Listing Assets: 60 Minutes, Redfin and the DOJ

The “60 minutes” story; the DOJ and FTC; Redfin and Co-Mingling”.  Wow.  What does it all mean?  It seems to me that the issues are being conflated and the waters are being muddied to the point where nobody can understand what is going on. 

From my point of view; traditional real estate agents are unfairly getting the short end of the publicity stick. Overtly or not, Redfin and models like them, are suggesting that traditional real estate agents are not providing a compelling value proposition to consumers. They are also suggesting, overtly or not, that the “traditional real estate industry” is trying to unfairly shut them down by discriminating against them. It also seems that everyone (from the DOJ, FTC through to the media and  60 minutes) is dying to jump all over “organized real estate” and blame it for any failures of alternative models. 

I have a couple of problems with this.  Firstly, it simply is not true that there is some form of organized systematic discrimination against discount and alternative models.  These models have been around, with varying degrees of success, for decades. Secondly, most professionals in this industry are proud of the value proposition they provide consumers and have no problem competing in the field against any of these alternative models.  As with most things in life, you get what you pay for.

So what are the real issues? Basically it comes down to this.  The DOJ is saying that it is effectively impossible to practice real estate without being a member of the local MLS.  They are also saying that NAR is using policy to allow “traditional” real estate brokers to effectively discriminate against “alternative” business models by not allowing them complete access to the MLS data to use in any manner they please.  To be sure, NAR has brought a lot of the problems on themselves.  “Anti-referral”, selective opt out provisions and limited service rules seemingly make NAR and MLS’s appear to discriminate against alternative models or at least allow and encourage traditional brokers to do so.

In some ways I believe that NAR has been discriminatory against certain business models. I believe this has come about because the MLS data is being used for a purpose it was never intended.  Let me explain by first describing what I think the MLS was intended to do.

Originally, or so most stories go, MLS’s were formed to facilitate cooperation and guarantee compensation between members which are typically real estate brokers and agents.  The MLS consisted of a database of listings of homes for sale.  Buyer’s Brokers could use this data to find the best home for their clients and sellers Brokers would make sure their sellers homes were exposed to more interested buyers than they had themselves. This arrangement benefited both consumers and real estate professionals.  The key to how this works is that the data was used by competing parties AFTER the Brokers had acquired their customers. It is worth noting that competing brokers could not advertise a listing that was not theirs, say in the paper, to attract new buyers and sellers. After all, the listing Broker generally has an exclusive right to sell granted, explicitly and contractually, by the listing agreement signed with the home seller.

Let me know also point out another fact that most in the real estate industry already know. 

  • Real property has two components: The first is p

    ublic information such as address and facts that don’t change these are largely quantitative. The second component is the mar

    keting descriptions and photos, which are qualitative and copyrightable. 

  • The listing agent/broker “creates” the listings by taking photos and using their marketing expertise and local knowledge to write compelling marketing copy.

  • These “listings”become an asset that the listing broker owns.

  • Agents and Brokers advertise listings to sell the home, but they advertise listings primarily to attract new buyers and sellers and to promote their brand.  They do this because they know consumers are interested in homes for sale far more often than they are interested in finding an agent or broker.

  • Listing and marketing houses is expensive work and is only paid for on a contingency basis.

Along comes the Internet.  Brokers, realizing that consumers want the convenience and efficiency of the internet, agree to share their listings assets with each other online for the convenience of the consumer. They did not agree to allow other MLS members to use their expensive assets to attract new customers.  This is essentially what many of these “alternative” business models are doing.

I believe that Brokers should have the right to use their listing assets as they see fit, including choosing their advertising partners.  Note: this doesn’t meant that all members of the MLS should not have access to the property data – they should.  It simply means that the Broker should have the right to completely control how their copyrightable asset, the listing, is used.

Why is this important you ask?

