Where Real Estate Gets Its Dirt

HomeServices wants SCOTUS to decide

HomeServices wants US Supreme Court to weigh Sitzer | Burnett case

“On Friday, Feb. 2, HomeServices of America filed a petition to the U.S. Supreme Court for a “writ of certiorari,” asking the court to review an August ruling by the U.S. Court of Appeals for the Eighth Circuit affirming a lower district court ruling that HomeServices can’t enforce arbitration agreements signed by seller clients of its franchisees because the contracts the sellers signed were not directly with HomeServices.”

Andrea Bramila, Inman News

Interesting angle. Doesn’t really go to the heart of the case, but more that they, (HSofA) shouldn’t be included in the case at all.

Did Edina make the right move?

To pull or not to pull?

Via Paul Hagey at Inman News.

“Living without the large portals isn’t easy. Operators of third-party listing portals are often able to devote more resources than brokerages to building consumer-friendly websites aimed at providing a wealth of information on neighborhoods and market conditions.

A recent review by real estate consulting firm Clareity Consulting concluded that Realtor.com, Zillow and Trulia have the best mobile apps for consumers.”

I have to say that Inman is really doing a great job lately at deep diving into these stories (the RPR story also comes to mind). Paul’s article really gets in to the nitty gritty. As for the answer to the article’s question. I think it’s a no-brainer; Don’t pull. The elephant in the room is mobile. ZTR mobile traffic is Tsunami like.

Warren Buffet Bets Big On Real Estate

HomeServices and Brookfield Announce a New Residential Real Estate Franchise Brand—Berkshire Hathaway HomeServices®

“The combined networks of more than 53,000 Prudential Real Estate and Real Living Real Estate agents generated in excess of $72 billion in residential real estate sales volume in 2011, and operate across more than 1,700 U.S. locations.

“Berkshire Hathaway HomeServices is a new franchise brand built upon the financial strength and leadership of Brookfield and HomeServices,” said Warren Buffett, chairman and CEO of Berkshire Hathaway Inc. “I am confident that these partners will deliver value to the residential real estate industry, and I am pleased to have Berkshire Hathaway be a part of the new brand.”

“We are honored and proud to be entrusted with the use of the Berkshire Hathaway name as our new real estate franchise brand,” said Ron Peltier, chairman and CEO of HomeServices. “We will convey the strength of Berkshire Hathaway’s reputation and its associated principles of integrity and financial stability in everything we do.”

The message is loud and clear. Warren Buffett has decided its time to bet on real estate again. And bet BIG.

This is great news for all of us in the real estate industry. But lets peel away the layers of the onion.

If you look up wwww.BershireHathawayHS.com (BHHS) on WhoiS you find out that the URL was purchased by HomeServices back in June of 2012. So either Home Services was already making plans to rebrand itself back then or this deal has been in the works for a long time.

This move solves Brookfield’s brand problem with Prudential. Since the Prudential name was going away they needed to come up with a brand the Pru brokers would not stick their noses up to. How are you going to compete with a “piece of the rock”? I think the Berkshire Hathaway brand will be something that will be very enticing to Pru brokers. I mean, what agent, at a listing presentation wouldn’t want to say that their company is owned by Warren Buffett?

Which brings me to another point. This could be a big risk for Berkshire Hathaway. They are leveraging the Berkshire Hathaway name for the first time. And who are the stewards to this exclusive brand? Real Estate Agents, which are just a couple steps above used car salesmen on the public respect scale.

Ron Peltier as Chairman makes sense. Earl Lee as CEO is interesting. Buffett is famous for being a great business operator and cultivating managerial talent. Broker-owners love Earl, but will he cut the mustard?

The other two execs, recently pictured with Earl on the August cover of RIS Media’s REAL ESTATE Magazine, are also interesting choices.

Aleya Chattopadhay rose from the ranks of Brookfield to become the CMO. She has a lot of experience internationally and in conversations I’ve had with her I can attest to her smarts and passion about the industry.

Steve Phillips came from GMAC Relo division before he joined Brookfield. I wonder since this is technically a JV between BHHS and Brookfield if they are still employees of Brookfield or have they left Toronto for good?

Time will tell.

The rate this industry is changing is dizzying. Think about it.

Here comes the Canadians!
Brookfield acquires GMAC Real Estate
Brookfield acquires Real Living, then merges GMAC Real Estate brand into Real Living.

Here come the “Interlopers”!
Zillow goes public
Trulia goes public

The Old Guard makes a stand!
Realogy goes public

There go the Canadians!
HomeServices acquires majority stake in Real Living and Prudential RE from Brookfield.

My head hurts!

A few takeaways:

HomeServices of America has always had a stable of multi-branded real estate companies. Think Long Real Estate, Edina, Prudential X,Y, Z etc. While I can’t see a company like Edina changing brand names I do see the Prudential brands under HSofA moving toward the BHHS brand. This will give them a web presence they haven’t had before. If I was Zillow and Trulia I would be watching these developments very carefully.

