The Big Thaw and the NAR Settlement
Friday certainly did not go as planned. The NAR settlement changed the course of my day and weekend. More on that later. Spring has sprung in Jackson, WY. The Big Thaw from winter to spring has begun. Yesterday was nearly 50 degrees, and we expect high 40-degree weather with sunny blue skies again today. A few great weekends of spring skiing still ahead. Switching to the big thaw in residential real estate: consumers no longer seem to have expectations that interest rates will return to 2022 levels. The stability of 6 percent mortgages is driving consumer confidence and activity. Mortgage buy-downs are becoming more popular. The Goldman Sachs chart below suggests interest rates may fall to 6 percent flat over the next two years. Coming off the lowest unit volume of 2023 in decades, the Realtor.com trend lines for new listings by month are positive compared to 2023. As we near the end of Q1 2024 and enter the traditional spring selling season, it seems that buyers will have more choices. The Realtor.com Active U.S. housing inventory for sale chart below has inventory building beyond levels seen since 2021. Now it's the buyers' turn to take down the inventory. Come and get it! Our markets across the country perform very differently; real estate is local. From my listening posts, Q1 2024 has been busier than any Q1 since 2021, which included record low interest rates and the great COVID migration. We are all thankful for the thaw! Regarding the NAR settlement: it represents an exceptional opportunity for the good to become great. This includes real estate professionals and brokerage firms. Those individuals and/or companies that focus on perfecting the expression of their value proposition will gain market share. It's that simple! If you have deeper questions, please call me. This is Where We Are Now. Mark McLaughlin serves as CEO of McLaughlin Ventures and M&A Advisory at WAV Group. To view the original article, visit the McLaughlin Ventures blog.

Sunrises Follow Sunsets: Mark McLaughlin on His Return to Compass
To amplify Compass' improved Q2 2023 financial reporting, I am pleased to report on my reengagement with Compass as Chief Real Estate Strategist. In my August 2021 Compass exit message, I stated that I would be available to Compass as a strategic consultant going forward. This was very true in casual conversations with Robert once every 45 to 60 days or so through during the last 24 months. In May 2023, these conversations heated up. Greg Hart, COO of Compass, Inc., came to visit Jackson, WY. We spent three sessions of time together covering business and personal conversations. It was very clear to me that Greg's outlook on our industry, market dynamics, and opportunities were nearly identical to mine. In June 2023, I made a trip to NYC and visited with Robert, Neda Navab, President of Compass, Inc., and several other key executives. Once again, the vision and conviction for growth and operational excellence was clearly aligned with my own. The combination of the technology platform and empowering local leaders will reduce friction and add velocity to the business. What I really missed about the business was the people and my ability to lead and motivate. The professional staff and the real estate professionals that rise daily to meet the passions of our clients living the American Dream of homeownership. Does it get any better? Current market conditions seem to be at a "bottom." Like we did with Pacific Union in 2009, we will drive Compass for market share gains and operational excellence to outperform the broader markets in the 24 months ahead. I appreciate Compass' confidence in me. I aim to gain the trust of the 30,000+ real estate professionals and professional staff that call Compass home! I am motivated and I will make a difference. Keep an eye on us. This Is Where We Are Now. Mark McLaughlin serves as CEO of McLaughlin Ventures and M&A Advisory at WAV Group. To view the original article, visit the McLaughlin Ventures blog.

Do Your Part in Eliminating Sexual Harassment from the Workplace
After a career that spans several decades, I am saddened to see that allegations of sexual harassment are still alive and well in our industry. I would have thought that we could have eliminated these challenges by now. After having completed my Sexual Harassment Prevention training myself just a couple of weeks ago, a program which is mandated by the state of California, it piqued my interest to find out how many states require sexual harassment prevention training. I was shocked to find out that only seven states (California, Connecticut, Delaware, Illinois, Maine, New York, Washington) and the District of Columbia mandate sexual harassment training for some or all private sector employers and employees today. California requires sexual harassment training for all employees. Under the California Code, employers with at least five employees or contractors must provide sexual harassment prevention training to all employees, including supervisory and nonsupervisory employees, every two years (CCR 12950.1). Even in California, however, a state VERY focused on sexual harassment prevention, employers are NOT required to provide sexual harassment prevention training to independent contractors. According to the Civil Rights Department of the State of California: Do employers need to train independent contractors, volunteers, and unpaid interns? No, but employers might consider doing so to be a best practice. However, in determining whether an employer meets the threshold of having 5 employees and is subject to the harassment prevention training requirement, independent contractors, volunteers, and unpaid interns are counted. For example, if an employer has 2 full time employees and 6 unpaid interns, the employer will meet the training threshold requirement and would need to ensure the two full time employees receive training. Just because few states require sexual harassment prevention training, and mandates exclude independent contractors, doesn't mean every brokerage, technology company, association and MLS and consulting firm should not proactively require it. For Mandate States: If you live in any of the states that mandate sexual harassment prevention training, make sure you are up to speed on the requirements and ensure you and your staff are fully compliant with the specific laws of your state. There are several options to provide FREE training. Some offered by the state government and other providers are available too. For Non-Mandate States: There is inexpensive online training available you can encourage/require each of your employees and independent contractors to complete. Below are some resources to get you started in your search for the right product for your organization. Here are some good articles and free resources from the Society of Human Resource Management. Here are some very inexpensive online training courses: Behave at Work – $29.95 Clear Law Institute – $10 Pro Trainings – $19.95 FREE Harassment Policy Language It goes without saying that every one of us must take responsibility for creating an environment where inappropriate behavior is not tolerated. Every one of us needs to do our part to eliminate sexual harassment forever. To view the original article, visit the WAV Group blog.

Cash Is King
A Conversation with Mike DelPrete Earlier this year, I had the pleasure to visit in person with Mike DelPrete. We enjoyed conversations together on four topics. Immediately after, I joined Mike in his classroom and shared my thoughts on the brokerage business with his very bright college juniors at The Leeds School of Business, University of Colorado at Boulder. Go Buffs! This post is two of four topics we connected on in our conversation. Mark McLaughlin serves as CEO of McLaughlin Ventures and M&A Advisory at WAV Group. To view the original article, visit the McLaughlin Ventures blog. More Articles in This Series Why Agents Will Remain at the Center of the Transaction Will the Agent Survive the Brokerage? What Is the Most Significant Sector of Proptech Going Forward?

We Are Likely to See More Banks Fail
The Minsky Moment is a term coined by economist Hyman Minsky, describing a crucial point in the economic cycle when a period of rapid growth and increasing optimism leads to excessive speculation and risk-taking in financial markets. This can ultimately result in a sudden collapse in asset prices and a crisis in the financial system as investors and institutions find themselves unable to repay their debts and meet their financial obligations. The recent banking failures in America have been caused by a combination of factors, including the Federal Reserve's decision to increase interest rates by 4,000%, which has distressed the short-term bonds that banks use to shore up their liquidity. This has led to a liquidity crunch, with many banks struggling to meet their financial obligations. US Bank and the Bank of the West were acquired by other banks in January and February because of stress to their liquidity. Silicon Valley Bank and Signature Bank were taken over by the FDIC because of liquidity, and Credit Suisse was forced to sell to UBS for the same reason. An additional effect of the raising of interest rates at the fastest pace in history is the crisis caused in the mortgage industry. Most existing homeowners are currently enjoying low interest rates, reducing the likelihood of moving or refinancing. This has led to a slowdown in the housing market, as fewer people are buying and selling homes. As a result, mortgage lenders are experiencing a decline in revenue, as the demand for mortgages and refinances decreases. On top of it all, the Fed stopped purchasing mortgage-backed securities in September of 2022. Overall, the recent Minsky moment has highlighted the fragility of the financial system, and the need for policymakers to take action to address the underlying issues. The Federal Reserve's decision to increase interest rates played a significant role in this crisis. Unless the Fed reverses course on hiking interest rates, they will be creating a much bigger problem than inflation – the collapse of our banking institutions and capital markets. While some see the handful of banking failures as anomalies, I see them as the tip of the iceberg. In terms of stock market, we are more likely to see a 12% drop this quarter than we are to see even modest gains. In terms of the housing market, there is some potential for investors to see the stability of housing to protect their cash – rather than risk the uncertainty of cash tied up in failing banks. To view the original article, visit the WAV Group blog.