In a cooperative, everyone has to pull their weight.  In my opinion; what some alternative models are doing can be characterized by a famous quote from Dave Liniger. They are, simply put, bringing a fork to a potluck”.  This issue is simply being masked by a number of related, but orthogonal, issues.  MLS rules of IDX opt out, discrimination by MLS’s and brokers against alternative business models, MLS co-mingling rules; all these things are important, and may even deserve DOJ/FTC scrutiny, but they are beside the point!

What is really at stake here is the spirit of what the MLS is intended for and how it is being misused by some for unfair advantage; this is to say that listing brokers are being taken advantage of. The MLS was intended to help cooperating brokers.  The key to cooperating is that everyone has to pull their own weight.  If you don’t do your share you are not cooperating – you are freeloading.  What’s happening is that this is being masked and hidden in name of consumer choice.

In order to illustrate this point let me use an extreme but true story;

At a recent Brokers conference a specific Broker was telling me that they were no longer going to list.  This broker was in a slowing Florida market and was finding that listing homes was too expensive.  It was costing too much to market to prospective listing clients, and that was just the start.  Once they had listings, they needed to market it on behalf of the seller.  In a hot sellers market you don’t have to spend advertising dollars, but in a slowing market you need to spend dollars.  Sellers expect it. So this broker had given up listing, not a trivial decision given that until recently they had carried as many as 500 listings.  They were finding that, at least in this market where buyers are hard to come by, that it makes sense to expend their effort on attracting buyers. 

So how does this brokerage attract buyers? There are not many, if any, successful brokerages that can attract buyers without advertising listings for sale. There are other things they could advertise, to be sure.  They could advertise their “negotiating skills” or their “persistence and willingness to dig through every available listing”, or their “superior market knowledge”.  At the end of the day I submit to you that most buyers  are created out of interest in a listing. 

So I ask again,  how does this Florida broker expect to attract buyers without listings?  Simply put he doesn’t.  He is using listings (assets) that are created by other real estate professionals to attract and retain buyers.

Does it necessarily make sense that this brokerage should be able leverage the assets (listings), that other brokers have attained by expending marketing effort, time and dollars, to lure buyers so they can remain profitable?  I would say that this is a decision that should be left entirely up to the owner of the asset.  The listing broker (asset owner) ought to decide whether or not it is in their best interest to allow other brokers to use their assets to attract and retain buyers.  In a perfect world, both brokers would list homes and pool their marketing assets (listings) for use to attract and retain buyers.  This doesn’t always happen. Too many brokers are willing to bring their fork to the potluck of MLS data and other broker’s marketing assets.

Please note carefully; I am not suggesting that all buyers’ brokers are freeloaders. Every market is different (real estate is local) and in many markets buyers agents more than pull their weight. I am simply suggesting that listings are assets and the asset owners have a right to leverage their assets and control how, where and when they are used. This is why we devised the P2 NLS, a system that gives asset owners (brokers and agents) complete control and choice as to where they advertise their listings and whom their marketing partners will be.  Agents and brokers that created these assets ought to be able to determine who their marketing partners are on a case by case basis.

The DOJ thinks that brokers and agents are restricting the consumer’s access to listing data to the detriment of the seller and consumer. This is simply not true. Brokers and agents want to advertise and market their listings as broadly as possible, as long as that’s what the seller wants. What they don’t necessarily want is for others to market their listings on their behalf and sell leads, generated with their own asset, back to them. Progressive MLS’s like Bob Hale’s Houston Association of Realtors know this and have begun to syndicate data to places like Google.  Not every MLS has the resources to carry out the development required for syndication. This is where we intend the P2 NLS to become a marketing partner, especially for any MLS that lacks the resources to allow selective syndication, analytics and predictive marketing.

