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  • If you are interested in where the lending industry is now, post recession and Dodd Frank regulation vs. where it has to get to in order to adequately meet the needs of a changing economic landscape, this is a must watch interview with the President of the Mortgage Bankers Association, Dave Stevens.

    scroll down to get to the video...

  • May 2015 - Equitas Realty

    With regards to the termination of the Zillow - Listhub license in April 2015, let's get real here: ListHub (aka Rupert Murdock/Move Inc) just lost the first major skirmish in a much bigger, potentially titanic,industrybattle. As per their PR machine, ListHub didn't cancel the contract ... Zillow didn't re-up on the deal, which tells you immediately that the value wasn't there from the point of view of the most powerful software development company in the Real Estate industry. Sorry Move Inc, but if the history of Internet competition is at all instructive about the future,ListHub will be nothing more than what we called 'Internet Roadkill' when I was at Microsoft back in the 90's.

    Sure, in May ListHub will still be syndicating listing data out from the MLS systems to a lot of websites, but the vast majority of consumer eyeballs are looking at Zillow and Trulia (now a Zillow company, so we know where that's headed: it's Zulia). We are talking about over 70% of consumer's surfing the web will no longer be looking at ListHub sourced data in the near term. The rest of the websites that ListHub will syndicate out to will represent less than 15% of consumer search traffic for homes. So who really cares about ListHub from this point forward? A few franchises (CB, C21, Sothebys, etc.) have customized back-end data feeds using ListHub, but realistically ListHub has been rendered as nothing more than the proprietary connector to the MLS for Realtor.com, which Murdock also now controls. But Realtor.com is a minor player in the consumer eyeball battle for theforeseeablefuture, so ListHub essentially is only about connecting MLS data to a lot offinancially inconsequential portals, most of whom will also be Internet Roadkill at some point in the not too distant future.

    Concurrently Zillow has announced the development of a Data Dashboard which agents, brokerages or the MLS's will be able to enter their new listing data into, thereby replacing the need for ListHub's previous stranglehold on upward flowing data from the MLS's. Heres why:

    Mary Agent writes a new listing contract at 6PM and goes home to enter it online as a newly available property. There are two customer constituencies she now serves: her seller and the agents in her local MLS who are her salesforce. Which customer does she not want to get a call from the next day complaining that they dont see the property advertised on the Internet? Obviously, the seller. So, in a pinch of time, which online site is Mary going to enter the info into first? Zillow's Data Dashboard. And I'll bet, just to reinforce this decision, the legions of smart developers at Zillow have been working hard at making the Data Dashboard easier to use than any of the MLS software systems.

    Mary will rationalize to herself that she can get the listing into the MLS first thing in the morning, but she is going to make certain her seller sees that she is advertising the property in Zulia first because she has sold herself to the seller on that very benefit.

    If Mary raises enough of a ruckus at her brokerage, and she and the other agents get fed up enough with redundant data input, they might even pressure the MLS to connect to the Zillow Data Dashboard. If her local MLS wont play ball with Zillow at this point, Mary will just continue bypassing them, grumbling all the while because Mary is going to make sure for her customer that the online data is correct. When Mary Agent views Zulia as more important than the MLS, it's game/set/match for a lot more roadkill (Part 2 of blog post to come).

    Serving customers first is a) what good Realtors learn to do really well, and b) the real force in the industry technology shift that so many of the Zillow naysayers dont get: the customer is always #1, not the agent/brokerage or MLS, and the customer is now primarily Zulia focused. If you, as a Real Estate agent want to fight your clients, good luck, but your career is somewhat limited moving forward.

    The online data train has left the station and the engine is named Zillow.

    JW

  • June2015 - Equitas Realty

    In Part 1 of Roadkill on the Internet Highway, I discussed how the departure of The Zillow Group (Zillow + Trulia) as a ListHub customer essentially renders that product as irrelevant.

    So the next Roadkill question is: what else in the MLS ecosystem is at risk based on the megalithic control of consumer eyeballs that The Zillow Group has amassed? Hmmmmm

    MLS database platform vendors

    Time was, back in the old days of MLS platform software (5-10 years ago), that the purveyors of the database platforms that MLSs use were also selling the notion of the MLS having customer facing websites that consumers would flock to. No matter that this notion competed with local brokerage websites or that they didnt get that they were about to be blindsided by Zillow, it seemed like a good idea for the MLSs to promote their data publicly on the Internet. The MLS platform vendors were basing a lot of software development effort on consumer MLS websites, and their profitability was modeled including that product-set revenue. Well, with the exception of a few of the largest MLSs, Zillow has killed that product segment. Zillow is now where consumers go to get listing information on the internet, not the MLSs. So the MLS platform vendors, of which there are less than 5 prominent ones, are competing for the 500+ MLSs solely as the database that serves the MLS agents, which is a limited subset of the revenue these vendors initially envisioned. Survival in this segment is iffy and we will see more Roadkill.

    Smaller MLSs

    For years there has been the persistent (and failed) discussion in the MLS ranks, of moving toward one national MLS. Realtor.com had grand hopes here, but that dog just couldn't hunt. However,it is inevitable and makes sense in real estate's 'Zillow Age' for smaller MLS organizations that have limited funds or technology expertise to merge into larger close-by MLS systems. And as smaller MLSs merge into larger ones, the MLS platform vendors customer base shrinks, insuring the Roadkill in that segment. So there's a double whammy in the MLS ecosystem: less MLSs and less MLS platform vendors.

    Larger MLSs

    If, as is the case, the average age of NAR members is 57, it might just be that the average age of local Realtor Association management is somewhere north of 57. And of the 60+ crowd, excluding the many outright Luddites, most dont really understandthe watershed industry changes being driven by the techno-giants as we speak. Yet,this is the management team tasked with developing MLS strategies locally in the Zillow Age!

