Answer the question, Rob

Feb 5, 2018  |  Michael Wurzer

Rob Hahn wrote a blog post today in response to my post last week, and seems to suggest that I’m either exaggerating the intent of his earlier post or sticking my head in the sand. Neither is true.

Most importantly, despite writing a lot of words, Rob never squares to the original question, which is whether a federally mandated database would really strip away from sellers control over where they can or must advertise their home for sale. That was the point of my post, because, unless the government were to go that far, the end result wouldn’t be substantively different than today. Sellers are in control today of how and where their homes are advertised either on their own as a FSBO or through a listing contract with a broker. The question I posed is why would the federal government take this right away from sellers?

With regard to Rob’s point that he was just tossing out “Black swan” ideas to encourage folks to think strategically, I applaud him for that. However, such “Black swan” thinking takes on an entirely different character when it is linked to and quoted in a news article that’s headlined by news about federal review of the real estate industry. Andrea’s reporting was excellent on the facts about DOJ and FTC but I very purposely wanted to counter the idea that the two things (DOJ/FTC review and Black swan ideas) should be linked.

I understand the desire to be provocative and get people thinking, and I understand the need to report the news and create compelling stories. But I think it’s equally important to think about the issues past the headline. Instead of thinking about the federally mandated database, my point is that you also need to think about the permissions for accessing that database, because stripping sellers of that right and allowing their house to be advertised all over the place without their right to control it seems incredibly unlikely and counter to the overall goals of accuracy and completeness proposed. Instead, some control is likely and the most logical place to put that control is in the hands of the seller, exactly where it sits today.

Lastly, Rob implies that I’m somehow sticking my head in the sand or being an apologist for the MLS industry. I’ll leave it to readers to decide whether I’m providing substantive analysis or being an apologist.

3 Responses to “Answer the question, Rob”

  1. Robert Hahn says:

    Thanks for the discussion, Michael. I feel like I can just respond here, but I’ll cross-post to Notorious to make sure anyone who read the original can see these answers as well.

    A few things:

    1. If your point was that the Feds wouldn’t strip the right of the seller to control where they can or must advertise their home for sale… could I suggest a rewrite? This is literally what you wrote:

    “If we apply the open banking model to real estate, the seller and/or listing broker would be the one to authorize access, which essentially is exactly what happens today when the seller either goes FSBO or hires a broker to market their listing for them. Now, to be clear, I know there are lots of nuances that people will be quick to put forth about whether the seller, broker, etc., should authorize access, but we don’t need to dive into all that here.”

    Since I’m not applying the open banking model, or any model to real estate, *and* the phrasing of “the seller and/or listing broker” is not as tight as your formulation above, I submit that if I failed to answer your question, it’s because you failed to ask it.

    2. Having said that… what is this mysterious right of the seller to control where to advertise? I know for a fact that I have never heard of such a thing through three years of law school and oh a decade or so of worrying about e-commerce… until I got into real estate. For your reference, here’s the FTC guidance on advertising and marketing on the Internet. It’s full of concern about truth in advertising and substantiating claims, but nothing whatsoever about a “right to control WHERE to advertise.”

    https://www.ftc.gov/tips-advice/business-center/guidance/advertising-marketing-internet-rules-road

    3. If the *real* question you asked, because it’s a little difficult to make sense of what it is that you’re precisely asking, is: “The question I posed is why would the federal government take this right away from sellers?” the answer is: Because it benefits the buyer.

    There are already quite a few rules that govern when/how/where advertising can and cannot happen. Almost all of them are for the protection of the BUYER — the guy who brings the money. So the Federal Government, in its infinite wisdom, would decide that protecting Buyers necessitates regulating where/when/how/what Sellers can advertise, and take away a phantom right to control avenues of advertising that doesn’t actually exist anywhere other than in the minds of real estate industry people.

    4. If your desire was to “very purposely wanted to counter the idea that the two things (DOJ/FTC review and Black swan ideas) should be linked” then you probably shouldn’t have written sentences like this:

    “The possibility of federal review probably is scary enough for most people, but then you add on to it wild-eyed speculation by lobbyists such as Daniel Castro of ITIF, a group Inman reports was partially funded by Zillow in the past, *and* pundits like Rob Hahn, about a federally mandated national listing database, and what was just scary quickly turns into all-out panic.”