28 Responses to Listing Assets: 60 Minutes, Redfin and the DOJ

  1. Barb says:

    Brendan, thank you SO MUCH for the post on Inman News and please thank Les Stool, too. I will be posting something there but geared more toward that readership. It’s been pretty harsh on that site lately, and I’ve engaged in some of the most frustrating discussions I could have imagined. Real estate is a tough world these days, but I’ve spent the past eight years building a successful full-service business and I’m not about to walk away. Some very challenging transactions combined with exhausting discussions with staggering displays of ignorance had left me feeling so worn out, I had decided it was best for me to avoid Inman altogether for a while (at least until the medication kicked in, ha ha!). I was feeling guilty about my wordy replies and in my last discussion (just about to drop off the roll), I was wondering, why isn’t anyone jumping in on this to support this side of the issue? Am I crazy, dumb, or both? Has everyone given up on this? I took one “final” peek at the blogs this morning, and I’m so glad I did! Our industry needs more of the time and care it takes to get this complex message across! Again, Thank You.

  2. Hi Brendan,
    “What they don’t necessarily want is for others to market their listings on their behalf and sell leads, generated with their own asset, back to them.”

    This is my first time using this blog.
    I have some quick questions…
    How do you see Exclusive Buyer Agency?
    Are buyers not to have someone represent them explicitly on a transaction?
    And how are Exclusive Buyer Agents supposed to show a listing from a Seller’s Agent if they don’t have access to the information? As you say the listing belongs to the Listing Agent. Wether the Buyer Agent is a member of the MLS or not… they don’t list homes… so how can it be cooperative. It can only be a one sided situation.
    Buyer Agents bring buyers to the table using the Seller’s Agent asset (the listing).
    How else can Buyer Agency exist if not by using the asset (the listing).

    That is a conundrum … don’t you think?

  3. Excellent segment on 60 Minutes – It seemed the way that the NAR is trying to elbow out competition screams anti-trust. I’m not entirely certain what the “full service” brokers are scared of – there will always be customers who want to use an agent. There will never be a lack of customers – or money.

  4. The only way local listings show up in these various
    search results is if you have managed your listings by entering
    marketing information. In some situations, you may have to return phone calls or e-mails to certain places
    in order to have your business listed, but this is to your
    advantage and only takes a moment. The bad news is that the information on the
    site might not be accurate.

  5. There are now select plastic surgeons that offer affordable payment plans on their plastic surgery procedures for their clients.
    You have to be very clear about why you want the nose surgery done.
    Wavefront -guided LASIK, contact our Sacramento office for a complimentary eye
    care consultation.

  6. Much less pleasant but equally essential is understanding expertise these kinds
    of as cleansing dentures, feeding individuals, having temperatures and measuring
    catheter output, all of which totally get ready students for the expertise evaluation test.
    Eventually this can cause hair thinning or patches of bald spots.

    However, pulling on a scab that was adherent to the skin usually dislodged the graft – often several days
    after pulling on a hair was safe.

  7. There are also several mundane electronic items that should be added to a college dorm
    shopping list to make a dorm feel more like home.

    Often the cancer can be removed from the skin, but 2,000 people
    still die annually, according to the American Cancer Society.
    Does it give out an aura of all-around cleanliness.

  8. nose job faq says:

    Kim Kardashian certainly isn’t the first celebrity to get some work
    done, but the ‘Keeping Up with the Kardashians’ episode did prompt a plastic surgeon, Dr.
    There are differences between Persian patients in the US
    as opposed to those in Iran. Some proper money movement and a breakaway from the
    Dolphins could land the tackle in an offense far better
    suited for his talents.

  9. There are now select plastic surgeons that offer affordable payment plans on their plastic surgery procedures for their clients.
    There are many forms of lasers available for skin resurfacing.
    The Dilation and Curettage is used between 3 and 14 weeks gestation.

  10. ” He had been admitted to the ER due to a heart attack. HCG will definitely not cause weight loss single-handedly. It is though because you just need to take drops timely and live the way you are doing.

  11. Much less pleasant but equally essential is understanding expertise these kinds of as cleansing dentures, feeding individuals, having
    temperatures and measuring catheter output, all of which totally get
    ready students for the expertise evaluation test.

    Purchase shampoo or other hair care products that are meant specifically
    for people with thinning hair. Your hair protected the top of
    the head from the elements.

  12. American Society for Metabolic and Bariatric Surgery. To achieve the best results, become more proactive
    with the appropriate professional services and
    products for your specific condition, have a hair care analysis performed and get a personalized consultation. Simply put,
    the heat destroys the whole hair follicle permanently.