Distilling Inside Real Estate Buying Boomtown
We have seen a lot of M&A transactions in real estate that have sent chills down the spines of customers – Zillow buying anyone, CoStar buying anyone, Compass buying Contactually and Glide, Lone Wolf buying Instanet and zipLogix. On the other hand, there are acquisitions that cause no fear or doubt, like MoxiWorks purchasing Imprev or, in this case, Inside Real Estate acquiring BoomTown. Many WAV Group clients have called to ask us why Inside Real Estate would purchase a company that does many of the same things that kvCORE does. As a point of disclosure, we were not involved in the transaction, but we do have some thoughts. It is true that the DNA of lead generation, team and agent website, and CRM are central to the elements of kvCORE and BoomTown. Years ago, the two companies dueled it out as the best product for teams. When Kunversion was acquired by Inside Real Estate, they brought their leading agent and team tools to the enterprise brokerage market through the rollout of the kvCORE platform. Today, hundreds of thousands of agents are on kvCORE through brokerage licensing of the platform – EXP, RE/MAX, BHHS/HSoA, Weichert, Royal LePage, NextHome, Keyes, and hundreds more. Inside Real Estate has done an amazing job of building out a brokerage-in-a-box solution for the brokerages that need one, yet allowing for customization and brand autonomy for larger enterprise customers. Regardless of brokerage size, kvCORE offers a wide range of integrations and marketplace solutions, giving flexibility to users from the agent level up to the top. The company is positioned with a handful of others as a single platform that does everything that a brokerage needs. Size Matters: Reduction in Costs The first benefit of the acquisition is revenue. BoomTown, like Inside Real Estate, is a big company. Size matters, and many redundant expenses born by two companies will represent a reduction in operating costs for both – think about data aggregation, data license fees, API management, marketing, accounting, etc. Moreover, they both are excellent at operating paid marketing campaigns. Diversify the Offering There are many teams and agents that have access to kvCORE from their brokerage, but choose to pay extra for BoomTown because they like the user experience more or because they want to be differentiated from other agents in their office. On plenty of occasions, a top producing agent or team at a brokerage firm is in competition with another top producing agent or team at the same firm. Having something different makes a positive difference at retaining top agents and teams. It is similar to the way that NASCAR has multiple drivers with different car configurations. Expand the Offering There are a lot of things that are available from Inside Real Estate that are not available in BoomTown. Rather than list them all, please visit the Inside Real Estate marketplace. I am sure that BoomTown agents are going to jump on the opportunity to access those tools, driving additional revenue and adoption. Like-minded Thinkers One thing that we are able to see from our perspective at WAV Group is the similarity and like-mindedness of these two companies. I am sure that Joe and Grier are finishing each other's sentences already. I expect that this acquisition will find two groups of great people coming together and expanding on a shared mission of brokerage profitability in the best possible way. Congratulations! [Screenshots credit: Houlihan Lokey] To view the original article, visit the WAV Group blog.

Democratization of House Flipping
Modern house flipping can be traced back to the autumn of 1960, when President Dwight D. Eisenhower signed Real Estate Investment Trusts (REITs) into law. Believe it or not, the legislation creating REITs was tucked into the Cigar Excise Tax Extension Act. For the first time ever, a broad base of investors could now pool resources for real estate projects, specifically commercial real estate development. In effect, REITS gave birth to the democratization of real estate investment. Everyday investors could now participate in a huge asset class that was previously exclusive to wealthy corporations. REITS provided increased attention on real estate as an overall investment, expanded the investment opportunities, and had a knock-on impact on residential real estate. The Bob Father ‍Jump ahead to the 1980s, which gave rise to a home improvement frenzy. The man behind the craze was Bob Vila. In 1978, he won the Better Homes and Gardens "Heritage House of 1978" award for restoring a Victorian Italianate-style home. Because of his impact on our culture at the time, it's not far-fetched to consider Bob the father of house flipping. In 1979, the PBS television show This Old House debuted with Vila as its first-ever host. Focusing on home renovation—typically of older houses of modest size and value—the popular program involved homeowners participating by providing work assistance, or "sweat equity." The program popularized the idea of home improvement, exposing millions of consumers to an "under the hood" look at home renovation. In addition, This Old House spawned dozens of imitations and other related home-improvement shows on cable and network TV. It's no coincidence that the summer before the show began, the first Home Depot opened the doors of its first two stores. By 1989, it was the largest home improvement store in the U.S., bypassing Lowes (operating since 1921). The popularity of the home improvement projects that fueled Home Depot's growth forced Lowes to change to a big-box model to survive. Foreclosure Fuel ‍The 1980s gave rise to 18.5% mortgage rates and a huge spike in foreclosures, which offered capital-enriched investors the ability to purchase a home at well under its after-repair value (ARV). The industry rule-of-thumb for house flippers was to pay no more than 70% of a home's ARV. When buying a home to flip, investors estimate what they believe the property will sell for after renovating it. To calculate the purchase price target, flippers multiply the anticipated sales price by 70%, and then subtract renovation costs. Recessions often cause a spike in home foreclosures and result in significantly increased house flipping activity. That's not to say home flipping occurs solely during recessions or when foreclosures are plentiful. On the contrary, home flipping can—and does—occur during all real estate cycles. For example, in 2019, the U.S. foreclosure rate hit a record low of 0.36% of all U.S. housing units. However, that still represents nearly a half-million units in foreclosure. More importantly, it is not just foreclosures that have untapped value. Most homes being sold often have the potential for a higher price—and a higher return—after proper repairs and renovations. Internal research at Revive indicates that when a home is sold "as is," some 15% to 20% of the value remains on the table. If the house were renovated, our research also shows that the average homeowner could increase their net proceeds by an average of $186,000. In higher-priced markets such as California, average net proceeds are significantly higher. That's a huge amount of money that most homeowners leave on the table. But flipping is not for everyone—at least not yet. Without experience, the risks are significant, and even the savviest flipper can find themselves upside down from forces beyond their control. House flipping is a stressful, intense, hands-on investment that takes capital and liquidity, the ability to endure delays, and the skills (or ready and reliable access to the skills) required for the remodeling. It also needs the project management skills, tech, and perfected processes to succeed financially. House Flipping for All ‍In Southern California, entrepreneur Michael Alladawi (Revive co-founder) helped his family diversify their investments from banks into the safe haven of real estate when the U.S. financial crisis hit in 2008. An abundance of foreclosed single-family homes were auctioned off on courthouse steps and Michael saw an opportunity to fix and flip. In 2009, he teamed up with former Blackstone employees and created a real estate investment fund that targeted value-oriented real estate investments and development projects in Southern California. He ended up flipping more than 1,000 homes in Southern California. After watching his friends and family struggle with home remodeling projects, he saw a huge gap in the home renovation industry and decided to do something about it. Michael knew that average homeowners desired the benefits of flipping their own homes, but many lacked the knowledge of what features to improve, the experience and skills, or access to the required capital. It wasn't until 2019 that Michael believed that he could democratize house flipping with the right technology. That's when we connected. Michael wanted to see what it would take to create the technology infrastructure to scale his home flipping business model. He tracked me down and after showing him what was needed, I eventually offered to partner with him and grow Revive to take his house flipping mainstream. Building Upon a Trend ‍Both iBuyers and the newer Power Buyers category have proved they are not fads. By the end of 2021, iBuyers accounted for almost 120,000 transactions, or 1.3% of the market. Likewise, Power Buyers are growing exponentially, with leading firms reporting 200% to 500% growth in their business in 2022. But there's another even more compelling way to sell. In October 2018, Compass launched a "concierge" program in the 22 markets it served. A year earlier, Redfin had debuted a similar concierge service in Los Angeles and DC. Compass' revolutionary concept was the game-changer: Compass would provide the funds for home staging and improvements, getting paid back only when the house is sold—just like a house flipper. But the Compass strategy focused on the financial part. The harder challenge was replicating the tenacity and grit of flippers, which is required to hire contractors and manage their work, while handling the delays and surprises that come with flipping houses. Still, Compass' move to fund seller improvements spawned today's fast-growing solution for expanding options for sellers: the Concierge or Listing Concierge category. Also known as presale renovations—allowing sellers to renovate now and pay later—the potential for growth in this new sector is massive. We envisioned a solution that would expand what Compass did so that any brokerage, agent, and homeowner could emulate the home flipper model: Maximize the property's value to get the home's highest price possible. That solution became Revive—and it doesn't put a cap on the renovation amount. If a $300,000 renovation of the right improvements will bring in the best return, then that's the right spend. It's what a house flipper would do. Democratizing the Flip ‍Two words will drive the growing popularity of presale renovations: wealth creation. Like a house flipper, sellers can reap all the benefits of maximizing the value of their home, but with none of the hassles or risks. When people think of presale renovations, they may think of it as a limited market segment that only includes homes valued at $1 million or more. While that is not the case, the explosion of homes valued at $1 million alone could catapult the growth of the Concierge category. According to Redfin, a record number of U.S. homes—six million properties—are worth at least $1 million or more, almost doubling from 3.5 million properties pre-pandemic. In the largest real estate market in the U.S., California, the percentage of new homes worth $1 million or more is astounding. In San Francisco, it's 89% of all homes. In San Jose, it's 86%, and in Anaheim and Oakland, it sits at 55%. As the market changes, brokerages must provide their agents with access to every tool available to offer their buyers and sellers. As the Concierge category expands its reach geographically, so will demand as homeowners embrace a new way to unlock previously untapped wealth. The potential of additional annual wealth creation is staggering. Every year, some five-to-six million existing-home sales occur. If just 5% of these homes chose a presale renovation, total seller wealth would increase by tens of billions of dollars. Estimates suggest that real estate agents could earn more than $1.4 billion in additional real estate commissions. If a brokerage nets 0.5% of the sale, that's an additional $280 million in revenue from presale renovations alone. Like the world of commercial real estate investing before REITs, presale renovations for ordinary homeowners to flip their home were also limited. The emergence of the Concierge category enables the fixing and flipping of homes with minimum risk, capital, and effort—while maximizing the value of a home being ready for sale. It's a revolutionary change in the selling of homes—a change that sellers, agents, and brokerages will welcome. And I couldn't be more jazzed about it. To view the original article, visit the Revive blog.

