Austin Texas Real Estate Blog

Well, it’s been a long time and I have to admit, that I am surprised super happy that REALTORS Property Resource,LLC has shared the Content License Agreement with NAR’s members. I just read about the revamped RPR agreement on Inman News. Seems to be a pretty long document, but as Brian Larson pointed out, the more clear and complete the agreement winds up being, the less trouble there will be down the road. I couldn’t agree more.

Ok, so I’m like a kid on Christmas morning and would love to have more to post now, but I’ve got to grab a glass of wine, sit by the fire (it’s snowing today in Austin), and crank through this baby!

And to RPR, thanks for ruining my funny use of this clip. :-P

It would have been something like, How RPR Responds to questions…

NAR makes it rain to the tune of $20MM for the boys at RPR!

I’ll be the first to say that technology can be sexy. Especially, when it’s technology that you wished you had. That kind of thinking makes me wonder if NAR didn’t fall in love with the idea of the REALTOR Property Resource and make a mistake by funding it completely alone.

A luxury once tasted, becomes a necessity. Not sure who coined that, but it’s very true. Use the new iPhone and it’s the next item on the shopping list; buy a GPS and it’s hard to imagine getting around without it. Now put yourself in NAR’s position. There are some awfully talented guys who used to run Cyberhomes. They have been with Fidelity, have been with LPS, and they’re used to selling to REALTORS with sexy looking technology. (LPS is a MLS provider.) Now take these Cyberhomes guys, put them in a room with some REALTORS who run the Association, and the Association’s big fat checkbook and what do you think the outcome will be???

I’m thinking a $20MM company replete with Cyberhomes guys and paid for by Joe and Jane REALTOR. Note that the CEO and a VP are actually brokers, which makes me feel a lot better. Of course, the details are not there for us to see. I mean, sure, there are a few extremely vague agreement drafts floating around there, there are likely some coders integrating data, maybe a few social media evangelists (we met Reggie of RPR in a previous post), and other than that, a whole lot of sealed lips.You can get some great info over at MLS Tesseract if you want to bone up on the current state of RPR. The lack of communication and attempt to get buy in is for some other posts so back to the main thought of this post.

Did NAR fall in love and blow $20 large on RPR? I think they might have.

But why do you think this Joe? Aside from the obvious reasons that we all sell locally (so why do we need a national system) and the fact that the resources they are aggregating are already out there, FOR FREE; Well, I was reading press releases and news stories about the past wonderful experiences that NAR and business partner/related tech companies have had and a few things popped up.

Remember HomeStore.com? Remember the CEO of HomeStore.com who was sentenced to 15 years in a Federal facility for defrauding investors. The outcome, just a little loss of $100 Million dollars to investors and stockholders. No biggie there. I mean it wasn’t Enron and at least NAR wasn’t the sole owner of that baby, who by the way is now called Move.com. Just for your reference that Move stock is now trading at about $1.30 per share down from it’s all time high of something like $102. (Note that Move.com is currently worth less than 70% of LoopNet and less than 50% of CoStar.)

So then I decided to check out what NAR had said about Realtor.com. How was this such a success when HomeStore and Move were disasters less than ideal engagements. Here is what I found interesting that either NAR has forgotten or the fun bunch from Cyberhomes helped them over look. My commentary in blue.

Directly from the Press Release

…
History of REALTOR.com
In November 1996, the Board of Directors of the National Association of REALTORS® approved an agreement between the REALTORS® Information Network (RIN)—NAR’s wholly-owned subsidiary–and RealSelect, Inc. to take over the operations of NAR’s official Internet site, REALTOR.com. At the time, many business models were considered to finance the development of REALTOR.com.

NAR’s Leadership Team decided against using dues dollars or asking for a special assessment of the membership to fund REALTOR.com. While Homestore and its investors have spent hundreds of millions of dollars to build and operate REALTOR.com, no NAR funds or NAR member dues dollars have ever been used for the creation or operation of the site.

Remember the fraud guy and the hundreds of millions of dollars. Seemed like a good idea then. With the current load of fraud ala Madoff, Standford, and the list continues, it SEEMS LIKE A BETTER IDEA NOW.

…

Key Provisions in the Operating Agreement
The operating agreement negotiated more than eight years ago contained a number of important provisions ensuring NAR’s control over the content and operations of the site. Those provisions remain in full force today and continue to guide the relationship between NAR and Homestore (NASDAQ: HOMS), which owns RealSelect.

Homestore operates REALTOR.com as a business. Its separation from NAR allows the company to make decisions that could potentially pose difficult problems for a trade association on business terms. These include the pricing of REALTOR.com products and services to REALTORS® and the development and marketing of new products and services.

