January 2017

Upstream is Already an Awesome Tool for Brokerage Firms

by Victor Lund on January 31, 2017

Brokerage firms and franchises across America are already in the data management business. There are 85,000ish firms in America and each of them struggle to manage their information in one fashion or another. Upstream may be most simply understood as a solution that harmonizes data management into a single solution that is 100% controlled inside the firm, like Google Drive. Given the fiduciary responsibility of firms to comply with real estate law and MLS business rules, Upstream takes special care to provide a platform that delivers assurances that a firms practices are supported. I was invited to participate in their first CIO/CTO webinar this morning and I am so impressed by the pace of development. Broker Control In Upstream, broker control over information is defined in two ways – Access and Entitlement. Upstream provides the firm with the ability to issue a Token that authorizes access to data. Entitlement is the ability to authorize who has privileges to manage the data. For example, some firms give control to the agent, others give control to some agents and not others, some entitle administrators, and others entitle managers. Upstream supports any entitlement process that a firm defines. Moreover, Upstream provides a firm with a switch to issue or rescind data access in real time. Custom Data Management Support In our industry, there is a combination of standard structured data formats that live alongside the custom needs of a firm. Upstream supports both. Data management is shaped by the requirements of the sum of applications that the data is distributed to. For example, data distribution to an MLS has a set of requirements, whereby distribution to a CRM application, Accounting software, or Transaction Management solution has different needs. Because of the variability of needs of each software solution today, firms find themselves hand entering inforamtion again and again and again. Moreover, they are also updating the information over and over, and are removing information over and over. This is a tremendous headache for firms to harmonize their data across so many applications. Upstream fixes it all, from a single location. Moreover, it provides your software partners with an easy integration source that works not only for your firm, but other firms that are using that software vendor. Vendor Support Real estate firms are managing their software vendors in a “many broker” to “many vendor” method today. In reality, if there is an issue […]

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Changing Trends

With 2017 in full swing there is no better time to get prepared for the year ahead. WAVes of Change will provide you with most effective ways to help prep your association for the inevitable evolutions and revolutions the real estate industry may experience this year. We Attend the Events so You Don’t Have To We know how costly travel, hotel and expenses can be, especially for multiple people from your association to attend various major conferences throughout the year. Our educational webinars are centered around major conferences and will bring you updates straight from these sessions. Four times a year we present our live webinar which includes an exclusive looks at research, emerging technology trends, broker challenges, and policy discussion, as well as key industry updates. Many successful MLSs and Associations already understand the value of this stimulating and cost-effective way to keep their members up to speed on industry initiatives that make an impact. The webinar series also allows for an opportunity for your voice to be heard, regarding issues we have in common, relevant questions as well as sharing potential strategies that lead to optimal success. The WAVes of Change Series allows every one of your board members and invited guests to keep in touch on the ever-changing trends in our business WITHOUT leaving the office. WAVes of Change means we attend the events so you don’t have to. Contact Us Today for Pricing! If the WAVes of Change series sounds like something your organization will benefit from please contact marilyn@wavgroup.com or camilla@wavgroup.com to learn more and get a quote. Please join your Association and MLS colleagues for this insightful series!  You’ll be glad you did!


