August 2015

Earnest Money Spoils The Online Transaction

by Victor Lund on August 26, 2015

The Inman Connect conference does not often have many brand new ideas. But if you look hard enough, they are there.  A year or so ago I met a company that was focused on transforming home prices to Total Cost Of Living prices (TLC Engine). This year, I met Lynn Leegard who co-founded a company called TrustFunds, with the tag line of Earnest Money Made Easy. Coincidentally, both TLC Engine and TrustFunds are both services offered through NorthstarMLS, based in Minneapolis, MN. Northstar CEO John Mosey seems to have a knack for launching very unique services that solve significant problems in his market. Commute costs, utility costs, and insurance costs play a major role in home ownership in Minneapolis (as is the case in most major cities). The higher price you pay for a home closer to the places you work may be less than what you would pay for a lower priced home that has a further distance to travel to work. TLC Engine runs that equation. It is a great solution. Likewise, TrustFunds is a great solution. Forms, transaction management, and digital signature solutions offered in the Northstar market area are delivered through an online forms and transaction management platform called Instanet. Everything can be done online except the transfer of earnest money, a.k.a. the deposit the buyer puts down on the house with their offer. As a result, agents end up running around picking up and delivering checks even though everything else can happen online. A clever Minneapolis area attorney and REALTOR® came up with a solution. As a REALTOR®, chasing earnest money was painful. Moreover, the security of managing, collecting, and tracking earnest money payments was even more challenging. I think of it as PayPal™ for Real Estate. Using the buyer’s email address, agents generate a request for earnest money to their buyer. They click the link and securely key in their bank routing and account information. From there, the money is transmitted to the proper trust account.  TrustFunds tracks the payments, and notifies everyone involved in the transaction. This is an elegant, simple to understand product that will take our industry the last mile to handle transactions electronically. What do you think? TrustFunds: Lynn Leegard 888-249-1616 x 104, www.trustfunds.us.com Disclosure – NorthstarMLS is a WAV Group Client.

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Rapattoni has been the leader in Association Management Software (AMS) for decades. Historically an Association would host the Rapattoni solution, called Magic™, on hardware owned and maintained by the Association of REALTORS®. Associations did a pretty decent job of hosting, but managing hardware servers and security has become increasingly complex and expensive. Dallas based MetroTex Association of REALTORS® with 15,000 members was among the first group of five Associations to move to the new hosted solution. The new service maintains the name Rapattoni Magic, but adds the tag, Cloud AMS. Press Release Follows SIMI VALLEY, Calif., August 19, 2015 – Rapattoni Corporation (Rapattoni) announced today that the MetroTex Association of REALTORS® (MetroTex), located in Dallas, Texas, has migrated to Rapattoni’s Hosted Magic Association Management Software (AMS) service. MetroTex currently serves approximately 15,000 members throughout Dallas and North Texas. MetroTex has been using the Rapattoni AMS product for twenty-nine years, since 1986, and they are now the fifth Rapattoni customer to move to the new Hosted Magic AMS service. Rapattoni’s hosting service relieves real estate associations of server hardware costs and expensive software licensing for their AMS systems. With robust hosting at Rapattoni’s state-of-the-art data center, the service includes managed database backups, automatic Magic maintenance upgrades, and monitored scheduler service, as well as a hosted email server for Magic’s integrated communication features. Customers that use Rapattoni’s Internet Member Services (IMS) module also receive monitored uptime for their hosted IMS site. In addition to offering Hosted Magic AMS to customers, Rapattoni is currently developing Rapattoni Magic – Cloud AMS as the next generation of its industry- leading association management software. Cloud AMS will deliver a redesigned interface and a wide range of new features, including an export builder, Invoice Cloud payment portal integration, portability for selected features on iOS and Android, and a quick menu search for faster navigation. Rapattoni is scheduled to demo the new Cloud AMS system at the Council of Multiple Listing Services (CMLS) Conference in October and at the REALTORS® Conference & Expo in November. “Our Hosted Magic AMS service lets associations run the industry’s most sophisticated AMS package without the burden of expensive server hardware, maintenance, and additional software licensing fees,” said Marc Werber, Director of AMS Software at Rapattoni. “It’s an ideal solution for associations of all sizes.” Ginny Haralson, Assistant Executive Officer at MetroTex, added, “Everything is going above and beyond my expectations. Rapattoni’s technical […]