Motley Fool Reviews Compass with Interesting Observations
When I saw the headline of Motley Fool taking a deep dive on Compass, I really expected Jason Moser and Matt Frankel to get it wrong -- most of Wall Street does. Normally, Motley Fool gets it right -- beating the stock market by 4X. They threw me off by talking about Compass as a software company. We all know that Compass is investing more in software today than any other brokerage in the world (including Zillow)—but that does not mean that they are a software company. They are a company that invests heavily in software development and they have amazing people crafting that software, but the heart of Compass is the same as Berkshire Hathaway, Realogy Brokerage Group and Howard Hanna: they are a real estate brokerage with a lot of agents. What Jason and Matt did get right is that Compass is far bigger than Redfin or all iBuyers combined. Compass has 6% market share in the US and they only operate in about 50% of the markets. Redfin has 1% and is nationwide. iBuyers are at 1% and are not even close to 50% of the markets. What Motley Fool missed is the massive referral revenue that iBuyers get on seller lead generation. I believe that is going to drive margin much faster than flipping properties. Where Compass gets interesting is in their title and mortgage business. It seems like Compass announces another title company acquisition every week, and their partnership with Guaranteed Rate, a mortgage company, gives them the full-service capacity. Few brokerages outside of firms like The Realty Alliance have done this. I am expecting Compass to make a significant move in insurance soon. Wall Street and Motley Fool have not really factored in the multiple on revenue for these home services companies that will create a durable long-term value for the firm. Another thing that Jason and Matt got right was Compass' growth. Everyone knows that brokerages are all having a ton of success right now, but Compass' growth is four times the industry average. However, they missed the reasons why. Compass is growing because they try to hire the best agents in the markets they serve at any cost. They know that high-quality agents coupled with high-quality systems and home services is the key to success. The review did not even mention Compass Concierge—a program that fixes up a home before they list it. Concierge is proving to drive top market prices repeatedly. Not only do homebuyers see the difference, but appraisers see it too. At one point in the interview, Matt talks about a home that he listed which sold in a day; the agent got $24k in commission and sold it to a buyer that he already had. He feels that he should have paid less in commission. What Matt does not understand is that companies that have listings and have buyers also have more valuable services—not less. Perhaps many consumers think this way. I have always said that the No. 1 reason for brokers to offer Buyside is because on a listing presentation, the agent talks about the qualified buyers that they already have for the home. "Sign here, press hard, and we will have this home sold quickly. Sure, we will market the property like other firms too. But we already have a headstart." The last comment that I will make is one that Matt got right. It surprised me. Compass is operating at a high scale. Moreover, unlike Keller Williams, RE/MAX, and a pile of other brands, their technology works for their agents and is embraced by them. They have done the heavy lifting of building a data company with lots of applications that all talk to each other. This is really hard work. Realogy is getting there with MoxiWorks, but it takes a lot of time. The top Realty Alliance and LeadingRE firms are there. The biggest issue for Compass today is the balance between growth and profitability. Clearly, Compass is focused on growth today, clocking in at 140% over the past year. Not bad. But someday profits are what the market will prefer. Check out the video of the Motley Fool Deep Dive on Compass below: To view the original article, visit the WAV Group blog.

How NAR Got It Wrong in 1988 May Teach Us Something About Today
When George Slusser joined WAV Group to lead our Mergers, Acquisitions, and Valuations team, we all reviewed his book titled Acquiring Profit. I love reading old business books because time is a cruel fact-checker, and also because the thoughts of leaders in the past give us great guidance for our current forecasting predictions. Namely, don't make them. When the book was written, the National Association of Realtors predicted that their membership would shrink from 820,000 to 500,000 by Y2K – the year 2000. At that time, there were also around 70,000 brokerages. The thought of industry leaders at the time forecasted the demise of the small, single office mom-and-pop brokerage. Oops!

Why One-Stop Shop Is a Fallacy
After 30+ years in the real estate industry, I find a truism that resonates with me. "The more things change, the more they stay the same." A case in point is our industry's quest to create a "one-stop-shop" for consumers. It has been a highly prized Holy Grail coveted and touted by experts and category leaders since I have been in the business. But the pragmatist in me, combined with personal experiences, has taught me to question conventional wisdom. So, I do. I have often found that conventional wisdom is just plain wrong.

