What do you do when your $6B company (Fidelity) has an extra $1.5B in cash languishing in your bank accounts? You buy back a company (LPS) that you spun out and you start all over again. If you ever doubted the value of providing software and data services to the financial industry, Mr. Foley just answered it. He is now officially back in the MLS business…. Almost. Deal is not quite done. But wait, there is more. Foley is a self made Billionaire who may perhaps be best known for his personal investing in the wine industry – having purchased more than $200 million in vineyards over the past decade and a half. Here in California, they say that the best way to make a little money in the wine industry is to start out with a lot of money. Regardless, Bill Foley is a legendary and upstanding member of the California and New Zealand wine movements. It just goes to show that you need to drink a lot of wine to appreciate how to offer data and software services to the financial industry that underpins real estate today. There were many hedge funds who suspected that Foley might buy Zillow or Trulia. There was some toe dipping into consumer facing websites with Cyberhomes. Perhaps losing tens of millions on Cyberhomes was enough to teach him that those companies are not attractive to him. Indeed, Zillow, Trulia, and MOVE have all learned that they need to diversify into other services to make money providing software services (becoming more like LPS). The consumer sites, even at scale, do not yield healthy profitability and sustained growth to investors unless they buy them on the way up (which Foley may have done). There was nary a whisper of Fidelity buying CoreLogic. Historically, Fidelity’s chief competitor First American would have poisoned such a trade. But they are out of the picture now and CoreLogic has a comparable valuation to LPS. In many ways, LPS was to Fidelity exactly what CoreLogic was to First American. These companies have been on parallel course for years and years and are vicious competitors. It would be a hoot to see First American buy back CoreLogic or even put in a bid for LPS. There is a “go shop” period of 90 days in the offer that allows LPS to find a better price. Place your bets boys! The […]
Since the housing market crash, there has been lots of discussion about shadow inventory. These are properties that are in bank foreclosure or pre-foreclosure that are making their way onto the market. Up until now, this inventory has been slowly released – perhaps strategically by banks who want to contain loss exposure – but more likely as a result of the slow process for foreclosure across America. The only thing slower than a bank’s decision making process is the US Court system. Last week, Zillow – one of the three leading search portals in America began to display 1.2Million listings. As a result, the shadow inventory is no longer in the shadow. What is interesting is that consumers are required to “sign in” to view these foreclosures in their area. I guess that this is Zillow’s version of a VOW. Just for fun, I signed in and looked at a home that was in foreclosure – 1220 Montecito Ridge 93420. Zillow listed this home with a Zestimate of $1,235,887 – $52,000 below the Zestimate. I looked up the same property on REALTORS(r) Property Resource. The RVM on this property is $1,424, 000. The owner is the Reed family (information that you cannot get on Zillow) and they live in Santa Maria, CA (full mailing address is available in RPR). I think that agents should be very grateful that Zillow has made this data available, for free. Consumers are likely to find these homes on Zillow then contact an agent for information. This is where RPR comes in – as a REALTOR(r), beginning tomorrow – you can look up that distressed property and possibly reach out to the owner for a short sale. RPR becomes available to all REALTORS(r) tomorrow. You can also find this information in REALIST, or iMapp, or LPS Tax. It is not clear who is providing Zillow with this shadow inventory data. Could be CoreLogic, could be LPS, is probably both. It is also not clear to me who is getting access to all of the consumer registration data. Those buyer leads are more valuable than the listing data. Perhaps the next horizon for broker websites will be the inclusion of Shadow inventory. The data is available for sale. There may be issues in many markets whereby brokers are not allowed to co-mingle MLS data with non-mls data. A separate search will be necessary to skirt this rule.
I guess that if you are a technology company that has been spending a lot of time in court rooms, you may as well make the best of it, and fix the court system while you are there. Just kidding. In all seriousness, LPS and CoreLogic have largely escaped all damages for thier role in supporting the bad decisions of lenders. That is a good thing. But LPS did just land a huge deal in their courthouse management systems. They were awarded the contract for managing documents on 425,000 court cases that roll through the Palm Beach County Clerk & Comptroller’s office each year. This type of throughput of paper makes a real estate transaction look like a sticky note. Here is the press release.
LPS saw the spin off of their Agent-Broker products division in a management led buy out last September. The new company formed is called Real Estate Digital. Today, it was announced that the LPS Tax company was sold to Lereta. This company has nothing to do with the data that is licensed to RPR or MLSs. This is a tax services company totally separate from the Applied Analytics Data Solutions company that licenses public records and serves MLS. These are interesting times. We will keep you posted on what we hear.
LPS, developers of the Paragon MLS system, announced that they have secured an agreement to replace a competitors’ MLS system with Paragon 5. This only happens about 12 times each year. The news is less about just getting a win, but tells a larger story about the future of MLS and how one MLS vendor is positioning for long term success. WAV Group performs upwards of 40 MLS customer satisfaction surveys each year to help MLSs understand what agents and brokers expect from their MLS. The number one complaint is Apple compatibility and Mobile compatibility. LPS knew this many years ago (when they were called FNIS or FNRES), and had the guts to invest more than $1Million into rewriting their entire application to meet customer demand. Taking on such a project is not for the faint of heart. It requires developing new software that feels the same as legacy software – like making a new car feel like the old car they know in love. Many things are in the same place – the lights, the breaks, the radio, etc – everything is where long-term Paragon users expect them to be. It was this thoughtful reconstruction that allowed more than 200 MLSs to move seamlessly from Paragon 4 to Paragon 5. Typically, any conversion – including from same system to same system causes an uprising. But in this unique case, MLSs heard more thank yous than hate yous.
There has been a lot of conversational concern about companies that enter into new verticals of data management and service offerings. Four such instances were announced this year. REALTORS® Property Resource contracts with LPS for data services and LPS subcontracts to Real Estate Digital. Zillow purchased an IDX vendor, Diverse Solutions. MOVE purchased Threewide, the providers of the popular Listhub syndication service. CoreLogic launched a new appraisal tool leveraging MLS data. In every case, the vendor has been virtuous and adhered to contracts and data use rules. In each of these cases, many feared that data could be misused or abused. But, thus far, there have not been any discoveries of inappropriate behavior.
The predominant buzz in real estate this week was focused on successful and unsuccessful buyouts. On the successful side of buyouts, a talented team of managing executives from LPS was able to complete a buyout of non-MLS products and form a new company called RED, an acronym for Real Estate Digital. In a more straightforward buyout, CoreLogic purchased MLS provider Tarasoft, rolling that system under their Marketlinx brand. On the unsuccessful side of buyouts, the Arizona State Association of REALTORS was unsuccessful in its bid to purchase the shares of ARMLS, its first leg in a course to develop a statewide MLS. Although it may be a stretch of the imagination, there is a synthesis among these transactions. We see that there are three ideological philosophies that are becoming more defined in real estate, each represented by one of these buyouts: The Broker/MLS-centric ideology; The MLS-centric ideaology; the State Association-Centric ideaology.
WAV Group would like to extend a sincere congratulations to our friend, Marty Reed of LPS. LPS Executive Rich Lull announced today that Marty Reed has accepted a new position expanding her role with LPS Real Estate Group’s MLS business. “Marty and team has done an incredible job with the development and launch of Paragon 5, currently being deployed by LPS’s 200+ Paragon accounts, and being presented to a number of MLS’s for consideration for conversion,” says Lull. Effective immediately, Ms. Reed will assume the role of VP ParagonSolutions, taking on responsibility for P&L management of the Paragon suite of products, as well as LPS’s Association Management product, LAMPS. In her new role, Reed will expand her focus beyond the products and work with LPS customers and the LPS team to insure a long and successful life for Paragon. Lull continues,
WAV Group has been commissioned by LPS Real Estate Group to hire a Product Management position located in Orange County, California for their rDesk platform. The ideal candidate for this position will be an enthusiastic individual that possesses that rare but valuable mixture of intellectual curiosity, business acumen, marketing savvy, technical proficiencies, strong communication skills, and attention to detail. They will be able to drive a team to rally around a vision of a platform that uniquely meets the needs of real estate consumers and real estate practitioners better than its competitors.
Across America, WAV Group has recognized that MLSs and Associations have been working with MLS vendors and IDX vendors to develop property search solutions for their members. These solutions are offered in one of three ways: Free, Freemium, and Premium. What follows is a basic description of how these programs are comprised along with a shortlist of MLSs and their partners. Free: In some Associations or MLSs, the IDX solution is offered as a complimentary (free) product for agents and brokers. This is unconfirmed, but we think that Rapattoni may have the most subscribers to the free solution. Rapattoni has offered a property solution that may be framed into an agent or broker website for a long time – and is often a standard component. LPS offers a similar offering, so does CoreLogic Marketlinx, FBS and others.
