As a long time real estate industry analyst, I’ve seen many brokers and agents who are unhappy with their websites and other technologies, even when first delivered, and who are at a loss to explain how they got into that situation without a way out. I am not an attorney, but as a business consultant I understand my clients’ needs and am always glad to collaborate with my client and their attorney to negotiate a technology contract – because the contract is where it usually all goes wrong.
I’ve noticed that many real estate brokers and agents, while quite smart about their clients’ contracts, are less so when it comes to negotiating their own technology contracts. Sometimes they have consulted an attorney, but if the attorney didn’t fully understand the business requirements, those end up being unaddressed in the contract. Obviously, understanding what you are negotiating for is a critical step to successful negotiation.
Let me provide an example to make it clear. I get called on by MLSs to evaluate their brokers’ Virtual Office Website (VOW) compliance with MLS rules and sadly, it is exceptionally rare that the site is compliant when I review it. Often the developers are not even aware of the MLS rules and think they have complete design freedom. Some developers even charge the broker to bring the site into compliance. It’s almost inconceivable to me that a broker would hire a developer to create a VOW for them and not have it say somewhere in the contract that the VOW will comply with all MLS VOW rules and that, if the MLS deems there to be a compliance problem, the developer will use commercially reasonable efforts to address the problem at their own cost. If that kind of language was negotiated into the contracts, I think that developers might take the time to review the relevant MLS rules and create more compliant solutions from the start. But even if not, at least the broker wouldn’t get caught in the middle between their MLS and the developer.
I could go on and on about the business requirements brokers and agents have for the websites and other technologies they contract for – specific steps taken toward search engine optimization, availability and performance, optimization for bandwidth, mobile capabilities, compliance with standards, liability for patent infringement and other issues, information security, process and costs for ongoing customization, and so much more.
The first step toward a successful technology project and forming a great relationship with a technology developer is being able to articulate the business requirements that the developer is expected to provide and ensure that those requirements are spelled out contractually. I want my real estate professional clients – and my software development clients – to be successful together. A good contract sets good expectations, and that’s an important basis for a happy long term relationship, profitable for everyone.
A note to my MLS/Association clients – you may want to pass this article on to your brokers and agents via social media – or reprint it in your own newsletter. Feel free to do so with attribution and link back to the original article. Thank you!
Image Credit: Idea go
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