestly, would you blame the riffraff who still control 70% of the market share collectively through the MLS should they decide that you and your Superfriends are a real threat to their very existence, and go to war against you and your clients? Would you blame the MLS for deciding that you and your clients are not “actively endeavoring” to list real property and/or to accept offers of cooperation and compensation, and therefore are not Participants deserving of access to the MLS that everybody else contributes to build?

      If you end up destroying the MLS system, and replacing it with something better, good for you! Maybe it’s time that we transition away from that 100+ year old system into something new. Fine, better mousetrap, disruption, and innovation, and Shiva Ranks and all that.

      But like I said, the MLS is not a suicide pact and I don’t think they have any obligation to help you and your network do that.

      Which is why what you’re asking for is civil war in the real estate industry. Is that really what you want?

      -rsh

  3. “Market Share”. “Make the market”. “Leverage data to dominate”.
    Sorry, but while this type of marketing mumbo jumbo might impress VCs who have no understanding of the RE market, it simply doesn’t fly here. There already is a company that dominates the market- Zillow. No brokerage (outside of possible Redfin) has any shot of ever coming close to that. They’ve all demonstrated that they are totally incompetent when it comes to using tech and that isn’t going to change.
    So however many acquisitions Compass might make, however big they grow, it won’t matter because any small firm will be able to compete with them when it comes to lead gen through Zillow, or PPC for that matter. And buyers really don’t give a damn about things like “Compass Coming Soon” especially when a competitor can offer them a buyer rebate a la OpenListings. This theory that a real estate company with a traditional model will dominate the industry is just utterly ridiculous.

  4. I hope and pray that each and every lawsuit against the NAR mafia will prevail. This industry is corrupted, and is NOT focus on the consumer. They all are agent centric to feed themselves with consumer money. There is absolutely no transparency in this industry and it is all about power and more power on the back of the innocent consumer who knows nothing how this NAR mafia running this residential real estate industry and the consumer pays for all of their stupid wars.Someone needs to step in and clean the room from these cockroaches.

  5. Forever, this industry has assumed that what it has done forever it what it should do forever. And I believe that therein lies the conflict here.

    The industry in terms of being free to adopt progressive change and leverage its own resources v. forcing the industry to sustain and to support those things that have forever protected the status quo and the resistance to such change? That is the underlying debate here.

    At the core of all this is this observation. With the help of companies like RealScout, the industry is finally evolving and that change is being met with resistance from those that do not support such change.

    So why? Let’s look at the MLS.

    Since inception, the MLS has served one purpose and one purpose only. To mandate the cooperation and consideration amongst all members, who are by the way, competitors. So in a real sense the MLS has been designed to the level the playing field and, in doing so, to essentially REMOVE the natural competitive advantages that some companies “grow to possess.” Before you say bunk, think about it.

    The MLS policies and rules are not supportive of a true competitive business environment as designed. The competitive advantages enjoyed by nearly all other businesses are noticably missing from the residential real estate brokerage business.

    You know, those advantages that Mercedes enjoys now over Audi for offering a superior vehicle engineered over more than a hundred years. And that American Airlines has earned over an equal number of years of operating an airline v. Frontier Airlines. Success creates a competitive advantage as the consumer makes choices of which service provider is more suited to serve their needs and success results. It is natural and it is normal in all other businesses..

    But it cannot be in this industry? Really?

    The other day I was flying home from my place in Utah and I noted a Delta Airlines aircraft with a big bold brand on the fuselage that read – Sky Team. Sky Team is a collection of cooperative airlines that share flights amongst their customers. Airlines like KLM, Air France, Alitalia, Koran Airline and others all belong to Delta’s Sky Team. And it is interesting to note that American Airlines is not included. That is because they have a One World Alliance and neither is United Airlines because they have their network of airlines called the Star Alliance.

    And of particular note, Southwest Airlines has not been “invited” to be a member of any of these alliances. And to this day, they continue to compete effectively with all of them.

    So now why do you think these alliances of major airlines have never been investigated for anti-competitive practices? It is because in business, they have the right to align and leverage their unqiue competitive advantages. It is called healthy competition. And it is because they have decided over time that “together they’re better.”

    Illegal? Wrong? Damaging to the consumer? No. Evolutionary? Smart? Consumer-focused? Yes.

    RealScout aside, I for one do not believe that allowing the industry to evolve into a much more competitive state is a bad thing. In fact, it is great. This industry need to evolve because it is clear that what it is doing today and how it does what it does today is a gigantic target for disruption and a corresponding consumer revolt. Eliminating many of the things the archaic MLS mandates and punishes the industry for today cannot be sustained for the creation of a true competitive environment. Forcing all members to operate their competitive businesses on a “level playing field” has evolved to be anticompetitive in and of itself. And as such, these ancient things need to evolve or to be recreated.

