Clareity's 2011 NAR Expo Report

The Next Best Thing to Being There!

• Around the Trade Show
• Association Management System Update
• Multiple Listing Issues and Policies Committee Meeting
• MLS Executives Session
• NAR Party Report
• MLS Software Update
• People on the Move

Around the Trade Show

Most Active Technology Spaces: Mobile and Document Management

There were quite a few new document management and e-signature solutions on the floor. Cartavi was a new offering that captured our attention – it didn't seem to have forms integration or e-signatures yet, but we liked their energy and consideration to the needs of the real estate industry, including simplicity. They were very nice and wrote to us after we published our recent document management article. We'll be watching them to see if they become a major contender – we wish them all success!

Like the sign says, mobile access to the web is exploding. There were a lot of vendors providing mobile solutions on the floor – many were good looking apps. Unfortunately, Clareity believes that the mobile space is in a transitional period. MLS vendor mobile apps are generally not very full-featured, and the other solutions on the floor were not well integrated with the MLS – creating a disconnect between MLS-provided prospecting and client collaboration and the client-facing aspects of these third party tools. Unless we push for RETS to be capable of moving data pertaining to clients and their activities, this will not get better any time soon.

Boopsie's mobile app is attractive and provides well-designed client-interaction.		MLS Touch provides a gorgeous interface to access MLS data on mobile devices.

Silly Branding

Redimob, made in Brazil. Did something get lost in the translation? Because we all want to join the ready-made mafia? Seriously - it's just a free online classified system with a social media twist. And yes, we'll feel foolish if in a few years it gets bigger than Craigslist and facebook!

Best Booth

The Delta Group had an interesting exhibit that showed hundreds of agent and broker web site examples so a person could see the full range of customization available. This was an inviting exhibit that visually attracted people into the web page maze and a good use of space.

Best Swag

The best SWAG this year was actually delivered to NAR attendees' rooms courtesy of Wells Fargo. It's always nice to have an extra pair of ear buds. I heard a few people comment there was less good SWAG on the floor this year - a sign of the economy.

Noticeably Missing this Year

There were no short sale booths in sight – the kind that offered courses to become a "short-sale expert" that seemed to be in every aisle the last few tradeshows. Apparently the demand dried up as agents wised up and learned that every bank is different and even each loan is different, making it silly to pay $300 and expect to become an expert!

Best Observation about the Show Floor

A top-producing real estate agent from Scottsdale shared the following observation and frustration. He said that everybody on this floor wants to sell me "STRANGE" (leads consisting of total strangers)! He said he walked the whole floor and was overwhelmed by the number of companies and new products that promise to deliver strangers to him and nobody seems to want to help me better manage the hundreds of people he knows!

Best Dressed Expo Attendee

This gentleman has style all day long. Check out the young lady in the chair admiring his classic style!

Best Booth Super Heroes!

These folks wore tight fitting body wraps promoting a letter based system for agents to get more listings. Green Man was smart and put on some gym shorts for modesty's sake!

Association Management System Update

We've heard from Association techs that the RAMCO association management system is functionally competitive, and though pricing is higher than some people would like, the reaction has generally been positive. You get what you pay for after all.

Clareity's Matt Cohen attended a RAMCO demonstration and discussion with Belton Jennings (Marketing Director) and Mike Cutlip (Product Manager).

A bit of background on RAMCO: The RAMCO team surveyed 400 AEs and staff, held focus groups and AE Institute 2010, identified 95 key features, and an RFP was sent to vendors. NAR funded the effort, over $2.5M so far. RAMCO is owned by its customers. Cooperative legal documents are in place, activated once critical mass is reached - estimated 2013. RAMCO is a non-profit organization and the RAMCO board will make all decisions on features, pricing, hosting, support, training, integrations, installation and administration. RAMCO has a perpetual source code license for the underlying system.

The system is cloud-based, "Software as a Service". It has integrations with websites, e-commerce, MLS & lockbox systems, 3rd party NAR apps like Aristotle, NRDS CDB, and Convio (by spring 2012), and it integrates with Peachtree, Quickbooks, Great Plains and ACPAC for accounting functions. It's also integrated with Authorize.net, PayFloPro, and NRDS ecommerce. The system is based on the vendor Cobalt's system, which is built on Microsoft Dynamics CRM 2011, allowing RAMCO customers to leverage what other MS Dynamics customers are doing via a "marketplace" of applications written on top of the platform, and use the API themselves if they want. Help and billing is provided by the Florida Realtors^® Helpline, which currently already serves 70 associations, including weekday and Saturday support.

There are some neat features - some that caught our eye included the ability to add fields and lookup table values at will and to save different user interfaces for staff with different roles, and one can review and reject input from end users (like when they change their address to Stop@EmailingMe.com). Meeting management is well thought out - including cancellation fee and wait list functionality, and selling booths online. One can license just the core member system and online access, or a full website including a content management system.

