In Which I Announce the Death of RPR

RPR! We hardly knew ye!
RPR! We hardly knew ye!

Without a doubt, the topic of conversation at this year’s NAR National Convention has been the REALTOR Property Resource (Link: PDF) or RPR, the ambitious $20mm program rolled out with much fanfare by NAR.  You couldn’t avoid talking about RPR even if you tried.  And I wasn’t really trying that hard, because RPR is a fascinating product, an awesome user interface, and one where the team led by Marty Frame deserves a whole lot of credit for pulling such a great product together in such a short period of time (roughly 4 months).  Despite my concerns that RPR will trigger a civil war in the real estate industry, I thought (and continue to think) very highly of RPR.

However, it is now time to bury RPR.  It is dead on arrival in its current incarnation.

Suspicious Minds

Having presented at, and then having sat through the presentation of Dale Ross and Marty Frame on RPR, at the MLS Executives Meeting at NAR yesterday, I believe that the general mood of the MLS operators ranges between open hostility to cautious neutrality.  The larger MLS’s are biding their time, to see what some of the details are, possibly to see what is being offered by RPR for early adopters.  (Full disclosure: a large MLS, MRIS, is a client of 7DS, but I am writing this post, as I have every post on this topic, based on what I personally saw and heard, and public information, as opposed to anything discussed with them.)  The smaller MLS’s are worried what RPR could mean for them, and miffed that there is no revenue sharing arrangement for the sale of “their” data.

Brokerages are not bursting over with enthusiasm either.  They also wonder what’s in RPR for them, since they feel that the data that the MLS is supposed to provide RPR belongs to them.  The broker-owned MLS’s can’t make a decision without getting their shareholders on board, and the mood appears dark, to say the least.

The fatal flaw of RPR, I think, is the lack of revenue share.  Brokers, MLS executives, and Association executives might all look with favor or at least interest on a proposal that promised revenue streams that would allow them all to either make greater profits, or reduce the cost of service to their members.  Dale Ross made it crystal clear to the MLS executives that there is no revenue share for them; he urged them, in fact, to cooperate and collaborate with RPR for the good of the members because RPR will provide tools to help the members of MLS’s become better practitioners.  Ross’s concession that maybe five years down the line, after RPR’s revenues and profits are stabilized, he may consider revenue share did not, it seemed to me, to go over all that well with the audience.

Trouble is, those types of answers do not appear to assuage the suspicion on the part of MLS executives and brokerages that what NAR intends to do with RPR is to create a national MLS.

Into this environment of suspicion comes a critical piece of information.

The Bullet to the Brain

The coup de grace for RPR, and why I am ready to announce it dead on arrival, is two pieces of news.

First, LPS is not prohibited from doing business directly with MLS’s, or indeed, with brokerages.

I spent an hour or so with Prem Luthra, the Chief Strategy and Sales Officer for LPS Real Estate Group, last night and had a great, wide-ranging conversation.  I learned a good deal of information on background as to the history of LPSREG, of LPS, of their motivations, of their strategies, and so on.  And Prem is a really good guy, a true professional, who is a credit to his company and to the industry.  So it was a great talk.

I did learn a few things that are relevant to the RPR discussion.

1.  LPS granted fairly broad rights to RPR for the public data it licensed to RPR.  However, the critical limit is that there is NO consumer facing usage allowed.  And the partnership between RPR and LPS contemplates a level of policing/compliance on the part of RPR users.  Prem allowed that REALTORS tend to be, as a group, extremely… ah… innovative in how they get around such limitations, but felt they could figure out what to do and how to respond on a case-by-case basis.  For example, if a RPR user were to go into the system, print out a PDF report for every single neighborhood in the state of California and put them all on his public facing website… what would happen?  The answer is unclear, but that would likely be a violation of the license; enforcement will be tricky.  One of the results may be that participating MLS’s may take on policing responsibilities as to its member activities which they may or may not be able (or willing) to take on.

2.  LPS Real Estate Group will sell RPR-derived products to the real estate industry.  Prem noted that what those products are or might be is unknown, but the business model for RPR is not limited to simply selling derivative data products to banks and financial institutions.  So for example, one might imagine a RVM (REALTOR Valuation Model) widget for public-facing websites that LPS will sell to brokers and agents.  Interestingly enough, the revenue share percentages on those products may or may not be the same 50/50 split that Dale Ross has mentioned for government and Wall Street data sales.

