Over the last month, a lot of people are talking about data. Inman Disconnect crafted a data statement as one of its Parker Principles, Real Estate Standard Organization (RESO.org) Spring 2018 Conference was all about data, and the Information Technology and Innovation Foundation (ITIF) held a panel to discuss how real estate can be more competitive with technology, which included data as a component of its theme. Here are some thoughts on the good, bad and ugly uses of data.
Parker Principle on Data
Some have revised their thoughts on the Parker Principles; both the good and the bad. I’d like to see a slightly modified dialog on data availability and use.
Some concepts first–
Data…We are a society of using data to develop information for building knowledge and then leveraging that knowledge to make better decisions. Oh, and by the way, we want the data now and we want it for free!
But, does data make us an expert? While it makes us more well informed to make better decisions, it doesn’t provide the knowledge to guide us through unintended consequences revealed during a real estate transaction.
Let’s say I used a website to self-diagnose a medical problem. I accessed free data about my problem and reviewed the statistical outcomes. What did I do after my research? Go see my doctor.
I am a technologist, but I firmly believe the act of performing a real estate transaction requires interaction between a consumer and a real estate professional. We know the landscape of this interaction continues to evolve as technology changes.
While we have seen numerous changes in technology over the last 20 years, we also know that we need brokers and agents to facilitate transactions.
Steve Murray states in his The State of Technology in Real Estate podcast, “85% of consumers are still using an agent to buy or sell a home.”
I agree that the agent consumer relationship in a real estate transaction remains intact for now and into the near future. The consumer will continue to be confronted with many obstacles outside of data availability, requiring a real estate professionals knowledge and guidance through a transaction.
A Direct Conversation –
Today, consumers have all the real estate data they need to manage their decisions. Properties for sale and sold, market stats and trends, automated home valuation, schools, walk scores, etc.…
Can access to real estate data be streamlined? Absolutely, and the Parker Principle outlines this very well. It just cannot be for free. There are costs to obtain, manage and distribute data.
Let’s ask the question, “Why is it easier to close on a newly constructed home from a major developer?” It’s simple. The developer controls the process during a transaction and facilitates the sharing of data between the necessary parties.
On existing properties, the process is tough to navigate for the consumer. Here is where the real estate professional assists in the process. How can we help the consumer and the professional? Shoulder industries such as mortgage, title, home appraisal, home warranty, home repair service, attorneys, and others need to have a form of data cooperation.
Transparency! I love this word. In real estate, the lack of transparency during the transaction is a major pinch point for consumers. We need to make the transaction process as simple as possible. We need to have open data cooperation between all parties of the transaction.
This is what open data means to me.
RESO – IDX Payload
Great news from the RESO 2018 Spring Conference. IDX Payload Workgroup has finalized a standard list of fields from the RESO Data Dictionary 1.5. The payload contains 237 fields of properties, members, offices, open houses, and media information.
The next steps will finalize the IDX Payload specification for a potential ratification by the RESO Board of Directors at the RESO 2018 Fall Conference being held in Milwaukee, WI from October 16th through the 18th.
Good news for Brokers, technology companies, and agents. Once the IDX Payload specification is ratified as part of the Data Dictionary, it becomes part of the RESO Data Dictionary Certification requirements.
Imagine asking for an IDX data feed from multiple MLSs and there isn’t a big hassle or big costs to map them all into a single database. Big plus for everyone!
Foresight on the IDX Payload specification is a lot of these fields can have null or blank data. MLSs have the option to expose the data for these fields.
Prudence is on the brokers and agents to understand what MLS IDX policies are in place and monitor any future policy changes. Data can be filtered from them.
RESO – Web API
Great news from this Workgroup as well. Passing of RCP – Web API-010 adds the API Update functionality to the specification. Passing of this RCP enables the ability to programmatically create, read, update, and delete data into a database. Prior to this, the Web API specification only allowed ‘read’ access from a database.
Nothing can be simple…yes, there were sidebar conversations all week about the Web API.
The colloquy during the week was about using the Web API to replicate data from one system to another. There are some in the real estate technology community who feel this functionality should be prohibited.
So, what If you have business use case to replicate data? Use RETS.
Jeremy Crawford, CEO of RESO, wrote a blog article, “RESO Web API Replication: Fact or Fiction”. He states the Web API specification can replicate data from one system to another, and Homes.com is doing this now.
The API versus RETS ROI benefits is outlined in the case study by RESO of Homes.com migration to the Data Dictionary and Web API. Web API wins hands down.
Bottom line, significant cost savings.
There are business use cases in the broker and technology community – business intelligence reporting on historical data – where replication of data is very important. Real-time access to the data does not provide a solution.
Let’s hope prevention of replication via the Web API doesn’t become a reality.
Information Technology and Innovation Foundation (ITIF) Panel
On April 5, 2018, the ITIF held a panel discussion titled, “Using Technology to Make Real Estate Competitive”. If you have not listened to the 90 minutes of discussion, you should just to have knowledge of what the FTC and DOJ will be discussing on June 5th.
The FTC and DOJ are have scheduled a public workshop on June 5th, “What’s New in Residential Real Estate Brokerage Competition – An FTC-DOJ Workshop”. Workshop discussion will evaluate developments in the competitiveness of real estate since the DOJ and NAR agreement on VOW’s in 2007.
Accessibility to data is on the agenda. I am not sure why. The mission of the DOJ and FTC is to protect consumers. Right?
The ITIF – who is a non-profit who is funded by the technology community – convinced the FTC and DOJ the real estate community needs more competition with brokerages experiencing already deflated margins in their business.
Consumers have access to real estate data necessary to sell and buy properties. There are thousands of MLS, Broker, Agent, and Listing Publisher websites with listings, pending, and sold properties displayed for consumption.
Using the data that is collected by the real estate community to sell back positions on a web site or a service isn’t innovation. It is a detriment that will redirect the real estate communities focus from innovating a great consumer experience into analyzing how they stay in business.
There will be more to come on this topic.
How the real estate community handles data should be aligned with constructing excellence in the consumer experience.
As long as consumers require real estate professionals to guide them through the transaction process, real estate will continue to remain local and personal.
Federal and state laws are in place to protect consumers and facilitate professionals to assist the consumer in their real estate journey. Only professionals with depth of knowledge of a neighborhood and community can accomplish providing valuable information to consumers.
Here is our goal. Collectively, we need to align all the decision and policy making with one simple idea. Consumers need to have a fast, easy, and fun experience when buying or selling property.
The WAV Group will be at the FTC and DOJ workshop and will provide in-depth insight to this conversation. Stay tuned! Contact Victor@WAVGroup.com