Over at the WAV Group blog, Marilyn Wilson ponders whether it is time for a National IDX:
Today, we have robust rules in place that allow a broker to share their active, pending and in some cases, sold listings with their fellow practitioners via a local IDX policy.
What if we took that idea to another level? What if a broker could become part of a NATIONAL IDX feed where listings from MLSs from all over the country could be displayed on a local broker’s website? The same rules of engagement could apply. Brokers could opt any of their listings out of the national IDX feed just like they can with a local IDX feed.
Then a broker could display listings from all over the country on their website to encourage more traffic and engagement and allow for referrals to listings all over the country.
She ends the article by asking, “Thoughts?”
Well, I’m happy to oblige, since we have no shortage of thoughts around here. 🙂
Say My Name, Say My Name
First, let us be clear and say the word “Upstream” since Marilyn’s post appears to be a fairly straightforward argument for Upstream… again. That’s completely understandable, of course, since WAV Group has been involved with and been a strong booster of Upstream from day one.
The concept of Upstream being a good one, I don’t have an issue with making all sorts of arguments for Upstream, including the idea of a National IDX. Once CoreLogic releases its version of Upstream, I’m sure it will include all of the technology to make National IDX a reality, so that franchises and brokerages can save time and energy and money on doing national property search websites. So go for it if you want.
If local MLSs want to, as Marilyn put it, “feed their local listings into a national database that could be leveraged by brokers and agents across the country to build relevance, engagement, and traffic to their own websites and mobile apps,” well, that’s their decision. If local brokers want to pressure their local MLS to do that, that’s their decision as well.
So let’s not be coy and pretend that this post isn’t what it is: a case for Upstream. Which is neither good nor bad, but say the name.
Once you’ve said the name, though, it seems pretty obvious that National IDX really makes no difference to Upstream or to brokers and agents.
On Upstream, I just can’t imagine National IDX would change that many peoples’ minds. Either you think Upstream is a wonderful broker utility, or you think it’s a backdoor attack on the MLS. Not a lot of people I talk to think, “Well, Upstream is all right, I guess… if it only had something like National IDX….” So I don’t see this idea making any difference for Upstream, which will succeed or fail on its own merits.
As for brokerages themselves… I just don’t see it. Local brokerages with all of the local listings are getting their asses handed to them by Zillow, Realtor.com and of course by Redfin, which is a local brokerage with all of the local listings and sold data and whatever else. Local brokerage websites aren’t competitive, but it isn’t because they don’t have listings from other parts of the country; it’s because of website design, usability, speed, etc.
I’m pretty sure that WAV Group’s own research in the past has shown that when local brokerage websites succeed, it’s because they’re hyperlocal and have great name recognition in their local markets. So why Marilyn now thinks that adding listings from outside the local market would help “build relevance, engagement and traffic to their own websites and mobile apps” is not clear to me.
Plus, it isn’t as if we don’t already have national brokerage websites. ColdwellBanker.com exists, as does ReMax.com, and Century21.com and so on. They have just about all of the listings from across the country via IDX. And they’re not competitive with Zillow, Realtor, and Redfin. Again, see above re: website design, usability, speed, etc.
So, what would change?
Finally, I am deeply skeptical of the idea that real estate agents would be happy to get a referral to a buyer from their own hometowns from an agent across the country, in exchange for a 25% fee. If it’s the result of a relocation, so the buyer asks his former agent to find him a local agent, that’s one thing; if it’s the result of an IDX website halfway across the country, I’m not seeing it. But hey, some of you readers are brokers and agents, so you tell me: how happy would you be to pay 25% referral fees to an agent from six states away for a buyer from your backyard who found that agent through a National IDX website?
The Deeper Issue
If this post were only about smiting the idea of a National IDX as Jules Winnfield might on those who would attempt to poison and destroy his brothers, this would be brief indeed. But there is a deeper issue worth discussing here: the constant attempt by the real estate industry to focus on yesterday’s problems, instead of today’s issues.
Two years ago, I wrote a post titled, “Please Stop Fighting the Last War.” That post was also about IDX, and I wrote:
Until brokerages solve the problem of agent-centric recruit-and-retain business models, nothing else much matters. That’s the next war, today’s problem, not the last war and yesterday’s problems.
Today, we have the general partner of Andreessen Horowitz proclaiming to the world that we will all buy homes from and sell homes to, companies. And pretty much the entire investing community listens with great interest. Real estate agents won’t go away, according to Alex Rampell, but they’ll all work under the rubric of a company. Watch the entire video if you haven’t done so already.
So in January of this year, I wrote the 2018 Year End Review with the subtitle, “The Dawning of the Age of Capital.” Let me quote from it:
There will come a day at some point in the future when we will look back on 2018 as we look back on 1973 today and say, “That’s when everything changed.”
2018 is when we can say definitively that the old way was replaced with a new basis of competition.
The old basis of competition was based on headcount, which meant that recruiting and retention was the key to success. Everything that brokerages, MLS and Associations, and technology companies in real estate have done for the past 45 years was based on and around creating advantages for recruiting and retention.
The new basis of competition is based on deploying huge amounts of capital, which means that access to capital is the key to success. Everything that the companies that will dominate the future of real estate will do will be based on and around acquiring and deploying large amounts of capital.
Is there anything about IDX, about brokerage websites, about MLS policy, or National IDX that would help brokerages acquire and deploy large amounts of capital? No.
Does constantly repeating, “The brokerages are the ones who curated and contributed the listings to the MLS!” help any brokerage anywhere acquire and deploy large amounts of capital? No.
Would the creation of a national database of listings, whether for IDX or whatever other purpose, help one whit with either (a) driving the margin-destroying agent splits in the other direction, or (b) acquiring and deploying large amounts of capital? No and no.
Yesterday, Today, and Tomorrow
In 2019, we have giant public companies who have acquired billions of dollars in capital and are deploying that capital to solve the age-old problems of uncertainty, inconvenience, and long transaction times. Technology alone could not and cannot solve those problems; it takes the application of huge amounts of capital to make a dent.
Back when technology was making an enormous impact, the industry was talking about “belly to belly” and “this is a personal relationship business” and office size. So now that things have shifted to capital, we’re naturally talking incessantly about technology and data.
Look, I completely understand. I get the desire to hold back the years, thinking of the fears you’ve had so long. It is a perfectly natural human response to want to keep holding on, so tight. But the real world (that is, the consumer who has to buy and sell homes) doesn’t care about your feelings or your fears or your wishes. It simply is what it is.
This is why it is so important for brokerages, MLS and Association leadership, and tech company executives to be cold-eyed (although warm-hearted) about today’s problems and today’s possible solutions. While we’re obsessing about using AI to target marketing to homeowners who are likely to move in the next 90 days, or some new technology to auto-message a bunch of potential buyers on Instagram or something, the real players are obsessing about helping buyers make all-cash offers using their money, or paying 99% of fair market value in cash, to eliminate most of the consumer pain around the home buying and selling experience.
What’s more, CEOs of various companies and organizations need to be thinking about tomorrow’s problems and tomorrow’s possible solutions, because well, that’s kind of what a CEO has to do that no one else can. But let’s leave tomorrow aside for now and at the very least focus on today, instead of yesterday.
It might or might not be time for a National IDX. It most certainly is time to stop trying to solve yesterday’s problems with yesterday’s solutions and find today’s solutions for today’s problems.