Tim Dain, MLS Director at the Austin Board of REALTORS (ABoR) is known for being a tech innovator. He can now add creating an industry first to his resume, thanks to the vital support of his forward-thinking Board at ABoR, plus a big assist from Jeremy Crawford, CEO of the Real Estate Standards Organization (RESO). What ABoR announced today busts open a door for real estate tech developers that has locked out the “kid in the garage” trying to develop better real estate software, as well as major franchises developing their own software as they don’t have the access to MLS data their brokerages do – without paying a hefty fee and going through an onerous, lengthy approval process. An Industry First As Jeremy Crawford note, “This is an industry first: a direct MLS data feed for developer access on RESO certified compliant standard. It is also an industry first that there isn’t a fee to use the data for developmental purpose or a huge approval process for access by the MLS, instead access is granted in 24 hours or less after filling out the online form.” He notes that the typical MLS approval process for a developer’s request to obtain access to data has stymied real estate tech development, creating a huge barrier to entry. He also points out that many MLSs have strict data licensing agreements as part of that approval process with heavy restrictions – another impediment.  Now through the Trestle platform from CoreLogic – extra kudos for CoreLogic – and the Austin Board of Realtors, real estate tech developers gain access to data that has been officially certified by RESO for the RESO Data Dictionary, the RESO Web API, and the RETS Standard. Dain notes that this is the only certified platform in the industry with this offering. Here is their news release from today announcing this breakthrough: Austin Board of REALTORS, RESO and the CoreLogic Trestle Platform Offer Groundbreaking Free Data Feed for Developers Austin, Texas – January 26, 2017 – The Austin Board of REALTORS® (ABoR) and the Real Estate Standards Organization (RESO) today announced a new groundbreaking free data feed for technology developers through the creation of the Developer Reference Server. Powered by the CoreLogic® Trestle™ platform, the Developer Reference Server gives developers access to a full compendium of listing data from the previous year pulled directly from the ABoR MLS. “This cooperative effort has created a vital new environment that allows developers to […]


Independence, Ohio— January 23, 2017. This week InstaView 3.0, the newest release of Property Panorama’s category-leading virtual tour platform, became the first virtual tour to publish Structured Data. Structured Data allows search engines like Google to render Agent Profiles, Office Profiles, Open Houses, and Property Detail summaries within search results, dramatically improving the search optimization of real estate listings. “Structured Data makes it easier to find and deliver information and is driving more consumer engagement with our new InstaView tours. InstaView tours are already receiving six times more unique visitors than any other listing marketing tool,” said Property Panorama CEO Mike Barnett. “By integrating rich listing data with lush visuals into a single package, InstaView 3.0 allows search engines and consumers to find what they are looking for in search results,” said Barnett. InstaView 3.0 complies with RESO standards and Schema.org, a collaborative site sponsored by Google, Microsoft, Yahoo and Yandex. InstaView 3.0 also introduces a completely new fully responsive viewer that has been redesigned to create an image-centric, full-screen tour experience able to render the highest quality photography from sweeping panoramas to fine interior details. InstaView 3.0’s platform is so flexible that it easily renders any visual media format in use by any of the Internet marketing tools, including Matterport’s immersive media technology, 3DM Digital floorplans, HD and 3DF photography and videography, 360º panoramic photography and more. InstaView 3.0’s MLS Enterprise launched this week at the New England Real Estate Network, making the program available to 7083 members. InstaView 3.0 has also been launched at First Multiple Listing Service (FMLS) to their 39,250 members. The branded InstaView 3.0 Broker Enterprise solution will follow within a few weeks of the MLS conversions. “We are pleased to offer Property Panorama’s InstaView virtual tour product as a Member Benefit. Several factors influenced our decision to offer this product including the level of service, customization options and 99.99 percent uptime record. The ease of use is also a great benefit for our members.” said NEREN CEO Joe Ryan. “Agents will be able to access InstaView tours from the Clareity dashboards with the convenience of Single sign on,”said Amy Gorce, president of Clareity. To illustrate how Structured Data improves agents’ presence on Google and other search engines, Google has leveraged structured data to greatly expand the agent profile and company information for Ohio Realtor, Hope Marsh which appears on the right hand side of […]


