Many of you have read the “Syndication Bill of Rights” that Clareity Consulting drafted as part of its April 2011 white paper titled “Syndication to Real Estate Portals: Problems and Solutions”. Clareity’s Bill of Rights laid down 10 rules that would make real estate publishers “industry friendly” and more respective of a the broker’s intellectual property – the listing. Over the past year, I was invited to present the Bill of Rights notion at many NAR, state, and local broker meetings. Since that time, we’ve seen several small and large brokers cease syndication to some or all publishers, but we haven’t seen a broker stampede or mass exodus yet. We’ve also seen a few national publishers (e.g. Homes.com and Trulia) respond and begin to improve their behavior by prominently displaying proper attribution and contact information for the listing agent and brokerage “above the fold,” instead of hiding it 4-5 screens deep. Still, on some sites, advertising for other agents – typically buyer’s agents – are displayed all around and even inside the listing detail so it doesn’t look like advertising, thereby deceiving the consumer. For the listing agent or broker, it’s as if someone plastered ads covering the yard sign the agent paid to have placed outside one of their listings. How can this conflict between the listing broker’s interests and the need for increasing quarterly profits of publicly traded companies be resolved?
Two weeks ago, a gentleman named Ben Caballero contacted me and introduced himself as the chairman of the newly created National Association of Real Estate Professionals (NAREP). Ben said he was a big fan of the Clareity Syndication Bill of Rights, so of course he had my immediate attention. Ben told me that the NAREP had formally opened for membership in October and is organizing as a 501(c)(6) non-profit trade association. NAREP plans to launch a national real estate listings network of Internet Data Exchange (IDX) websites overseen and managed by individuals who truly understand real estate — licensed real estate professionals. Ben’s goal is to create a competitive listings website that better meets the interests of listing agents and serves consumers better by delivering pure, current, and accurate information.
Following is an overview of NAREP and its objectives Ben sent me:
NAREP’s revenue model involves collecting a nominal $10-$20 total fee at closing from its member listing agents, a sharp contrast to those business models of Zillow, Trulia, Realtor.com, and others (i.e., the “ZTRs”), which typically charge monthly fees regardless of whether any home sale results. NAREP’s listings site would conspicuously display NAREP member agent’s contact information. NAREP member agents agree to cease syndication of their listings to all websites not adhering to Clareity’s Syndication Bill of Rights (www.narep.net/br).
As the controversy surrounding the ZTRs demonstrates, monetization of listing data incentivizes their much-discussed and questionable business practices. The Internet lends itself well to the Pay-Per-Click (PPC) concept when selling a commodity, and the ZTRs have adopted a form of the PPC model (in that they charge their fees on the front end, regardless of the outcome). The ZTRs treat a home as just another commodity, but a home is not a commodity from the perspective of the individual buyer or seller. Rather, it is a personal part of their lives. All homes — and their buyers and sellers — are unique in some way. In short, the buying and selling of a home is a personal experience that is much different than that of buying or selling a commodity.
Until now, consumers and industry professionals have tolerated the ZTRs’ business practices for lack of anything better.
By introducing a non-profit business model to the Internet real estate space that relies on the Pay-Per-Sale (PPS) concept, NAREP will give real estate consumers and practitioners an alternative to the ZTRs. NAREP will do so: (1) by enabling its practitioners to ensure the integrity of their listings, as the IDX data feed will ensure accuracy since it comes directly from the MLSs; (2) by providing consumers with a simpler, more streamlined online experience; and (3) by satisfying consumers’ hunger for listing data. Because it incentivizes data integrity and promotes customer service from cradle-to-grave of the home buying/selling process, NAREP believes that, for homes, the PPS model of monetization is more compatible with the real estate industry’s long-standing and proven business practices.
NAREP’s mission is to end syndication abuse, not syndicators or syndication sites. If they wish to remain relevant, they must adopt more responsible business practices than what they currently have in place. Clareity’s Syndication Bill of Rights is a good place for them to start.
So, Ben is a man on a mission. NAREP is a fledgling trade association, but perhaps it can fill a void that groups like NAR, CMLS and the Realty Alliance have been unable to do for legal fears – anti-trust or group boycott – and other reasons, including broker fragmentation on this issue. Some colleagues have told me, “Gregg, NAREP is just a few brokers led by one guy that’s fed up with the system.” My response to that has been, “Isn’t that how most groups start?”
I find NAREP very interesting as one of the first efforts in a long time focused on the interests of brokers and online publishing. At Clareity Consulting’s first conference back in 1998 – “Law and Order in Information Commerce” – the content owner’s IP rights were a major topic on the agenda. Since the beginning of online publishing, the collective voice and IP protection for broker’s content have been fragmented. No offense to NAR, The Realty Alliance or Leading Real Estate Companies of America, but there has been a leadership void in this specific area, and other than the handful of brokers that have pulled their listings from syndication, 99% of brokers and agents have been forced to put up with the increasingly egregious terms and unfortunate business practices set by the national publishers, or “ZTRs” as Ben calls them.
Ben is not your average REALTOR®. According to NAREP’s Press Release dated October 10, 2012:
“Caballero was the top individual real estate professional in the United States for 2010 and 2011, as measured by unit sales and dollar volume, with more than 4,500 home sales exceeding $1.2 billion in total value. He is the co-founder of the National Association of Real Estate Professionals. He serves as a member of the board of directors of the Greater Metro Multiple Listing System of the MetroTex Association of REALTORS®.”
So Ben is not some wing nut with an idea who just fell off the turnip truck. Ben knows real estate and he’s sick and tired of syndication and the publishers looking for ever-increasing profits, made off of his listings. Can this one man rally the industry?
I love the subject of online real estate advertising and I’ve been involved with it since launching CyberHomes at NAR in Atlanta in 1995. (Wow, that was 17 years ago this week.) I was curious what a large brokerage I respect would think about NAREP, so I made an introduction, and Ben met with them last week. I was impressed when this firm responded very positively and agreed to join and support NAREP and the company’s CEO was invited to join the NAREP board. This brokerage is part of a powerful national franchise/organization and is also a member of the Realty Alliance. A few large brokers can put a dent in any publisher’s inventory.
Will NAREP grow to fill the aforementioned void and be able to turn the table on the publishers? Will NAREP be successful enough that the publishers are forced to further moderate their practices in order to receive the broker’s listings? Will the national publishers, with over two billion dollars in market capitalization, and more than $300 million in cash, overwhelm anything NAREP, and a freshly united real estate professional group, do to reach consumers?
NAREP reminds me of a song I learned at bible camp in Minnesota when I was about 10 years old: “It only takes a spark, to get a fire going …”
NAREP will be in booth #422 in Orlando, or you can reach the man on a mission at:
Ben Caballero,Co-Founder and Chairman
National Association of Real Estate Professionals, Inc.
(214) 997-1229 | (214) 616-9222 mobile
email@example.com | www.narep.net
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