RAMCO has forty installations underway with two already live. There are 93 associations in the pipeline already total. If an association signs up today, implementation would start at least in summer. Pilot sites include Anne Arundel AOR, North Star MLS, St. Paul AOR, St. Cloud AOR, Minneapolis AOR, and the Minnesota Association. Once an implementation is slotted, there's a 60-90 day implementation process.

This is exciting stuff, and Clareity will continue to track RAMCO's progress and customer satisfaction as they roll out new implementations.

More info: RAMCOams.org - including the slideshow presented at NAR.

Multiple Listing Issues and Policies Committee Meeting – the IDX Battle Continues!

The PAG IDX policy recommendations were discussed: 1) to eliminate franchisors from IDX policy. This was passed by the MLS committee and the board. 2) to expand IDX to deal with social media while complying with applicable laws and regulations and also, to clarify that all delivery mechanisms and devices may be utilized for display of IDX listings provided that the resulting display complies with the IDX policy and applicable laws and recommendations. Bob Bemis moved to strike RSS language, and the motion was passed. As for the rest of the expansion of IDX as per the PAG recommendations, it was admitted that the policy had flaws and that without the detailed rules to supplement the recommendations the policy could not be properly evaluated. It was further suggested that brokers would need a way to opt out of social media and other uses while continuing to allow listings to be used in the traditional IDX setting. Some committee members suggested not rushing bad policy through while at least one member suggested that policy had fallen behind practice and that passing something was needed to prevent loss of credibility. A motion was made to approve the policy recommendation in concept but not to create a formal policy recommendation to the board until model rules are created, including creation of the aforementioned broker opt-out, and that motion passed. We dodged a bullet on this one – not having a less-than-complete policy approved.

Other Matters

Travis Kessler presented on the policy and rule recommendations regarding disclosure of sales price in the MLS. Currently many MLSs have mandated sales price entry into the MLS, and the recommendation clarifies rules regarding this requirement, including the conditions under which the requirement can be implemented in non-disclosure states. The recommendation is that, in nondisclosure states, failure to report sales price can result in disciplinary action only if the MLS categorizes sales price as confidential and limits use of sale price information to participants and subscribers providing real estate services, including appraisals and other valuations, to customers and clients; and to governmental bodies and third parties providing valuations for academic research. Also, sales price can only be categorized as confidential in states where the actual sale prices of completed transactions are not accessible from public records (non-disclosure states). A friendly amendment was suggested such that price could be withheld based on Seller's written authorization. The amendment passed. The main motion as amended then passed.

The group also approved a motion to increase the lockbox deposit to limit it to no more than $300 (versus $200 as previous). It was asked whether this was possibly price fixing of some type. It was explained that there was local discretion within a range, and the cap was there to ensure it wasn't excessive or abusive. The motion was passed.

Then the group discussed disclosure of bank owned, REO, and foreclosure status in the MLS. The recommendation to consider is: that as a matter of local discretion, MLS may require participants to disclose if a listed property is foreclosure, bank-owned or REO. The motion was passed.

MLS Executives Session

Patents and the MLS

At the MLS Executives Session, William G. "Bill" Jenks of Gibson Dunn & Crutcher, a patent litigator specializing in patent appeals, presented "Patents and the MLS". There are a lot of potential patents in the real estate space.

Bill presented various defensive strategies, including "Lack of Standing" and "Joint Defense/Common Counsel" (when a case is brought against multiple defendants). Another approach is Acquiring Patents in a Secondary Market - buying and holding patents whose holders may litigate against you. Clareity says: Bill did skip important strategies including, but not limited to, design-around, patent invalidation, and safe harbor.

Bill presented about the new America Invents Act, enacted September 16, 2011. This act creates litigation alternatives, including a post-grant review (arguing patent invalidity), inter partes review (a 'paper' proceeding conducted by the board - less expensive but limited scope), and pre-issuance submissions (regarding filed patent application: sending prior art, submit patents and printed publications to the patent office to delay or stop the issuance of a patent). These alternatives only apply to new patents. Congress may make technical corrections and the executive branch will focus on implementation of USPTO reforms. The act also includes litigation reform - discovery limits, limits on impleading co-defendants, and venue reform. Clareity says: it isn't all positive news. Note that the "first to file" versus "first to invent" aspect of the Act means that prior art may not be so important going forward.

Art Carter asked about copyright infringement - where the judge barred the copyright holder from enforcing the copyright - is there something like that in the patent world? The answer is yes, that someone can be barred for misusing a patent. Is patent aggregation for the purpose of profit (i.e. a "patent troll") considered misuse? The answer was that nothing is settled at the appellate level and it's unclear how the courts will rule on that business model.