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The Do’s and Don’ts of MLS System Selection

by Marilyn Wilson on August 19, 2015

MLSs are growing again. Membership is up. Agents are making money again. Life is good.  In many cases, the upward turn in the market is allowing MLSs to once again focus on evaluating their technologies to ensure they are offering the strongest tools they can. Recently we have been involved in a few system selections and I thought I would share some of our thinking about the best way to make the process as successful as it can be. Turn on all of the relevant enhancements Before you even contemplate looking at alternative MLS systems, meet with your current MLS provider. Review all of the enhancements they have launched and be sure you have turned them all on. We just looked at one MLS, for example that had not activated several new features on their system. Their members were complaining about a lack of functionality when in fact the features existed and the MLS had simply not launched them in their local market. Quantify the areas of strength and weakness Before you begin an MLS system selection, be sure you understand what’s working and what isn’t with your current system.   You can use an online survey and focus groups as well as reviewing the suggestions and complaints you have received from your help line over the past couple of years. If you outsource that work to your vendor, ask them for a report of your member’s feedback. It is customary for MLSs to perform product satisfaction surveys. If you need help, let us know. We do them routinely. It helps define your requests for your vendor’s roadmap and identifies areas of needed training. Involve the Staff that Works with the MLS Vendor While it’s absolutely critical that the voice of the members/end users are heard and represented in the process, it is also important that the staff person that works most closely with the MLS system provider is also involved. They might not be the best one to evaluate functionality, but they can provide great perspective on responsiveness, system enhancements, localization opportunities and customer support to the MLS organization. Ask for a Plan of Attack to Address Issues Before you go through the hassle of a full system review, talk to your current provider.  Ask them to provide you with a plan for how they are going to address the key issues/challenges your members are facing with their current system. […]

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Why Millennials won’t buy Boomer McMansions

by Kevin Hawkins on August 19, 2015

Self-confession: I love surveys. Data is my kryptonite. I got hooked in my grad school stats class and I’ve never looked back. At Great Western Bank, I created the Realty Confidence Index, which surveyed face-to-face broker-owners in 23 states. At Fannie Mae, I got to pitch to reporters nationwide the most comprehensive housing surveys of its day. At Imprev, I helped craft and launch the real estate industry’s first Thought Leader Survey and continue to spearhead that effort. This all means I know intimately what Mark Twain meant when he popularized the saying, “There are lies, damn lies and statistics.” Two people can draw completely different conclusions from the exact same data. Which is why I am having problems with a few statistics about Millennials and their immediate impact on home buying: Zillow’s economist Stan Humphries says, “By the end of 2015, millennial buyers will represent the largest group of homebuyers.” The National Association of Realtors 2015 report on generational trends says that Millennials make up the largest share of homebuyers at 32 percent and comprises 68 percent of first-time buyers. A TD Bank survey says that 62 percent of potential first-time home buyers think that they will purchase a home within the next two years; among millennial survey respondents, the number rises to 67 percent. The problem I am trying to reconcile is that there are many other statistics that seem to contradict the notion that Millennials are going to drive the housing market, including the numbers below, from a blog (“Millennial Marketing Madness”) I wrote last November provided by economist Elliott Eisenberg: In 2010, households headed by Millennials had a median income of $37,600, now it’s just $35,300. 41.4% of Millennials have student loans, which is up from 33.6% in 2007 and 23.3% in 1998. Student loan balances are up from $10,000 in 1988 to $17,300 in 2013. Just 38.6% of Millennials hold equities, down from almost half in 2001. Median net worth for Millennials overall is a paltry $10,400. Add in these statistics from the TD Bank survey that touts how Millennials are going to “own” the housing market in the next two years: 70 percent of Millennial respondents said that they need to save for a down payment. 52 percent of Millennials said that they need to pay down debt. More than one-in-five consumers (22 percent) looking to purchase their first home said that they can’t […]

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Unintended Consequences That Cause Spectacular Results