Broker Public Portal Inks Deal to Become Homesnap

by Victor Lund on January 19, 2017

Homesnap Logo

●     Homesnap will be a national MLS consumer search portal ●     Portal will adhere to Fair Display Guidelines   ROCKVILLE, MD, January 19, 2017 — Broker Public Portal, LLC and Homesnap, Inc. have executed final agreements to create the National Broker Portal, LLC, a joint venture that is equally owned by the two companies. The parties agreed that the best path to success would be served by forming a mutual partnership with Homesnap providing technology, brand and operational expertise to the new company, rather than composing a vendor agreement. The National Association of REALTORS modified their model MLS policy to designate an MLS consumer facing website as a basic benefit of the MLS. In turn, more than 50 leading brokers and 50 leading MLSs developed the case for a national consumer site rather than 700 independent local MLS sites. “HAR.com and a number of other MLSs have been able to capture a reasonable share of voice in online consumer search,” said Rebecca Jensen, President and CEO of Midwest Real Estate Data (MRED). “But we believe that the best opportunity for success will be paved by MLSs who focus on a single, national strategy.” MRED is one of several MLSs whose board of directors have already authorized participation in the portal, including a $1 per subscriber fee that will be paid to the National Broker Portal each month. Other MLSs committed to the portal include Northstar MLS (Minneapolis), Connecticut MLS, NORMLS (Cleveland), CRIS (Akron), Buffalo Niagara Association of Realtors and Rochester Genesee Region Real Estate Service. In anticipation of this initiative being formalized, MRED launched the BPP/Homesnap app in July of 2016. “Adoption has reached over 25% of MRED’s 40,000+ Realtor customers in just a few months,” added Jensen. In addition, now that the joint venture has been finalized, MLSs representing over 200,000 subscribers have requested the new National Broker Portal MLS Agreement to review and present to their boards. “Homesnap is honored to have been selected as the technology partner to this inspired vision for the future of real estate search,” says Homesnap co-founder Steve Barnes. “As a company, we have always considered ourselves a business partner to the MLS and subscribed to the principles of the Fair Display Guidelines for MLS consumer sites.” Over 400,000 real estate agents have access to Homesnap Pro today, and the Homesnap app is used by over 4 million consumers. “This joint venture […]


Looking for a Killer CTO position?

by Marilyn Wilson on January 12, 2017

We work with tons of brokerages that say they want to look at their business in completely new ways. Companies that have been in the business for a long time though, cannot fundamentally change their approach for fear of losing agents and decreasing their market share. eXp REALTY is different. This company came out of the gate with a fundamentally different business model and an extremely unique approach to sales coaching, training and management. It is the Agent-Owned Cloud Brokerage®. Technology is absolutely at the center point of what makes eXp unique. Their industry exclusive use of a 3D immersive cloud office eliminates the need for the costly brick and mortar offices of traditional firms. . These cost efficiencies in turn allow the Company to deliver more value to their agents. They’re growing like gangbusters so they’re looking for a really smart and strategic Chief Technology Officer to help them continue to expand beyond the over 2400 agents and 42 state footprint they have established in a very short time. The ideal candidate will have strong leadership skills and will have a unique mix of understanding the needs of agents and their clients combined with a depth of technology vision and executional skills. As a key member of eXp Realty’s executive management team, this newly created position will act as strategic thought leader who will help drive the growth of the Company through the building of a scalable enterprise application through which eXp can efficiently serve its fast -growing international agent base. In addition, the CTO will drive the evolution of eXp’s Cloud Office to better serve the Company’s agents. The CTO will also be charged with developing a data strategy within the organization to leverage the vast amount of data available to the Company. This is a critical role in helping to shape and drive the future success of eXp Realty. The successful candidate currently holds, or has held, a visible and high impact technology leadership position in or around the residential real estate brokerage industry, should have a strong technical acumen and the ability to build and lead high performing engineering, product and IT teams. If you want to learn more about the position, feel free to reach out to me, Marilyn Wilson at Marilyn@wavgroup.com or call me at 805 748-9118 and I’ll be happy to tell you more about it.


