The U.S. real estate industry trembled earlier this week when Zillow announced its intentions to buy Trulia for $3.5 billion in stock. The deal, if approved, would create a colossus in the industry with more than 130 million monthly visitors and over 2,000 employees.
For years, many real estate organizations have viewed Zillow with a wary eye, concerned that the company would move onto their turf by getting involved in the real estate transaction. Zillow has long battled against this theory, with CEO Spencer Rascoff earlier this year declaring to the real estate industry that “we come in peace.” In multiple interviews, Rascoff also has noted the importance that tech-savvy real estate agents will play in brokering deals in the future.
Obviously, the message hasn’t completely resonated. At least not with the National Association of Realtors.
In a 930-word manifesto, NAR’s Steve Brown and Dale Stinton write about the challenges real estate professionals face, speaking about the power of technology to provide “instant access” and an “insatiable demand for more and more meaningful information.” They also write that “data does not define us.”
The essay does not mention Zillow or Trulia by name. But the undercurrent is clear, especially given the timing of the message.
Things are changing. And they are changing fast. And real estate professionals better keep up or they are going to get run over.
The message is especially interesting given that the National Association of Realtors is allied with Realtor.com, a division of Zillow rival Move Inc. That competitive angle is apparent in the essay, which notes that businesses always emerge to fill a vacuum. (Obviously one that Zillow and Trulia have filled with their consumer-friendly mobile apps and Web sites).
“We need to embrace competitive forces, learn from them and adapt,” Brown and Stinton write. “Competition should strengthen us because of the healthy tension it can create but we must also strengthen our resolve and stand up for ourselves.”
In addition, Stinton and Brown write that real estate professionals themselves must change.
“Your future lies in upgrading and elevating our profession to make you absolutely indispensable to the real estate transaction,” they write. “Do not fall in the trap of thinking if we just regain control of the data that everything will go back to the way it was. It won’t.”
Here’s the full essay:
Much has been made of how technology has and will affect our lives and chosen vocations. Technology speeds things up. Technology provides instant access. Technology feeds the insatiable demand for more and more meaningful information. Information wants to be free. Technology and ‘change’ are often used interchangeably to remind us that our world tomorrow will be very different than it was yesterday. Then you throw in a healthy dose of ‘who moved my cheese’ and all those other consultant driven mantras about adapting to the new world order and quickly your head is spinning and you just want it all to stop. But it doesn’t and it’s not going to!
The legendary Steve Jobs was described as mercurial, a little crazy, and passionately driven. But one of his favorite quotes tells us everything we need to know about him: “You can’t connect the dots looking forward; you can only connect them looking backward. So you have to trust that the dots will somehow connect in your future. You have to trust in something – your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.”
So what’s all this got to do with you and your participation in organized real estate? Let’s go back and connect the dots. An industry that’s come together for over one hundred years. Inventors of cooperation and compensation. Inventors of self policing through a strict code of ethics and professional standards. Inventors of MLS. Inventors of RPAC, the countries strongest political force. Inventors of yes, Realtor.com®, the first viable real estate portal, the traffic leader in the space for the first 15 years.
Here are a few Realtor.com dots. The business case for Realtor.com®, now 18 years ago, was summarized in the popular “lions coming over the hill” speech which has been repeated many many times. In its’ rawest form it said – if others harness the ability to aggregate data from your listings, and capture the consumer upstream, you will be disintermediated. Therefore, in exchange for using your listing data to make commerce, we will cause to be created a Realtor®-friendly, accurate, time sensitive, site with explicit guarantees not to threaten your commission or disintermediate you. To this day, Realtor.com® has kept its promise and it will continue to do so.
But as in any business, where there is a vacuum, the market will move to fill it. This is a good thing. We need to embrace competitive forces, learn from them and adapt. Competition should strengthen us because of the healthy tension it can create but we must also strengthen our resolve and stand up for ourselves.
As Realtors®, data does not define us; our insights, experience and expertise run much deeper than that. So as the industry moves forward, we have to look at ourselves – and better define our value proposition.
NAR believes that a highly skilled and professional Realtor® is and will always be integral to the process of buying and selling real estate. The association and its leadership is committed to promoting and supporting the Realtor® brand and Realtor® value proposition to consumers. In the internet age, consumers are going to go online for real estate information, but they will continue to rely on local experts when they buy and sell property. NAR is committed to ensuring that Realtors® are those local experts.
So just as data does not define us, nor should we allow service providers to become too comfortable in defining how you conduct your business. In practical, actionable terms – this is what you can do:
Demand the brokers and the listing agents identity be prominently displayed
Demand timely, ‘fresh’ listing display
Do not allow your listings to be modified
Do not allow co-mingling of your listings with FSBO’s
Demand preservation of copyright notices on your listings
Demand that your provider highlight and promote the term Realtor®
AND – NEVER, EVER let any provider threaten your commission!
This advice is provided as a way to emphasize that your listings, your data were acquired by you through tremendous work and effort, and a heck of a lot of money is being moved around in the marketplace predicated on you continuing to provide it. It’s seed corn – don’t squander it.
Now comes the hard part – we must be brutally honest – you must change and quickly. Your value proposition is not data – it’s YOU! You must be the best and you must be the most professional and ethical. For too long we’ve allowed the term Realtor® to be bandied about as a low ranking career choice. Your future lies in upgrading and elevating our profession to make you absolutely indispensable to the real estate transaction. Do not fall in the trap of thinking if we just regain control of the data that everything will go back to the way it was. It won’t. A quote from the NAR Strategic Plan says it all – “We need to be totally consumer centric – not what we want but what they want – and be able to adapt quickly.”
With over 1 million members it’s time, as Steve Jobs said, to trust in something, and that something is a history and a future of which we all can be proud. Connecting a million plus dots is never easy, change can be excruciating – but if not now, when?
2014 NAR President
NAR Chief Executive Officer