Sunday, May 27, 2007

16 minutes, Refin, What's the Point?

So as many now know, Point2 produced a little Spoof on the 60 minutes about the 6% commission. First off, I hope I’m not commissioned to don lipstick and a wig anymore, but it was a fun day putting it together. So how did it happen? Well, we’ve had a rough wet and cool spring up in Canada. Thursday morning we were having a daily standup meeting with sunny blue skies and warm air in the background. I think we were feeling a little giddy and perhaps feeling less motivation to do real work that morning. Next thing you know, a quick script was slapped together, a wig was purchased and the camera rolling.

Personally, I still have some reservations about it. I don’t know if it was the right thing to do. It was produced in fun and if you really look at it, there are holes in the logic because it is not meant to make sense. Similarly, it does not make sense to produce an editorial about a very large industry, focusing on an involved topic, push an opinion, try to appear objective, but ignore the fundamentals. I disagree with Brad Inman, that the industry had a shot on the CBS show. If I understand the facts correctly, the NAR offered to participate in the program but they did not receive fair representation on air. This common place in media where objectivity is not goal, just the air objectivity is.

I would like to note that neither Point2 nor I have anything against Refin or discount models. I believe in really existing free markets and in perfect competition. Where a discount brokerage can enter the market, compete fairly and win, I’ll be biggest supporter. To be truthful, I really like Glen Kelman and I think he's very smart marketer. The main issue at hand is that Refin is not competing fairly. They are taking advantage of MLS structures and data sharing agreements to undercut brokerages they also want to cooperate with. Let me back up:

MLSs were first formed to facilitate cooperating and compensation between competing brokerages that agreed to pool their resources and provide better exposure for their clients. There is no other industry I can think of where competitors agree to cooperate to such a degree. The offer of compensation makes the cooperation work because the brokerages have similar business models. It has allowed clients to gain maximum exposure by leveraging the collective marketing dollars spent by hundreds or thousands of these cooperating professionals. The Internet added a new dynamic…

At some point, the MLS data became the standard data source for online listing display and IDX (or ILD) agreements became the de facto policy behind data sharing. It’s become problematic to have these managed at the MLS level because it allows companies to take advantage of the spirit cooperation due to global opt in, opt out provisions. Cooperation is possible if companies have similar business models but it does not make sense for a brokerage to cooperate with another company that undermines its business model. Listings are marketing assets in real estate and they are the product of money and time spent on advertising, promotion and networking. It does not make business sense for a brokerage to allow a competing company, that is undercutting commission rates, to use my marketing assets to attract new business for itself.

Now as a member of the MLS, I don’t mind if ANY company brings a buyer for one of my listings. I also don’t mind if that any company contributes listings to the collective MLS cooperative effort and offers a co-broke that will cover my full service efforts. What I can’t accept, again, is allowing that company to undercut my rates but expect me to offer up my listing inventory publicly to help them attract clients.

Cooperation in real estate must continue. Real estate is a local business. As a regular homeowner, I can advertise my own home on Craigslist and Google. I might even feel I can show and stage my how better. What I can’t do is leverage the collective advertising dollars of hundreds or thousands of real estate professional and at the same time, gain access to their collective network of buyers.

If the spirit of cooperating is to continue for organized real estate in the Internet era, brokerages will need to be able to make their own peer to peer business decisions on who to cooperate with if discounters continue to unfairly take advantage of the MLS. A peer to peer system will help melt away anti competition rhetoric. It will allow discounters to continue to participate without harassment from traditional companies because those companies will not be forced to publicly share marketing assets and be undercut at the same time.

Brad Inman comments that “if a spoof is the best way to make a case for full service, the industry has a bigger problem”. I certainly hope this video is not perceived as the industry’s response to discount models. But I would add, if the only way to grow a discount business model is to unfairly take advantage of data sharing, they would be well advised to figure out how to both cooperate and compete in an era where brokerage can make peer to peer advertising agreements.


Wednesday, May 23, 2007

Brendan King, Uncut and Unplugged

Oh my. Some of our standard members saw a video show up in their online office this afternoon. I got to thinking, heavens, what if our active Pro and Prem members that know Brendan saw this. I mean, what kind of ribbing would he receive? Geez, I hope this doesn't 'get out' ...


Wednesday, May 09, 2007

Real Estate Syndication Chaos

There was recently a very good post on our messageboard that is applicable to a very wide audience. It was posted by Shelly and David Sheffey:

What happens when one of our listings is submitted to Trulia or any of the others via more than one source?As an example, when we put our listing in the Keller Williams listing service they automatically submit our new listing to Trulia, then we put it into P2 and they send the listing to Trulia, and now that we decide to advertise this listing in the Real Estate book they stick it up there too. Which one wins? Does a new version bump an old version? Do multiple sources cause the listing to disappear altogether?I would suppose the answer might be different for each of the destination sites, but could this be a cause of our missing listings?

It's is a really good question and it's one of the biggest challenges we tackle around here. All syndication partners handle duplicates differently:

  • Some post both copies of the listing
  • Some filter and take an authoritative feed based on their own criteria [Franchise, MLS, Broker, Agent, 3rd party]
  • Some post paid listings first
  • Some will use the most recent feed and replace the existing listing with that newest feed.
  • Some will take the feed with more information.

For all these reasons, the reports on your status tab will become more and more important over time. We are working with each syndication partner to do what we can to ensure that the feeds from our members are the ones being published. It's a very complicated and politically challenging problem which is why many simple feed solutions are insufficient for this industry.

There may be some people that see that larger picture that exists here. The challenge is identity. How do listing sites identify feeds from franchises, MLSs, brokers and agents? How do brokers ensure their business rules are protected? There needs to be commonality established to for online marketing and there needs to be better identity solutions. How does franchise and MLS feeds provide brokers and agents the statistical feedback they need for marketing and reporting feedback for troubleshooting?


Thursday, May 03, 2007

The Problem with Real Estate Listings

Last week I published part 2 in a series of articles on Realtown titles "Why 95% of Realtors are leaving big money on the table." Part 2 discusses the poor quality of listing data and the effect that it has on online conversion. It perplexes me why more real estate professionals don't market listings properly online, why they don't publish multiple high quality photos. I confront those that use old school reasoning that you should publish a little content and get the prospect to contact you for more info. It no longer hold. the conversion rates for IDX registration forms are decreasing. Online consumers have too many information sources to spend time on sites that don't provide the content they are looking for.

In my mind, the only way to increase the quality of real estate marketing is to talk about what the numbers suggest. The discussion needs to happen at the top and filter down, even though we've heard leaders like Allan Dalton, Alex Perriello and others talking about this for some time. It seems to me that MLS executives play a big part in this because they provide the software, the policies and education to local members. In the next while, you'll see Point2 reaching out to MLSs.