MLS Consolidation

The next topic was MLS Consolidation. Bob Bemis, CEO of AZMLS talked about the Arizona Statewide Initiative. The most frequent motivator to aggregate is either political and/or economic. According to Bob, in Arizona, there's not a lot of overlap - hundreds of miles of sagebrush and sand separating MLSs and not a lot of members belonging to multiple MLSs. But the state association decided to build an overlay MLS and combine it with transaction management and digital signatures. However, the attempt to consolidate toward a statewide MLS failed. ARMLS attempted to figure out what dollar figure the MLS was worth - no matter what was put forth, some thought it was too low, others too high - that's interesting! But conversations continue. Bob posited that there will (inevitably) only be 10-20 MLS systems (in the country) and that this (will) doom small MLSs, or even large ones that don't get involved in consolidation.

Then Ken Beckrich, an M&A expert from BCMS Corporate, discussed what buyers and sellers need to know when formulating consolidation strategies. He's not an MLS expert and put on his standard presentation that he provides for small business owners about getting maximum value for their company. Note that in MLS, there may be more of a "strategic buyer" than a "financial buyer" - a lot of Ken's presentation regarding maximizing profit was not a good fit for the audience.

2011 NAR Legal Seminar for Associations and their Attorneys

Ralph Holmen updated the 300+ attendees on the DOJ Antitrust Compliance and reviewed recent/current legal examples such as:

• Regional MLS of Minnesota had a broker feel he had the right to use "MLS" in his URL (theMLSonline.com – geez, that wouldn't mislead consumers, right?) so he sued the MLS for restraint of trade. Play it straight and get a life, dude!
• First MLS in Atlanta had a class action suit for alleged price fixing of brokers and RESPA violations. The lawyers will probably be the only ones to end up with any money here.
• The Greater Augusta Association was sued by a broker because he wanted to put "advertising" in his property descriptions (his contact information). This case was dismissed as a personal grievance, and was not anti-trust related as that broker stated. Interestingly, we have heard of other MLSs talking about now allowing this practice (allowing contact info in the remarks or description field) as a way to combat online publishers that strip out the agent/ broker contact info and sell ads to multiple buyer brokers to "cyber-squat" on that listing.

Ralph also provided info on FTC vs. RealComp II, and the REALTOR® Party Political Advocacy Initiative related to federal income tax issues and 501C organizations.

Mike Thiel gave a humorous presentation on Marketing and the Law where a recent class action law suit earned each plaintiff a 99 cent ring tone, but the lawyers made $5 million in legal fees. A small cheer was heard from the lawyers in the room – and a few good laughs. Mike explained the difference between a Contest, Raffle and Sweepstakes. The key take away? Don't do raffles – they are almost all illegal gambling! Mike also explained why NAR sued Champions Real Estate after they stopped paying dues, but told their agents they were still REALTORS®. NAR prevailed and recovered their legal costs and proved again that the REALTOR trademark is very strong and misuse is not tolerated.

Clareity's own Gregg Larson and NAR attorney Katie Johnson gave a presentation about MLS Listing Syndication and the ever changing business models and terms of online publishers, including some recent bad behavior such as stripping all contact information and selling contact information around the listings to the highest bidders. Another example showed how one publisher is allowing previously sold listings to be advertised as for sale, but when the consumer looks closer, they find out it was sold. The "best bargain" listings are being used as bait to snare consumers to call a bargain hunting broker to find similar or better deals and are encouraged by statements like "let's steal this one from the bank". Sold date, property address, and the actual listing broker are intentionally not being displayed.

Syndication continued to be a messy topic in Anaheim. Dennis Fried, the attorney for CRMLS, summed it up during the Legal Forum when he asked how his 70,000 member MLS was supposed to keep track of 600+ online publishers and their changing terms and business models - in addition to monitoring thousands of member IDX and VOW sites? His point was that it's a growing challenge to keep up on compliance without hiring an army of compliance officers. Clareity Security created the new SAFE Syndication^™ tool to address MLS data compliance concerns. If you wish to learn more about it, please visit: http://clareitysecurity.com/safe-syndication.

Another publisher that raised some eyebrows during the legal meeting was NeighborCity.com. This site has extensive MLS listing information along with foreclosure data and FSBOs. Several MLS executives said NeighborCity has their listings, but they have no idea where they are getting them. Clareity Consulting spoke with the CEO of NeighborCity and learned they are getting the data from a variety of partners and they have some big plans for the industry, including a patent pending method to score agents and match the best qualified ones with buyers and sellers. Are your listings and agent profiles on NeighborCity? Please tell us if you know how they are getting them.