Insider's View: MoxiWorks Acquisition of Imprev
At 6:30 am, a text appeared on my phone from a great friend and former colleague. The story he sent had this headline: "MoxiWorks Acquires Imprev, the Best-in-Class Marketing Automation Service." My immediate reaction? This was fantastic news for Imprev and MoxiWorks. My DNA is part of Imprev. I've had the pleasure of knowing and working with Renwick Congdon, founder of Imprev, for nearly 20 years. Both firms are Seattle-area based. Both have hired and developed a team of exceptionally talented, passionate, and loyal employees. These folks are super nice people whom you enjoy being around.

May We Please Start Saying 'My Pleasure' Instead of 'No Problem'?
Customer service in real estate is paramount. It's a key differentiator promoted by the vast majority of brokerages and agents. It's vital because real estate is a relationship business. I've written about this before, but growing up and working for my dad in the hotel business, I was taught how essential it was to provide exceptional customer service. That has made me acutely aware of the overall decline in excellent customer service in our society at large.

Houston 2020: A Historic Dive into America's Biggest Boom Town
If you don't know the name, Ralph Bivins, then you've likely been insulated from Houston's real estate scene. Bivins is Houston's most enduring and prolific real estate observer, reporter, champion, and now, author. Houston 2020: America's Boom Town – An Extreme Close Up is the rookie author's new book in which he does a deep dive into one of the nation's fastest-growing and most remarkable cities. Bivins explores not just the projects and the people that mastermind this massive city but its global impact. He doesn't hold back and explores the good, the bad, and the ugly of Houston. Houston 2020 is a must read—even for those who have never been to Houston or have no connection to its the area whatsoever. I will tell you why.

What Real Estate Brokerages Can Learn from 'The Avengers'
Movies based on superhero comics are a serious staple of nerd culture, but believe it or not, they have a big potential impact for businesses like real estate brokerages, too. And it isn't just tied to selling comic books. Now, with the recent release of Avengers: Endgame, we thought it would be fun to take a look at what's made these movies so popular over the years—and what real-life lessons brokerages can learn from them.

How iBuyers Die
iBuyers are all the rage in the investment community. Given the enormously challenging economics of the iBuyer business model, I'm not yet sold that these companies will come to take a large bite out of the real estate pie. What clues can we take from Zillow's traditional and new iBuyer model to peek into the future of the real estate industry inclusive of iBuyers? What can ultimately kill iBuyers?

What's Wrong With Real Estate Tech?
In the beginning Everyone is aware of how the real estate industry operated 15 years ago. Agents controlled access to listings, the MLS carved out a competitive advantage as holder of the lock and key, and consumers had no option but to chat with a Realtor or jot down notes from a for-sale sign to engage in buying or selling a home. Then it all changed, sort of.

Lone Wolf's New CEO Jack Blaha
WAV Group and RE Technology would like to welcome Jack Blaha to the real estate industry. This article is part of our Follow the Leader series that highlights real estate's most profoundly impactful CEOs. Blaha (pronounced Bla-ha) has taken the helm at Lone Wolf Technologies, replacing CEO Patrick Arkeveld who has moved up to Executive Chairman of the company. (Lone Wolf founder Lorne Wallace continues in an executive advisory role with the company).

Influencing the Future: Insights from 2 of Real Estate's Most Powerful Voices
If you've spent any time reading our broker and MLS channels, you undoubtedly recognize the name "WAV Group." They're not only the dominant voice on those channels, but the founders of WAV Group are also the founders of RE Technology. Every year, we look forward to seeing the names of WAV Group partners Marilyn Wilson and Victor Lund appear on lists of the industry's most powerful and influential. In December, the duo was named to RISMedia's 2019 Real Estate Newsmakers list (see here and here). And just this month, Marilyn and Victor were listed on the 2019 Swanepoel Power 200, a comprehensive list of the most powerful people in the residential real estate industry.

Do We Need a National MLS?
The Pros and Cons of It Today we're tackling a big question: Do we really need a national MLS? Who stands to benefit the most? Who would suffer? Below is an overview of the pros and cons and common questions I've had during conversations with home buyers, real estate technology companies, and brokers.

Why Is Real Estate So Obsessed with Innovation or Disruption?
I was inspired by a Facebook post the other day that asked the question, "Name one thing that government has made cheaper and more efficient." Okay, it was not really a question. But it was a command that begged a question. As I looked though the answers, I could only be humored by the banter posted by some people that I knew, others that I did not know. For a while, I also contemplated a list of answers. I even did a bit of research. Then I started to break down the question. First with "government"—national, state, county, city, village, town, and so on—I wanted to know which government. Then I turned to "things." What are things that government... yadda, yadda. After toiling with the game in my mind, I came up with my post.

Compass Is Really a Branding Agency for Agents
In the media, you hear that Compass is a traditional brokerage driven by incredible technology that gives their agents an advantage in the marketplace. Frankly, I have registered for Compass' website and mobile apps as a consumer and have not experienced anything extraordinary yet. We will continue to watch how they evolve their technology. It takes a very long time to do this, especially if you are trying to keep up with the data integrations driven by their market growth.

Days of Disruption
Disruptors seem to be a dime a dozen these days. At least they're self-defining themselves as disruptors. I cringe every time I come across the word because there is nothing disruptive about many of their technologies. They aren't turning the industry upside down. They aren't replacing brokerages or agents as a part of the transaction. They are building new software and processes designed to make this industry more accessible, more secure, more reliable, more profitable. Many of these self-defined disruptors have great products, services, and technologies that will improve the day to day of working in real estate. Let's call a spade a spade – we're surrounded by innovators, not disruptors.

Is Technology Helping or Hurting the Real Estate Industry?
"When Keller Williams is renaming itself a technology company, it's probably fairly important," said Mike Schneider, CEO of First.io, in Onboard Informatics' recent Technology Panel. There's no doubt technology is important, but we wanted to know from the group if they felt real estate was helping or hurting our industry. The overwhelming consensus? Real estate companies and professionals benefit from technology, but only when they use it right.

Holiday Lights Obsession, Explained
No, my house has not been featured on "The Great Christmas Light Fight." My thousands of lights are neither programmed nor synchronized to holiday music. The International Space Station can't see my Bainbridge Island, Washington home from orbit. I am just a guy who every year, for the last 20-plus years, has found the time to squeeze in dozens of hours to brighten our home for the holidays. From climbing ladders and walking on our high-pitched (formerly wood-shake) rooftop, to donning lights, stars and a blazingly bright cross made by our then 8-year old son and his granddad, to blanketing our front yard with classic cartoon character blow molds, animated blow ups, rope lighted deer and tens of thousands of LED lights.

How Will iBuyers Affect Traditional REALTORS?
iBuying is the process in which home sellers bypass traditional listing and sales practices, receiving in exchange both cash from a third-party investor and an accelerated closing schedule. For many home sellers over the last few decades, this iBuying concept has been the stuff of dreams – sweet dreams. For many real estate agents over the last few decades, this iBuying concept has been the stuff of dreams, too – but for them it may have been nightmares.

Steve Murray Appointed to Lone Wolf Board of Directors
WAV Group would like to congratulate the Lone Wolf board of directors for expanding their ranks to include Real Trends President, Steve Murray. It's a great move and brokers should celebrate! If you are not familiar, Lone Wolf is among the largest technology providers in the real estate industry with a focus on broker back office solutions where they are the market leader. Their accounting solutions have profound market share – likely exceeding 50 percent of all brokerage firms in America. Last month, Lone Wolf acquired Instanet – making Lone Wolf either the no. 1 or no. 2 provider of forms and transaction management solutions for brokerages. Lone Wolf has a vast array of tools that complete the full footprint of any technology stack that brokers want to deploy in their business today. If a company is looking for a complete lead to close solution, Lone Wolf may be the only company that has the entire system. Real Trends has been consulting with the broker community for decades and Mr. Murray is clearly the most experienced consultant at putting together brokerage mergers and acquisitions. Murray has a keen eye for helping brokerage firms develop profound and meaningful value in their company as an asset. When you look at business development and operations though that lens, Real Trends is expert.

