The Five Unspeakables from the California Association of REALTORS Event


The above is my view right now, as I’m in the Lakes of the Ozarks for an event tomorrow and Friday, so this post is heavily influenced by the fact that I’m sitting at a bar with a tropical drink, listening to Jimmy Buffet. So if it seems a bit of a disconnected ramble… blame Margaritaville.

But I did get some requests to discuss the event on Monday in San Jose for the California Association of REALTORS. I love this event, because it brings together leadership of organized real estate to look at serious strategic issues in the industry. CAR likes to push the thinking beyond business as usual, and I’m honored to participate.

Steve Murray of REALTrends was spectacular. If you’ve never heard him speak, make arrangements to do so. If you haven’t read his new book Gamechangers, make arrangements to do so. He’s far more radical than you might think for a stalwart of the industry, and he sees almost all of the big issues confronting us. I’m not going to go into much detail of his presentation, since you can get most of it from the book, and I don’t want to misrepresent inadvertently. Instead, let’s talk briefly about my presentation.

I actually went into the event with a different presentation in mind, but based on what I had heard that morning, made the command decision to talk about the five things that we in the industry talk about privately, acknowledge as problems, but don’t really discuss in polite company. So here’s the gist of the Five Unspeakables.

The Five Unspeakables

Basically, the Five Unspeakables in the industry are:

  1. Too much incompetence
  2. Agent Teams are the future of the industry
  3. Technology only makes things more efficient
  4. The MLS is Broken
  5. It ain’t data, it’s advertising

There are others, but on those, I haven’t made up my mind on them, so I left them off. Some of these actually do get talked about in public, but never to the full conclusion. And those of you who are faithful readers of this here blog kinda already know my thinking on some of these.

What surprised me was how little controversy these generated with those in attendance. I suppose part of the reason is that Steve Murray went before I did and laid down much of the same concepts.

For example, what I call “incompetence”, Steve nicely describes as the difference between Counselors (the elite 20% or so of agents who really know what they’re doing and add value) and Facilitators (the others who can facilitate a transaction, but not much else beyond that). Since he already laid out the consequences of the divide between Counselors and Facilitators — such as the private listing networks, and possible impact on cooperation and compensation — it wasn’t that big a shock I guess when I laid out my thoughts.

Bottom line is that we all know there are far too many people in the industry who need to get out. Every single agent — and I mean literally every single one I’ve ever spoken to since 2004 when I got into real estate — has a horror story about the agent on the other side who was so bad, so incompetent, that she had to step in and do the other agent’s job in order to get the deal done. Every. Single. One.

Yet, not only are those people licensed, they are REALTORS, members of an trade association whose core Code of Ethics preaches zealotry in “maintain[ing] and improv[ing] the standards of their calling.” It’s a tragicomedy of sorts to read in the Preamble to the Code this passage:

The term REALTOR® has come to connote competency, fairness, and high integrity resulting from adherence to a lofty ideal of moral conduct in business relations. No inducement of profit and no instruction from clients ever can justify departure from this ideal.

Did we want to get here?

You’ve come a long way, baby!

And as Steve and I both pointed out, the companies and organizations that make up “real estate” in any collective form have enormous incentives to keep the numbers as large as possible. Headcount is king in our industry.

Our government is complicit, since every person who becomes a real estate agent is another person who goes off the unemployment stats, despite the fact that they’re not getting paid a damn thing by anybody until they close a deal. Every agent knows that she wakes up each morning unemployed, and has to hustle to make a living… but our politicians like it this way, and term real estate a “transitional employment” situation.

So we all know this. We all know the consequences of this. We even know what causes it. Question is, and the question I asked the group is, “Do we want to fix this? Do we really want to change it?”

Similarly, we all know in our honest moments that the MLS is broken. It can’t do the basics right, but thanks to broken governance, internal politics, and this obsession with “control”, we give up hope of reforming the MLS and wait for the “other shoe to drop”. It’s like how we think of the entitlements problem — we all know in our hearts that entitlements will ruin us all, but we can’t think of how to change it, so we just kick the can down the road and wait for the other shoe to drop.

What’s an example of the MLS being broken? In 2014, we still have MLSs in this country — not Zimbabwe or North Korea, but in the United States where Al Gore invented the Internet — that won’t work on MacOSX, forcing its members to keep a Windows-based computer solely for the purpose of accessing the MLS.

Thanks to companies like Trulia, Zillow, Move, and Redfin (and others), the consumer has mobile apps to access property information that are lightyears beyond what the professional has at her disposal. More than a few agents I know use the mobile app when out with a client in the field to do property search, because their MLS doesn’t have one, or the one it has blows leprosy-ridden rhesus monkeys.

The industry’s been urging and talking about consolidation for decades, since 900+ MLSs are probably 850 too many, but there are too many rice bowls and too many folks who are all about “control” to make such things happen easily. Why, it’s like some sort of miracle when two MLS’s actually merge, and unique in the industrial world, when two MLS’s merge, there are zero job losses!

We can go on and on, but fact is, if you’ve been in the industry for more than a year or two, you already know these things and more. The question again is, “Do we want to fix this?” Or do we wait for the “other shoe to drop”? My issue is that I want to save and preserve the MLS, the best friend of the consumer, and when the other shoe drops, I don’t know if it’ll survive.

Speaking of “control”, it’s astonishing that so many people still continue to use the word “data” to describe listings, and rage on and on about the need for the industry to protect its “data” and distribute the “data” responsibly.

I’ve written about this before, but that was over a year ago. And there is something I didn’t mention in that post, which is that the “data” component of “listing data” is not copyrightable. I talked about that back in 2012:

But it may be a pyrrhic victory indeed if the court makes it clear in the ultimate ruling that the facts contained in a MLS database can be freely copied and used by anybody, including a competitor.

Why? Because the really important part of a property listing isn’t likely to be the agent’s sales pitch of the home for sale. Y’know, the “Exquisite two-story colonial on quiet cul-de-sac, with granite countertops and mermaids in the swimming pool” type language. The really important part are the facts

So the only copyrightable parts of “listing data” are the parts most relevant to advertising: photos and descriptions/sales pitch. Everything else is “bare facts” as per Feist v. Rural.

But we want to keep ignoring such realities and keep on talking about “taking our data back”. I suppose it makes some of us feel better, and makes others of us a lot of money.

At least we’re taking steps towards recognizing the reality. Clareity’s recent white paper advocating “responsible distribution” is a big step forward. But I’d be happier if we simply changed the terminology, thereby changing the way we think about the whole issue. It’s pretty simple actually: if it’s “advertising” instead of “listing data”, the entire issue of syndication comes down not to “responsible distribution” like you’re handing out a particularly dangerous but lifesaving pharmaceutical, but to effective advertising. On behalf of the seller. You know, that nice couple who signed the listing agreement with you, so that you can sell their house?

Anyhow, I think that counts as rambling on for long enough. Please let me know if you have any questions, or wish to point out the dozens of ways in which I am wrong. You know how we roll here at Notorious: debate yields wisdom!

Meanwhile, I see a blue pool and a pink drink that require my personal attention.


Share & Print

Picture of Rob Hahn

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.

Get NotoriousROB in your Inbox

Comments are closed.

The Future of Brokerage Paper

Fill out the form below to download the document