In part 1, I tried my level best to keep my opinions restricted to what RPR actually is, based on the demo. And what RPR is is a fantastic piece of web engineering. In this part, I get more into the opinionating and what Reggie Nicolay might term, “fearmongering”. 🙂
Let us examine the possible impact of RPR on brokers and agents, based on what we know thus far.
Caveat Lector: What We Know That We Don’t Know
One thing I learned at REBarCamp NYC that just happened last week, from Reggie himself, was that the Terms of Use for RPR have not yet been set. And while the RPR has announced API’s, the terms of use on those have not been set or published. We also don’t know what those API’s will actually do in terms of data provisioning over the API’s to third party tools or websites.
Therefore, one of the biggest pieces to the puzzle — the legal rights and responsibilities of RPR’s users — is as yet unknown, except in glimpses. We also don’t know how flexible the RPR system will ultimately be. It may be incredibly flexible, or it may be a closed system.
We don’t know yet whether brokerages (or even agents) can participate directly in RPR, or if they have to wait for their MLS to first sign up with RPR in order to utilize the full range of functionality.
For that matter, since all we’ve really seen is a video demo and some screenshots, we don’t really know at the end of the day what the finished product will actually look like and how it will work.
Enough caveats? Okay, let’s get into this…
Impact on Both Brokers and Agents: The Musket Age
As I suggested at the conclusion of Part 1, RPR levels the playing field in a significant way, in much the same way that gunpowder leveled the battlefield between armored cavalry (“knights”) and peasant infantry.
The obvious impact is that the smaller, less established players gain an edge, while the larger, more established players lose competitive advantage. This is true for both brokers and for agents.
Large brokerages, who may have invested millions of dollars over the years into a proprietary toolset that provides their agents with data, tools, attractive reports, and analytic tools will find that the little mom-n-pop down the street can now compete pretty effectively with them on the technology front. RPR is a boon to the masses, and a curse to the classes.
Similarly, pre-RPR, some agents may invest a lot of time and money gathering data, doing analytics, and presenting them in a clear, attractive manner to their prospects and clients to differentiate themselves from other agents. The raison d’etre of the gorgeous and powerful Reports module in RPR is to make even the newest and least experienced agent “seem professional” with the push of a button. Reasonable people may disagree on just how much RPR’s reports will help the agent who doesn’t know what he’s doing, but I don’t really think it can be debated that there will be a leveling effect.
For both brokerages and agents, if your competitive advantage is based on data, analytics, and reports… well, then post-RPR, you’re going to have to do something to maintain that advantage to the degree you have it today. Brokerages may need to invest in newer, better tools; agents may need to invest more time in understanding what all the pretty charts and graphs actually mean.
The key is differentiation and expert usage. Even after the introduction of firearms, some people were better shots than others; some armies knew how to use firearms effectively, while others did not. So the introduction of RPR isn’t the end of competition; it is the shifting of competition.
Impact on Brokers
Some of the corollary impact on brokerages — particularly large brokerages — is that once RPR’s leveling effect takes place, there is likely to be further brand erosion and pricing pressure.
As it is, real estate brokerage brands are at a nadir of power and meaning. Most consumers have no idea what one brand stands for over another, and most don’t care. But professionals at least did (still do) care somewhat about brokerage brand. Quite a bit of that brand, however, in this day and age is tied up with the proprietary technology systems of the brokerage or brand.
There is a reason why brokerages and franchise brands spend millions of dollars every year building productivity tools, technology tools, and data reports for its agents. Part of it is that these things make the agent more productive, but the other part is that having these proprietary systems helps brands recruit.
While RPR doesn’t eliminate all of these systems, it certainly brings a leveling effect into it. Now, anything within RPR’s realm (data analytics, research on properties, research on an area, and creating reports) that is today in the province of brokerages is something that their mom-n-pop competitor down the road can also provide. As this article on Inman (link may require subscription) points out, agents want “1) fiscal responsibility, 2) education and information, 3) brand differentiation, 4) technology, 5) marketing tools, and 6) a Customer Relationship Management (CRM) system.”
