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Opinion Editorials

Neighborcity.com alleges NAR, MRIS, NorthstarMLS violate anti-trust laws: op/ed

Neighborcity.com has filed a countersuit against two MLS operators, naming NAR as a co-defendant, claiming anti-trust laws are being violated by all three.

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Allegations that two MLS operators violate anti-trust laws

In the interest of full disclosure, I should start by telling you that while researching this editorial, I discovered I’m almost a zero. At least, according to neighborcity.com, which is in the news for recently filing countersuit against the NorthstarMLS and MRIS, naming the National Association of Realtors (NAR) as a co-defendant.

The operator of neighborcity.com, American Home Realty Network (AHRN), alleges both MLS operators are in violation of anti-trust laws, and that the original copyright suit brought by the two MLS operators is just a bogus claim to prevent AHRN from exercising their “right to inform American consumers to assist them in making choices on the biggest purchases of their lives.”

According to their own website, neighborcity.com – owned and operated by AHRN, is an “operational brokerage” by which I believe they mean “paper brokerage” since they don’t actually employ agents. Their business model is, as far as I can tell, based upon receiving referral fees from “non-paper brokerages” that have “non-paper agents” to assist “non-paper consumers” in buying “non-paper houses.” Although, to be fair, buying all those “real” houses does actually generate quite a lot of paper.

Operating across different regions

AHRN/neighborcity.com operates with a San Francisco address as a California “brokerage” but the two lawsuits involve MLS services that are far, far, far from the sunny hills and valleys of San Francisco. Which gets to one part of the problem: the collision we’ve repeatedly seen between the competing business models of geographic “flesh-and-blood” brokerages and virtual websites that want to make money in the realm of real estate.

Under CA state law, a real estate brokerage is defined as including anyone that “solicits prospective sellers or purchasers of [real estate],” but are you really a brokerage in St. Paul Minnesota (Northstar) or Maryland (MRIS) if your mailing address is in San Francisco, you don’t employ agents in either Minnesota or Maryland, and your business model is based upon taking a cut of an industry derivative? In other words, do you deserve to be called a stockbroker if you don’t actually buy or sell stocks, but provide information about stock brokers and make a profit every time you refer a friend or relative to a preferred stock broker?

…and then the internet came along…

While I don’t know the complete history behind the evolution of California brokerage law and it’s definition, I’m willing to make a friendly bet that the definition of brokerage has been expanded over the years and widely interpreted to consider any plausible behavior that pertains to real estate as engaging in “brokerage.”

Why? Again, I don’t know for sure, but my hunch is to make it easier for the state to protect consumers from fraudulent or misleading advertising, and to make it easier to bring claims of fair housing violations against a wider audience of individuals. Historically, a broad definition of a brokerage gave the state greater regulatory control over a business that was by its nature (and existing technological limitations) inherently local. And then the internet came along…

Neighborcity’s fight for information

I’m sure that neighborcity.com will argue that they bring value to the real estate transaction by providing “hidden” information to the consumer that those un-fair people-based brokerages want to hide. However, providing information about a market isn’t the same as providing that market. I can tell you all day long which cardiologist is the cutest, but that doesn’t mean you should trust me to crack your chest open and put some stitches in your ticker.

In addition to the fact that they aren’t capable of actually closing a transaction involving a home because, you know, that would involve something more than paper (like a human being), the information that neighborcity.com does provide seems abysmal. Which is where that disclaimer from the introduction becomes relevant. Apparently, I suck.

How I don’t match their algorithm

I’m not sure exactly why, but my best guess is that I’m almost a zero (07 out of 100 to be exact) because I work as part of a two-person team. We’ve been a team for more than a decade (ie, we aren’t just a “paper team”), and sometimes we list properties under my MLS ID. Other times we use Britton’s ID. Sometimes our closings are reported under my MLS ID, other times they are reported with her ID. Go look either one of us up on neighborcity.com, and you’ll quickly discover that despite our great reputation in the SF brokerage community, the incredible number of referrals that power our business, our raving testimonials, and our great Yelp reviews that… we both suck. Because the “operational brokerage” that is neighborcity.com isn’t designed to deal with anything that doesn’t match their algorithm.

Well, fine, you might say, teams are an exception to the rule, no algorithm designed by incredibly super-smart engineers with advanced computer science degrees can ever get everything right (but we should still trust the algorithm over our flesh and blood friends)…

Ok then, how about this example? A home we listed in the San Francisco MLS four days ago isn’t in the neighborcity.com database. I searched by street name “4064 17th” and zip code “94114” and then tried multiple variations with no success. So finally I gave up and just exasperatedly typed in the exact MLS listing number. And then I got results! Neighborcity.com returned one listing – a house located in Hesperia, California that sold in November of 2010 for $100,000. Which is almost exactly like my listing in the Castro neighborhood of San Francisco for $1,695,000. Except that the home in Hesperia is 425 miles to the south-east of San Francisco and $1,595,000 cheaper. Oh, and it isn’t even for sale anymore. Yeah, that.

Bad information is not valuable information

The usual argument is that the consumer benefits when the most information possible is made widely available. As I hope the two examples above demonstrate, bad information is not valuable information (if you recently upgraded to iOS 6, you’re probably with me on this). So let’s flip the argument around. Do the owners of the data have the right to ensure that it is used accurately?