by Kevin Hawkins on August 19, 2015

I just returned, as some 3,000 other folks have, from attending Inman’s Real Estate Connect in San Francisco. For many of the industry leaders whom I spoke with, it was one of the most successful Connects that they have attended and certainly the busiest. I found myself squarely in the same camp. I discovered something incredibly special about what I think makes Inman Connect unique: It fosters the creation of what I call “unintended consequences that cause spectacular results.” I have a few great examples from this most recent Connect to illustrate what I mean. Origins of Real Estate Connect In the spring of 1997 I left Fannie Mae, most recently as Director of Housing Impact for its highly successful Seattle Partnership office that I had opened, and forged out on my own. When Brad Inman heard the news, he asked me to meet with him. I had worked with Brad since the mid-1980s. He was a friend and I was a fan of his business acumen. I immediately said yes, as I wanted to talk to him about my new company. So I brought my “team,” which at the time consisted of my wife, Kyanne, who handled the financial side of the business, and my father-in-law, Keith Willis, a skilled businessman and savvy investor, to a restaurant near the Hyatt in Bellevue, WA where we met with Brad. My intended objective was to strike a content deal with Inman News for the company I had created that was going to help real estate agents more easily stay in touch with their customers. Brad had another objective. He wanted me to help Inman News launch a brand new conference. It would be a greater manifestation of an experiment he had tried a year earlier at his “retreat” in Sonoma wine country along the Russian River. Brad had invited a group of tech industry startup CEOs and a group of traditional real estate business leaders together for a face-to-face meeting in a setting designed to foster conversation and relationships. He dubbed it, brilliantly, “Real Estate Connect.” The unintended consequence of our meeting with Brad was that I would agree the next day to help him launch his first full-blown Real Estate Connect conference at the San Francisco Hilton. At the time, I thought he was nuts, charging a $495 registration fee, which made it one of the most expensive real estate […]

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DotLoop and Zillow

by Victor Lund on August 19, 2015

As far as I know, DotLoop customers were happy enough with the product and service until the announcement that the company was being purchased by Zillow. That news, along with the $108M price tag of the acquisition was the fundamental buzz at Inman Connect conference last week. About the price of $108 Million. Typically companies’ sell for a multiple of profit – 6x to 10x profit is not bad. The last acquisition of this type was the Real Estate Digital deal, which sold for a much lower multiple than DotLoop. In the case of DotLoop, it looks like Zillow paid a multiple of revenue. As best we can tell, DotLoop would be running at a rate of $15 million in annual revenue. Its privately held, so that number is a guess. They hold a distant third position in the market share behind ZipLogix and Instanet. With the calculus on this valuation, Instanet would be worth about $300 to $500 Million. ZipLogix would be worth about $750 Million or more. The multiple that Zillow paid on this deal is irrational unless they see an opportunity to modify the business to reap profits in entirely new ways. Rather than spend hours on the phone with the investor community discussing the deal, here is a summary outlook on why the $108 could be justified from Zillow’s point of view. I get the strategy. Today, consumers shop for property on Zillow. They then bump into a real estate agent who handles everything from there, and Z is long gone from the picture. With transaction management, they can stick their brand inside the transaction. This strategy not only allows them to measure ROI on Zillow lead conversions to measure “share of wallet,” but it also provides them with a lead to close solution that supports the consumer to think that they purchased a home on Zillow. Zillow connects with consumer mindshare first. If they continue to expand the consumer’s understanding of services from Zillow, the consumer will stick with them through more of the transaction steps. The long-term goal object seems to be to develop a Zillow customer for life. DotLoop fits with this. The homeowner will be able to log into Zillow and grab their transaction documents forever. The implications for the relationship with the broker and the agent in the loop would also seemingly be solidified. Far out strategy. Sometimes you need to […]

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We have been talking about mobile in real estate for far too long now. Two years ago Trulia, Zillow, and Realtor.com all announced that mobile was passing other methods of accessing their site. As brokers began to adopt mobile solutions, the debate about mobile browser vs. mobile app went on for an eternity until everyone put down their guns and agreed that the answer is both. One of the broker website service providers that we have been tracking is Booj or The Enterprise Network. They offer a good benchmark because of their unique client base. If you are not familiar, here is the scoop. The Enterprise Network only works with one broker in any given market. As a researcher, this eliminates the network effect that can often happen when a mobile solution is adopted by many firms in a given area. No franchise means that the brokerage is standing on their own brand to drive awareness and adoption of mobile. Many franchise organizations drive mobile adoption in local markets, ie. Century 21 Hometown Realty gets all of the mobile traffic in their area for Century 21. The Enterprise Network is geographically diverse. They cover the major market centers across America, mitigating geographic bias. I think that they have 32 brokerages across the nation representing 15,000 agents. Again, the average size of the brokerage is somewhat in the middle or “lower upper” in terms of agent count. Huge firms like Wiechert, Howard Hanna, Long and Foster, and the like can distort research. Desktop browsers are dying in Real Estate Search Having said all of that, it is significant to note that in March of 2015, mobile visitors to their mobile browser exceeded 50% of the total traffic to their customer websites. Desktop browsers are becoming the nursing homes of real estate search. It’s for old people who are not mobile enthusiasts. Think Mobile First The founders of the Broker Public Portal are hell bent on developing the website to be mobile first. This is a model that we expect to prevail in real estate. Last year, most brokerages looked at products on desktop browsers first, then took a look at the mobile solutions to “see if they were o.k.” That is all changing now. It’s a new day whereby if you do not focus on mobile first, you are likely to be investing in technology that is not long for the […]