Ok. Why has this changed? I mean, I love technology as much as the next guy, but if there aren’t private investors out there willing to provide funding then maybe the NAR shouldn’t step in an fund this start up with member dollars. Are any of the NAR board members technology incubator guys? What about venture capital guys with experience in taking a technology startup from soup to nuts??? I’m sure the guys from Cyberhomes are stoked. “Hey check this Bobby, we got an angel investor and get to play start-up now with other people’s money.” Also, since the exact product offerings are not set in stone, nor are any pricing models for members, what’s the deal here? Before owning the whole enchilada posed difficult problems, now, now sweat.

Outlook for the Future
Homestore has survived the shake-out among dot com start-up companies and complete turnover in its management team. It has undergone major cost-cutting and restructuring to adjust to changing business realities. Certainly, its relationship with NAR has helped see it through challenging times and REALTOR.com has never lost its lead in the real estate space.

The two organizations have continued their relationship essentially unchanged because they both benefit. Homestore has access to the best brand in real estate and NAR has a vehicle to provide its members a strong presence on the Internet without incurring the cost or risk of operating REALTOR.com itself. Time and trials have tested the formula, and now it’s poised for new growth, profitability and service to REALTORS®, shareholders and consumers alike.

…

Um. yeah. If I hadn’t sworn off the blink tag long ago, the middle sentence above would be blinking like John McCain at a presidential debate. Why has the time tested formula been changed? Remember what happened when Coke tried that??

So now you see why I think NAR fell in love with RPR and wrote a fat $20MM check. The past taught us as an association what works, why it works, and leave it to NAR to forget the history only 10-15 years in the rear view. As a NAR member, it saddens me. As a technology guy, it frightens me.

I’d love to hear from other agents, brokers, MLS folks, even some of those tight-lipped RPR people are welcome here. Maybe if we knew more about what was going on some of the skepticism would melt away. That remains to be seen.

Yesterday, I was browsing around the net and came across another post on RPR. That’s REALTOR Property Resource for those of you not familiar. It would be awesome to get some good answers back from someone intimately involved in the RPR project, but, I have yet to get public responses to my comments calling into question the usefulness, plans, or financials around the RPR. I should have known that if RPR has a director of social media (Reggie Nicolay), that RPR might want to control the spin in the social media outlets. Oh well, that’s the blog owner’s prerogative, even if I think it’s a disservice to other agents who read that blog.

[UPDATE] Geek Estate Blog confirmed that my comment in question of the RPR was not deleted, but instead went to spam. My apologies to GeekEstateBlog and Reggie Nicolay.

Back to the actual RPR itself. According to NAR and the folks hired to run the RPR, it will be the panacea for all our woes. The press release below is typical of the media surrounding NAR’s new national property database. You can read the full release here: http://www.realtor.org/press_room/news_releases/2009/11/tech_property

My comments are RED and inline in the press release below.

NAR Tech Acquisition Will Create National Property Database
Washington, November 09, 2009

The National Association of Realtors® has acquired technology to create a database of all properties in the U.S. so Realtors® can better assist consumers in a high-tech, fast-paced business world.

Guess what? Agents don’t sell in Austin Texas on Monday morning, then board a jet and sell in Salt Lake City Tuesday. Real estate is a local business for the vast majority of practitioners. Yeah, if you work at a REIT you may be jet setting and buying across the nation for pension funds, but you make plenty of money and have better data than will any national database created for REALTORS.

The technology acquisition includes licensed data and secured data aggregation services from LPS Real Estate Group, a wholly owned subsidiary of Lender Processing Services Inc. (NYSE:LPS), a leader in real estate technology. NAR will use the assets to develop the Realtors® Property ResourceTM, a parcel-centric information database covering all of the more than 147 million property parcels in the country as a resource for NAR members. NAR is planning to launch RPRTM in the second quarter 2010.

This paragraph is particularly useful when you hear from an RPR evangelist that it’s not going to cost you anything. Of course, NAR used NAR funds to buy these assets. So my question is, if it’s not the member’s money, whose money is it? Did NAR get a grant from the Bill and Melinda Gates Foundation? I don’t think so.

“Realtors® are the first, best source for real estate information, and the RPR™ is another emphatic feature to that resource. RPR™ will give Realtors® nationwide data on all properties at their fingertips so they can respond quickly to consumers interested in residential and commercial real estate. This is exciting news and a terrific NAR member benefit. NAR is committed to keep Realtors® central to the transaction and to the buying and selling experience with their clients and customers,” said NAR President Charles McMillan, broker with Coldwell Banker Residential Real Estate in Dallas-Fort Worth.