3.  There is no exclusivity in the agreement between LPS and RPR; Dale Ross also mentioned this during the MLS Executives session, and suggested that if LPS isn’t living up to its part of the bargain, RPR might find someone else to step in.  But that lack of exclusivity goes both ways: LPS is not prohibited from working directly with MLS’s or brokerages who opt out of working with RPR.

To be fair, Prem stressed that LPS is 100% committed to seeing RPR be successful, and that he believed that once things settle down from the initial shock, the industry would get behind RPR.  And the team at LPS is busy promoting RPR, from all appearances.

On further digging, however, he allowed that IF an MLS has made a final decision to opt-out of participation with RPR, and IF that MLS wanted to explore options for monetizing its data, then LPS is not barred from working with that MLS.  What is not clear is how much, if any, of the Cyberhomes assets (which went into the awesome user interface for RPR) are retained by LPS.  Based on what I’ve heard at REBC San Diego, it appeared that NAR bought all of the code and intellectual property behind the user interface — but not having seen the agreement, it may be that LPS retained some sort of co-ownership rights.

What is clear, however, is that the Data Analytics Group did not get sold to NAR along with Cyberhomes.  This is the group of “propellerheads” — data analysts, statisticians, economists, etc. — who work for LPS creating data products (normally from the mortgage and title data it processes for banks and institutions).  They remain at LPS, and these are the folks who are experts in data analysis, data productization, and derivative data.

Prem further allowed that First American, the main competitor to LPS, also has capabilities in data processing, data analytics, and in institutional sales into government and financial institutions.

The second piece of information, from a reliable source, is that Move retained some or all of the intellectual property to their version of RPR which they developed for NAR on a “work-for-hire” basis.  With NAR having terminated that relationship, to go with LPS/Cyberhomes, Move is completely in the clear in introducing a competitive product to the market.  Not having seen Move’s version of the toolset, and not having seen what their possible model could be, it is unknown what Move’s… ah… next move will be.

But it seems wholly illogical to assume that Move would simply lay down and accept defeat.  It is far more likely that Move has been working on some sort of an alternative solution to RPR for the past four months since learning that they are going to be cut loose.

Don’t Fear the RPR

Brian Boero of 1000watt Consulting amusingly referred to RPR as “the Reaper”.  Well, based on the above, I’m with the Blue Oyster Cult in saying, Don’t Fear the RPR, for it is dead on arrival.

First, Dale Ross mentioned several times during his presentation to the MLS Executives that RPR could not work without cooperation from the MLS’s.  “We can’t do this without you” was the message.  What he did not ask is whether the MLS could do this without RPR.  That question has been answered: the MLS can.

The foundation of the LPS-RPR deal is twofold: one, that LPS provides data analytics expertise with which the raw data from MLS can be combined with public data to create data products, and two, that LPS provides sales and marketing channels.  Both of them are retained by LPS, and crucially, LPS can provide both of these services to MLS’s directly.

The likely result of such collaboration, then, especially with the RPR deal as the template, is that the revenue share from such data sales and data productization will go to the participating MLS rather than to RPR.  With the dollar figures that have been thrown around so far, it seems extremely unlikely that any MLS will forego potential millions in revenues by working directly with LPS in order to collaborate with RPR.

Second, the only piece that RPR brings to the table, then, is the user interface — which, admittedly, is extraordinary.  But Move retained the intellectual property rights to its version.  It seems unlikely that they would just let such an asset lie fallow.

Combine the two and the incentive to opt out of participating with RPR becomes insurmountable.  On the one hand, the MLS can cooperate with RPR, get a very nice UI (which may or may not make the MLS itself irrelevant), and get no money.  On the other hand, the MLS can opt out, work directly with LPS (or First American), get a UI of unknown quality from Move, and get a revenue stream from data sales.  That, my friends, is what we strategy consulting professionals call a no-brainer.

At this point, any MLS executive who agrees to collaborate with RPR is likely in danger of getting fired at the next opportunity by his/her Board of Directors.

What’s Next?

There are still open questions and issues.

What’s next for NAR/RPR?  Do they proceed with the current incarnation of RPR, even in the face of all-but-certain failure?  Or do they reinvent RPR quickly?

Where is First American in all of this?  It seems odd to me that we haven’t heard from them, but they may be the biggest winners from all of this.

