Where Real Estate Gets Its Dirt

Big Broker Brinkmanship

“Am I not destroying my enemies when I make friends of them?”
-Abraham Lincoln

The disconnect or “hatred” big brokers have for MLS providers is something I’ve heard for years, and years, and years.

“Leveling the playing field”, “not your role”, blah, blah, blah.

Unfortunately this is the same narrative that’s also reflected in our current national politics. Shut it down. Whether its Obamacare, or MLS public facing websites. I want my way or just Shut It Down!

They give their list of demands and set a deadline. “Brinkmanship” is the new term of the day.

Well last week, whether intended or not, The Realty Alliance (TRA) got the attention of the MLS community. On stage Craig Cheatham, CEO of The Realty Alliance (talk about a tough gig!), delivered his message, “You’ve got 10 days”. After this tense panel discussion the hallways outside of the general session were smattered with MLS execs making hasty calls back home.

“Bullshit posturing” was my first take. But this time, I’m hearing, it will be different. The Realty Alliance is going to do something, not just talk the talk, but walk the walk!

But from my eyes I don’t see anything that can’t be fixed. And they need to be fixed by working with MLS providers not against them. Because if they decide to work against MLS provider I see disastrous consequences for TRA and will only serve to make MLS Providers “more powerful than you can possibly imagine.

TSA, here’s your nightmare scenario. The scuttlebutt I hear is you are planning of pulling out of IDX from local MLS providers and then provide your own quasi-MLS.

Here’s the consequences.

agent pick up1. You will lose a ton of talented agents. Agents, like most people, hate change. It won’t matter if your solution is better. They hate change. I know many franchisors that are literally licking their chops. Knowing, if you do this, it will create a HUGE recruitment opportunity for them.

2. Your quasi-MLS solution will fail. This is not your core competency. This will be a huge distraction to you just as the real estate market is recovering. A distraction, I might add, that your competition will not face. First rule of getting out of a hole you dug is to stop digging!overhead

Business man in suit3. When you fail you will have to go back to your local MLS providers with your tail tucked between your legs. That smile on the MLS execs face as you come walking in the door is hiding the thoughts crossing his/her mind, “Who’s your Daddy now bitch?”

So what’s a big broker to do?

Stop listening to the consultants you’ve hired. Stop drafting new business plans. Go sell a ton of real estate. You have the MLS community attention. Take advantage of it.

Don’t lose this opportunity.

You only have 6 days!

  1. Nice breakdown Greg, looks to me to be a little “Napoleon Complex” going on from TSA! They are not big enough, strong enough, or talented enough to pull this off…Unless they have a friend at a Large Brand that is telling them that they will “Have Their Back”?

    I see this a terribly bad move…great intentions, and if only the Brands had the “balls” to do this, but a bad move by TSA non the less.

    Keep us posted


  2. Hi Greg, love your blog by the way. I don’t know if I would underestimate these brokers “IF” they truly feel backed into a corner. Desperate people do desperate things. TRA has some serious brokerage power in their ranks for sure like Home Services of America and Prudential. Also they have brokerages that are pretty leading edge and spend heavily in tech like Intero or @properties so they may indeed have thought this through…..they may not have as well lol, but doubtful from this group. Also I should tell you that many agents would suggest, the single biggest pain for an agent is not switching mls providers (although it ranks up there) it is switching brokerages. Many of these brokerages have a very loyal fanbase due to the fact that they are so far ahead of many of their big box counterparts which is how they became such large yet independent firms in the first place ie. @properties or Shorewest or even Howard Hanna so a mass exodus is unlikely. That said threats to mls’s should not be the way to go and both sides clearly need to sit down and have productive dialogue. I wish you and they all the best and hope for the sake of all it is just posturing or puffing.

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  4. Its better than Million Dollar Listing and The Housewives combined…but in all seriousness it’s very interesting and the outcome will be interesting. Thanks for the recap Greg.

  5. Greg,

    To quote the inimitable Russ Bergeron (although he was talking about something else at the time), “This is wrong on so many levels.” As I posted yesterday at http://to.ly/pvVF I don’t think TRA (not TSA by the way) would have made the statements they made without support, at least implied if not express, from some of the other larger players including the franchisors. They were on opposite sides of the IDX indexing issue a couple years ago, but are very much aligned in their opposition to the MLS public website as basic service issue. If they have the franchisors support, that makes it tough for an agent to change firms when all they have left to pick from are boutiques and mom-pop shops, companies they would have already moved to if there were so inclined.

    True, building an MLS is not a core competency of TRA, but it doesn’t need to be. Craig Cheatham said as much when he mentioned multiple NDA’s that had been signed with vendors in the CMLS audience. They could just contract out for the technology service or use one that one of their members has already built. No need for rules, compliance, NAR oversight, and all the rest of the baggage. Just a pure aggregation of listings from multiple sources and shared across a private network. All of the big brokerage names already do that.

    Based on those two points, I doubt if your #3 is a concern. I don’t think TRA would go into this project with any thought of turning back if it doesn’t work. Take a hint from their HQ location – Dallas. This is Texas Hold “em and it looks to me like they’re going “all in.”

  6. @Bob So if I’m reading you correctly.

    1. TRA and major franchisors get together to block agents from leaving.

    2. A vendor will solve all TRA MLS core competency issues?

    3. They won’t turn back.

    All these things strike me as the same rhetoric another large organization, with over 100,000 said when they went to start their own MLS initiative.

    Remember calREDD?

    As the saying goes; The only future we don’t know, is the history we haven’t read.

    1. CAR thought that their loyal members would support them to break off and form a new MLS. – After much hubbub the agents defected.

    2. Vendor. They announced Discover MLS as the future of MLS systems, and it didn’t work on an iPad. -After much hubbub the agents defected. http://youtu.be/DJTyRroZFyk

    3. Any smart poker player knows, “you gotta know when to hold ’em, and know when to fold ’em.” These guys are smart businessmen, they didn’t get that way by taking stupid risks.

  7. GR,

    I think you read my points right, but came to different conclusions.

    CalREDD was an attempt to create a statewide MLS in California in competition with two mega systems and many, many smaller ones. I don’t see TRA trying to create an MLS. That would be overkill and would lead to repeating many of the problems that now exist within the current MLS structure.I think we are over-thinking this. Let’s look at Occam’s razor: the simple answer is most often correct.

    What do the brokers say they want? A simple solution that lets them trade inventory and cooperate on selling homes. Nothing more. The simple solution would be to meet for coffee at the corner restaurant once each week and exchange lists of addresses and prices. Sound familiar? Now make it electronic, but keep it simple.

    We are seeing this in the agent community with private listing networks where agents exchange pocket listings with other agents with whom they choose to work. No NAR oversight; no mandatory cooperation requirement, no syndication; no MLS rules or competing products/services, no need to join 47 MLSs because of artificial geographic or political boundaries, just a simple society created by the peers in the group. And if someone isn’t playing by the rules, the group either kicks them out or just ignores them.

    That approach on a slightly larger scale could work for residential brokerages. It certainly has worked just fine for the commercial brokers for decades. And most of them have never joined an MLS in their lives.

    There are probably many other simple solutions that could be considered. I don’t know which one might be chosen, but I doubt if it will be earth shattering new technology or a new business model.

    I totally agree with your last statement. “These guys are smart businessmen; they didn’t get that way by taking stupid risks.” I don’t expect them to start now. Also, I don’t look forward to an “Aha” or “Gotcha” or “TaDa” moment after TRA’s Monday meeting. It took them years to reach this boiling point. They will take their time effecting any change.

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