    Case in point: In a few short weeks, on April 7th, ListHub will stop feeding our listings to Zillow, the biggest source of consumer eyeballs on the internet. Since this announcement was made 3 months ago, there has not been one message from our local MLS or the Association management to the 3000+ membership brokers and agents about what the MLS plans are for maintaining our listing presence in front of 70+% of the consumer eyeballs on the Internet. Either a) the Association management has their heads stuck in the sand and are oblivious, or b) perhaps they are deer in the headlights, or c) (wishing hopefully) just maybe they are thinking really hard and consulting with other top industry thinkers and are about to tell us at the 11th hour their brilliant solution to this potential disaster.

    Smart money isn't on scenario C.

    But I can guarantee that there are a lot of extremely smart, young, tech savvy MBA grads at Zillow who have a very well thought out plan that they are executing on every day. Their plan is not just about the coming months, but actually about how listing data will be acquired, managed and published for years to come. Their plans likely have nothing to do with a surviving MLS system, large or small. MLSs are an inconvenient bump in the road whichwill be completely repaved into a smooth efficient highway in the not too distant future.

    And the national MLS system will be Roadkill under that new layer of asphalt.

    The entire ecosystem, including IDX Based Systems

    No more MLS no more IDX. WOW! Now we are talking about a large swath of vendors, from market reporting software, to mobile platforms , to brokerage website vendors, etc. This could make for fun new posts titled Roadkill Parts 3-5, but I dont think Ill go there. Suffice it to say, at some point Zillow (and/or other national internet databases) will be the data source for the ecosystem of real estate vendors, once the MLS dodo is extinct.

    And there will be huge opportunities for new tech startups that play the game according to Zillow, as they leap over the carrion of a lot more roadkill on the internet highway.

    JW (Next post: Gary Kellers Snake Oil: 'your data'.)

  • March 2015- Equitas RealtyHeres an elixir that will solve some of your real estate agent problems (the most egregious these days seeming to be Zillow):Its your data, so just say 'NO' to Zillow and the devil will shrivel up and go away!I probably shouldn't just pick on Gary Keller on this issue. There are a lot of old fuddie duddies in the real estate business who think they can resist fast paced technology change by preaching a gospel of days-gone-by loud enough to enough people. But Mr. Keller is the biggest target since he's amassed the biggest soapbox from which to hawk his potion. And he can really whip up his large congregation into a frenzy, shouting out their righteous indignation: just read the comments at the bottom of any article about Zillow on Inman News and the Kellerites will be in full fury that the Zillow-devil is selling their data back to them, which is apparently tantamount to real estate heresy. Inman recently published a video of Gary preaching his medicine to thousands of his flock; you don't have to watch the video necessarily, but read the comments at the bottom of the article to really understand the allure of the elixir.

    A great sales ploy that some salespeople know how to use with powerful results is to lead the customer through a series of assertions, God given facts that cant be refuted, and then slip in an opinion so that it seems like it's another one of the facts. Gary Keller has refined this technique: he says a lot of stuff that is simply and compellingly true and then he slips in statements like: its your data. And voila!, he's got thousands of real estate agents out there believing and proselytizing something as fact that just simply is not.

    Here's a good test, and a challenge, for Mr. Keller and any of his minions who dare: at your next listing appointment, as you are at the dining table with the sellers about to sign the contract, look the sellers right in the eye and tell them that you own all the data about their property once you've listed it for sale. Ya maybe better get their signature on the contract before you let that cat out of the bag, should you have the cojones to be so bold.

    But wait, you say! A lot of listing contracts state that the listing data belongs to the listing brokerage! Hmmm. Lets take that one to the Supreme Court and get a decision on what that ownership really constitutes. My guess is the Chief Justice will say something like it gives the brokerage (not the agent) the right to publish the data with the brokerage's name attached. Kinda like the right of having it up on Zillow with the brokerage brand on it so millions of people know the home is for sale?

    Oh, but you might say the agent worked so hard to secure the listing, surely all the specific data the erstwhile agent gathered must come along with it! Well, reality is that all that data that Mary Agent collected probably can be found online already, so its actually in the public domain. In fact, I'll bet that if Zillow wanted to today, they could provide agents with a listing input form where you would type the address and all that special data Mr. Keller thinks agents own would just auto-populate, and the sources of the data would include ten or more public record databases that have nothing to do with MLS historical data. Maybe the agent inputting the listing could edit a few facts, but they certainly wouldn't be the source of the data.

    So does the agent own anything that gets placed online about a listing? Actually there are a few pieces of what gets published that at least we can say might be the proprietary property of the agent: approximately fifty words of property description poetry and pictures, maybe even a video. Well ...guesswhat ...even though you might have paid for some of that precious information, you probably don't own what you paid for anyway! And you probably will get fired by your sellers if you don't post the pictures online with Zillow/Tulia/Realtor.com/Homes.com, etc. So once again I have to ask: is it really your data? You may have paid for it, but you don't have much control over it. It's really a down payment on a potential commission you don't own yet.

    So, in reality (or Realty), it is totally your prerogative to not like that Zillow has built a big business selling advertising space in their online publication; but your reason for not liking their business model is a distortion if you think they are selling something back to you that you own. And furthermore, your listings that they publish are a minor part of their online content that is getting the consumer to look at your ads. And should you advertise on Zillow and get a lead off one of your own listings, is that any different than what Realtors have done for years with print advertising before it became Internet Roadkill?!!

    Sorry, I'm just not buyin the snake oil. I'll go into more about why in a future post: Back to the Future starting a real estate business isn't FREE.

    JW