NAR attorneys Cliff Niersbach, Finley Mason and Laurie Janik also provided updates on the IDX PAG, MLS Listing Issues, FTC Rules, the HUD Safe Act, NAR legal resources, and a general litigation and legislative update

NAR Party Report

ListHub held a party at Fire + Ice Bar & Grill that was co-sponsored by Clareity Security. The venue was a smokin' hot restaurant showcasing an incredible variety of fresh food, cooked on an open grill. As if that weren't incredible enough the party featured ice sculptures of the sponsors' logos, fire, and snow – yes they made it snow on the patio! The fire dancers were amazing in their daringness and the crowd was truly "wowed". Industry professionals from all sects danced the night away to great music and fun was had by all!

Clareity Security also co-sponsored the annual Corelogic party which was held at 300 Anaheim. The location boasts the tagline "Bowling with a Twist" and they sure delivered. Packed with contemporary decor and state of the art bowling, pool tables and dancing there was something for everyone. 'Everything's more fun in bowling shoes' was never more true and the open bar and appetizer buffet made this event a blast!

Clareity hosted a open house at its suite Sunday night and Sponge Bob showed up. Actually, some kid lost his doll on the roof top below the suite and Sean Murphy from Tucson made the descent off the balcony to save him. Michael Hayes of Homes.com helped in the daring rescue and recovery.

Classiest Dinner at NAR

Real Estate Digital (RED) hosted a "Launch" dinner for about 75 industry leaders and friends in a private room at "The Catch". Jay Gaskil, RED's CEO, gave a great welcome speech and the "who's who" crowd enjoyed a wonderful reception and dinner.

MLS Software Update

We asked several MLS vendors to tell us what's new in their world and here's what we received by press time:

Perhaps the biggest news was the announcement of Solid Earth's new platform in-progress, "Spring". Spring is a mobile-focused platform written in HTML 5 that works on any tablet and any browser - built for mobility first and fully functional on a PC, not the other way around. Simplicity will be important in the new platform – which means Solid Earth is really re-thinking the MLS offering. Analytics and social media will play a huge role in the new platform. HTML 5 solutions (vs. apps) present an attractive option for MLS users.

LPS MLS Solutions announced Paragon 5 MLS as GOLD in the first quarter of 2011. LPS built Paragon 5 while running parallel with the version 4 system and gathering feedback from all users proved to be win-win resulting in a near seamless transition from Paragon 4 to Paragon 5 with a final cutover of all customers in October. Delivering cross-browser and cross platform capability was key coupled with Multi-tasking, Auto Completion, New Wizards for Contact Manager and CMA, Client Collaboration, iPad Compatibility, New Third Party Integration Framework and more than 200 additional enhancements to ensure the best user experience possible. Clareity has observed Paragon 5 being voted the "easiest to use" system during two recent agent evaluations.

CoreLogic continues to finalize its next generation Fusion MLS system and has completed the acquisition of Tarasoft Matrix so its customers will have two "new" systems to pick from. Historically, CoreLogic (First American) has done a good job of letting acquired companies continue to do what they do well, and the product teams tend to stay intact. CoreLogic reported the Realist user group meeting just before NAR was its most heavily attended ever. The buzz about the all-new Realist is growing. By year-end CoreLogic is projecting over 40 customers and 350,000 users running their "next gen" Realist. They expect to convert all Realist sites by the end of 2012. The number and size of new customers committing to Realist caught our attention - MLSs such as Naples, Honolulu, New Orleans, and Minneapolis.

FBS is working with several MLS organizations on a new initiative called the Flexmls Platform, which is a new approach to developing, marketing, and delivering software through multiple listing services and brokers.

People on the Move

Congratulations to everyone in their new positions and to those that retired, too!

Well, that's it for 2011. Thanks for reading the Clareity NAR Expo Report!

2012 MLS Workshop Announced in Scottsdale, AZ – Almost Full Up!

Please consider joining us in Scottsdale, Arizona February 29-March 2, 2012 for Clareity's 11th Annual MLS Executive Workshop. This MLS Workshop will provide timely updates and address the key issues facing MLS executives and leaders. For more information, please see http://www.callclareity.com/MLSworkshop/. This event sells out every year, so register early to reserve a spot.

About Clareity

Founded in 1996, Clareity continually strives to provide our clients a truly independent and unique perspective. Clareity has successfully executed a vast array of consulting projects for our clients, related to:

• Executive and technical staff recruiting
• MLS System Selection and Implementation
• Transaction Management System (TMS) Selection
• Information Security Assessments
• Business Continuity Planning
• Public Records Request for Proposal (RFP)
• Software design, quality assurance and scalability testing
• Contract negotiation
• Public speaking
• Member/Subscriber Surveys
• Focus groups
• Expert witness
• Project and Program Management
• Regionalization facilitation
• Staff audits and compensation studies
• Strategic planning

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