Where Real Estate Gets Its Dirt

Behind Opendoor’s layoffs

I think I’ve told this story before, but I attended a Proptech CEO Summit a couple of years ago put on by Pete Flint and Paul Levine. One of the speakers was Glenn Kelman, CEO of Redfin. During his interview, he commented that Opendoor was the first company he thought cared about operating margins as much as Redfin.

Opendoor’s culture is one of frugality. You have to deeply care about your margins if you are in the iBuyer market because, at this stage of the game, they are razor-thin. They even have a saying at Opendoor, “We eat BIPS for breakfast”. BIPs meaning basis points (BPS), meaning 1/100th of 1%. That’s the increments Opendoor lives in. Every little expense matters.

Flash forward a couple of years and I wasn’t surprised that Redfin had partnered with Opendoor.

Last week when I read the news about the Redfin layoffs I tweeted this.

A few people on Twitter thought I was referring to other brokerages or franchisors. But, knowing how similar Redfin and Opendoor operate my first thought was Opendoor. Cuts are coming, and they are going to be deep.

Haters are gonna hate. Just as many people were crowing that Redfin’s model of employee agents doesn’t work, many are already calling the death of iBuying. Pay no attention to the haters, they are wrong. What is happening now is unprecedented.

Mr. Kelman and Mr. Wu are fighting for the survival of their companies and sometimes that means you have to make tough decisions, you have to focus, and give it everything you got.

That’s what happens when you are in the arena.

Industry Relations Episode 41: 10 Defining Moments & Trends in the Last Decade of Real Estate

On January 1, 2010, organized real estate was still reeling from the recession. Dale Stinton was steering the ship at NAR. Zillow was seen as the enemy of the MLS. Real estate software was meh. Agent teams were rare. Nearly all brokerages took a split. Selling your house online seemed outrageous. And we still signed documents in pen.

On this episode of Industry Relations, Rob and Greg are looking back at the last 10 years in real estate. They discuss the passing NAR’s MLS Statement 8.0 Clear Cooperation Policy, debating the significance of the office exclusives loophole and how it might lead to government involvement. Our hosts also express their disappointment around the Newsday investigation in Long Island, Testing the Divide, challenging brokerage leadership to make a strong statement against the egregious racism it uncovered. 

Greg and Rob go on to share their top 10 defining moments and trends with the biggest impact on the industry over the last decade, describing how the rise of agent teams, 100% commission brokerages, the iBuyer model and consolidation have transformed organized real estate. Listen in for insight into how NAR’s decision to fund RPR and Upstream changed the way the MLS saw Zillow and explore how the space has evolved from 2010 through the end of 2019.

Editor’s Note: We did record an Episode 40 that was never aired. It was about Policy 8.0 but wasn’t ready before the vote. After the vote passed we decided it didn’t add to anything to the issue.

What’s Discussed: 

NAR’s passing of the MLS Statement 8.0 Clear Cooperation Policy

Rob & Greg’s take on the Newsday investigation in Long Island

How the loophole in 8.0 could lead to government involvement

The 10 defining trends/events in the last decade of real estate

  1. The end of poorly designed software
  2. The rise and domination of agent teams
  3. The transition in leadership at NAR
  4. Opendoor pioneering the iBuyer model
  5. Zillow’s acquisition of Trulia
  6. 100% commission brokerages
  7. Consolidation and the influx of capital
  8. The practice of buying agents/agent teams
  9. The mainstreaming of digital signatures
  10. NAR’s decision to fund RPR + Upstream

Connect with Rob and Greg:

Rob’s Website

Greg’s Website

Resources:

MLS Clear Cooperation Policy

Compass Pre-Litigation Letter to Bright MLS

Bright’s Response to Compass

Newsday Documentary: Testing the Divide

Rob’s Blog on the Newsday Piece

1000watt Article on Real Estate Software

The Millionaire Real Estate Agent by Gary Keller with Dave Jenks and Jay Papasan

Ben Thompson Interview with Rich Barton

Our Sponsors:

Cloud MLX

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A Vegas Christmas Carol

A Christmas Carol by Charles Dickens…

For the first time the hand appeared to shake.
“Good Spirit,” he pursued, as down upon the ground he fell before it: “your nature intercedes for me, and pities me. Assure me that I yet may change these shadows you have shown me by an altered life?” The kind hand trembled.