A wise man once told me that Joint Ventures never work. In this case HomeServices owns the majority share, so that will help, and Brookfield gets the cachet of being partners with Warren Buffett.

You gotta feel for the staff at what was GMAC, Real Living and Prudential Real Estate. They been through 3 years of nothing but change, and now this!

The Harley Rouda story that leaked yesterday I reported on. Was it an honest mistake, a crossing of wires due to the Hurricane? Or was Harley tweaking Brookfield’s nose?

No matter. Right now I’m optimistic on real estate’s future.

So Nouriel Roubini can go suck on it. The Housing Recovery is official, Warren Buffett said so!

When REN?

A few things have been written about MOVE’s latest announcement on the creation of the “Real Estate Network” (REN). MOVE’s says REN will “extend the syndication of property listings to highly trafficked websites operate by real estate franchisors and brokerage networks.”

I have to say I think this is a brilliant strategy on MOVE’s part. Here’s why:

1. Zillow and Trulia have already proven quantity (and quality for that matter) of listing data isn’t necessary to operate a highly trafficked real estate portal.

2. This further hedges MOVE’s position. MOVE currently depends upon its agreement with the National Association of REALTORS (NAR) for listings and does not run a national IDX network.

The big question is “who cares?” So I’m going to focus on a few tipping points that would cause a Franchisor or brokerage network to implement a REN feed on their respective websites.

1. SEO benefits
I think this is the weakest case. Most Franchisors running sophisticated IDX networks from vendors like Homes Media Solutions (formerly eNeighborhoods) and RED (formerly LPS Real Estate Group) have already figured out how to maximize SEO benefits using a platform designed to be a launching site for a “network of broker idx sites”.

2. Cost
This is a big factor. As I’ve stated Zillow and Trulia have already proven quantity of listings doesn’t matter. Aggregating MLS data from multiple sources managing all those different display rules and paying those MLS fees have a huge cost associated with it. What if RE/MAX is paying their IDX vendor $70,000 per month and MOVE is offering REN for $7,000 per month. Is it possible that a company like RE/MAX might opt to save the money? Maybe.

3. The MLS Two Step
This is also a potential decision point. Lets say that a particular MLS provider, for the purposes of this example the Houston Associaiton of REALTORS (HAR) has made is very difficult to display listings from their MLS. The Franchisor always has to jump thru a few extra more hoops when dealing with HAR. Will some Franchisors be willing to forego not having all Houston listings as long was they don’t have to talk to Sam Scott anymore? Maybe : )

4. Filling the gaps
The REN might be a great way for new and exisiting Franchisors to supplement coverage in areas where they don’t have a Franchisee yet. According to the rules they would still need a license in the state, but thats relatively easy. This makes Realty Executives participation as a charter member of REN a little clearer.

5. Exposure.
Search traffic to real estate portals is still heavily brand related. Long tail searches are a relative minor piece to the equation. It was announced recently that Century 21 is running a Super Bowl ad on February 5th. Depending on when REN would be implemented how ironic would it be when Realty Executives announced to their agents that all their listings would be advertised during the Super Bowl. Pass the chips!

In a way MOVE, with the announcement of REN, has changed the conversation away from IDX (something they are very weak in) to Syndication (something they are very strong in).

“If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle”
Sun Tzu, The Art of War, Special Edition

Smart MOVE.

Speaking of listing syndication…

I sent this post out to Vendor Alley Private Newsletters subscribers last week but thought it was worth a re-post today.

I’ve been reading a few interesting perspectives on listing syndication.

Here’s the first one:

‘Think Before You Syndicate’

Jon Colie, President of Champion Realty – Guest posting on MRIS‘ blog, REsource

If you think about it, a national aggregator selling agents leads off of a website becomes less about the quality of the listing database and far more about the quantity. More listings mean more “eye candy” thus more opportunities to sell agent placement.

Champion Realty is a HomeServices Company, natch!

And the second comes from a comment made on a Vendor Alley post about Brookfield acquiring Prudential:

Brad Blumberg, Smarter Agent

Am I the only one who finds it amazing that the entire real estate relo and franchisor business of Prudential just sold for $110 million, and Zillow Market Cap on that day was over $600 million. Has the value of the real estate purchase shifted to the aggregators at the expense of the value of real estate brokerage businesses. Think Edina realty, when they pulled listings from Trulia, was thinking about creating local value in their brand instead of adding value to the aggregators?


Brookfield Residential acquires Prudential Real Estate and Relocation Services

Talk about a piece of the rock!

Brookfield has already acquired GMAC Real Estate and Real Living (which now both operate under. This huge news in the world of Real Estate Franchisors. Brookfield has now seemingly overnight become one of the major franchisor in the United States (think Realogy or RE/MAX).

“Through its various brands, Brookfield’s residential real estate franchisees are now present in all 50 U.S. states, 10 Canadian provinces, Mexico and Portugal, with a network of approximately 80,000 real estate agents, 2,800 real estate brokerage locations and more than $150 billion in annual residential real estate transactions.”

