Tag Archives: NAR

DOJ-"opt-out" and a war with a "discounter"

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A new Broker opens an office and has no listings yet. He goes to area brokers and asks if he can advertise their listings in his “window” to help get him started. Mostly they say yes. They are not trying to force out the competition and they are more than willing to help him.

Now they walk past his office and they see their listings in his window. No problem. Until they see this big sign on top of the houses for sale, which are their listings. “Our Mission: To reinvent the existing residential real estate business — an ANTIQUATED, INEFFICIENT, and COSTLY system of selling homes!!”

That is an actual statement from a website. It used to be pages and pages of “Help us fight the GREEDY brokers! Join our CAUSE!

Well, do you think the local brokers wanted their listings in that “window”? Would you? So the “window” is the internet, same difference isn’t it? That guy was using their listings to show homes on his site because he didn’t have any listings yet, and badmouthing them at the same time. Does that seem right to you?

The brokers didn’t opt out against this company because he was a discounter. They opted out against this guy because he was advertising their listings (VOW site showing other broker’s listings) while at the same time badmouthing them and calling them greedy SOBs! That’s the kind of “mud” that causes the “opt out” provision to be invoked against a “discounter”.

The local brokers said get my #%$## listings off that guy’s site now!

What do you think? Do you think the brokers should be forced to let this guy put their listings on his site, while he badmouths them on the site at the same time? I don’t think so. But I’d like to know what you think.

This is what the DOJ suit is about. The DOJ is trying to remove that right of brokers to say, OK, you can use my listings. But don’t sling mud at me from behind the picture of my listing! If you do that, I’m taking my picture out of your “window”.

Of course we could break his kneecaps, but opting out seems like a better answer 🙂 The brokers “opted out”. The new company didn’t have any homes to show on his site. He cleaned up the site a lot, though the Mission is still as it appears above without the CAPS, and a compromise was reached. Opting out is a negotiation tool to prevent companies from getting started on other broker’s listings while slinging arrows at them. There is another group involved. Same theory. EBAs. But they are “Johnny come lately’s to the suit”, so let’s stop at this example.

Tell me how you feel about all this.

DOJ suing NAR and the "opt out" clause

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Galen: “As I understand it, the Justice Department is not challenging this sort of (NWMLS) setup.”

The reason NWMLS is not affected by the DOJ suit is because the DOJ is suing NAR. Most mls systems are owned by NAR and State Boards of Realtors. Ours is one of the few in the country that is not owned by the Board of Realtors. Our mls system is owned by the member brokers. So if the DOJ wins the suit against NAR, it would only affect mls systems owned by NAR and State Boards of Realtors.

Galen “I’ve heard that other MLS systems are a little different, where members can withold listings from selected brokers’ websites, which does little to keep nasty, mud tracking agents out …”

The “opt out” clause is a NAR policy. It could be the policy of broker owned mls systems in the country too. But the suit is against NAR, so even if broker owned mls systems had that rule the same as NAR, the suit would not appy unless the DOJ sued each mls separately. So when you hear that the suit does not involve NWMLS, that doesn’t necesarily mean they don’t have an “opt out” clause (I don’t know one way or the other). It means the suit does not involve them even if they do have the same clause, because they are not named in the suit and do not come under the NAR umbrella of the suit.

The two groups who are joining forces with the DOJ as potential targets of the “opt out” provision are the “discounters” and the EBAs. The reason these two groups fear being targeted has to do with the mud they track through, but not the kind of mud you are thinkiing of. It’s more like “mud-slinging” as opposed to dirty mud from rain soaked Seattle.

I will give an example in another post that should “shed some light” on this whole DOJ thing. I happen to have witnessed it first hand, and while I will not name names, I will explain how and why some brokers “opted out” on the “discount” broker.

I think it was a reasonable move and it worked. The discounter was not put out of business, nor was it the intention of the other brokers to put them out of business. It was to force them to clean up their act and stop mud slinging and it worked.

Read my next post and see if you feel differently about the “opt out” provision after seeing how it is used in real life examples.

Electricity isn't a competitve advantage anymore

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I find all the F.U.D. regarding opening up MLS data to be kind of overblown. Perhaps, it’s because I’ve been a software engineer my entire career, and the notion of technology changing business models and society at large seems anti-climatic to me. Perhaps, I have this attitude because my former employer, embraced the notion of “Only the Paranoid Survive“? Regardless of the root causes, the fact that the N.A.R., and other members of the real estate industry are so scared of the upcoming tidal-wave of technology changes just seems so short-sighted.

Your friendly neighborhood realtor from the 22nd century?
After all, during the past 100 years or so, the only constant has been change. So the fact that more technological change is coming, shouldn’t surprise anyone. I don’t remember the explosion of digital photography during the past decade cause anywhere near this much fuss, do you? What about the growth of photocopiers & other printing technologies during the last 40 years? Before computers, I’ve heard that people used to use a device called paper to exchange & store information, and the ability to manage these paper records efficiently was a key competitive advantage for many businesses. And yet, I can’t help but wonder if the MLS placed the same kinds of restrictions on printed property listings 30 years ago that they are trying to place on digital property listing today. Surely those all free real estate magazines at the grocery store are harming agents & brokers, by giving away valuable information for free?

I’d argue that associating digital photos with electronic MLS records on free web sites has done more to decrease the value that people place on a real estate agent, than anything I or other software engineers are going to invent during the next few years. Maybe the embrace of digital photography was just a way to get back at all those real estate magazine publishers?

Anyway, my advice would be to tell the powers that be to get over it. Things are changing: deal with it. Nobody thinks electricity is a competitive advantage anymore and in a few years from now, I suspect nobody will give the new generation of real estate web applications a second thought. I suspect very few realtors are afraid of the value that maids, handymen, and landscappers bring to the real estate industry but yet somehow software engineers & database administrators are out to destroy the industry. I can’t speak for all IT professionals, but I think it’s safe to say our area of expertise is NOT in the sale, finance, or purchase of properties (which should be the core competency of any real estate agent/broker). Similarly, it’s foolish for the real estate industry to think that they can job a better job of developing tools that let Joe & Jane Consumer search & browse listing data than software engineers. After all, if the engineers at Google can search 20 billion web pages in a fraction of second, processing the 20,000 properties in the MLS is sleepwalking by comparison.

On a related thought, how did people buy & sell homes in the “dark ages”? That seems more mind boggling to me than anything I or the folks at Zillow are going to be doing in the next year.

In closing, it’s not geeks with SQL Servers or even free web servers you should be scared of. It’s those real estate androids showing homes at a holodeck near you that should keep you up at night. That’s REALLY going to shake things up.

Robbie
Caffeinated Software