Why Millennials Deserve Respect
What comes to mind when you hear the word "Millennial"? A quick Google search prompts you to finish the statement "Millennials are..." with negative descriptors that start with every letter of the alphabet. It seems like 18 to 35 year olds are facing such heavy criticism that "Millennial" has become a derogatory word. This kind of reproach occurs with every generation. Elders consistently believe that their younger counterparts are foolish, lazy and entitled. No doubt there are members of Gen-Y who are accurately described by these words, but it would be a serious misunderstanding to believe that they are the majority.

Zillow Is a Broker – So What?
"Berkshire Hathaway Home Services, NRT, Redfin – all brokers. Do brokers drop out of IDX because they are selling homes in their market? Brokers share their listings with these large firms every day. If Zillow joins the list, what's the diff?" This is the conversation starter that an investment banker had with me today. I appreciate having conversations with people in the capital markets. Bankers see the world differently. They believe that markets shape themselves and that great companies lead markets. Perhaps Zillow Group has its heart in its current service offerings today. The company protests against becoming a brokerage, but everyone got very upset recently when they launched a pilot for Instant Offers that seemed broker-like. It's a program where Zillow helps investors buy property by submitting offer letters directly to homeowners. Brokers don't like it. Some agents really like it.

March Madness, Competition, and Upstream
Ahhh... March Madness. I love everything about it. Team dynamics, competition, and the sheer will to win. If you give any credence to the media, you'd think there's a game to be won within the real estate industry for control of data management. That's understandable. Looking at how our industry has evolved over the past 18 months, it's clear that most data vendors and portals also see the need for an "Upstream-like" data repository. Many vendors and portals (and some MLSs) have either introduced one or are working on one. So we seem to have a consensus that property data must be better managed, and perhaps in a single source location. The question is no longer "Is it needed?" but "Who is the best entity to create and operate the database?" Every entity creating their personal "Upstream" is fighting to obtain a significant critical mass of data to ensure they become the standard for data management and control. Vendors will position their "Upstream" as a free (or nearly free) incentive to leverage your collective data to get you to commit to their products and services. There is no free lunch: what is given away up front always has a price somewhere down the line. It's a familiar model that portals have used to move into a control position for consumer website interaction. As an industry, we gave up that position of control and, without efforts like Upstream, are precariously headed there again. To be clear, these are not evil companies trying to destroy our industry. They rely on our industry for their livelihood, but make no mistake: they do not share our goals and objectives. They are looking to monetize the data for the benefit of their company, while brokers are looking to manage the data to benefit our industry. There's nothing wrong with either, but the two will not always be aligned. The good news is that both a for-profit and an industry centered solution will benefit the consumer in cleaner, more accurate data so consumer benefit need not be drawn into the conversation.

DocuSign's New CEO: 'Why I’m Proud to Sign on'
When I talked to friends and family over the holidays about my excitement to join DocuSign in the New Year, I was astonished by the response. One after another would comment: "DocuSign? I love DocuSign." People's enthusiasm for DocuSign matched my own in every instance. Whether it's buying a house, closing a deal to meet quota, or signing a parent permission slip for a school field trip, people have a very real and very strong connection with this company and its products. And it makes sense. DocuSign helps you take care of important things quickly, easily and securely – so you can get to other, often even more important and higher value things in both life and business. It's so fast and easy that you wonder why you ever did it any other way. That's powerful. And it's why I'm thrilled to be joining the company as CEO. That, and the tremendous opportunity ahead of the company and our team across three dimensions: 1. Impact. Anyone can use this technology to make their lives and their businesses better. The team here is defining and growing a category with incredible breadth. There is not another private Software-as-a-Service company that has bigger potential. Every individual professional, every small business, every global enterprise and every business department therein are potential customers; and every consumer is a potential user. Already, DocuSign has significant scale as the pioneer and global standard for eSignature and Digital Transaction Management with more than 100 million users across 188 countries. And we're adding 130,000 new users every day as we expand into new industries, new markets and new geographies. That's exciting.  

Why Zillow is Wrong About Halloween
I have a bone to pick with our friends over at Zillow. Every year they do a list of the best places to trick or treat on Halloween. This is this year's list: Yet again New York did not make the list. Why?! To make the cut, trick or treaters must be able to get serious candy in a short period of time. So Zillow considers home values, proximity of homes to one another, crime rate and percentage of youngsters under 10. Well – it's no wonder New York didn't make the cut! Sixty-nine percent of the population are renters and 86 percent of us are over 10. But I am here to make a case for New York trick or treating. New York does Halloween better than any other city in the country I'll give other holidays to other cities. Last year we officially said Rochester was the best city for Thanksgiving. Paris probably has Valentine's Day. Las Vegas can have bachelor parties (is that a holiday?).  St. Patrick's Day can go to Chicago or Boston. But New York has Halloween. We have a parade with over 50,000 people, a jack-o-lantern blaze with 7,000 pumpkins, a Halloween dog parade, horror film festivals, and countless haunted houses. Even our museums host Halloween Parties! It's also widely known that New Yorkers like costumes. We have Fashion Week, Broadway, the Met Gala....we even dress up for Christmas. So yes, Halloween is a big deal in Gotham.

Real Business is Personal and Authenticity Lasts a Lifetime
I filmed at a business innovation conference a few years ago. The conference was run by MBA students from a prestigious Canadian university and attended by prominent business people from all over North America. I was paid by the MBA students to film the conference. That included all the keynotes, some of the breakout sessions, and all of the fancy snack and alcohol consumption. I was a one-man crew, handing all of the lighting, audio and camera. I filmed all Friday night, all Saturday day and night, and half of Sunday. I was also underpaid, but that's another story. The most important thing for me to capture was the interviews with the four keynotes and the seven conference organizers. I'll admit I was a little intimidated at the conference. I was an Arts student with no business experience and some of the concepts went over my head. I did learn one very important life-lesson though: Real business is personal and authenticity lasts a lifetime. Let me explain.

Managing Innovation Generated Team Conflict
The American real estate industry has been tracking, examining, debating and denying a wide range of innovative disruptions and transitionary forces over the past several years. By way of example, transaction management has been on the industry menu for almost 20 years and is just now about to become mainstream. Agent ratings can be traced back six years and is only now preparing to take its place as an industry staple. The idea of developing and implementing superior consumer experiences is starting to gain traction after having competed with agent centricity for years. Integrating intensified agent portal participation promises to be challenging, given its inherent chain of command conflicts. Perhaps most dramatic will be the management shifts and transitions that brokerages will have to integrate into their operations as a result of the new Upstream broker-centric data management program. These are but a few of the internal and/or external innovations that the industry is currently preparing to incorporate. Each of these surviving innovations and developments (as well as a score of others working their way through the system) has followed a predictable course on its way to industry acceptance. Most started with a visioning experience gained through either industry publications or any one of several industry conferences that provide "coming out" events for new innovations. At some point, these introductions blossom into discovery relationships as R&D, marketing and promotional activities and/or internal innovation programs seek out ideal candidates for beta testing, utilization and adoption phases. When the discovery programs find traction, the innovation journey moves to the design phase where specific needs and applications are addressed and resolved. It is during this phase that the future of the innovation is either sealed or rejected.