It’s awfully difficult to have brand differentiation when #4, 5, and possibly even 6 are more or less the same across the board. “Our sign is blue, while their sign is red” isn’t significant brand differentiation, even to the newbiest of newbie agents.
Which then means that competition for agents will shift to something else: education, training, brand recognition, a manager who’s a nice guy, and of course, money.
Today, some brokerages might justify a higher split, or charging a significant “technology fee” to provide productivity technology. Tomorrow, unless the broker offers tools and technology over and above what any REALTOR can get from RPR, that higher cost is going to be more difficult to justify.
The smaller guys, the independent shops, they can go big game hunting post-RPR, simply by offering far higher splits much easier than they can today: “Look, what can that big broker and his 70/30 split offer you that I can’t? We all have RPR, right?”
Impact on Agents
The leveling effect, of course, is not limited to brokerages. Agents will also be affected, in both good and bad ways.
The newer, less experienced, less capable agent is boosted up, while the more senior, more experienced, more capable agent is brought down. This may not impact that many people, at the end of the day. The more experienced agents have wider networks, are better known, and may be better able to interpret all of the data coming off of RPR than the newbie.
The real impact, I believe, is that post-RPR, the nature of the real estate agent’s work shifts decidedly away from “knowledge worker professional” to “customer service representative”. Some skills will become far more important than others.
Today, I believe the realtor sits right in between the pure knowledge worker (like a research scientist) and a pure customer service rep (like a salesman at Nordstrom’s). She has to know the market, be able to interpret/present data, do asset pricing, do research, etc. while doing client hand-holding, staying in touch, and keeping the clients happy throughout a difficult process. Those agents who are using data tools heavily gain a competitive advantage over those who don’t because they can appear like knowledgeable experts while others will have a harder time of doing so.
Post-RPR, that gap is narrowed. The whole reason why the Reports exist is to make it easier for agents to look like an expert, even if they are not. Pricing opinions can be backed up with official-looking RVM estimates, that takes the realtor’s own views and opinions into account. Unless you are a moron who has trouble tying your own shoes, chances are that you can look and sound quite convincingly like a market expert given tools of that quality.
Which, then, puts greater emphasis on the customer service side of the equation, as well as on the skills that an expert systems technology (like the RVM) could not duplicate — for example, negotiation skills.
What to Do About All This?
It isn’t clear right now that there is anything anyone can do about all this just yet. RPR has been all the talk, and the demo is seriously impressive. But it isn’t live just yet. The actual production software may have more features, or fewer features; it might actually suck in practice. Who knows? I still think RPR in its current incarnation is DOA (as will be made clear in future parts), but one never knows what could happen.
Having said that, if you’re a brokerage, you need to be thinking about both scenarios post-RPR. Because even if RPR, LLC goes down in flames, the energy and the possibilities that the concept and business model of RPR have unleashed are here to stay.
How do you differentiate yourself on technology? How important is that in your recruiting, and in your compensation structure? If you’re in a cooperating MLS market, what do you need to do to have competitive advantage in a level playing field? If you’re not in a cooperating MLS market, your REALTOR agents will still have access to a pretty sweet set of data and mapping tools — is that a factor in your competitiveness? You might even want to be thinking about what sorts of alternative business models the existence of RPR (or something like it) in your market will allow you to have.
At a minimum, your senior staff should be debating these things and putting together a plan for whatever comes down the pike.
If you’re an agent, you also need to be thinking about both the cooperating and non-cooperating scenarios. You need to be looking at the materials you are providing to your clients to see how competitive they are to what the RPR will offer for free not just to you but to every single REALTOR competitor in your market. You need to be thinking where you will shift your competitive efforts, if data and technology tools aren’t going to yield the marginal returns as they once did.
The one thing I know you cannot do is to pretend this doesn’t exist. You cannot bury your head in the sand and ignore the fact that the world is changing around you.
Your thoughts and comments and criticisms are, as always, welcome.
-rsh
24 thoughts on “Reviewing RPR Demo, Part 2: Brokers and Agents”
I am going to disagree somewhat with you Rob. I will agree the tools available will make it a lot easier to narrow the gap, but there are cheap and easy tools to do that now. While I think it will make the tools easier to narrow the gap, the lazy real estate agents will still not put in the little extra work required, and go-getters wills till find a way to make the most of it and run with it.
