Let’s pretend there is a Choose Your Own Adventure book called Compass. There are lots of choices you can make about the plot, and lots of possible endings.
Here are the choices you can make:
- You decide that spending tons of money on brokerages and agents only ends up penciling if you sell your own listings. Like every time. So, unlike other big brokers with big market share in the past, you decide to really leverage your power. You double down on pre-marketing listings before placing them in the MLS. Then you pull out of IDX, because who wants a bunch of barnacles clinging to the bottom of your boat? Then you really slow-roll MLS participation across the board, because – c’mon – this isn’t some socialist dairy collective for god’s sake! And because buyer brokerage is totally toast anyway, you just kinda set things up like you’re the store for homes – like really: people go to your shop and just buy a home. What’s some agent from another company got to do with this anyway? Do people hire someone from Chevy to represent them when they go to the Ford store? No, because that would be insane. And you’re not insane. You’re Compass. But anyway, this home store choice… you gotta move fast, because there’s another store out there. People sometimes call it the Everything Store – EVERYTHING.
- You buy Opendoor. Because this ibuyer thing isn’t just for cookie-cutter houses in Phoenix. You’re valued about the same, share a big investor and, really, it just makes sense – almost like it was meant to happen. Funny. And Opendoor – whoa – these people are real-deal, South of Market, tech startup folks. Lots of top-shelf devs. You want more of those. Plus, they need what you’ve got: thousands of productive agents who can walk the Opendoor offer into living rooms across America, just like the Avon Lady. Plus, everyone’s doing it. But mostly that Expedia guy.
- You go after the real money, which is in originating mortgages and selling title insurance, plus some other “home ownership” things. This isn’t new, but you will make it sound new. And big. Very big. Old-timey 15% capture rates on this stuff won’t cut it, so you get way ahead of your agents with serious data science and killer software that connects with consumers. It looks good, so everyone will be cool.
It’s just make-believe, right?
First, I am glad CAR and NAR are letting go. Trade associations owning tech companies has never made sense to me. Wonky software protected by association lock-in isn’t exactly a recipe for excellence. The circular deal to make Ziplogix a free benefit to all NAR members was the highest expression of this craziness.
Second, it’s worth noting that Lone Wolf, since being absorbed by private equity giant Vista Equity Partners in 2015, has collected massive share in the forms business. This, combined with its legacy reach into the back offices of thousands of brokerage operations, represents a formidable, though still only potential, platform play. If you are inclined to paranoia, you might also see the possibility for a rich data mine. Hundreds of thousands of real estate professionals keying transaction information into one database at some point in the future would be a very valuable thing indeed.
Teams have been the “future” for about 20 years now. They have proliferated because they are small units of command and control in an industry where that is largely absent. They can dictate a certain experience for consumers, and for agents. They can maintain coherent, consistent processes.
Great. Makes a lot of sense. Some of the smartest, most impressive people I have met in this business are team leaders.
But… teams are also basically a hack on a challenged brokerage business model. This doesn’t seem sustainable.
Feels like a next step is upon us, where teams are set free as much as legally permissible (lots of risk and grey area here) from their broker. The expansion team phenomenon, lead by Keller Williams, is one signal. The explosion of virtual brokerage EXP is another. New entrants like Side are redefining the relationship between team and brokerage.
Teams are the present, and they are changing.
Exhorting NAR to raise the requirements for being a Realtor was always asking the organization to do something deeply irrational and self-destructive. This whale of a trade association gorged itself on masses of unproductive, unprofessional member krill. And things cruised along just great, even though the housing meltdown of 2008. That was just a cyclical ebb, not an existential crisis.
So rant and rave as I might, it was kind of an unreasonable ask.
It’s not unreasonable anymore. I think it’s now rational for NAR to raise standards, raise dues, and clean the Realtor house.
I think this because the tsunami of money, tech and changing consumer behavior hitting real estate is going to clean house anyway. iBuyers offer consumers a real choice, not the made-up choice between a REALTOR and a “real estate agent”; more production is being absorbed into fewer teams; brokers are keeping more listings in-house, reducing opportunity for newbies.
It would be smart for NAR to get ahead of this. To put all its energy and might into supporting the best homeownership warriors in the land, not a million “members” in dues only.
This is no longer a moral or normative argument. It is a practical one.
Enjoy the weekend.