  13. nose job Jew says:

    To relieve this problem, a revision rhinoplasty would
    have to be done. There are differences between Persian patients in the US as opposed to those in Iran. This massage also encompasses the beauty facial
    techniques making this a wonderfully relaxing massage to receive.

  14. Facelift surgery will help you defy age and enjoy
    an attractive and more youthful facial appearance.

    Sometimes, our decisions could be clouded
    by pressure from our surroundings. Often fine dining and jewelry discounts are offered.

  15. Testosterone is converted to dihydrotestosterone (DHT) which slows down or stops hair growth and produces
    weaker, shorter hair. The platinum blonde is a much sought after persona, and the look,
    an elegant and beautiful one if carried off properly, is a much desired
    and much employed part of dressing up. Certain shampoos,
    soaps, other body products and flea powders can cause allergic reactions to your Yorkie, resulting in loss of hair.

  16. dog Attack says:

    To relieve this problem, a revision rhinoplasty would have to be done.
    If you are residing in Miami and want to enhance your appearance then you will need to visit an experienced cosmetic surgeon in Miami.

    Wavefront -guided LASIK, contact our Sacramento office
    for a complimentary eye care consultation.

  17. skin care says:

    American Society for Metabolic and Bariatric Surgery.

    Hair fall is a condition of losing hair from the scalp leading to the generation of new
    hair. Have Some Much more Derm – Organic Care For The Locks.

  18. One more thing on which you need to pay attention to is fats and
    this is something that you should not be consumed in the large amount.
    Warrants have been issued for his arrest in Europe and he lives in hiding outside the
    E. If you go to the market for buying any weight loss product
    I am sure you will definitely get confused.

  19. If the support is not good, then their services won’t be
    good either. If you own a Brother printer and use it very often, there’s a good chance you
    go through toner very quickly. I’m hoping that with subsequent use this
    will be less of a problem.

  20. There are also several mundane electronic items that should be added to a
    college dorm shopping list to make a dorm feel more
    like home. So try to follow the tips aforementioned to get rid of the farmer’s tan. Actually, once you get used to
    working with these tools, you’ll probably wonder how you ever lived without them.

  21. Betsey says:

    To keep you in the most comfortable and peaceful state of mind
    possible, Dr. Nathan Newman is world renowned for his advanced cosmetic surgery procedures.
    If nothing else, it is more “beach and tan” culture than the West LA So many people seeking cosmetic surgery and there are many thousands of them who can afford
    it.

  22. While the FDA has not advised or approved the HCG for
    weight regimen, it is legal to ship it to any country for personal use and a lot of people actually inject HCG on their
    own at home. The Homeopathic HCG drops are diluted and
    are working with a distinct principle from the other procedures.
    Oz is that HCG is an approved fertility medication by the Food and Drug
    Administration.

  23. Thus, when the HCG diet info was released today, I once more sharpened my
    pencil to take notes. But first, here is a list of a few of
    the similarities:. Some of the fad diets which
    have been “the rage” over the past few decades
    include:.

  24. We’ll show how to accomplish this with just a few simple
    steps. Surgical treatment for Gynecomastia is considered the fastest and
    most effective way to reshape the male breast. I picture a white light swirling around me, and see myself smiling and happy as I say to myself, “I am Happy, I am Healthy, I am Wealthy, I am Wise, I am Light, I am Love.

  25. The following are the benefits that you have to be aware of
    the most. A lot of people have small business ideas that they often fail
    to put into practice either because they lack the money to
    make an investment or because the fear to lose everything.
    Selling the same things, to the same market, in the same way.

  26. dünya says:

    Hi to all, the contents present at this website are in fact amazing for people knowledge, well,
    keep up the good work fellows.

  27. Because the admin of this web site is working, no doubt very soon it will be well-known, due to its quality contents.

  28. ながし眼 says:

    What’s up mates, its great paragraph on the topic of educationand completely explained, keep it up all the time.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: