RISMedia's Real Estate Magazine

JUL 2018

Real Estate magazine is the industry's leading source for real estate news and information since 1980. Published monthly by RISMedia, Real Estate magazine offers timely and relevant real estate news to the industry's top brokers and agents.

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RISMedia's REAL ESTATE July 2018 99 free access to data, I have a more pessimistic view of this going for- ward," said Luke Glass, executive vice president of Industry Plat- forms for realtor.com®. "You can leverage consumer data, and use that data to influence all market participants. All boats have risen in that tide, but looking forward, it really advantages big companies over small companies." Will the emergence of too many portals force the distribution of in- formation to become segmented? "There are positives and nega- tives," said Stephen Brobeck, ex- ecutive director for the Consumer Federation of America (CFA). "A lot more information is available to consumers about properties, and I think that it's really important for consumers to have access to that information. On the other hand, if real estate portals are really large, they can wield a lot of power." "As a technologist, there is this saying: 'Garbage in, garbage out,'" said Simon Chen, CEO and presi- dent of ERA Real Estate, part of Re- alogy, one of the largest residential real estate companies in the U.S. "If the data isn't consistent, and comes from multiple sources, [and] you have a hard time aggregating it, ultimately, it's the consumer that is disadvantaged and inconvenienced by it." However, others believe that cut- ting back on real estate portals could increase advertising fees, and, therefore, commission rates. "We view the portals as a tax that we would rather avoid—every dollar we have to spend is a dol- lar that we have to charge the con- sumer," said Art Carter, CEO of the California Regional Multiple Listing Service (CRMLS) and chairman of the Board of Directors for the Real Estate Standards Organization (RESO). "If there are only a few portals, you'll see prices go up. We carefully monitor the price to adver- tise on different sites." Although MLSs receive support from the majority of industry profes- sionals, ethical questions were raised on whether consumers and agents should be forced to share listing infor- mation on real estate portals. "The forced sharing of listing data to listing websites and tech- nology companies, which are not even essential to buyers and sell- ers taking advantage of brokerage services, may only be to the profit of third-party entities, and not to consumers, who already have great access to real estate information," said Johnson. "We want every website to have every listing," said Glenn Kelman, CEO of Redfin. "The problem is that websites outside the MLS don't re- ciprocate. It creates fragmentation in the market if one website has a listing and another doesn't—that benefits bigger websites." With these ideologies, where does transparency fit in—and, more specifically, should the in- dustry be more transparent about agent commissions? "Folks don't understand how commission works; they assume if the buyer agent gets paid one thing, the seller agent gets paid the same," said Khalil El-Ghoul, principal broker of Glass House Real Estate. "The buyer agent fee is free, the listing agent is the only one that gets paid, and the listing agent offers a share of his commis- sion with the buyer agent…that's not a good place for the industry to be in." "The challenge is [the industry's] lack of transparency and ability to collaborate in a way with the consumer, not with each other, to expose what's happening. What the fees and services are—that's where we should be safely com- peting," said Joshua Hunt, CEO of TRELORA. If change is on the horizon, some panelists warn that without close scrutiny of possible solutions, there could be consequences. "There are definitely points of friction in the real estate business, but we need to have knowledge and information if we're going to make changes," said Brian Larson, associ- ate professor of Law, Texas A&M Uni- versity School of Law, and of counsel, Larson Skinner PLLC. "Under-tested solutions come with risk." The question remains: Should government regulation play a role in the transparency and sharing of real estate information? "We have to voice the impor- tance of having free information, and if we allow some parties to withdraw some information, that could have important consequenc- es," said Dr. Panle Jia Barkwick, associate professor of Economics, Cornell University. "In an already vibrant and com- petitive environment, the National Association of REALTORS® does not think that a trade association or the federal government should mandate how or where REALTORS® and their customers' properties are shared and posted on the in- ternet; consumers and their agents should have ample choices and protections," said Johnson. "We firmly believe industry innovation is abundant and the current market is working." RE Liz Dominguez is RISMedia's associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com. RISMedia Online News Editor Suzanne De Vita contributed to this report.

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