“I will honour Christmas in my heart, and try to keep it all the year. I will live in the Past, the Present, and the Future. The Spirits of all Three shall strive within me. I will not shut out the lessons that they teach. Oh, tell me I may sponge away the writing on this stone!”

The quote above is from the last few pages of Mr. Dickens’ famous novel. In which that last spirit, the spirit of death, is pointing at Scrooge’s tombstone in a deserted churchyard, and showing what will happen if he doesn’t change his ways.

Okay, so what does this have to do with Greater Las Vegas Association of REALTORS recent reversal to end listing distribution to portals like Zillow?

Work with me here…


One group that at first I found humorous, but now annoying, are the “Zillow Haters”. These agents and brokers begin to see red when the subject of Zillow is brought up. This fear, and yes its mostly fear, can make the comments section of any Zillow article on Inman News look like a Trump rally.

Now, I’m not saying Zillow is perfect. They can be heavy handed and a bit tone deaf to organized real estate.

But, I also see many MLS organizations have to deal with these “haters” with their leadership. And sometimes it just takes one director. When the subject of Zillow comes up at the next board meeting the hater’s blood begins to boil and any rational business decision making abilities go right out the window.

The haters don’t want to hear facts. Such as, they (the broker) can remove listings from Zillow at anytime, many of their agents find value in working with Zillow, one of the first things a Seller does now a days is check Zillow to make sure their house is listed on the site, etc.

But none of these facts matter to the hater, they just want to “stop sending listings to Zillow!”. They may as well be shouting to shut down the internet.

But, no matter how many emails are sent, no matter how many special board meetings are convened, the haters simply refuses to understand that they can remove their listings from Zillow at anytime. So what do you do if you’re an MLS?

This is where Dickens come in. You need to show the haters the future. And I think that’s exactly what GLVAR has done. They have given the haters what they want by announcing they were indeed shutting down MLS feeds to Zillow. And look what happen, people were now paying attention. Facts began to matter and GLVAR announced they were “reversing” their decision.

My guess this wasn’t a “reversal” at all. This was exactly what GLVAR wanted to have happen. It’s a Christmas Miracle!

Did Zillow just “raise the bar” in real estate?

Our long national nightmare is over. After all the debates, The D.A.N.G.E.R. Report, and industry hand wringing over how to raise the level of professionalism of REALTORS across the country, Zillow just went ahead a did it.

From Inman News:

‘Best of Zillow’ Premier Agent platform to unlock new consumer data

“Customers will be asked to rate interactions based on responsiveness, communication style, knowledge and expertise, customer priority, trust and customer needs.

Premier Agent customers will receive customer experience reports based on the aggregated data and tools to gauge their performance with consumers. Zillow will be providing training for agents focused on the behaviors that drive customer satisfaction as well as suggestions to help them improve.

“We’re counting on you to be as obsessed with superior customer experiences as we are,” Schwartz wrote in a blog post introducing the changes. “In return, we promise you this: we’re going to give you the greatest platform to make it happen. And we’ll keep pushing to get it right so you can deliver exceptional experiences.”

No details on how this will work. My guess is just like when I finish a ride on Uber, I have to rate my driver before I can do anything else.

And it looks like Zillow is putting their money where their mouth is, Here’s Greg Schwartz, president of media and marketplaces at Zillow Group, again…

“For agents who aren’t performing up to customers standards — Zillow will no longer be interested in taking their money. The company wants to be able to tell every consumer who comes to the site that the agent they select will deliver a high-quality experience.”

Read that quote again. “Zillow will no longer be interested in taking their money”.

Can you imagine NAR, Realogy, KW, RE/MAX or any independent brokerage making the same statement?

I also love this quote from a blog announcing the changes titled “Why Customer Happiness Holds the Key to Your Future – and Ours”

Buying and selling a home remains one of life’s most stressful transactions. Great agents supply great customer experiences. Demand for great customer experiences is growing.”

“Demand for great customer experiences is growing.”

This is exactly right, and what a lot of people are missing about the recent iBuyer trend. Call it the “convenience economy” or whatever, people want great service and they want it now.

Act accordingly.