Establishing Roots in Real Estate After working as the Director of Marketing & Professional Services at the Naples Board of Realtors in Florida, Paine moved on to the head position at the Bonita Springs-Estero Association, which, at the time, was a small association sandwiched between a megaboard in Fort Myers and another in Naples. As a contiguous market, all three were collaborating on building a jointly-owned and controlled MLS called Sunshine MLS. Uniquely, at the time, the project involved writing and producing MLS software. “It was a very educational experience that really prepared me to understand the critical technology pieces that have become the life bread of what the MLSs have become –  technology companies,” says Paine. Growing An Association Even while sharing an MLS and geographic borders with larger regional competitors, Paine led Bonita Springs’ growth from a small board to a medium board and boosted agent count under board of choice. A key strategy he employed was raising the profile of the Association by creating partnerships with the town to sponsor public events such as movies in the park as well as organizing charity golf tournaments to integrate the Association into the community.  By bringing greater publicity to the Association, Paine provided his agents with venues to meet prospective clients and helped drive appreciation for the positive role that brokers and agents played within the community. Within the Association, Paine engaged the membership by providing hands-on computer training seminars for agents to help them make the most of Sunshine MLS technology. “It sounds completely antiquated now,” explains Paine, “But, at the time, most of our agents had desktop computers and there was no GoToMeeting, which meant they had no way to learn technical skills in a supportive, informational environment.” The training was especially successful because it was delivered in a small group environment and focused on helping agents deliver consumer-centric service. “I developed relationships with a large number of our members simply by providing help in areas that they needed it.  That ability to meet a need quickly and in a friendly way really helped to build a sense of community that helped us to compete more effectively.” Nourishing Ideas for Growth In 2006, Paine was hired as the founding CEO of the Connecticut MLS, a newly created non-stock, broker run corporation, where he was tasked with an ambitious project to become a regional MLS and possibly a […]


NYC Party Next Week – Hamilton

by Marilyn Wilson on January 11, 2017

Every year a bunch of us industry road warriors get together while we are in NYC to have an late night off campus party. This year, we will be meeting up at Tonic West. And as usual, John Heithaus has pulled together some of the best NYC musicians who will be playing a few sets of good old rock and roll along with some features from the hit musical Hamilton. Because it is a private underground event, only a few people have tickets. If you want to come reach out to your friends at one of the following companies: Realtor.com, Buyside, Moxiworks, Imprev, Wolfnet, CloudCMA, NAR Center for REALTOR Technology, Road to Close, and Real Estate Digital. Of course – Victor, Marilyn, and Kevin can also hook you up. As usual, this party starts at 9 PM after dinner and the band plays until Midnight. I am not sure if bars still close in NYC – We buy the first 600 drinks – after that you are on your own. Details: Venue: Tonic West, 727 Seventh Avenue, NY, 10019 Date and Time: 19th January 2017 9pm – 12:00am Dress Code: Party/Casual


RESO Standards Adoption Report

by Victor Lund on January 11, 2017

RESO Real Estate Standards logo

The Real Estate Standards Organization (RESO) has driven the most important data solution for real estate brokers over the past year. With support from the National Association of REALTORS®, all NAR® affiliated MLSs (think association-owned) are required to adopt the RESO standard for MLS data. This change compelled CoreLogic®, the nation’s largest MLS provider to make the changes to the MLS data feeds. Zillow Group also jumped into the mix with the acquisition of Bridge Interactive to complement RETSLY. But firms went further, and it‘s good for brokers. Prior to the NAR mandate to adopt RESO data dictionary, every MLS in the nation spoke a different data language. In parlance, everyone had different data fields and rules in those fields. For example, some would structure the number of baths as a whole number that added up all of the bathrooms, like 3.75. Others would structure the data to say 3 full baths, 1 half bath, and one quarter bath. Now, almost every MLS has adopted the same structure for data distribution through the RESO Data Dictionary. The way that any given MLS made choices about data structure was up to the MLS. Now it’s a standard across them all. Read the full report on RESO Standards Adoption here!