WAV Group has been commissioned by LPS Real Estate Group to hire a newly created Director of Product Management position located in Orange County, California for their rDesk platform. The ideal candidate for this position will be an enthusiastic individual that possesses that rare but valuable mixture of intellectual curiosity, business acumen, marketing savvy, technical proficiencies, strong communication skills, and attention to detail. They will be able to drive a team to rally around a vision of a platform that uniquely meets the needs of real estate consumers and real estate practitioners better than its competitors.
JACKSONVILLE, Fla. – July 7, 2011 – Lender Processing Services, Inc. (NYSE: LPS), a leading provider of mortgage and real estate technology, data and analytics, today announced that its LPS Applied Analytics division has introduced the LPS Home Price Index (HPI). The LPS HPI shows historical price trends for residential properties in the United States, offering cost-effective estimates of property values that underlie residential mortgage portfolios and securities.
If you add up the comments across the real estate technology space during the past few days, you will find a resounding thunder of criticism over the quality of the S&P Case-Shiller index, powered by Fiserv data. Companies like, Zillow, and RBI were the most vocal on their blogs. LPS and CoreLogic probably have opinions similar to Zillow and RBI. They have observed the weaknesses of the Case-Shiller index for years. I think that they are just a little less apt to douse Case-Shiller publically. Talk to any of the data specialists at either LPS or CoreLogic, and you will hear an accurate and technically sound assessment of the data set going into Case-Shiller.
On the heals of settling the Civix lawsuit, MLSs are aware that litigation can have significant impacts on the services they offer to their members using third party service providers. The Civix settlement was arranged by NAR legal council and cost MLSs about $9.06 per subscriber. There are other ongoing patent infringement lawsuits for mobile that could also have significant impacts on MLS service providers, but a recent Inman article brought my attention to a suit that CoreLogic has pending against LPS, and by association, RPR™. CoreLogic® has patents on their Automated Valuations tools and claim that LPS and the RPR™ REALTOR® Valuation infringe on their patent. I do not know the quality of the case or defense, but I do know that MLSs and Associations do not want to get sucked into litigation or a settlement as a result of the litigation. As each Association of REALTORS® and MLS go through their decision making process on data licensing, consideration should be given to mitigating future exposure related to this lawsuit and other lawsuits. The concept is indemnification. MLSs are insured, but litigation is painful and time consuming. NAR sanctioned MLS are insured by NAR for lawsuits after a deduction of $100,000 – any expense up to the deductible are your responsibility. This may all be avoided if MLSs negotiate indemnification language into their vendor agreements. As it relates to data licensing: regardless of your preference for CoreLogic’s Property Infonet, or RPR, or both, or none; be sure to address indemnification from the lawsuits between these companies. Keep your MLS business out of it.
Trulia made a brilliant acquisition around the beginning of 2010 when they purchased @movity. @movity was a company that specialized in taking complex data sets and layering them onto maps in a variety of brilliant ways. Today they are leveraging the skills from the @movity team to explore ways to communicate data easily, and drive engagement. The data kings in the real estate industry are CoreLogic and LPS. They are both companies that collect, warehouse, and distribute massive amounts of data. The focus of these companies has always been data quality and predictive analytics – not necessarily presentation or engagement. Zillow busted into their house with the Zestimate – although not quite as accurate, the Zestimate is a reasonable predictor of property value when benchmarked against the “professional AVMs” offered by LPS and CoreLogic. In truth, Zillow brought the AVM to the consumer, and they did it for free, so consumers cut them some slack for being a little off. Zillow created data easily, and drove engagement. In isolation, data is a rather sleepy lummox, but web presentation changes all of that. I was inspired when the MLS systems around the country embraced map search. Those long forms with checkboxes, drop downs, and codes were such a bore. Form based search is the summit of tedium. For me, map based search changes all of that. MLS data became interesting, and somewhat engaging. Flood Zones, and school districts and other key property characteristics layered over property maps began to convey an understanding of meaning and purpose behind real estate property values. Great data trains the REALTOR and provides them with tools that enable clear communication to the consumer they serve. I sincerely believe that Trulia has an edge today over many of the MLS software provider. Take a look at this video (I would love to see training videos like this in the MLS systems) of how they explain the launch of a new feature. Then go try the product. You are sure to be impressed, and engaged.