Molon Labe

Realogy roars: Corcoran and Climb to franchise in 2019

In a double-barreled play to leverage brand identity and work culture, the new Corcoran and Climb franchises will target franchise opportunities in global metropolises and leisure destinations, senior executives for both companies told Inman. Realogy, the parent company, plans to begin selling franchise agreements early next year.

Executives declined to disclose franchise fees associated with owning one of the new franchises. Realogy has not filed franchise disclosure documents yet.

A lot of people have questioned the future of the traditional franchise model in real estate. Hell, venture capitalists are throwing over a billion dollars in to fundamentally changing how real estate is practiced.

That’s why this move by Realogy is so interesting to me. It seems to be a poke in the eye to venture capitalists and the companies they funded looking to poach, replace, or even eliminate agents all together. Realogy’s play is nothing fancy, just straight up “brand and culture”.

This move by Ryan Schneider, Realogy’s new CEO, might seem counter intuitive to some, but to me its him taking a stand (for his company and maybe even the industry), seeming to say. “You want these agents? Come and get them.”

MARIS launches new website.

MARIS MLS launches content-first website

“The new marismls.com utilizes a ‘related’ feature that integrates products, education, news and support – making it easy to learn how to leverage MLS tools and access a wide range of business products. On-demand education is available 24 hours a day in the form of a brand-new video library, and online support materials. This content is available widely, outside of any login or paywall, to streamline access.

Website design was crafted by 1000watt, a creative and strategic agency for real estate, who also used the website launch to roll out a new visual identity they designed for MARIS. The new visual identity system was designed to be digitally native and reflect the company’s friendly and professional approach to serving its membership.”

Can’t say enough how impressed I am with this new design. I just love the vibe of the site. The site is not at all corporate, which works well for some, but not others. The site has a really simple, friendly feel to it but is full of forward thinking features. I believe the Products section is a re-skinned Clareity Dashboard –clever!

I had a chance to talk to Quinn Nichols, MARIS’ new Director of Marketing Communications about the challenge of educating their membership of the choices available and what products were best for what task. This can be daunting since there may be feature overlap in some products. That’s why I think the “Learn” section is really smart. It gives members a quick way to learn about products, watch videos and sign up for upcoming webinars all in one place.

I also love the “MARIS Asks” section just below the fold on the home page. MARIS asked several industry thought leaders “Why is the MLS important?”. Glenn Kelman’s response is just priceless.

I also sat down with MARIS’ CEO Tim Dain at the recent Fall RESO Conference and record a Listing Bits episode about launching the site and other MLS industry issues, look for that coming out later this week.

I’m glad to see more and more MLS providers taking the time to focus on their own company website. MARIS’ new site is going to be hard to top. Kudos to Tim, Quinn, and 1000watt for raising the bar.

Florida MLS provider kicks Homesnap to the curb

Florida’s Space Coast listing service ditches its Homesnap site

“In an Oct. 2 announcement and email to members, Space Coast MLS said the Homesnap-powered public search on its new association website “wasn’t the right fit for our needs” and had been replaced by a search tool from Financial Business Systems’ (FBS) Flexmls, a previous vendor, while Space Coast MLS works on a permanent solution.”

Looks like Space Coast was iframing Homesnap as their public facing site, which according to Steve Barnes..

““This is really kind of a fringe case related to Homesnap,” Barnes said in a phone interview, adding that none of the other MLSs that iframe Homesnap’s site have chosen to turn it off.

“What it might say is a very local MLS needs unique flavor and a more seamless [tool]. Iframe might not be the best solution for them, but it’s not something that’s actually core to the Homesnap brand,” he added.”

But here’s the rub. According to the article whether you iframe or not you still can’t filter on pools? WTF?

Also, something else. Did you know that you can’t get listing alerts via Homesnap? That’s right you have to login on to the site run a saved search manually (like a caveman) and then find out if properties match your criteria. Unless of course if you just wanted a home with a pool because there is no way to do that currently.

Think about it, it’s 2018 and Homesnap can’t

1. Search for homes with pools
2. Create and send listing alerts (which is ironic because this.)

2 things, I’m sure 99% of IDX vendors have been able to do, for the last 19 years.

Who the fuck cares about “fair display guidelines” if you can’t search for homes with a pool or get listing alerts?

