Friday Flash: Thoughts on the CAR forms issue

The California Association of Realtors is in a public fight over the transaction forms it produces – or, more pointedly, the forms software it produces.

Inman has covered this well. So read those stories if you haven’t done so. They quoted me in their first piece, but I’d like to share how I see this more broadly here. Because while it seems like a small thing, how it shakes out is really important for brokers, agents, software innovators and ultimately consumers.

The issue in a nutshell:

CAR creates and updates transaction forms. This is immensely valuable. A standard set of forms used by the vast majority of practitioners produces efficiencies and confidence that would otherwise not exist. Members get a license to these forms when they pay their dues.

The sticky part is that CAR brings those forms to market wrapped in a software product, ZipForm, that it produces through REBS, its for-profit subsidiary. Some CAR members like ZipForm. Some don’t. But CAR mandates its forms may only be used within its software.

Herein lies the dispute.

dotloop, a real estate software player with lots of users in California, is challenging this. CAR is countering with arguments about security, privacy and indemnity – important things, of course.

But the CAR argument falls apart logically in a lot of ways.

Take one really obvious example: there is a “Print” button in the ZipForm software. Any Realtor can transform bytes into paper at any time. And a lot of them do. They put these printed forms on desks, in the back seats of cars, in the mail, through fax machines and into office recycling bins.

And in some cases, Realtors write on them, amend them and initial them with pens.

Ghastly, yes. But I don’t think CAR is going to ban paper. So why effectively ban other – and, indeed, much more secure – ways of working with the forms?

What I’d like to see is a way to let the forms and legal people (CAR) do what they do best and let the software people (in this case, dotloop) do what they do best. That means working together to integrate and update forms within software platforms that meet stringent legal, security and privacy requirements.

CAR, through REBS, could continue to make money. Just differently. And I guess part of what I’m saying here is that the REBS business model is perhaps outdated.

It’s 2013, not 2002. Software is eating the world. And the options available to Realtors have never been better. They should be free to choose what works best for their business, not their association’s business.

I spoke with a California broker today, and asked him about this issue. His blunt take crystallized things in my mind:

ZipForm sucks, and it costs me money to deal with it. But it’s my job to keep the DRE off our ass and not get sued. I have to have secure, updated forms.  

Security and choice are not mutually exclusive. Both are important. Both can and should be delivered to brokers.

Larger implications

If you’ve read what we write here for any length of time, you’ve probably gathered that we think Realtor associations getting into the software business is a bad thing.

It’s a fundamentally misaligned arrangement, even through a for-profit subsidiary. The ingredients necessary for a software company – agility, a capacity for recruiting top talent, acute sensitivity to market and competitive pressures – are just not in the association pantry.

So, yes, we think NAR starting a national online property database (RPR) was a bad move. And we think CAR bringing its forms to market exclusively through its own software is too.

And of course, MLSs getting into technology is its own can of worms.

To keep this business moving forward, everyone needs to be doing what they do best.

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