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1000watt nails large broker IDX strategy

by Victor Lund on August 14, 2015

Dum IDX

1000Watt Consulting wrote a post this week that is a must read. View it here – http://1000watt.net/2015/08/friday-flash-the-broken-down-lead-machine/# Brian Boero’s point is clear: “If you are a large firm with more than 10% market share – ditch IDX.” Reasons to Act This Way compromised presentation of properties raft of local competitors drafting on your listings paper brokers leverage your data with impunity relatively small number of leads that agents will probably drop the ball on. I am not going to recant the entire article. Please go and read it. But I do want to reinforce one point and add another. Reinforcement – We studied response time to IDX leads. 50% of inquiries get no response, and those that do respond usually do a bad job. Here is a whole white paper on the research. Its real. http://waves.wavgroup.com/2014/01/13/agent-responsiveness-study-reveals-critical-flaws-in-real-estate-lead-response/ New Point – Consider and IDX/VOW combination website. When a broker opts out of IDX, they cannot display other broker listings except when the consumer registers! Once a consumer registers, your broker website becomes more of a buyer client servicing platform. Not only can you display all of the IDX listings, but you can display 100% of all information in the MLS other than confidential fields like commission and agent-to-agent comments. Most consumers are driven to a broker website organically – 68% type in the URL. Again, we studied 1 million consumers using broker websites. There is a full paper on it here http://waves.wavgroup.com/2013/07/25/wav-group-releases-2013-broker-website-effectiveness-study/ Consumers are looking for the broker’s listings. Many brokers have dropped the “Our Listings” tab on their website, which is a mistake in my opinion. Lead with your inventory! “We represent 58 listings that match your search criteria, view them now or register to see all 486 area listings that match your search criteria.” This is not a new schema. This was developed by Wolfnet for the Chicago marketplace years ago when brokers would select who could display their listings and who could not (the DOJ terminated this practice). Believe it or not, lead capture was 20% higher when an IDX/VOW combination site than just an IDX site by itself. Better yet, if the top 5 firms in an MLS followed suit, it would devastate the raft of competitors using your another firm’s data to grow their business. I am with 1000watt on this point 100%. If you are a big broker, opt out of IDX and install a VOW property search for registered […]

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Information and Real Estate Services, LLC (IRES Multiple Listing Service) is pleased to announce they are the new public listing display provider for the CREN MLS (Colorado Real Estate Network). Effective immediately, this new partnership merges the listing information from two of Colorado’s largest MLS’s onto one public site: ColoProperty.com®. “We are thrilled to assist brokers, buyers and sellers by displaying southwestern Colorado listings on our very popular public listing site, ColoProperty.com®”, said Lauren Hansen, IRES CEO. “As the number one lead generator for Northern Colorado listings, we will aim for similar success with the newly added Southwest Colorado listings”, Hansen added. Jeff Follis, CREN MLS CEO, said, “We saw what IRES accomplished in Northern Colorado and wanted similar success for our brokers and consumers in Southwest Colorado. We couldn’t be happier about this new partnership.” ColoProperty.com® has been owned and operated by IRES MLS since 1998. With a map search, open houses, rentals, vacation rentals and commercial properties directly from the MLS with no advertising, it has been consistently popular with consumers and brokers. Southwest Colorado properties will enhance its footprint significantly bringing an additional 9,000 active listings to the site from Montrose, Durango, Delta, Cortez, Pagosa Springs and Alamosa, to name a few. About CREN CREN is the Regional Multiple Listing Service for the Western Slope and Southwest Colorado with over 9,000 Active Real Estate listings. Their data based is comprised of more than 700 active Realtor® members that reside within 250 Realtor ® Offices. About IRES Information and Real Estate Services, LLC (IRES) was formed in 1996 as the regional Multiple Listing Service (MLS) for Northern Colorado by five Boards and Associations of REALTORS® in Boulder, Fort Collins, Greeley, Longmont, and Loveland/Berthoud. In addition to these five Boards and Associations, IRES is the MLS provider for the Estes Park Board of REALTORS®, and Logan County Board of REALTORS®. Its office is centrally located in Loveland, Colorado. Contact: Lauren Hansen lauren@ires-net.com 2725 Rocky Mountain Ave, Suite 450 Loveland, CO 80538 Ph: 970.593.9002