What does Move actually have with their user interface?  Was it really that horrible that NAR terminated the agreement rather than try to improve it?

Where do all of the MLS tech vendors stand?  Are they favorably inclined towards RPR, or are they scared shitless by it?

Even after the funeral for RPR, questions will remain.  The effects will reverberate throughout the real estate industry for some time to come.


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Rob Hahn

Managing Partner of 7DS Associates, and the grand poobah of this here blog. Once called "a revolutionary in a really nice suit", people often wonder what I do for a living because I have the temerity to not talk about my clients and my work for clients. Suffice to say that I do strategy work for some of the largest organizations and companies in real estate, as well as some of the smallest startups and agent teams, but usually only on projects that interest me with big implications for reforming this wonderful, crazy, lovable yet frustrating real estate industry of ours.

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34 thoughts on “In Which I Announce the Death of RPR”

  1. What would stop the larger mls companies from developing software compatible to what rpr is offering and selling it to the agents for a small fee that is considered very reasonable and just ending rpr discussion that way?

  2. Six Feet Under was a Hall Of Fame series. Blue Oyster Cult, meh. The twists and turns in this boiling kettle of breaking news, is award worthy. Thanks for sharing.

  3. Hmmm.
    I think they reinvent. I think they re-package their marketing strategy, focus not on the “National MLS” but on the superior value of the data. THAT is where they went wrong. They should have sold it as something completely different, show us (REALTORS) the value, and we would have bought the nicest, newest, and flashiest gadget…
    Next iteration…

    And Yes, I did hear the same info about Move MONTHS ago… just had no idea about RPR so didn't connect the dots.

    Great post Rob, thanks for keeping us on our toes.

  4. No matter how many different ways I've looked at this, I can't, for the life of me, come up with any compelling reason for an MLS (or any association of Realtors) to participate in the RPR venture. The UI is fabulous. There's no question about that; massive kudos ought to go to Cyberhomes/RPR for their development. That said, RPR simply doesn't work without data from the MLS. It just doesn't. That NAR seems to expect the MLSes to simply say, “Duhhhhh … OK. Here y'go!” is totally illogical, given that this is something that could end them (the MLS) in the altogether. The more I examine the information that's been put forth thus far, the ONLY group that stands to benefit from RPR is NAR itself. If there's a REAL benefit — something other than a pretty interface — to other sectors of the RE industry, I'd love to hear about it.

  5. I believe that NAR thinks they are offering a fair trade – mls data for tax data.

    In the webinar it was stated that MLSs would save a collective $30 million+ by using the tax data offered to them by RPR for free. I assumed the catch was the mls would only need to provide the mls date and that NAR figured an MLS would jump at the chance to save a few bucks.

  6. I think the core/key to the RPR deal was the Data Analytics and the Sales & Marketing that LPS is bringing to the table. The software app itself, as cool as it is, does not generate the $$$. Those two things do.


  7. I think you're right, Bob. Trouble is, won't First American (and LPS apparently) simply offer the same trade to MLS? Free data for internal use, plus data sales, but with proceeds being split with MLS directly?


  8. Of course. The only question is who they will have as a partner. The assumption I heard all week is that Move would do this.

    If I am FirstAm, Move isnt my 1st choice. I would be on the phone with Google and MS. The cost to fund this for either of them is a rounding error in their corporate check book. The deals they could strike with the MLS at the local level would be more lucrative since they can monetize this in more ways than NAR could. Since many boards already syndicate listings to these entities, it keeps the local MLS as central to the source of the data and the status quo doesn't appear to change significantly.

    The upside for the local MLS is that they get everything they would get from NAR (tax records for free and valuation info), plus rev share, plus they are still Ground Zero for the local broker.

    NAR believes they will own this space. That was stated in the original webinar. That will not ever be the case. It is too bad that NAR doesn't get it and I doubt they ever will.

  9. I was in the ballroom discussions you speak about and yes there were many great questions and many wondering what it all meant for them. Did you know that also going on yesterday were suite demos for various MLS executives? These meetings took the demonstration and conversation to a much deeper level.

    The MLS executives were there to get more real facts about RPR rather than speculation. When confirmation was made that RPR will carry no offers of cooperation and compensation and the fact that it would firmly apply the MLS’s business rules to their data, sign a no compete, etc… the MLS executives I heard were eager for next steps of the conversation.