What Happens if Your Tech Leader Is Hit by a Bus?
Bob Rosecrans and Michael Koval at Pixces Consulting Group are a little more subtle in addressing this subject in their new white paper, "Real Estate Brokers: Is your CIO future proofing your business?" But the title of the paper's first chapter really says it all: "I love my CIO but..." What follows in an exceptionally candid and insightful examination of the conversations that Chief Executive Officers or broker-owners must have with their Chief Information Officers – or whoever is the technology leader or point person at their brokerage. As Senior Partners at Pixces – and industry power hitters – Koval and Rosecrans specialize in helping real estate brokerages address IT business solutions to solve business challenges. The deep insight they share is based on years of highly honed experiences. Koval, a founder who also serves on Pixces Board of Directors, was the Chief Information Officer for Long & Foster Real Estate. There he was responsible for all technology, business solutions, IT governance, security and online systems. Koval also has served on numerous boards including Trulia, National Association of Realtors Security & Policy Group, LeadingRE and The Realty Alliance. Rosecrans previously was the Chief Security Officer for the Graduate Management Admission Council (GMAC), an international non-profit organization providing services to business schools, including the widely used Graduate Management Admission Test (GMAT). He also was the CIO and CSO for the Blue Cross Blue Shield Association, a national federation of 36 independent, community-based and locally operated Blue Cross and Blue Shield companies. What they impart in this white paper addresses the reality that most real estate brokerage leaders simply do not have the deep tough talk they should with their tech leaders. The harsh truth is, if, God forbid, a brokerage's CIO was hit by a bus, chaos is likely. The good news is that in their white paper, the authors outline a specific game plan for what a CEO should expect from their CIO with very clear objectives and direction.

Real Estate in Crisis: Is Nothing Better Than Something?
Real estate is a fascinating industry when it comes to making choices about something versus nothing. Again and again, we see individual agents, brokers, associations, MLSs, and franchises make choices to get something when getting nothing may be the better strategy. I doubt that this article will have any change on the bearing of the industry, but in some small way it may influence one or more decisions today or this week by a few people. Why Do We Sacrifice Long Term Success for Short Term Gain? In our industry, people too often say "yes" to a bad deal. An example of this would be the business model where an agent will rebate their commission to a consumer.  Why would a real estate agent accept a $500 flat fee for a transaction? Every one of us knows the hours of time and the level of training, tools, and expertise it takes to represent a consumer in a property trade. $500 is like accepting below minimum wage. I understand the justification. We hear stories like, "Well, it's only this transaction," or, "We will make it up in volume." That is sheer craziness. Every time a real estate agent agrees to offer their services at a loss, they feed the beast that will overrun their fair compensation. What I am trying to illustrate is that nothing would be better than something. Not accepting the loss on the transaction would be superior to accepting the $500. Whenever I make this assertion, I get no argument. Everyone agrees, but in agreement they deposit one caveat, "If I don't take the $500, someone else will."

What the Real Estate Industry Could Learn from FIRST Robotics?
Robots are cool. High school students building 120-pound robots in just six weeks to compete in sporting-like competition with and against other robots is cooler. Being a mentor for a local FIRST Robotics team, Spartronics Team 4915 of Bainbridge Island, Washington since its inception three years ago is the coolest, most rewarding, non-profit volunteering experience I have ever had. I have learned so much, and it got me to thinking about a couple of concepts that define FIRST and how it relates to what I do. So what could the real estate industry learn from FIRST Robotics? First About FIRST 25 years ago, Dean Kamen, an inventor extraordinaire, and MIT Mechanical Engineering Professor Dr. Woodie Flowers, created FIRST Robotics. They wanted to find a way to transform our culture from celebrating our sports and entertainment stars to creating a world where students dream to become science and technology leaders. FIRST – or For Inspiration and Recognition of Science and Technology – offers robotics programs for grades K-12. The top tier – FIRST Robotics Competition or FRC – is comprised of high school-aged teams who compete head to head on a special playing field with robots they have designed, built, and programmed. The game that is played changes every year and combines the excitement of sport with the rigors of science and technology and why it is called the "Sport for the Mind."

Full Circle on the Consumer Experience
This column’s first two articles of 2016 explored the relatively narrow band of issues being generated by the emerging premium agent movement being championed by the national portals, and the industry’s growing vulnerability presented by the questionable influence and impact of the subpar “facilitator” agent. This third article of 2016 will revisit the question of the consumer experience issue, first raised at the beginning of 2015, as it relates to the two issues raised above. All three of these subjects have been on the industry’s priority agenda for the past eighteen months. The fact, however, is that the industry’s current disruptive environment is making these factors even more relevant. More specifically, we are seeing a classic case of convergence. Three formerly marginally related issues are coming together to create a major shift in procedures. Understanding this new environment is a prerequisite to appreciating the dangers being presented. There are two types of disruptions currently impacting the real estate industry and marketplace. The broadest reaching disruption is called innovative disruption. This is the change that occurs when new digital technologies and business models affect the value propositions of existing goods and services. Virtually every aspect of the American economy is currently being subjected to innovative disruption. Every time there is a significant digital or technological advance, the value in place of all systems that contain that technology in its previous configuration is automatically changed. The best-known and most quoted disruptive process is called digital disruption. These occur when competitors use innovative disruptions as competitive business advantages or weapons systems to improve their market positions or propositions vis-à-vis their competitors. In a relatively high tech, competitive and complex industry such as real estate, there is always a high number of each form of disruption occurring. This rate of change can seem quite chaotic for those businesses and participants caught in the middle, with neither a disruption plan nor a developmental road map.

Do You Know What Your Real Estate Consumers are Reading?
A recent edition of this column focused on a number of industry current trends and forces that, taken together, strongly support the idea that, moving forward, brokerages are going to have to take a much more activist position regarding the activities of their agents—most especially with respect to the quality and nature of the services and consumer experiences they are delivering. The industry disruptors driving this issue were identified as highly motivated consumers, national portal premium agent programs, the high probability of definitive “independent contractors” litigation, potential CFPB regulatory initiatives, and the increasingly dissatisfied “counselor” agent sector. Taken together, they deliver a clear message that is best represented by the CFPB motto, Flight into Quality. Given the potential seriousness of this situation, it has become critically important that brokers, executives and managers began the process of understanding where the objectives of these disruptors come together in the marketplace and what sources are impacting the opinions and impressions of today’s consumer. Consumer Reports is a publication that has been published and distributed monthly by the Consumer Reports organization since 1936. The organization currently has over 7.3 million subscribers and a $21 million annual testing and evaluation budget. The organization and its publication are considered to be one of the leading consumer influences in the country. The March edition of Consumer Reports featured an in-depth piece on the real estate marketplace entitled, "The Real Estate of Real Estate." The subtitle spoke to its contents: "New population patterns, lending practices and housing preferences are changing the rules, whether you are buying, selling, renting or remodeling."

Why Real Estate Isn’t a Zero-sum Game
In recent years, housing has failed to move the needle in growing transactions or homeownership rates, which is causing some to believe real estate is a zero-sum game. We begin to think there will only be a certain number of transactions in a given year, and we're all just fighting for a piece of the pie. But, what about growing incremental sales? Isn't that the ultimate goal? Bear with me because it's the New Year and the time to be both reflective and aspirational. A zero-sum game A few months back, the Notorious R.O.B. (Rob Hahn) tackled this zero-sum game issue. We have a lot of respect for Hahn's industry insights and wouldn't want to have to match wits in a dark alley. To be sure, he is talking about the inability for technology alone to drive incremental home sales. Still, it got me thinking, does anyone have the ability to make more sales happen? Are down payments a core issue? Surveys such as the National Association of Realtors Profile of Home Buyers and Sellers find that first-time homebuyers are at a new low, and the finger's pointed at the core challenges of saving for a down payment, student loan debt and increasing rent and home prices.