Again, we are local in real estate. I don’t care about property in Paducah and likely never will. So that we’re not beating a dead horse, let’s add another aspect to the commentary on this paragraph. We already have all this data! What?!?!? We already have all this data! Yes. It’s true. We get tax information from the central appraisal district where the property resides. We obtain legal filings at the court house or online if the matter is federal. We can get flood plain data from any one of several GIS (Geographic Information Systems) in this or surrounding counties. So why spend all this money, time, and effort creating an RPR? I have yet to hear a good answer, although I have some cynical thoughts as to why.

…

RPR™ is not a national MLS, and will carry no offers of cooperation and compensation, Stinton added. “It is a private, NAR members-only benefit. The assets acquired by NAR will be directed through a wholly owned subsidiary corporation, Realtors® Property Resource, LLC,” Stinton said.

The management team of RPR™ includes CEO Dale Ross, co-founder of the Metropolitan Regional Information System, the country’s largest regional MLS; President Marty Frame, former General Manager of Cyberhomes; Senior Vice President of Industry Relations Mona Steen, former SVP with Cyberhomes; and Jeff Young, NAR director of the Realtors® Property Resource™ and 2008 president of the Michigan Association of Realtors®.

Seems like another Realtor.com deal to me. NAR has an essentially captive audience of consumers, read members, and partners with a technology provider to use our data to resell us a product. I’m not sure if you’re aware, but that $50 per listing per year that you pay to Realtor.com to have your listings on there is exactly what I describe above. Just for a little kicker, throw in the fact that the reason people come to realtor.com is that they publish data on listings that you take and you’ll really feel the love.

RPR™ will provide nationwide access to public record information such as tax and assessment data, liens, zoning, permits, environmental information, and information on neighborhoods, school district and community demographics, along with advanced search features for property searchers, as well as market-to-market comparisons and referral opportunities not currently available.

Yep. So we already covered the fact that you can get all this data locally as paid for by your taxes or fees. Now I see this as potentially poking the bear (DoJ). The public and DoJ LOVE NAR. I mean, the DoJ loves to make sure that NAR isn’t a monopoly or engaging in anti-trust practices. That said, WHY create a GIANT target for the public and DoJ to use for the next round of anti-real estate association sentiment? Could it be that there are other, more lucrative plans for the RPR?? Maybe there is a large market out there for this and all NAR needs is to create it on the backs of it’s members, wait for the DoJ to complain, and then voila, sorry Realtor members, but now we have to open this system up to any paying entity, BY COURT ORDER. Ok, I know this could be construed as a little Alex Jones and all, but based on the last 7 years of NARs technology direction, I have no doubt that the individual member’s interest are subordinate to making money.

…

RPR™ will develop business strategies to make it affordable and feasible for NAR members, and will complement, not compete with, MLSs and CIEs.While many MLS and CIE systems provide a range of services, no two are alike. Brokers are looking for tools that support their agents across multiple markets with similar service levels and access to robust and valuable data. RPR™ is designed to support local MLS and CIE models to create a common experience for agents and brokerages.
…

For more information on the Realtors® Property Resource™, visit www.realtor.org/about_nar/realtors_property_resource.

Check out the latest from Inman on RPR.  I doubt my comments will be there long given the pro-RPR sentiment there, but you can always try and see.

Of course, the folks at RPR are busily spinning this beast as fast as she will go and only time will tell what’s to come. Would love to hear other REALTOR’s feedback!

Nothing like trying to get the real down low on our own association’s doings. It’s like trying to figure out what our local MLS is doing. Makes you recognize the clip below!

When someone is looking for a second home, either as a vacation home or an investment property, the motivation and influencing factors are very different than that from a first home buyer. This is more valid in today’s buyers market.

The National Association of Realtors (NAR) released a report that showed vacation home sales dropped a whopping 30 plus percent in 2008. It appears to have parallel reasons compared to the primary residence market. The sales came within the deeply distressed, deeply discounted home market. The median price of a vacation home fell as far down at 150 thousand dollars across the country. Of those who did settle on the second home purchase, the vast majority planned to use the second home for themselves. This means that people are still looking for second homes and are financing them.

Even with the declining numbers, there are significant pluses to this. The housing market is poised for growth again, especially in the Austin area. This also means as people are looking to sell their home, they have two potential markets to target. Growth options continue to be opened, making the housing market more viable.
Now is the time to buy, and sellers are getting more attention.