Head in the sand in St. Paul. Will come up for air when the product is actually launched. Have been hearing about it, reading about it and watching demos. Yawn. Bring it on already
Executing their plan, delivering at or above expectations, converting threatened MLSs, educating the agent masses (who will local agents listen too, a RPR stranger or a local MLS/Board Member), providing acceptable levels of troubleshooting/customer support (Technological Savvy = average age of a Realtor 52-54), meeting the unique perceived needs of 1,000's of individual market places/cities/towns and more. Sounds like an impossible task. I'd venture to say that of the 1.2million Realtor Members only 1 in 400 has ever heard of RPR, let alone understand why they want it and how they'd point and shoot it.
I also agree with Dean, today agents have access to dozens and maybe hundreds of services/tools/software/activities/strategies that will help them succeed. It's really true, only 3 in 10 knows about them, only 2 in 10 use them and 1 in 10 use them well. That's a big challenge for RPR and a big head start for the bigger savvy brokers.
Lot's of moving parts, unknowns, threats and opportunities. Thanks for sharing your thoughts, it helps .
Dean – very true that the lazy agents who don't even use the tools that are out there today won't benefit much at all. Those who aren't investing in cellphones and email likely won't see squat.
However, the leveling isn't going to be between the lazy do-nothings vs. the go-getters; the leveling will be between the inexperienced, less-expert and the experienced, expert agents.
The shift away from knowledge worker to customer service provider is the result.
But yes, I agree that the lazy-ass mofo's won't benefit much at all. 🙂
Ken – don't underestimate the people at NAR and the RPR in terms of everything you mentioned. This change isn't going to be happen overnight; it isn't as if Q3 of 2010, everything will be deployed fully. But NAR does have a good customer service group, does do a good job of getting information out there, and is better positioned to do that than any tiny little tech vendor in real estate.
-rsh
-rsh
Hey Rob, you mention “the Terms of Use for RPR have not yet been set”. I believe you’re most interested in the “Data Content License” that will be going out to the beta MLS markets once complete. I can confirm the document is very close to being finalized. Believe me we would like nothing better that to have everything complete all at once. But that’s just not reality; we’re a start-up that is only a few months old. But I can tell you I’m amazed at the progress my team is making. Do we have a lot more to do? Yes, but we’re committed to the journey!
As for leveling the playing field, c’mon Rob. Think about it, great REALTORS will tell you time and time again they would rather have more access to complete data then less. It helps them better assist their clients. But nowhere does the data do their job. By leveling the playing field, you forget all the activities outside of data the average agent employs to differentiate and serve the buyer and seller. I think Kristen does a great job of explaining here: http://realtechspeak.blogspot.com/2010/01/level… . As for the large brokerages that have invested in technology that is duplicated in RPR, they’ll continue to innovate and evolve. #RTB
You say “It’s awfully difficult to have brand differentiation when #4, 5, and possibly even 6 are more or less the same across the board. “ Now I think you’re just trying to scare people. RPR is going to be a wonderful and much needed resource for REALTORS, but taking over the complete marketing channel, CRM and technology…seriously?!
Hey Reggie – thanks for the comment 🙂
Please don't regard the lack of info on the Terms of Use and the Data Content License as criticism — it was merely to point out what we don't know as yet. As soon as you guys publish those docs, we'll be able to see what some of the issues/terms are.
Secondly, I don't think I've said that once RPR is released, there won't be any competition between REALTORS. In fact, I've said very clearly that competition will exist, but on a basis other than data and technology. If you think differently, I'd like to understand why. FWIW, I don't disagree with Kristen — but the items she mentions are what I would classify as “customer service” elements, rather than “knowledge worker” elements. Do you disagree?
I'm most interested in what you and the other folks at RPR mean by, “large brokerages will continue to innovate and evolve”. Such bland generalizations that mean nothing in actuality should probably be made a bit more specific. What exactly do you think a large brokerage — let's take NRT as an example — could do to “innovate and evolve” in a post-RPR world? What space have you reserved to them for innovation? What areas of technology or data services will RPR never be touching so that these brokerages can innovate and evolve in those arenas? And most importantly, what would such innovation and evolution _cost_ said brokerages?