    I also wouldn’t be so quick to toss away the value of real cost savings through a national compilation of 3rd party data (tax and assessment data, property data, neighborhood, school, demographics, maps, and trends) it’s a real benefit for many MLS’s…and of course reduced costs means increased profits.

    They also enjoyed the fact that the MLS’s (that opts-in) will get a branded version of the RPR system to integrate with their MLS system. This will allow members increased efficiency by clicking right from a listing inside the MLS and landing on a MLS branded/integrated version of the RPR.

  10. I, for one, would love to see this product come to fruition. However, as stated before, MLS cooperation is key otherwise it is nothing more than I already have access to through LPS and my local MLS already. The mashup is the value.

    The problem is, I just don't see my local MLS cooperating. They have been separating themselves from other local MLS data shares for years. They don't want to have anything to do with the CA statewide MLS. They bitch and moan when agents from the next town over try and get info from them. Most of the people with power on the board are old-school and don't understand that the horse has left the barn and probably wish that they could pull everything offline and go back the the printed MLS books of yore.

    I've gone back and forth on this issue personally over the last six years and now I'm of the opinion that a national MLS isn't a bad idea. My only requirement is to have the capability to pull data from the system and use it any way I choose with any interface I want. The limited proprietary interface we deal with sucks (though it's better than some) and the powers that be make it damn near impossible for an outside source to tap in to the RETS feed to design something better.

    When I think about it I get so frustrated that I wouldn't mind pulling out of the MLS altogether and go with RPR only and feed my own data in to the system just for the principle of the matter.

    The only thing that tweaks me about RPR from what I've heard so far is the profit sharing deal, though. If LPS and NAR are able to sell the MLS data for their own purposes, I do think that there should be some compensation back to the MLS for providing that data. The last thing I want to see is the development of another … One of those debacles is enough. If we can turn RPR into a killer than that would please me to no end. I doubt that that will ever happen, though … probably why there is the “no consumer facing” stipulation in the deal.

  11. Reggie, Im not discounting the savings, just saying that since we make our living negotiating the best deal possible, perhaps we should do just that instead of taking the first deal offered.

    We can get “a national compilation of 3rd party data (tax and assessment data, property data, neighborhood, school, demographics, maps, and trends)” from more than one source, but you cant get MLS data from anywhere other than the local mls. This means that since we own the parcels where you folks want to build your highway, and eminent domain doesnt apply here, we have the ability to be king maker, not NAR..

  12. @James…I want to be clear LPS is NOT selling or touching your MLS data. The product LPS is helping to market is newly created analytic based off the data known as the RVM. When an MLS opts-in the MLS data will be securely stored in the RPR environment….for members access only!

  13. Not that that mattered to me, but thanks for the clarification. However, that brings up this question: If LPS is marketing the RVM with MLS data being used to come to the figure (a low-high range, I'm assuming?) is the RVM not displaying the comps used to come up with the number? It's just displaying the range of value?

    And will I, as a REALTOR member be allowed to use the complete dataset to give to my client as a CMA report or am I disallowed to give out the info as part of the “no consumer facing” aspect?

  14. LPS will just be using that RVM number alone. And yes, as a member you will be able to create advanced analytic reports and other value added items for your clients using the data.

  15. Okay, so again, if the RVM that is being sold by LPS is utilizing MLS data (even if it is invisible), why wouldn't the MLS be offered some kind of stipend – even a small one – to make this whole deal more palatable to them?

    I don't know if a MLS gets compensated by for providing the data to them (I'm assuming not), but if they aren't, I'm thinking that the arrangement may be a major detractor from providing the data to yet another 3rd party for “nothing” in return. And worse yet, there is probably a concern that, although this is being sold to us as a member benefit today, that NAR could go ahead and decide that they can't afford to NOT charge the membership for the project at sometime in the future. And by that time we'll be so far into it that we can't back out.

    Please note, these are just random thoughts coming out as I am thinking about it … I'm still for the whole system, just trying to figure out how I can convince my MLS to participate if/when the time comes. 🙂

  16. Thanks for the comment, Reggie.

    As I mentioned to you directly, I happen to think RPR is pretty darn cool. I have extremely high regard for all of the people involved with the project, and yes, I would like to see it be successful. So if everything you're saying is correct, then you're not going to find anyone happier for RPR than me. Well, except you, and Marty Frame and Dale Ross and others. 🙂

    Having said that, I am merely reporting on impressions and facts. Based on those impressions and facts, I am saying that RPR — in its current form — is DOA.