Brokers Need To Fix Their YouTube Channel

by Victor Lund on January 11, 2017


WAV Group has studied the effectiveness of video marketing for brokers over number of years. By and large, firms are not seeing the level of engagement on video marketing that justifies the trouble or expense. Having a video on YouTube with 2 or 3 views is not a conveyance of success. The promises of video marketing are pretty significant. By using video, a property is marketed more dynamically than photo and text marketing. Videos are processed by the brain 60,000 times faster than text. Simply stated, it’s a better consumer experience. Prima facie – people enjoy a video television experience over a magazine or newspaper experience. Homebuyers spend more time looking at the property (minutes rather than seconds) at a much higher cognitive level. The average consumer with an Internet connection watches roughly 206 videos per month according to Nielsen. Brokers are also failing to syndicate the branded and unbranded videos effectively. WAV Group audits portray that unless the insertion of the videos into the MLS is done automatically, Realtors® or staff do not consistently complete the chore. IDX syndication of virtual tours drives a lot of views, and done correctly will provide some additional SEO benefits that can accrue to the broker website in the form of back links. Moreover, the branded virtual tours are not being syndicated well on third party listing websites like Realtor.com, Zillow, Trulia, Homes.com or others. Again, syndication drives views. Social media also plays a significant role in video engagement. We do not propose that brokers automate the publication of property videos on the wall of their social media pages. Rather, we suggest that you build a channel for videos and socialize the channel. If you pollute your wall with automated tour publishing, you will find that consumers will abandon. According to research by Usurv, Consumers are 39 percent more likely to share content if it’s delivered via video, and 36 percent more likely to comment and 56 percent more likely to give that video a coveted “like.” Brokers and agents would serve themselves well to deliver performance on their YouTube page by boosting the views with a few ad dollars. We have seen some interesting results whereby a broker who tags and advertises their videos correctly can actually display an ad as a pre-roll on a competitors’ video. That’s fun, and not very expensive. On average, video advertising is only about $0.02 per […]

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About MLS Client Portals

by Victor Lund on January 10, 2017

For sale With mouse

This afternoon I was able to enjoy a delightful conversation between two very bright, very experienced real estate CEOs – Greg Robertson of W&R Studios – makers of CloudCMA and CloudStreams, and Michael Wurzer, CEO FBS Data Systems, makers of FlexMLS (America’s second largest MLS vendor). The discussion centered on speed, design, delivery, among other things. It all went down on Twitter. If you love real estate technology – @gregrobertson and @mwurzer are must follows. Bigger Considerations? Stakeholders in the MLS client portal services are a combination of broker interests, agent interests, and by extension a consumer interest. I wonder what they think of listing alerts Broker View Brokers have a mixed bag of opinions about MLS client portals that push out listing alerts. Some brokers complain that it levels the playing field. It becomes a standard and agents use the MLS rather than broker solutions. Brokers also complain that they do not have access to the communications between the agent and the consumer, which they are responsible for supervising. Brokers do not even have access to the list of customers that their agents are working with! These portals also let agents leave brokerage companies and take all of their prospects with them. All in all, you can understand the argument. But the simple fact is that all MLS systems have client portals and it is a requirement of every MLS. You cannot have an MLS system without a client portal. End of conversation. Agent View Agents love the client portals. They have the flexibility to do highly specific and exotic searches that address the needs of their clients. They do not need to pay extra for the technology; it comes as part of their dues. The MLS is a safe and reliable storage place for customer records that does not get lost like a cell phone. They can also set up unlimited searches and customers. I know that one MLS vendor reported that they send over 100 Million emails to consumers each month out of the MLS system. Add all of the MLS systems up and you could easily estimate that the emails across the industry equal 200 Million or more. The MLS is a powerful consumer facing application (even in the absence of a consumer website like HAR.com). But most of all, agents love the client portal because they can switch companies and their customers are still registered […]