As for your last statement, can we then interpret that to mean that RPR will never have a CRM module? No drip email module? No way to deliver the Reports except by manually sending emails one customer at a time? No VOW API's?
I'm not trying to scare anybody; I genuinely like what RPR is and what it represents. At the same time, I think the _impact_ of RPR is as I've sketched out. Since you disagree, I'd like to understand why. Brokerages will continue to compete, but on a more level playing field (or do you disagree that RPR levels the playing field?) and on a different basis than on technology/productivity tools for agents.
Let me know where you disagree with these thoughts. 🙂
Thanks,
-rsh
Where the Brokerage of the future will innovate? Wow, that’s a big question with lots of answers. But as a consumer, I would hope the focus is on customer experience, agent training, increasing online efficiencies and probably most importantly hiring the right agents. Of course wherever they innovate, they'll need to make sure all those endeavors lead to profitability.
So agent training, customer experience, and hiring right agents… three of the four “areas of innovation and evolution” turn out to be something that (a) has nothing to do with technology, and (b) is presumably something that every brokerage everywhere in the United States is focused on right now, today. They might not do a very good job, but I honestly don't know a single brokerage anywhere in the country who doesn't care about agent training, recruiting, and customer experience.
“Increasing online efficiencies” is a phrase I'd like to have clarified. What does this mean? Does it mean only upping the conversion rate for their public-facing websites? Do you think brokers have paid inadequate attention to public websites, lead conversion, and lead generation? From my perspective, that's all they ever seem to think about. 🙂
Plus, that might work well for buyer-agency focused brokerages, but how that helps listing brokers isn't all that clear to me. In contrast, how RPR helps listing brokers is very clear to me.
Look, I wouldn't downplay the power that RPR will bring to the REALTOR community if I were you guys. There is absolutely no doubt that RPR represents a game-changer; it's powerful, it's useful, and it's desirable. You don't want to be claiming, “Well, RPR's just this little thing we don't think is going to have much of an impact….” I'm sure you and the team believe that RPR is a major boost to REALTORS, that it will really help those who use it, and that it will benefit them in concrete, measurable ways.
So let me ask you plainly:
Do you believe that RPR levels the playing field between large brokerages and small brokerages, yes or no? Why or why not?
Do you or do you not believe that RPR levels the playing field between experienced REALTORS and less experienced REALTORS, yes or no? Why or why not?
Post-RPR, what areas of real estate technology do you think will be the battleground for innovation between brokerage companies?
-rsh
Rob, thanks for you insight and post. I'm not sure that I agree with the crystal-ball on this point.
Contrary to the mass marketing that has already well under way with this program, the largest majority of agents still don't know about it or understand it. The majority will not use, just like ALL the other tools their Franchises and Associations deliver to them.
I think this will make the strong a bit stronger and leave the mushrooms in the dark.
I have been teaching technology risk management and broker applications to company leaders for a few years now and here's what I've found to be true: Most small brokers are either a.) very innovative and choose to be small in order to maintain quality -or- b.) are small because they don't know how to grow and will never use even the most useful of tools. Group “a” is a VERY small group…
That's why I don't think this will level the playing field, most agents / brokers in small companies want their niche and that's it. I've worked for mom 'n pop and I've worked for the “big boys”… I'll take an innovative large company any day.
I don't think most agents will listen to anyone 🙂
Rob, my point is simple. Every new technology has had the potential to level the playing field. Look back through the history of real estate. They never do.
Let’s play out one version of your scenario; two agents Agent-1 and Agent-2 both use the same database for their listing/sale/market trend information and both use the same report.
Agent-1 is not the best agent, they have a history of over promising and under delivering. He shows up to the seller and hands over the CMA/Market trends report…but doesn’t provide much insight behind the report. The seller asks a few pointed questions, and Agent-1 doesn’t answer with authority.
Agent-2 shows up to the same seller. He has the same CMA/Market trends report. But Agent-2 walks the seller through critical data points to explain the “why” behind the pricing decision. Providing confidence with authoritative answers to the sellers pointed questions.