    So, do I believe that the MLS is going to be able to adapt? Absolutely not. The MLS is the horse and for the industry, “there is no changing this horse in the middle of todays’ stream.” The MLS must remain the MLS because there are simply too many participants who depend on their ability to leverage the opportunity to sell and be compensated for selling the product (listings) of their competitors that are being protected by the antiquated rules and policies of MLS. End of story. It really is. And if you doubt that fact, think back to the last DOJ and FTC investigation of the MLS. Fundamental change to the MLS as it operates today in order to promote change and treat a more “competitive playing filed” within the industry will simply not happen.

    So what now?

    What RealScout is doing, as I understand it as recent as yesterday, is NOT exclusive to any one group or size of broker. What is likely the limiting factor today is that Andrew is wearing multiple hats at RealScout and he can only reach so many of the 50,000 plus brokers with the offering now. So it makes sense to begin with the biggest and work down.

    That said, I think what RealScout is doing with its Buyer Graph is energizing the brokerage industry with a new way to use data they have not leveraged effectively to date. And the target market for the benefit of the sue of this data? Without question, it is – brace yourself – the consumer.

    Well it’s about time. Finally, someone is assisting the brokerage community with a true consumer-first intended offering.

    Is is so bad to evolve the commonly stated value of, “we will throw your listing into the MLS and it will be exposed to the members to sell it,” to, “in the market today, we have X number of active buyers working with broker and agents looking to buy a home like yours right now”? RealScout proves a means for the brokerage industry to extract and apply data that absolutely benefits the consumer. Our industry long known for its uses of generalities evolve to be specific. Scientific. More precise. Positioned to better serve the needs of the consumer.

    So what now? Maybe it’s time that we all take a long hard look at what it is we are doing in this industry and how we can make it a more valued service for the consumer, instead of basing the merit of progressive change on how it will impact the well-being of the status quo. I say you go Andrew and RealScout – and thank you.

    In closing, it is very possible that the days of the MLS as we have known it are over. And if so, and if there is the consistent resistance to changes suggested by an evolving industry aided by companies like RealScout, them maybe it is time to evolve the underlying forces like the MLS. If how they “govern, create the rules and set policies” for the use of the data that the industry rightfully owns, then I say it’s time to find a new” horse” to ride to assure that this industry ultimately makes it across that “stream.”.

    Onward.

    1. Ken,
      Didn’t I see you shilling for for BuyerGraph and Realscout recently?
      http://learn.realscout.com/landing/buyergraph/
      You must have forgotten to mention that…

  6. I’m in the midst of moving so can’t respond in full. I will simply note that if Delta, KLM, and others want to form Sky Team WHILE remaining members of One World Alliance, using One World Alliance data and route info and so on, you wouldn’t blame One World for disinviting them.

    Sure, if RealScout and it’s Superfriends want to create a new MLS, power to them. I’m simply pointing out that the MLS and the other brokerages are under no obligation to go along.

    And that means civil war.

  7. Just two comments. It will be very difficult for RealScout to gain the adoption of enough brokers and agents to pose a huge threat. Not impossible but very difficult. The whole “coming soon” or “pocket listings” universe is going to dry up once the market shifts. With buyers crying they need their house sold every broker will be putting those listings on the MLS ASAP.

  8. On its’s surface, I think it has legs. In the current MLS environment, a good many MLSs will let them advetise on the MLS portal as a “vendor” and push the product on to it’s members, regardless if it holds value or if it’s just simply predatorial to the members (Remine, looking at you!). If the vendor pays to have access to the MLS listing feed, and offers services exclusively to MLS members…. more and more MLSs are happy to take the monthy payment from the vendor, and pretend they have expanded a service set to members…. ( See? See what we bring to you, our members!)

    Truly though…. in 2019 any service that throws around “data this” and “data that”…. like they may just be holding the keys to the next great Machine Learning algo….. but the core pitch of the service offered is based on an outdated “listing book” mentality of “hide/restrict the data”…. that just reeks of “traditional broker”…., and I just have not seen anything New or Innovative come from that broker title in a looong time.

    I’m more impressed by data fueled services that let you look far enough into the data for distressed flags to target the next person that will be interested in listing their home. That would signal to me that you actually knew something about the “data” you speak of so much. Lol, when you hear the disruptors like REX talk about generating business, it’s all about USING the data to understand and target the next potential seller….. not standing around waiting for a handout.

    The DISRUPTOR tag is tossed around loosely in RE, and rarely does the tag fit the premise or the product.

  9. […] led me to think that it might be helpful to pen a short followup to my last post, about whether RealScout wants civil war in the […]

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