    See, when you use that word “and” as you did, you LINK the two together. That’s the exact opposite of what you claim you were attempting to do.

    And then you write:

    “Rob Hahn *similarly* speculates about a federally mandated national database that is “easily available to all data users, including consumers, Wall Street, government, and academia” but he doesn’t even attempt to address the question of what “easily available” means, including who would authorize that access.”

    That word “similarly” doesn’t counter the idea that the two should be linked; in fact, it does the exact opposite.

    So forgive me if I thought you were linking the two together.

    5. It appears that you didn’t really want one (or more!) questions answered. You wanted to make a point. Specifically, this one:

    “Instead of thinking about the federally mandated database, my point is that you also need to think about the permissions for accessing that database, because stripping sellers of that right and allowing their house to be advertised all over the place without their right to control it seems incredibly unlikely and counter to the overall goals of accuracy and completeness proposed.”

    That’s a fine point, and one that is worth engaging with.

    Is it incredibly unlikely? Of course it is — hence, the “Black Swanness” of the whole deal.

    Is it counter to the original goals of accuracy and completeness? I don’t see how that could be and would love your rationale on how government mandates on submitting data to a government database (as unlikely as it is) makes that database less accurate and less complete.

    6. Finally, if I implied that you were sticking your head in the sand, I apologize. I must have gotten confused by the words you actually wrote, instead of the words you were thinking of in your head. But don’t be concerned: it’s all wild-eyed speculation anyhow. Keep calm and carry on!

    Having said that, I must tell you that when you write words like “Instead, some control is likely and the most logical place to put that control is in the hands of the seller, *exactly where it sits today*” well… there’s a certain whiff of the status quo about the whole thing, isn’t there? I mean, what else to make of “exactly where it sits today?”

    I have to go take the wife to a movie, but will check back later to continue the conversation. Thanks again for the response and the opportunity to engage in constructive blog-to-blog dialogue!

    -rsh

  2. Michael Wurzer says:

    There are two related reasons a federally mandated “open” database doesn’t result in the most comprehensive or accurate information available to buyers. First, the accuracy of the database is not in question, the question is the accuracy of all those sites who will post the data for whatever purpose they decide. We all know real estate data is valuable and so lots of site owners undoubtedly will try to take advantage of that value, but the last few decades have shown that many of these sites could care less whether their presentation is up to date or accurate. The result is a myriad of web sites creating tons of noise that isn’t beneficial to consumers and likely doesn’t present homes in the best light for the seller. Second, the less control sellers have over how their home — likely their most valuable asset — is being presented to the public, the more they’ll restrict the content they provide. For example, let’s stick with photos, which the seller should either own or control through contract. Even if the federal government decided posting some photos was important enough to buyers to mandate that sellers post them to the central database, sellers and their representatives will reserve all the best photos for sites they control, which again means that the “database” isn’t complete or fully representative of the property.

    One of my customers pointed out that the crux of the disagreement we’re discussing is that I’m focused on the seller and you’re focused on the buyer. Of course, as CMLS posits, MLSs are concerned with “making the marketing work,” which means balancing the needs of buyers and sellers. That’s the point I’m trying to make. And, in that regard, yes, I am suggesting that MLSs are doing a great job of striking that balance and, as I’ve written before, am concerned that failing to recognize the delicacy of that balance can kill the goose that laid the golden egg. I make no apologies for that.

  3. Tom Wissel says:

    I often wondered, not being a specialized anti-trust lawyer, how is a single group (NAR) allowed to adopt rules that so completely dominate an industry? And now after an upstart competitor (CMLS) entered the arena of rule making, the two are joined together into one rule-making body.

    Why can I talk to a Sprint Customer from my Verizon phone? RESO is a data and transmission standard, so why am I stuck only accessing information in one flavor. I may love FLEX and need to access some neighboring data system that is non-FLEX.