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CEO’s Message: How Was New Year’s Day 2018 Different from New Year’s Day 2017?

Jim Harrison: MLSListings Inc CEO and President

Jim Harrison
President and CEO, MLSListings

The answer to this question is simple. At the end of 2016, the industry and the marketplace were awash in trends, issues, forces, and disruptions that were being discussed and envisioned in terms of what would be happening in the future. Then, a short 11 months later, the industry is actually experiencing, dealing with, and measuring the impact of actual events, with real rather than imagined impacts. Consider the following:

  • Former NAR CEO Dale Stinton is gone and, in his absence, organized real estate at all levels is engaged in a full debate regarding what philosophical and strategic elements of organized real estate, if any, will be continued, discontinued, or initiated.
  • Redfin is now the third largest brokerage operation in the country and is demonstrating the competitive and financial benefits of employed agents, standards, and best practices.
  • Compass is currently realizing the benefits of over one half billion dollars of Wall Street capital and a new brokerage business model that suggest that firms need no longer carry marginally performing agents.
  • Open Door is now expending over $100 million per month, proving that consumers wishing to sell their properties are willing to pay a small premium to avoid the hassles, anxiety, and confusion related to the traditional real estate transaction and its players.
  • Tens of thousands of Zillow premiere agents are completing their first year of a program that proves that, like in most human endeavors, high performing individuals actively seek out collaborative opportunities and benefits.
  • Realogy Corporation, the cultural holy ground of the traditional real estate brokerage and agent, is currently fully engaged in an attempt to re-engineer its philosophy, structure, culture, and approach to the industry’s “agent-centric” real estate legacy.
  • Significant numbers of American real estate consumers are voting with their feet by either electing to delay overdue transactional decisions or, in the alternative, selecting alternative methodologies through which to buy and sell properties.

With the above game-changing forces and scenarios in place, few industry experts, leaders, sages, philosophers, or mystics will be able to deny that, indeed, all matters regarding real estate are in play, including the role and value proposition of the traditional agent who may well be on their way to either their demise or their next iteration.

A strong argument can be made to support the proposition that the stage has been set for what may well be the final great battle between the advocates and forces of real estate reform on one side and the practitioners and forces of the traditional real estate service value proposition on the other. Support for this supposition can be found in any number of fronts.

By far one of the most interesting of these fields of fire is the recent posturing around the dialogue of whether or not organized real estate exists to be an organization “for” its members (the traditional view) or, in the alternative, whether organized real estate exists to be an organization “of” its members (the reform position).

While the philosophical positions of these two spheres of influence are still in the developmental and design state it doesn’t take a lot of imagination to project their likely destinations. The traditionalists are already gathering around the idea of “Real Estate, love it or leave it.” The reformist movement, on the other hand, will continue to promote the idea that “consumers are king” and that “standards and best practices” must be the holy grail.

As the industry continues to evolve these positions a hundred different iterations and articulations of this basis dispute will emerge. Diplomats and hustlers will position themselves to evolve and market compromise and best interest positions.

While these opportunist players will attempt to peddle their positions as something new, in fact, the opposite is true. The industry and the marketplace have been debating this argument for much of the past decade. The reality here is that the campaigning phase has passed and the decision period is upon us. The money folks, the consumers, the brokerage sector and the agent segments are already exercising their votes. The players are already on the field and to the winner will go the benefits and spoils of our $60B plus industry and control of the most significant symbol of the American Dream.

This piece does not presume to educate or lecture the MLS sector with respect to the moral, ethical, or financial aspects of deciding which side of the conflict the MLS sector should rest on. The purpose of this piece is to present a number of tactical points.

  • The first is to remind us all that the current weak and uninfluential position of the MLS community is due, in great part, to its inability or unwillingness to take strategic positions on all but issues that relate to its ultimate survival.
  • The second is to gain recognition of the fact that, while some will suggest that staying out of this debate offers significant advantages, such an option will not be available in a battle of this ultimate consequence. Real lives, fortunes, and compelling positions will be at stake here. From its very beginning, both sides will take the position that “you are either for or against us.”
  • “To the victor belong the spoils.” The benefits of being on the winning side of this battle may well be sufficient to create the foundation of the MLS sector’s power and influence in the industry moving forward. However, the failure to enter the battle or to support one side or the other will forever weigh heavily upon the MLS as an industry player and participant.
  • “You can’t please everyone.” For much of the past quarter century, the MLS community has indeed tried to please everyone. By any measurement or analysis, this approach has not been politically or philosophically successful and it is highly unlikely that it will be successful in the upcoming battle. On one side or another MLSs must take a stand and use their power and influence to support their chosen position.

Finally, the charge. Given the current speed of matters, it is likely that the decision of whether to be on the winning or losing end of this struggle must be made within the next nine months. Once again, the issue. Should the MLS support the positions of the industry and market reformist movement or should the MLS sector support the positions of the traditional and legacy real estate?

Clearly, this must be agenda item #1 over the next few months.

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