Put the Deck Chairs here, please!

Am I the only one, while watching Leonardo DiCaprio and Kate Winslet in the titanic blockbuster movie Titanic, who thought “All these people are about to drown and they don’t know it yet?”DeckChairTitanic

That’s kind of what it felt like during the MLS Issues and Policies Committee meeting this past Saturday in San Francisco. Assembled before the standing room only audience was an august panel of industry thought leaders discussing the crumbling relationships between the brokers of The Realty Alliance (and other large firms) and their Realtor Association MLSs. After about a half hour of listening to repeated platitudes heard ad nauseam in the past I was eagerly anticipating the announcement of Peace in Our Time! Would there be a breakthrough in the shuttle diplomacy that must surely have been going on in the back rooms? Would NAR CEO Dale Stinton tip his hand and let us know that mother NAR was riding to the rescue with a new MLS model of inclusion in governance and a noncompetitive product/service policy?

Alas, it wasn’t to be. Instead we heard, ‘Yes, we talk to large brokerages regularly, but they haven’t told us what they’re planning,’ and ‘No, it isn’t NAR’s place to get involved in the local issues between brokers and their MLS(s).’ (Both of those are paraphrases as I heard them, not direct quotes.)

<Sigh!!!>

I could almost hear the arctic waves washing over the feet of the band members accompanying the frenzied hustle of the ship’s mates as they rearranged the deck chairs on the doomed ocean liner.

Everyone in the room either heard firsthand or read accounts of the presentation by Realty Alliance CEO Craig Cheatham at the CMLS meeting in October. Everyone knew the deadline (imaginary as it turned out to be) ten days later when TRA was to meet and decide what to do next and with whom. Everyone in this room expected something to happen or to be discussed at this meeting. Nothing happened.

The general forum ended and the official committee meeting began. Surely now the sparks would fly. Someone from the major broker contingent must have prepared the motion to rescind the policy adopted in May that allowed MLSs to decide whether to treat their public facing website as a basic service, paid for by general funds rather than individually based on usage. In what may have been the fastest and shortest meeting in recorded NAR history, the matter was dealt with in a matter of seconds, referring the question back to a task force for more study, with nary a comment from the floor for or against before a rather lopsided voice vote.

<Double Sigh!!!>

Admittedly NAR is between a rock and a hard place in this drama. They have the most to lose if either of the two most popular guesses about TRA’s ultimate detection proves to be true. If (a) TRA brokers opt out of IDX and syndication by mounting their own web portal, thereby undermining one of the most productive tools for both listing and selling brokers, or (b) go all the way and withdraw from MLS altogether, the cornerstone of NAR’s local associations, the singular most attractive value proposition that associations have – access to and participation by all in MLS services – goes away, and with it any reason to belong to a Realtor board.

Without MLS, and all the benefits attendant to it, NAR stands to lose a significant portion of its membership and with that goes a similar portion of dues dollars and political clout. By my rough count, the five largest brokerage firms account for nearly half of NAR’s million members. Without the big brokers, NAR becomes a second tier lobbyist with small, disorganized members who are focused more on day-to-day survival than on the long-term prosperity of the industry as a whole. I cannot imagine that they are deferring responsibility to their local MLSs with just advice to “Talk to your brokers and see what they want.”

Yet, NAR walks a thin line in the aftermath of the DOJ settlement, being constantly careful not to be seen as trying to dictate business practices that might be anti-competitive or guiding the MLSs to do so. Still, I have to believe some conversations with some of the major players are happening somewhere, sometime, leading hopefully to something.

If not, then we might indeed have witnessed the rearrangement of the deck chairs on a sinking ship. I, for one, certainly hope not, because I know how that movie ends.

For this post
Cause – Invisible iceberg!
Effect – Glub, glub, glub.

 

The Impossible Dream or a Glorious Quest?

This “thought” by Steve Murray of RealTrends appeared in his October 31 email newsletter and was posted on his website the next day.

State of Unrest

Why is there so much angst between Realtor associations, MLSs and brokerage firms?

By Steve Murray

“The whole is festering with unhappy souls. The French hate the Germans, the Germans hate the Poles. Italians hate Yugoslavs and South Africans hate the Dutch. And I don’t like anybody very much.” -Kingston Trio “They’re Rioting in Africa” lyrics

Sounds like the current state of our industry, doesn’t it? The level of angst between local, state and national Realtor associations, MLSs, brokerage firms and national realty chains has risen to new heights. Everyone is unhappy with everyone else in some fashion. Of course, there are exceptions (though hard to find).