Inman Influencer Logo

The impact of the annual reveal of both the Inman Influencer List and the Swanepoel Power 200 is like a social media cannon shot: you can hear the buzz everywhere. The fact that this year, these leadership lists were released nearly simultaneously makes the buzz near deafening. The rush you get seeing your name on either – and in some cases, both – of these prestigious lists never gets old. And nor does the surprise of discovering those who are “missing” – exceptionally worthy influencers and incredibly powerful leaders who didn’t make either list. For many, it must be a personal downer because you can almost feel the entire real estate industry all at once clamoring to click-through these lists to discover who is and is not being recognized this year. Most importantly to the WAV Group – and our sister company RE Technology – are the leaders of companies we work with who have been honored by inclusion on these lists. We are deeply humbled to be included as well. Once again, WAV Group Founder Victor Lund and Marilyn Wilson are recognized by inclusion on the Swanepoel Power 200 as two of the most powerful and influential people in real estate. Victor also lands again on the 2017 Inman Influencers list, and for the first time, Kevin Hawkins, a 30-year communications and marketing veteran who heads up WAV Group Communications division, also is a 2017 Inman Influencer. But our enthusiastic congratulations go to the change-makers we are proud to represent, both current and past clients. For the 2017 Inman Influencers, these industry stalwarts include Mark McLaughlin (Pacific Union), Bob Hale (HAR), Pam O’Connor, Paul Boomsma and Stephanie Pfeffer Anton (Leading RE), Chris Bennett (CoreLogic), Joseph Rand (Rand Realty), Keith Krach and Glenn Shimkus (DocuSign), Ryan O’Hara, Marci James, Luke Glass and Brandi Friedland (Move), Art Carter (Chair of RESO and head of CRMLS), Jeremy Crawford (RESO), Joel Singer and Leslie Appleton-Young (CAR), Guy Wolcott (Homesnap), Susan McHan (Opes Advisors), Ben Caballero (HomesUSA.com), Spencer Rascoff, Amy Bohutinsky, Greg Schwartz, Jay Thompson, Errol Samuelson and Alissa Harper (Zillow Group), Laura Monroe (RealSatisfied), Jim Harrison (MLSListings), John “OB” Jacobi, Anne Jones and Marguerite Giguere (Windermere Real Estate), York Baur (Moxi Works), Jed Carlson (Adwerx), John Aaroe (John Aaroe Group), Marty Frame (RPR), Cindy Ariosa (Long and Foster and MRIS), David Charron (MRIS), Seth Price and Frederick Townes (Placester), Pace Davis (Bridge Interactive), […]


Should Brokers Do REALTOR Background Checks

by Victor Lund on January 4, 2017

Background Check

Too often, brokers and managers get caught up in recruiting goals that they skip some basic best practices – Background Checks, Customer Satisfaction Checks, etc. Perhaps agents should be checking out the backgrounds of their broker too. Before the New Year, Todd Kohlhepp, a real estate broker was linked to 7 murders and a kidnapping. Todd was the broker in charge of TKA Real Estate. Inman news reported that the guy had spent 14 years in jail for kidnapping a 14-year-old girl. Of course – his agent ratings on popular listing syndication websites gave glowing reviews. (The agent has been removed from those sites). Research Production This case points to some good fundamentals about proper recruiting. You may want to start out by building a target list of agents to recruit. Just as agents focus on customers, brokers should focus on agents. BrokerMetrics® from Teradatum and Trendgraphix are both good for this. You can see things like historic transaction history. How many brokerages they have worked for. Transaction dollar volume. Transaction location. There is a ton of intelligence available. Do your research. Recruit Around Culture Consider the cultural fit. I recently did a research project to look at Agent Profile pages on a broker website. We took stock of the brokerage culture that we could glean from simply looking at the headshots of agents. Diving in deeper, we would look at the profile of office managers and how they looked relative to the agents they recruit. It is astounding to simply look at profiles and pick out agents that look like they fit vs. others that seem out of place (or missing photos all together). Surprisingly, production numbers correlate to profile photos when you ask a group of people to pick the most and least productive agents. A photo says a lot. But deeper than that, take a look at the agent’s social media profiles – look at their friends, their posts, their reach, their engagement. It is never a perfect science, but simple observation goes a long way. Consider the risks. We all know that a bad apple ruins the bushel. But sometimes brokers take too much risk in bringing in agents that don’t fit. That can really demoralize an office, or worse yet – a brokerage. I seriously doubt that consumers are going to want to work with agents form a brokerage that has felons on their roster. […]