And this is supposed to be “the real estate’s industry answer to third party sites like Zillow and realtor.com”.

I bet they are laughing their asses off in Seattle and Silicon Valley.

But hey, “downloads”, right?

Thoughts on NAR’s iOi Summit

I had heard about this event a few months ago, and had been asked if I was going to attend. I was skeptical about it, but when I received an invitation to apply to participate in the “pitch battle”, I went ahead and applied. As I previously mentioned I was surprised that we were selected.

The event was designed by Bob Goldberg, NAR’s CEO to bring the disruptors “inside the tent”. To foster “innovation, opportunity & investment”. Basically Mr. Goldberg wanted NAR to be part of the conversation.

Color me impressed. Not only was the event very well produced, but I enjoyed meeting and seeing other vendors, some old (like me) and some new in the space. I loved vendors pitching agent safety apps, new CRMs, new front end of choice apps, 360 photo apps to help with disaster recovery efforts, real estate photo augmentation, using lockboxes help with in-home medical care, and a way to level up agent performance. What I found most impressive is none of these new startups seemed to be making money by selling ads. Bliss!

BoxBrownine won the “Pitch Battle”. And KW Labs won the Hackathon. You can read more about them here.

And true to his word, Mr. Goldberg did bring in a few heavy hitting investors to the conference too. Of course Mr. Goldberg couldn’t help himself in touting NAR’s own success in the investment arm of his organizations, Second Century Initiatives and REach. He interviewed Ron Hirson, Chief Product Officer from DocuSign. Which recently went public and made NAR a small fortune.

As Mr. Goldberg hit the stage to wrap up the conference, I was thinking about what was missing about the event. And then it hit me. Zillow. I heard nary a mention about Zillow from any of the presenters, or startups in attendance. Not from some sort of mandate, but just…because.

Which to me was the most impressive. Bob Goldberg did seemingly the impossible. He held a tech conference where nobody was talking about Zillow.

RIP Senator John McCain

I don’t get too political on my blog, but I thought I would share this Twitter thread from Benjamin Wittes. I’ve made it a bit more readable below.

I want to tell a story about John McCain–a story that took place at the Polish embassy, back when Poland was still a committed democracy of the sort that would host a book party for the release of @anneapplebaum’s book, “Gulag” (which you should read).

Anne will correct me if I am misremembering the details here–as it’s been a few years. But McCain, as I recall, introduced Anne to the assembled audience, which included a large number of Gulag survivors.

His short speech moved me as much as any other speech–on any subject–I have ever seen a politician give. For starters, he had clearly read the book (you should too)–which is a bit of a project. Gulag is long. It is exhaustive. And it is brutal and unsparing.

While McCain had many thoughts about the book, he said that the part that really hit him in the gut was Anne’s description of prisoner tapping codes–by which prisoners would tap on cell walls in specific patterns to make out letters to communicate with those in adjacent cells.

He described the code as Anne portrayed the Gulag prisoners using. And then he described the modification that he and his fellow prisoners used–the Cyrillic alphabet being somewhat different from our own. Then he paused and said that he still dreamed in that code sometimes.

And then he tapped.

The room was silent.

It’s been 15 years since this happened, and as I say, I could be misremembering details. I suspect, however, that I am not the only person who recalls vividly being stunned by this speech. I have never heard another politician give a speech like that.

That’s all I got.

I disagree with our president. I think John McCain is a national hero. Rest in peace.

Zillow responds, calls Upstream “protectionist”

The shit is hitting the fan with the DOJ/FTC comments

Andrea Brambila, writing for Inman News

Zillow Strikes Back, Bashing Upstream and CAR in public regulator comments

“Zillow noted there are various barriers to listing data access that the company deemed “protectionist.”

“Some large brokerages refuse to provide all their listings to Zillow. If sellers understood that their fiduciaries were restricting data from appearing on the largest real estate site in the U.S., they would likely be upset. Initiatives like Upstream make the potential for such behavior more feasible and commonplace,” the company said.”

I agree. No matter the responses from Upstream, it’s always been about control of listing data. When Craig Cheatham, announced at the CMLS Conference in 2013 that “You’ve got 10 days!”, the sentiment wasn’t “You have 10 days, before we eliminate the need for double entry!”. It was, “You have 10 days before we start yanking our data!”

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