Real Estate Transactions Are Now on Top of the Stress List
It may or may not come as a surprise to most real estate professionals that it is now public knowledge that—with respect to stress—participation in a real estate transaction is now on par with death, terminal disease, divorce, airline travel and computer repair. An article published in the October 2015 edition of the Harvard Business Journal by Leonard L. Berry from Texas A&M University and Scott Davis from Rice University reports that services such as cancer care, airline travel, computer repair and home buying and selling can trigger powerful human emotions. Even more surprising is the fact that the vast majority of the entities and individuals delivering these services are not sensitive to the level of stress their consumer experience generates. Nor are they provided with the training necessary to either demonstrate sensitivity or reduce the amount of stress their performance is largely responsible for. By this point, some readers will be rolling their eyes and not so subtly pointing out: Hey, what's new? This is the way it has always been, this is the way it will always be and, as a hyper busy real estate professional, I can't be responsible for the client's mental health. Buck up, consumers! While there may be no lack of support for this macho position, hopefully there will be a few souls who will want to better understand the big picture, because there is one. Let's start with a few facts. First, this is not our parents' real estate marketplace. A strong argument can be made to support the idea that, as a market, we are in the last vestiges of that era in which real estate agents and sales representatives have the absolute power to design and deliver the consumer real estate experience. From a consumer and regulatory perspective, we are now in an new era in which the only thing that matters is what experience the real estate consumer gains from their buying, selling and transactional experience and how they can customize that experience to make it a positive one.

Management Migration: A Sign of the Times
The conclusion of the industry's recent round of summer presentations and articles provides an opportunity for reflection and consideration regarding what lies ahead for fall and winter. As has been the case for the past few years, increasingly dramatic transformation continues to occur. Issues regarding the control and processing of listings and other real estate related data, the emergence of the hybrid brokerage culture, the continuing demise of MLS organizations and REALTOR® associations, the sharpening of the consumer expectation and the industry's almost myopic focus on all things 'portal' provides the framework for this ongoing discussion. Certainly one of the most significant dynamics currently driving the industry is the almost universal sense that little or no change will be initiated or driven by the traditional brokerage element. With few exceptions, like great fortresses along the Maginot Line, they stand bravely facing out toward the forest, awaiting their fate at the hands of those that will carry the day forward. Yet under the umbrella of the forest, there is a great deal of activity. Record numbers of more aggressive agents are abandoning these fortresses seeking refuge, safety and success with brokerage organizations that appear to be preparing to take both a leadership position and the advantage of the evolving marketplace environment. Many of these agents are entering into new brokerage relationships that involve levels of compliance, accountability and discipline that would never have been possible in the traditional sector. These agents may constitute the first wave of the new movement. If that is the case, the second wave is likely to consist of the brighter and younger managers who are increasingly recognizing that their futures are likely to depend upon getting onboard and up to speed with a brokerage that is preparing to align with the trends, emerging rules and realities of the new industry environment. In July of this year, I found myself engaged in a riveting discussion with a group of clients, all of whom are very successful brokerage management executives. The conversation worked its way through a number of interesting issues before coming to rest on the subject of management careers in the real estate industry. It was at this point that one of the participants assumed the leadership position and sharpened the group's focus by sharing the fascinating story of her recent career changes.

What is the Deal with Millennials?
Brokerages are currently being challenged in their efforts to capture a commanding share of what some in the industry are trying hard to classify as a "Millennial land rush." The fact of the matter may be that the current situation may not constitute a land rush at all, but rather a generation playing out its unique developmental destiny. The industry's conference and literature environments are currently awash with presentations and articles about the consumer behaviors of the 80 million Americans between the age of 18 and 34 that comprise what is generally known as the Millennial generation. While much of the information that is being shared is simply a rehash of extremely limited professional and previous offerings, there is one new publication that meets everyone's five star test of relevancy, accuracy and power. Last week, the Pew Research Center, a unit of the Pew Charitable Trusts, issued what is probably, at this point in time, the definitive report regarding the Millennial Generation and their current interactions with the housing industry. The Pew Charitable Trust is an independent non-profit, non-governmental organization (NGO), founded in 1948. With over $5 billion in assets, its stated mission is to "serve the public interest by improving public policy, informing the public, and stimulating civic life." It is, by any criterion, an amazing fountain of knowledge that matters. The Pew report is entitled More Millennials Living With Family Despite Improved Job Market. The report contains a revealing analysis of U.S. Census Bureau data regarding this increasingly important demographic. For real estate professionals seeking to effectively work with this group, the following insights will be essential.

Who Will Install the Giant Rats of Real Estate?
If you visit New York City regularly, you will sometimes encounter a giant inflatable rat on the sidewalk outside businesses experiencing union disputes. Organized labor has also joined in the fight against companies like Airbnb and Uber. Ken Jenny of TranCen often remarks that "With Airbnb, you have one of the largest hotel companies in the world who does not own a single hotel room. With Uber, you have the largest taxi cab company in the world who does not own a single taxi." I would add that Facebook has become the largest publisher in the world and they do not write a single word. YouTube is the largest broadcaster in the world and does not make a single video. Incidentally, my 12 year old reads Instagram more than newspapers and watches far more YouTube than television. There is little doubt that, in the future, the largest real estate brokerage in the country will not have a single listing or show a single property to a buyer. Anyone can compose a list of who will disrupt real estate. But the more interesting list to create is who is likely to defend the industry. The most obvious answer is the NAR. But I do not see that happening.

Stand By For Position RPR Verification
Last month, we reviewed the down to earth business intelligence and guidance provided to the brokerage community by a recent series of industry conferences renown for the depth of their research and the accuracy of their presentations. In preparation for this month's information, you are requested to immediately climb to 55,000 feet for a more extended view of the circumstances that will be impacting, if not controlling, your businesses and marketplace moving forward. The events of Saturday, May 16th will, in all likelihood, impact the operation of your business more than any other single day in recent history. This is, of course, a reference to the National Association of REALTORS® Board of Directors meeting held in Washington, D.C. and the positive vote taken in support of NAR's partnership with Project Upstream as well as the funding of both Project Upstream and AMP (Advanced Multi-List Platform). The following comments benefit generously from comments made by Dale Ross, the uber gifted RPR CEO. The partnership between NAR and UpstreamRE, LLC will leverage the RPR technology platform to develop a new data management service for brokers known as Project Upstream. The events of May 16th culminated several months of extensive discussions between the leaders of many of the nation's largest brokerages, franchise networks and NAR. They created a significant opportunity for the industry to leverage and take advantage of RPR's five-year investment in data and technology. In light of the importance of these events, additional clarification may be necessary. It is common knowledge within the industry that NAR, through its wholly owned subsidiary, Realtors Property Resource®, has, over the past five years, invested millions of dollars into what may be the finest real estate database ever created. It is also widely known in the industry that RPR's first attempt, in 2010, to bring the benefits of this database to its REALTOR® constituents was something less than successful. Even today, five years later, our ever-present industry observers--many of whom have no claim to creativity or innovation--continue to rave on about this early shortfall.