How Will You Expand in 2017?

by Victor Lund on January 3, 2017

Businesses have a simple strategy – MORE! If you are brokerage, you want more revenue. To get more revenue you need more transactions. If you want more transactions, you need more productivity per agent, or more agents. If you are an MLS or a technology company, you want more subscribers. More, More, More. The problem with more is that it typically does not involve listening to your current customers. In real estate, that means listening to customers. WAV Group is always astounded at the lack of focus groups and customer surveys in our industry. To our knowledge, we are the only consulting firm that specializes in customer research. On any given month, we are running about 10 research projects. That seems like a lot, but given that there are hundreds of MLSs, hundreds of technology vendors, and hundreds of brokers – we arrive at the consensus that the real estate industry is not listening to its customers very well. The McDonald’s Filet-o-Fish A classic business story comes from McDonalds. They are a huge research company. They never guess and do not make decisions without asking customers and testing their food. Makes sense right? They are an example of how to listen. Back in the 1960s, McDonalds noticed sales numbers went down on Fridays. They talked to their customers and quickly learned that Catholics eat fish on Fridays – so McDonalds was a hook with no bait on Fridays. They decided to sell the Filet-o-Fish on Fridays and as you know – it remains on the menu today as a result of the success. Survey and Focus Group Research Survey and focus group research should be part of your annual budget. It is something that you can do yourself, but if you do not have the skills to know how to build surveys, test surveys, and build survey reports – you may have less success than you expect. The same is true of Focus Groups. These disciplines are sciences. A number of companies will hire a firm like WAV Group to do the work the first time, and rinse and repeat in successive years to benchmark improvements. The important thing here is that you know your limitations and seek support if research is not your people’s strength.  Incidentally, be mindful that your customers will tell independent researchers things that they do not want to tell you directly. Truly great leaders are […]


Companies Are Not Designed to Merge

by Victor Lund on January 3, 2017

Merger Puzzle

WAV Group has participated and observed the mass amounts of merger activity that has hit a high pitch in 2016. It is happening at all levels of our industry – agents merging into teams, brokers merging into mega brokers, Association of REALTORS® mergers, and MLS mergers. Based upon our work schedule for Q1 of 2017, this trend does not seem to have any ebb in sight. WAV Group will facilitate more M&A activity in Q1 than any other quarter in our firm’s history. Company founders and Boards of Directors are often not open-minded about mergers. The first reaction to a merger discussion is naturally defensive because the merger itself often pits a company that is stronger against one that is weaker. The stronger company often overlooks the centers of excellence that the weaker company has. The weaker company often feels dominated and under appreciated. Commit To The Evaluation I fondly recall an awkward meeting where two boards who were considering a merger were stuffed into a junior suite at an industry conference to interview consultants for merger facilitation. My responsibility was to pitch them on WAV Group. I started out by asking them if they had decided to enter into discussions in good faith, had they signed a non-disclosure agreement, were they willing to share financial information, etc. They looked at me like I was crazy. Consultants do not build consensus. They build merger models. I went on to explain that Boards must commit to a full out merger evaluation to have any chance of success. Boards must agree to enter into merger discussions and create merger models that are real. This involves performing customer research, financial modeling, governance modeling, staffing, communications, contract review, etc. In effect, you fully plan your merger before you ever call the question at a board meeting. The role of a consultant is to build the model, collecting information from both sides and working collaboratively to see what the new entity looks like. Both boards should have an answer to every question. The Threat or Opportunity In many mergers, there needs to be some notion of a shared threat or opportunity. It begs the question, what happens if the merger does not go through. If the answer is nothing, then there is probably no reason to merge. However if the answer is tied to protecting both organizations from a mutual threat, or allowing both organizations […]