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Broker Public Portal License Agreement

by Victor Lund on August 11, 2015

WAV Group is providing consulting services to the Broker Public Portal project. This project seeks the collaboration of MLSs and Brokerages in developing a national MLS consumer-facing website that adheres to the Fair Display rules for property search. Since starting the project in January, the company has developed and filed its LLC governance, elected the board of managers, and is running three parallel projects. The first two projects include Brand development (work contracted out to 1000watt Consulting), and Request for Proposal (being done by a workgroup of the Board). The third project is the development of the data license agreement between the portal and the MLSs participating in the site. WE NEED YOUR HELP! The goal of the development of a data license agreement is to create one license agreement. We have engaged the services of Larson Skinner to manage this process. A first draft of the agreement has been circulated to MLSs participating in the project. In this second phase of review, we would like to extend license agreement for open comment until August 24th. There are two documents linked to this post: the first is a letter explaining how to submit your feedback (click here to download), and the second is the revised draft license agreement (click here to download). Please carefully review both documents and submit your feedback to bppcomments@larsonskinner.com BY THE END OF THE DAY ON August 24, 2015.

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CoreLogic Purchases LandSafe Appraisal

by Victor Lund on August 10, 2015

I always thought that it was a bit incestuous for Bank of America to own LandSafe Appraisal. I could never understand how they could use their own appraisal company and insure an arms length loan transaction. Soon, LandSafe will be part of CoreLogic. LandSafe is an appraisal management company that employs about 500 appraisers and operates a Qualified Appraiser Network of independent appraisers. LandSafe was a wholly owned subsidiary of Bank of America and providing services to Bank of America mortgage. CoreLogic will now be the vendor to Bank of America. The size of the transaction is reported to be $70 Million. CoreLogic has long been a leader at delivering data solutions and software solutions that enable appraisers to have indispensible information at their fingertips to perform the most accurate appraisals possible. The quality of those solutions is fundamental to the risk associated with mortgages. Banks like Bank of America and others would be hamstrung without a robust group of appraisers. They are the human element collect facts leading to consumer home finance. According to HousingWire (http://www.housingwire.com/blogs/1-rewired/post/34721-monday-morning-cup-of-coffee-corelogics-purchase-of-landsafe-confirmed) Solutionstar, Findelity and Solidifi were all in the running to purchase the company. This is a solid win for CoreLogic. It seems to strengthen their bench in the appraisal business and reinforce their dominant position as a leader in other areas like consumer credit reporting and consumer verification services. Another product that leverages many of these data services and assets is RentSafe, which is growing in popularity among leading MLSs in America. The $70 Million did not seem to faze the capital market for either company. CoreLogic’s market cap of just under $4.5 Billion traded down slightly when the rumor hit the media on August 6th. The stock is trading higher today.

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Tim Business

AUSTIN, Texas – Aug. 3, 2015 – Today, the Austin Board of REALTORS® (ABoR) announced the appointment of Tim Dain as Multiple Listing Service Director. A seasoned MLS executive, Dain brings a unique combination of experience to ABoR, including leading a regional MLS, where he oversaw significant growth for the MLS; working as a REALTOR®, both as an agent and a broker; working in information technology outside the REALTOR® organization; and serving four years in the U.S. military. ABoR CEO Paul Hilgers commented on the announcement, “Tim’s extensive experience in evolving MLS organizations and his industry acumen will be central to helping ABoR deliver even more value to its MLS members. We’re preparing for future growth and I’m fully confident Tim will help take our MLS to the next level.” ABoR retained executive search firm WAV Group, Inc., to assist in finding a new MLS Director. Dain will assume that role on Sept. 8, reporting to CEO Paul Hilgers and working with ABoR’s Board of Directors and committees dedicated to MLS services. Barb Cooper, 2015 ABoR President, said, “We recognize that being aggressive in technology innovation is the best way to serve our members and homeowners in the Austin area. With Tim’s well-rounded experience and track record for successful innovation, we believe he will help us continue to be a leader in MLS services. Prior to accepting this role, Dain was Executive Director of the Southern Illinois Regional MLS. He began work there as Technology Director and was promoted to CEO in less than two years. During his five-year tenure with the organization, Dain was responsible for creating a virtual MLS and helped achieve cost reduction of more than 30 percent while streamlining processes to enhance daily operations and strengthen relationships with participants. He also partnered with the Illinois Association of REALTORS® local government affairs director in utilizing MLS data to enhance political advocacy efforts. Dain is also active in the MLS industry generally, currently serving a member of the executive advisory team for Move, Inc., Dotloop and the interim executive committee for the Broker Public Portal. He has also served on the board of directors for the Council of MLS and as the chairperson for Corelogic Advisory Group. As part of that involvement, Dain was instrumental in Move Inc.’s decision to build FIND™ Mobile, a national mobile MLS application provided for free to any MLS. Prior to his career […]

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