Friday Flash: The Broker Uprising

I just returned from the Leading Real Estate Companies of the World conference in Las Vegas, where the mood was buoyant. It was good to see so many broker friends looking ahead with optimism. Just 5 years ago gatherings like this sometimes felt like survivalist camps.

These good-times-coming-off-bad-times produce a focused energy. Things are happening now in Broker World: acquisitions, re-investment in technology and, yes, lots of talk, special projects and back-room strategizing.
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Which brings me to the national broker portal project, of which there was lots of talk this week at Leading RE.

If you want to know all the reasons why a broker-controlled national listing site might not work, read this post from Rob Hahn. I don’t share his bleak perspective on this project, but I do admire his deep exploration of the matter.

I look at it like this:

Brokers took a bite from the portal apple when they were vulnerable. The idea of free listings exposure sounded great in 2007, just as we were headed into the abyss.

Then came the dark days. Brokers were bleeding money while the portals were raising money. They got their asses handed to them on SEO; they watched the mobile explosion from the sidelines; they saw their agents drift toward the siren call of technologies provided by others.

Pain. A good five years of it.

But the strong brokers survived. They’re still here, on the other side of what felt like armageddon. They’re standing back up, looking around, and wondering how to regain some of what they gave up.

Is that not rational?

Yes, making the national portal project work is a tall order. Getting Project Upstream to critical mass won’t be easy either.

But isn’t doing nothing riskier than any of that? Isn’t it reasonable to expect brokers to try and regain some leverage over MLSs and portals?

Of course it is.

As usual, these things will come down to execution. There’s no debating that.
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Another hot topic in Las Vegas: rising portal ad rates. It seems a lot of brokers coming up for contract renewal with the Big 3 are facing sticker shock.

I do not think this is a function of the pending consolidation in this space, or any other anti-competitive dynamic. It’s about scarcity.

Think about it:

There are around 5 million homes sold every year.

There are around 1 million Realtors, about 150,000 of which are productive enough to buy software or advertising.

There are about 100,000 real estate brokerages, most of which are very small shops.

In other words, there’s a limited number of listings, a limited number of ads you can sell on or around them, and a limited number of people who will pay for those things.

Zillow could get a billion unique visitors a month, but the facts above aren’t going to change much.

So prices go up. And as prices go up people start looking around for alternatives….

Like maybe a broker-controlled portal.

Huh.

Enjoy the weekend.