It occurs to us that this is what happens when the pie shrinks (revenues generated by the industry and the lack of growth in membership). The fight becomes one where everyone invades someone else’s turf (mission creep). It happens in other industries as well.

What is needed is a group of wise people from the various constituencies to gather and come up with a way to co-exist. A new road map is needed. A map that lays out how the market place can be made clearer and more efficient. That would be a worthy goal. It behooves these leaders to find some solutions before external forces develop their own path (pocket listings anyone?).

We may be wrong, but it seems like we are creating fixes on the run when what is needed is a full examination of how we are organized, whether that still works as intended and are there new structures and rules that are needed that reflect today’s reality.

Just a thought.

quixote-windmillI agree with Steve that left unaddressed these problems will merely create an environment ripe for invasion by yet other “external forces” that can send the industry in directions no one wants to see it go.

I was reaching for the phone to call Steve and offer my assistance in assembling the right people in the right room at the right time to try to solve these issues. But then I stopped.

My pitch to Steve was going to be, “You bring the brokers. I’ll bring the MLSs.  We both know a couple of influential association executives who could bring the Realtor organizations at all levels. Let’s get everyone in the same room at a large round table (think either King Arthur or Paris Peace Talks – no “sides” so everyone is equal) and hash this thing out. Sounds easy. But the doubts crept in as I put down the phone.

What would we talk about? Well, for starters, there’s the list of grievances prepared by The Realty Alliance and aimed at the MLSs and their Realtor Association owners. Many are superficial or apply to only a few isolated situations and could easily be fixed by taking a couple of people out to the wood shed. Others are but the tip of the iceberg and the most recent artifact of a much deeper malaise.

There’s an underlying current of doubt, mistrust, and apprehension that courses through these discussions. It sits like a mastodon in the room, ancient is his repose and invisible to any and all who choose to look around or through the hulking question that challenges every professional in the business: “How do we make this industry better?”

How do we elevate the practice of real estate to a level of professionalism that will foster trust from our clientele and confidence from our fellow practitioners?

How do we reform our trade associations into support organizations that work to the benefit of ALL parties in the transaction – buyer, seller, agent, broker – and not just two or three of the participants?

How do we construct a matrix of interrelationships where all of the pieces not only connect but support all the others and through those connections make the whole of the structure stronger?

How do we build a platform from which to lobby for laws, policies and regulations that promote and sustain the concept of home ownership as a cornerstone of economic prosperity where one’s home is one’s castle and in most cases the basis of one’s family wealth? Could such a platform be supported by both red and blue ends of the spectrum, left and right wings of the parties, and all shades and wings in between?

How do we stop the bickering between the parties which seems to be consuming far more energy and effort than could possibly be justified by the results? There seem to be no results – just continuing misunderstanding, finger-pointing, and ill feelings.

Could any of this be done at a level (national, state, local) and with enough support from all quarters to truly make a difference in how real estate brokerage framework is structured? Or are we too far gone, too deeply mired in our current morass to come up for air long enough to have civil discourse about these problems?

What is needed here is far more than just another real estate conference with panel discussions and break-out sessions where lots of platitudes are spoken but nothing is accomplished. We need something more akin to a constitutional convention with delegations from each of the constituent “states.”

we-the-people-9The assembly would need more than just a couple of days, but certainly less than the nearly four months it took the founding fathers to draft, debate, and adopt the new structure of an entire nation.

But the next step would be the trickier one. How do we ratify such a new structure? In 1787 it was fairly easy, even with 13 independent minded states joining together for the common good. On a simple yes or no vote, each state decided could it go it alone or would it be better off joining with its confederates to become stronger through union and common purpose. This time it’s trickier. One no vote by one vital “state” would/could undermine the entire effort. This truly needs to be all for one and one for all.

In the end, all the states joined. They joined for purposes similar to those which the real estate convention would be asked to address: to form a more perfect industry union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the benefits of home ownership to ourselves and our posterity.

Is this the impossible dream? Or are we as an industry up to the task? And if so, when can we start the quest?

For this post:
The Cause: an impossible dream?
The Effect: a glorious quest!