Michael Wurzer I’m tracking two conversations about being big on the web and want to share them with you.
Future of Real Estate Brokerage
First, there is a debate regarding regarding whether the future of real estate brokerage favors the big brands or the power agents. Rob Hahn argues that the big brands will prevail, who writes:
- I believe that the brokerage of the future will be large enterprises that are consumer-centric, with most of the power shifting back to the broker and away from the agent.
- I believe that the smaller brokerages will become boutique shops, who are allowed to exist because they fill a market niche that the big players do not care to address.
- I believe that agent splits are on the way down, and that the number of real estate agents will be reduced fairly dramatically. At the same time, the top producers will find that they are able to build real wealth by ownership stakes in the enterprise, becoming partners in all respects, resulting in either same or increased income.
- Contra Danilo, I believe that the freedoms that real estate agents and teams currently enjoy are headed to the ash heap of history as the big brands reassert themselves.
- And technology will make all of this possible.
Rob is addressing Danilo Bogdanovic, who suggests that the future of real estate brokerage is:
A “”White Label Brokerage’. It has an agent-centric versus broker-centric focus and a fee structure that does not interfere with an agent’s business focus. It allows agents to brand themselves, the team to brand their team, and the small brokerage office brand their own company name.
This is a big conversation and reading the full posts linked above is worthwhile. I wrote some time ago about the excellence of examples like Jay Thompson going independent. Jay’s brokerage, Thompson’s Realty, appears to be a great example of Danilo’s “white label” brokerage where agents within the firm are creating their own brands on-line, like the Butterworth Group and Heather Barr, the North Phoenix Agent.
There’s a lot to like about this model, where the expertise of the actual people doing the work is front and center for the consumer to see and judge, without any brand interpretation required. This model is especially compelling in this age of “too big to fail“. At the same time, the big brands do seem to be getting bigger and consolidation in the real estate industry seems likely as the market deteriorates.
The Bridge To The Next Big Conversation
Central to Danilo’s theory of the white label brokerage is the web. The web is about links, because links power search engines. Some of the biggest links in real estate are from listing portals back to listing owners’ web sites. In most cases, the links from listing portals go back to the big brands, which own the majority of listings. More links, more search engine placement. Brokers like Thompson’s real estate rely on IDX sites to power their search, and yet the biggest portals don’t link back to IDX sites. This also applies to the continuing trend of MLSs building consumer facing listing portals, which have deep links going back to the listing brokers.
Future of MLS Web Sites, IDX and VOWs
The next big conversation I’m following deals with the possibility that the new VOW policy required by the NAR/DOJ settlement could jeopardize IDX and favor consumer facing MLS sites “protected” by VOW rules. Again, Rob Hahn is playing devil’s advocate and suggests “the incentives are just enormous for an MLS to create public facing websites, dirty up its IDX rules, and have everyone else toe the VOW line — especially the ‘signup’ requirement that creates a walled garden around listings, except on a MLS website. I just can’t imagine why a MLS would not pursue this strategy.”
Brian Larson details the issues well on the MLS Tesseract blog, and concludes that the new VOW policy is more likely to strengthen instead of weaken IDX. In doing so, Brian raises significant questions about consumer-facing MLS listing portals, a topic we covered in-depth this last summer:
As to whether public-facing MLS web sites are good or bad, I think there has never been a debate, really. Those who want to believe public-facing MLS sites are good have argued for that view; those who believe they are bad likewise. Each side ignores evidence that does not support it. We did a whitepaper in May with Focus Forward Consulting (Kevin McQueen’s firm) that addressed some of the problems with the MLS-public-facing debate. Those problems remain unaddressed. Neither the pro-MLS site camp nor the anti-MLS-site camp has shared with the community meaningful data supporting their central arguments. I don’t think anyone wants to pay for research that might prove them wrong….
One of the big questions for these public web sites is where the links are going. Ironically, often the biggest brokers are the ones who object to consumer-facing MLS listing portals, yet the links from such inordinately benefit the biggest brands and do little to promote IDX sites. I’m not entirely sure of the solution yet, but I believe links are the key and those who have more links and better links will end up being the winners.
Help Me With Questions for Panelists at Inman Connect in January
I’m thinking about these issues a lot these days as I’ll be moderating two panels on MLS issues at Inman Connect in NYC in January, one on consumer-facing portals and the other on big MLSs getting bigger. The panel on consumer-facing MLS listing portals includes Bob Hale from HAR.com, Sami Inkinen from Trulia, Spencer Raskoff from Zillow, and Cameron Paine from Connecticut MLS. One question I have is who do these sites benefit most, big brands or independent brokers? Is this answer to this question different for MLS portals versus other portals? What’s the future of IDX and VOWs versus the portals?
The panel on MLS regionalization is Joel Singer from CAR, Art Carter from CARETS, Jim Harrison from MLS Listings, and Joel Cohen from IMAPP. A good question for these regionaliation efforts is whether consumer-facing search engines is a critical part of the effort. I believe consumer-facing MLS sites are important for some of the panelists and not others, and learning the reasons why will be interesting.
What I’d really love, though, is hearing from you regarding what questions you’d ask these panelists. What are the key issues that need more discussion from your perspective? These are big conversations and I need your help.