Time to Market
Shaping an idea or a strategy takes time. More importantly, it takes a well-structured catalyst that "just makes sense." WAV Group has had the opportunity to work with some pretty fantastic visionaries on the future of real estate – powerful market makers that rethink things many times to carefully construct strategies for the greater good. The outreach with peers and competitors only drives the momentum and refines the structure. It is impressive and inspired. But these things take time to develop correctly. Upstream and the Broker Public Portal are the outcroppings of this industry-wide thinking. We are blessed to be administrative supporters of the will of these leaders. Passion creates urgency and urgency drives desperation and that causes mistakes and increased risk. Despite pent up energy and demand, there has been ample time for consideration of detail. That's good news. For the past couple of years, we have worked with franchise organizations, MLSs, large firms, independent firms, mid-sized firms, small firms, all sizes of associations, state associations, an incredible range of technology companies, portals, and the National Association of Realtors to plant some seeds. Sorry for the run-on sentence, but we have endeavored to keep pace with many of the greatest sprinters in our industry. For the most part, our process has been confidential. I can tell you that the endurance and desire among this group of confederates is nothing short of world championship caliber. They are a fantastic group to serve. There is no 'love at first sight' in any industry. Relationships and strategies take time to develop. After all, industries are the constitution of competition that is programmed to allow some to win at the loss of others. There are only a fixed number of homes sold each year. The winner takes their share from their peers. In these projects, there is mutual agreement that data is like oxygen: How each person uses it will be different, but the purity of the air is requisite to all.

What’s in a Portmanteau?
It has been 90 days or so since Spencer Rascoff and Stan Humphries of the Zillow Group released their book, Zillow Talk. Published by Grand Central Publishing, the volume carries the subtitle The New Rules of Real Estate. One cannot help but observe that there has been a lack of buzz and discussion across the industry regarding the book's unique and highly relevant content. This compelling collection of knowledge, discovery and insight should have the potential to change how the industry thinks about the new realities of its various markets and how it judges properties as being appropriate for consideration for purchases or rental. Moreover, it might also drive industry reconsideration relative to the role of respect in its interactions with the consumer. As a starting point, the book offers the proverbial 100,000-foot view of the changed (and changing) role of research, statistics and information across the entirety of our culture, including the real estate sector. The authors talk in reasonably humble terms about having created a collection of technologies that use a million valuation models to process 3.2 terabytes of data each day. They don't suggest that this is the ultimate technology. For Zillow Talk, technology is a mere supporting actor. This is not a book about technology or mining gold. This is a book about what one, anyone, can do with the crown jewels of an expanded, innovative and creative real estate related information system. That's all. While it is difficult to nail down which of book's many salient points are the most compelling, a particularly strong argument can be made for the concept of replacing myths with facts. The authors gently point out that for much of the past fifty years real estate related decisions by consumers, and even institutions and investors, have been made on the basis of cultural myths, many of which were created and propagated by real estate service providers.

Want to stay relevant? You need a kick in the pants.
Hire a Chief Millennial Officer Every company, MLS, brokerage, publisher, mortgage company and even NAR should have a kid with a skull cap and a skateboard in their boardroom. Her title will be Chief Millennial Officer. Let's call her Joplin. The first thing that will change? The boardroom. If you have an old wooden table and a crooked picture hanging on your wall--throw it away. As you do, embrace the fact that the table will be the first of many status quo ideas you may have to trash. To say that we will never be like these cool tech companies and all we want to be is par is simply not an acceptable way of doing business, nor will it last. The greatest proof I can offer? Huge old line brands have stopped pounding their chests as the reality of the landscape is finally hitting home. The term "level playing field" has become our reality. Established, antiquated brands have fallen way behind. The inclination to "redo" websites is a good first step, but many are doing this on the same foundation and ideology as the old one. How is it possible that companies are not implementing a responsive cross-platform strategy? One that is mobile first? As you throw out your table, throw out this myopic way of thinking. Joplin would never let you do this on her watch. A simple way to fix this is to flatten out your organizations and empower younger, more innovative thinking that is embraced at the higher levels of your company. If you proceed down the path of status quo, I assure you you are building trouble on top of trouble and that your work product will fall short.

Driving Management Collaboration
As the industry continues though its winter and spring conference season a number of evolving concepts have become increasingly clear. For those who have been tracking industry acceptance of change and adaptation, it would appear that a point of universal acceptance has finally been reached relative to the fact that the traditional brokerage business model is neither functional in today's real estate industry and market environment nor appropriate in terms of profitability and return on investment. With very few exceptions the coaching, presentations, articles, blog posts and editorials delivering this enlightenment have carried the message that, moving forward, brokerage management will have to be a matter of neutralizing agent centricity, focusing on customer experiences and installing metrics driven management practices that are surrounded by and driven through standards, best practices, accountability and organizational transparency. Of course, it will come as no surprise that those industry executives who are less than excited about this impending transitional experience (and the prospect of spending the last years of their careers engaged in a total reengineering of their life's work) are reporting to company decision makers that move in these directions will cause massive disruption within the agent panel. What is of even greater concern is that these announcements are, in many cases, not issued to assist top brokerage executives to anticipate danger ahead as much as to ward off the decision itself and allow these veteran and vested managers to skate to retirement. All of which is to say that there is growing evidence that it is senior managers that may be the ultimate impediment to brokerage change rather than the more traditional scapegoat, the agent.

Are You Prepared to Launch Your Flight to Quality?
It is at best a bizarre situation. As this article is being prepared, the American residential real estate industry is but 213 days from an event that many experts believe may be the industry's seminal moment for the decade. The centerpiece and stimulus for all of this activity is the Consumer Financial Protection Bureau (CFPB). The 1,888-page RESPA-TILA (Truth in Lending Act) Integrated Mortgage Disclosures Rule issued in 2014 by the Consumer Financial Protection Bureau will probably not end the residential real estate business as we know it, but it will certainly change the way it currently operates. When the RESPA-TILA rule takes effect (currently slated to take effect in August of 2015) it will integrate information currently provided to consumers in four separate documents to satisfy the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA), boiling it down to two documents: a loan estimate and closing disclosure. As most of our readers already know, the Dodd Frank Wall Street Reform and Consumer Protection Act created the CFPB during the 2010 congressional session. The agency began operations in 2011. It hit the ground running with a campaign directed at debugging the national student loan act. Its noteworthy and unfettered staff includes an unusual number of young "go getters," many fresh out of college, without the "industry" baggage that has crippled so many prior efforts to "make a regulatory difference." During those first few years, it managed to find the time to draft, approve and implement thousands of pages of new procedures, rules and regulatory edicts. Even when assaulted by constant political attacks regarding the Bureau's purpose and methodologies, it quickly became an effective regulator and attacked some of the country's most outrageous consumer traps. The agency next went after the credit card, automobile loan and mortgage industries. One of its current targets is the residential real estate industry.

Millennials and the Curated Web (and Why I Chose Pinterest over Google)
When looking for a squash recipe for this Thanksgiving, I turned to Pinterest instead of Google. "Why?" you might ask. I turned to Pinterest because it is part of the curated web. When I search for squash recipes on Pinterest, I know there is a real person behind each "pin"; a real person who decided the idea, image, and content worth calling out and saving for later. That person selected an image that best represents an "idea worth saving" and often will annotate the pin with some useful information. I chose Pinterest instead of Google because I find it is more trustworthy. Google gives me viable and untrustworthy results alike, gnarled and intertwined. I have to dig through the results to find the gold. Google's search results are generated based off a search algorithm—a fancy equation used to determine which of the billions of websites and web pages on the Internet match your search terms. This equation then orders the results based off the factors Google determines to be "relevant" to your search terms. Pinterest, conversely, uses the power of its users, real human beings who have done the heavy lifting by hand, serving you "the best of the web." Google's display of search results is also much less... provocative. There are no images to entice me to click. If I switch to a Google image search, the results won't reliably give images that link to a recipe. Often, I find Google image search results link to nowhere, and it is difficult to discern which images are safe and trustworthy versus phishy. Pinterest curates the web and brings order to the chaos. The content in Pinterest goes through an additional level of filtering, by human hand.