See Full Press Release here.

RE/MAX signs deal with Homes.com

I heard through the grapevine last week that RE/MAX International (LLC?) has signed a deal with eNeighborhoods Homes Media Solutions, for it’s new marketing system Home Connect. Details are a bit early but it appears RE/MAX agents will have access to some of Homes Connect features and will be able to upgrade to other features. Sounds similar to the Market Leader and Keller Williams for eEdge. But as I said details are still forthcoming.

There are a couple things I like about this:

1. It’s great to see eNeighborhoods Homes Media Solutions get their enterprises sales mojo back. With products like Mercado sun setting, and the siphoning off their IDX business, it was huge to see a deal of this size come out of the pipeline.

2. It’s good for RE/MAX. Outside looking in it appears the franchise is going through a transition period (isn’t everybody in this market?) and it’s good to see them making investments toward the future.

I have a lot of questions still. How does Homes.com fit in? What about LeadStreet? What components are included? How much does it cost to upgrade? But I’ll save that for a later post.

Congrats to Andy and his boys for a nice win!

The 2011 Vendor Alley Awards

It’s just about the time of year when you start reading “top 10” lists of 2011. I thought I would start a new tradition here at Vendor Alley and rattle off my choices for top companies and people in the real estate industry for 2011.

I call them “The Vendys”.

1. The “Bob Hale” Award
The reason I call this the “Bob Hale” award is that it seems Bob is listed every year as one of the top influencer/innovators in the industry. So think of it as “besides Bob”, who really made a difference this year in the real estate industry. : )

And the winner is….Merri Jo Cowen

I’ve been a part of CMLS for many, many years and while other board presidents have set the stage for CMLS to take a larger role in the MLS community Merri Jo has been the catalyst to make those goals happen. It’s been a pleasure to have a front row seat to how CMLS has changed over the years and Merri Jo has been a huge part of that success.

2. Best new real estate technology/product. –Nest
What happens with the inventor of the iPod focuses his attention on real estate? Magic.

Runner up- I have to say that I really love Realtor.com’s iPad app.

3. Top MLS Provider. – MRED, LLC
All you need to do is take a look at the pressroom of MRED, LLC to see the transformation happening at MRED.

4. Top MLS Vendor – TIED: LPS and CoreLogic.
My basis for this was the CIVIX lawsuit. While I believe NAR painted themselves in to a corner with the settlement it was these two MLS vendors who stepped up and wrote the really big checks.

5. Top Real Estate Portal – Zillow
Their spectacular IPO and recent acquisition of Diverse Solutions only shows they are here to stay and poised to dominate.

6. Best new real estate vendor. – Goomzee
I’ve had many discussions with their CEO, Mike Sparr, and he is one of the new players that “gets it”.

7. Top company to watch – RED -Real Estate Digital
After a bold management buy-out, these guys are just getting started.

8. Most improved company – Inman News
The conferences are better, their site is better, Agent Reboot, InmanNext, the list goes on and on. Tim, Alice, Chris, and Katie and the rest of the team has done a spectacular job and can’t wait to see what’s next.

9. Best industry blog – 1000watt Blog
If I can’t pick VendorAlley.com then 1000watt Consulting gets my vote. Brian, Marc and Joel, offer equal doses of spot on analysis and inspiration all wrapped up in a beautifully atheistic and great writing.

10 Best company blog – RPR
While I have been known to poke some fun at these guys you can’t argue what a great job they do with their blog. One small quibble, I can’t view videos on my iPad.

11. Top MLS Provider CEO – Art Carter
Art Carter turned the fiasco that was California Association of REALTORS failed state-wide MLS effort (calREDD) into in the the largest MLS in country. I don’t think he’s done yet.

12. Best Industry Conference. – CMLS
Like with all my picks I’m a little biased but CMLS’ annual conference keeps getting bigger and better.

13. Best Real Estate Franchise – Keller Williams.
Sure their consumer facing website sucks but in the world of real estate franchisors its all about agent count and these guys are winning.

Well that’s it. Am I a “kiss ass”, “spot on”, “not even close”? What say you?

Interview with Matt Cohen on new IDX policy changes.

I’m in Minneapolis this week and had a chance to hook up with Matt Cohen. There is a lot of discussion going on regarding the IDX PAG recommendations. You can read Matt’s comments on this subject on his blog here.

I haven’t done any interviews of this type before (so pardon my flubs) but Matt was kind enough to share his thoughts with me about these upcoming policy changes. Enjoy.

Real Living gobbles up Windermere franchise.

Nice win for Real Living. Important for two reasons.

1. Momentum. After bringing aboard Dilbeck (1,000 agents) less than 2 months ago this deal with Windermere Exclusive Properties (400 agents) shows they might be on a roll.

2. Talent. Many of you may remember Steve Rodgers, the current president and owner of Windermere Exclusive Properties, from Prudential. He’s all about growth, and picking Real Living as a partner bodes well for them.

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