In my opinion, the playing field is not level
Matthew – So true, but still FUNNY. Point taken, however, persuasion is more likely among tribe members that strangers from afar. But in the end, perceived self-interst will prevail.
Good point, I don't underestimate the power of brains and money. I'm not sure if I'm for it or against it yet. What I don't underestimate is that SIZE usually equals less-in-touch, communication-challenge, responsiveness, a heard voice, etc.
March On.
I'm with a large broker in Houston. YES. It does level the playing field. It provides a tool that a small or independent or I-don't-have-the-money-to-create-this-for-myself-or-my-agents brokerage have access to a tool they otherwise wouldn't.
Do the benefits for big brokerage outweigh their current competitive (potential or real) advantages? I don't have enough information to decide yet.
Interesting comments, thanks.
Interesting discussion. please keep me in the loop
Any realtor data that we can access that can serve to as competition to Zilllow and other sites, that my customers use now as their yardstick , can only help us.
I can only wonder how they are going to squezze agents to pay for this. After all we paid for the first attempt to pay for Realtor.com that was a total failure. Then when they finaaly got it to work (sort of) it was slow and loaded with ads. The consumers were not impressed and I know I was not either. Then they decided the way to fund it was to offer services that we had to pay for (even though we had alrady paid for it twice with our dues) and to use those to convince us if we don't have the tools then our competitors will have them and hurt our business. Then they took it a step further and raised the cost of everything substantially. That was still not enough as they raised the cost every yearI. I finally had enough with their crappy system and cancelled everything I was paying for with them.
At that point I was called and e-mailed over and over again that I really NEEDED their poor and expensive tools.
I don't need to have my dues help make new or poor agents look like they have many of the skills that I have spent 25 years to develop to say nothing of the tens of thousands of dollars I have spent on technology to help differentiate me from the crowd.
Thanks for the comment Dave!
Look, I think it's important to be fair in any criticism of RPR and NAR. What Move has done or continues to do with Realtor.com may or may not be a good thing. But that has nothing to with RPR. Even as a sometime critic and skeptic, I can say in all honesty that I really doubt that any more REALTOR dues (after the initial $25m) will go towards making RPR work. Their business plan is solid, and if enough MLS's participate, I'm sure that you will get the tools of RPR at no cost.
Now, new or poor agents will look like they have many of the skills that you have — which is not to say that they will have those skills. They'll just look as if they do.
Or not, if you believe Reggie's last reply.
-rsh
I see.
So if I'm a new, inexperienced Agent-1… what does the Report and RPR as a whole do for me then? Anything at all?
Or is RPR just a pretty little toy that really won't help my business at all?
-rsh
You know my answer to that…the RPR will be a huge resource for REALTORS. Even to Agent-1 in my scenario….yes! My point is that having access to data doesn’t level the playing field. I believe it’s the agent’s use of their own intellectual property that will set them apart.
Hola Robbie –
Like your points here …
I have this notion that data are just numbers on a page if the user has no idea how to interpret. (I include brokers, agents and consumers as user in this example.)
I am interested to see what evolves with RPR. With NAR and Marty at the helm it has more of a shot than others, IMHO.
That said, I’m hoping someone is trying to get the consumer to a conclusion via smart data. Offering more, deeper, prettier, brighter and shinier data isn’t it. It’s all but commoditized and the interpretation is subjective, right?
The next iteration needs to have the data provide a definitive conclusion as “what to do” at the property level. Buy or sell.
Ah, but yes, how will that impact agents and brokers?
Hola Robbie –
Like your points here …
I have this notion that data are just numbers on a page if the user has no idea how to interpret. (I include brokers, agents and consumers as user in this example.)
I am interested to see what evolves with RPR. With NAR and Marty at the helm it has more of a shot than others, IMHO.
That said, I’m hoping someone is trying to get the consumer to a conclusion via smart data. Offering more, deeper, prettier, brighter and shinier data isn’t it. It’s all but commoditized and the interpretation is subjective, right?
The next iteration needs to have the data provide a definitive conclusion as “what to do” at the property level. Buy or sell.
Ah, but yes, how will that impact agents and brokers?
Comments are closed.