Kodak, Blockbuster, Northern Telecom, Sears, Pan Am, CREA – which one doesn’t belong? Well, if Canadian Organized Real Estate (CORE) doesn’t pull its head out of the sand, CREA, traditional monopolistic real boards and real estate brokerages of every size will join this prestigious list of organizations that were once at the top of their game and were all toppled by technology-savvy companies that made it their mission, successfully, to be social and business “disruptors”.
Phil Soper’s recent column in REM, In 5 years, you won’t recognize this industry, had a compelling title. I spent 35 years in information technology before entering real estate about 10 years ago. I found one absolute constant in I.T. – change. I’m absolutely certain that the Realtor we know today will not exist 10 years from now.
Unfortunately, Mr. Soper’s article smacked of the same protectionist-isolationist mindset of the senior management of all the companies I first mentioned who ultimately underestimated the consumer. His comparison of realtor.ca versus Zillow and the American versus Canadian ways of doing things is a red herring.
No number of Luddites will ever stop consumers from embracing the easiest-to-use, most information-robust and lowest-cost (especially free, advertising-driven) products and services. It’s the human condition. And politicians will change laws to cater to their consumer voters.
Companies like Zillow are redefining what it is to be a Realtor, just as hoteliers learned from AirBnB and taxi drivers from Uber. Telling Realtors not to figure out a business relationship with the Zillows is like asking consumer keyboard typists to ignore accurate voice recognition technology. Millennials are the Realtor’s clients of today and the next decade. They are so technology driven they text each other on their phones when they are literally sitting next to each other.
The various MLS systems serve arguably 110,000 Canadian Realtors. Realtor.ca is public and it aspires to be national but it’s light years from providing the breadth of choices and the depth of information that consumers demand today.
A system like Zillow will reach tens, and potentially, hundreds of millions of eyeballs. Which system do you think sellers want? Buyers will go to look where the sellers are “advertising” their listed properties.
I agree that Zillow should not receive for free the right to advertise a Realtor’s hard-won property listing. But to say that the MLS, non-integrated national brand proprietary listings services, and especially realtor.ca is the way to go, is like saying don’t worry about digital cameras; film is still better. Realtor.ca and every other Canadian MLS system I’ve seen are all built on 20-to-30-year-old technology with brutal navigation systems, unfindable information portals and display interfaces that would bankrupt any organization that actually had to compete for business.
CREA and the boards should get out of providing the MLS technology infrastructure and service. They’re collectively no good at it and they’re holding the whole Canadian real estate industry back. But they shouldn’t give up control of MLS and realtor.ca. They should properly monetize them and maximize their potential. How?
Embrace innovative and world-class technology partners by licensing the MLS and realtor.ca brands in an intellectual property policing role like entertainment companies do in developing and expanding their franchise universes (eg. Marvel, Lucasfilm). CORE should take a commission (royalty) from each use, that is, every viewed advertisement. Let the technology companies build competing MLS platforms if they wish but CORE takes a piece of every transaction. The consumers will win big-time from the competition. So will Realtors and CORE institutions.
CORE shares a piece of that royalty with their Realtor members as encouragement to list on these open MLS systems. Realtor listings will be exposed to a vastly larger audience. Perhaps successful transactions earn a larger commission. The massive increase in CORE revenues can be channeled to raising the bar of Realtor professionalism, vastly increasing charity contributions and effecting more powerful government lobbying.
Google built a $10-billion company within its first 10 years by providing free information. Ninety-nine per cent of that income came from advertising revenue. To Mr. Soper’s point, Zillow is repeating that success with a similar strategy and plan. Tens of thousands of advertisers will pay to advertise through one or more open MLS systems (controlled, but not managed, by CREA and its partners) to local, national and international communities.
Imagine the benefits to Realtors; maybe an MLS built on Google’s world-class search engine with its incredibly effective AdSense technology, integrated phone and camera systems, integrated Bing and Google maps with 3D buildings, integration with public municipal land-use systems (such as zoning), highly personalized and targeted “pushed” listing emails to likely buyer prospects, world-wide interconnectivity, maybe integrated municipal and land registry geographic information system layers – the options are beyond imagination.
So, who do you think is really holding you back and potentially obsoleting your profession as a trusted advisor to real estate buyers and sellers?