    Let's not discount the value of the cost savings for a national compilation of public data, fine. One issue there is, I just don't see why some MLS in Florida would care about getting neighborhood and school information in Seattle. They care about getting their market area data, right?

    As I've reported, LPS has retained its copyrights on all of that public data. They have retained the data analytics, and they have all of the data sales and marketing channels. And they have no exclusivity, no prohibition, and no non-compete vis-a-vis RPR, based on what I've been told. IF that is untrue, and in fact, LPS cannot “compete” with RPR by working directly with a MLS, then I'll retract nearly everything I've said.

    In some respects, however, exclusivity with LPS doesn't matter, because First American is still in business. Presumably, they're not just going to concede the market segment without at least a fight.

    So let me spell it out:

    – MLS opts out of RPR
    – MLS strikes deal with FirstAm/LPS, in which they receive a license for public data that is substantially the same license that LPS has granted to RPR.
    – MLS further strikes a deal with FirstAm/LPS that is substantially the same as the one that LPS has struck with RPR: MLS data is merged with public records data, products are created by the Data Analytics folks, and marketed to Wall Street through Channel Sales folks. But, instead of RPR getting 50% of the proceeds, the MLS gets 50% of the proceeds.

    So at the end of the day, the bargain for an MLS to work with RPR is essentially that they surrender this 50% of the proceeds from data sales to get the RPR software, the user interface (which is admittedly very nice). Whether they do so or not depends on (a) competition, such as from Move, which we know has retained copyrights to their version; and (b) what the MLS believes the 50% of the data sales proceeds for their data (or products derived using their data) will amount to. If XYZ MLS believes that their cut of the data sales revenues will be $500/year, then they might be thrilled to sign up for RPR; if ABC MLS believes that their cut will be $1mm/year, then I really doubt they would.

    The larger MLS's with significant market coverage, I would imagine, would be getting a fairly significant dollar amount for their cooperation with FirstAm/LPS post opt-out. But those are precisely the ones RPR needs to become viable.

    Maybe your point is that the $12mm that NAR paid for Cyberhomes assets and a data license is money that the MLS doesn't have or won't want to spend. Maybe. What's unknown is how much the LPS data license is costing RPR every year; perhaps nothing, as it may have been a straight barter deal. Perhaps the amount is in the millions of dollars every year. All of these facts are as yet unknown, and you have the ability to reveal such information to us. Perhaps NAR/RPR struck a great deal with LPS for data license based on economies of scale; perhaps not. I for one would love to get some concrete answers to these mysteries.

    So none of my points are based on skepticism of RPR; I have been singing RPR's praises as a software product. But the incentives and the economics don't appear to lineup for me, based on what I know.

    As a fan of RPR, and as a fan of innovative products, I'd love to know which of the facts I'm reporting or assuming are wrong. If my facts are wrong, then my prediction of RPR's death is wrong; but if my facts are correct, then the conclusion is, I think, inevitable.


  17. “As I've reported, LPS has retained its copyrights on all of that public data.'

    There is no copyright on virtually all public data and other 3rd party PDAs (public data aggregators) are free to put together their own public data soup and beef up local MLS. (There is a big mistake with RPR but it has nothing to do with local MLS.)

    Local MLS can easily protect themselves from RPR.

  18. Hey JF – RPR and the data inside will only be accessed via members. Member will have a robust set of reporting and data tools…so it would be a breeze to create a market to market comparison, property centric report etc.

  19. I'm not Reggie, and I don't play him on TV, but I did point out in the “liveblog” thread that Marty Frame mentioned a VOW API for RPR. That would imply that members would be able to provide RPR data to their clients via a VOW (Virtual Office Website) at a minimum.

    Clarification would be good though.


  20. Hey Rob & JF,
    Please understand this is not a legal talk on VOW, simply how I understand it.

    Yes, RPR will provide an API for VOW operators to be able to generate these reports and provide them to registered users. So to be clear, VOW is behind a password and then the client could go to a section of the VOW and choose one of the many reports. Then the RPR system will generate the report and deliver it as a link back to the VOW website so it can be opened.

  21. I love the quality of conversations here and very little to add, but there I did alpa/beta test the Move version of RPR.

    1. Six Feet Under is HOF Material
    2. Move's API was that bad
    3. More Cowbell

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