I say that yes, absolutely, the owners of the original data have the right to ensure that their data is used accurately and responsibly. Why? It isn’t to protect me or my flesh-and-blood business. I’m doing just fine, thank you very much.

Consumers are the biggest losers when inaccurate information is gussied-up and trotted about as beautifully accurate data that can be relied upon. And if you look at the disclaimer page of neighborcity.com you’ll be delighted to discover that “[AHRN]… disclaims any warranties concerning the accuracy, quality, title or timeliness of the content on the [neighborcity.com] website.”

This is exactly why I support NAR, Northstar MLS, and MRIS in their lawsuit to ensure that their data is used in a way that helps consumers.

Matt Fuller, GRI spends most of his waking hours obsessing over all things San Francisco real estate. He is half of the successful JacksonFuller real estate team, and also writes at the San Francisco real estate blog about all things SF. He is also a father, husband, foodie, avid runner, and slave to his Newfoundland and Basset Hound dogs.

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2 Comments

2 Comments

  1. victorlund

    October 9, 2012 at 2:21 pm

    I can’t imagine why MLSs or Brokers would care about this.

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Opinion Editorials

The strong case for Texas being technology’s next frontier

(EDITORIAL) Everyone loves Tacos and tech in Austin, but Texas has far more to offer – here’s how the various cities will create the next mecca for the tech world.

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Despite what the movies have told you, Texas is not the place you think it is. Sure, we’ve got cowboys, brisket, and a lot of BBQ, but the Lone Star State is much, much more than clichés. Over the last few decades, Texas has been gaining steam as one of the premier places to live in the country.

While yes, people love a good chicken fried steak or are always looking for an excuse to sneak over to their favorite grocery store, HEB, Texans aren’t sitting idly by when it comes to tech – they’re grabbing the industry by the horns.

Thanks to the state’s business-friendly tax breaks, a year-round predominantly warm weather climate, and a strong state culture, the popularity of Texas makes a lot of sense: Houston, which was once considered a third tier city is about to overthrow Chicago as the third largest in the nation, while also being lauded as our most diverse city.

Let’s repeat it, for all the people in the back: Houston, Texas is more diverse than Los Angeles, or New York.

Affordable neighborhoods are popping up across Houston, which are attracting immigrants from every culture looking for their slice of the American Dream. Houston is seeing explosive growth and a cultural shift away from being a town built on strictly fossil fuels, but now, startups, tech, and umbrella industries are finding their niche in the state’s biggest urban area. Only New York is home to more public companies.

Houston’s medical sector ranks with some of the top care in the world. And with those elite doctors, come the innovative pharmaceutical and medical companies, and the tech that supports them.

When you look at the top twenty metro areas to live right now in the country, four of those cities are in Texas. While some of those reasons are affordability and the signature Texas heat, the state is seeing new residents thanks also to a healthy job market. Since 2010, Texas has added 12.6% more residents, double lapping California’s growth of 6.1%.

Texas’ workforce is bigger than 46 states in the union total population and has doubled in job growth, productivity, and new deals are being struck daily. Texas’ impact on the tech sector is indisputable: Texas has exported more technology than California, again.

Deep in the heart

Startup culture is alive and well in Austin, but while some of our startups are finally beginning to draw VC attention away from Silicon Valley, we know how to slug it out in the land of the bootstrapped beginnings. If your company can thrive in Austin, with so many talented people, and a lot of great ideas, you can make it anywhere (sorry New York, for stealing your platitude).

Austin is still a developing story. As enterprises are opening offices in the capital city, this is helping VCs along the coasts see Austin’s potential as a hub of ideas. The city is still behind the bay area for risk-taking ventures, but given the current climate of investors, there’s a sea change happening.

Giants like Apple, Atlassian, Oracle, Dell, Amazon, Samsung, Facebook, and Google are all occupying space in buildings across the Austin skyline. Enterprise companies are investing heavily into the Austin market, and there are zero signs of a slow down. If you need further proof, just look at the traffic on any of the city’s major highways during rush hour.

Dallas is making a hard play at attracting the top-tiered companies as well. When Amazon head honcho Jeff Bezos announced put out a call for bids for Amazon’s HQ2, many cities made a play for the site, but now that the final cities have been chosen, both Austin and Dallas both stand to score the shopping monolith.

Oculus, TopGolf, and startups like Veryable, Dead Soxy, and Artist Uprising are attracting some of the brightest minds to the Dallas/Fort Worth metro area.

South Texas joins the party

San Antonio is quietly building a case for a burgeoning tech scene, too. It’s not quite there yet on the enterprise or startup level, but the city is widely known for one thing – cybersecurity. Outside of Washington D.C., San Antonio is known as “Cyber Security City USA” to folks in the black hat scene.

San Antonio logged the most substantial growth of all of the Texas cities, adding over 250,000 new residents in 2017 alone. Thanks to a robust military presence, San Antonio is quietly attracting more and more security-minded firms, a feat that’s unique in comparison to what the rest of the state is offering. Military-friendly banking institution USAA is headquartered in San Antonio, as is grocery chain HEB, and Whataburger, with all three companies investing heavily into user experience and mobile applications (aka technology).

If Amazon decides on HQ2 in either Dallas or Austin, that will signal a 200,000+ person addition to the state’s population and economy. That’s a lifetime investment into either city, wherever Bezos, and his board chooses. Coupling that possibility with the already strong presence of Southwest Airlines, Texas Instruments, and just about every major gas corporation, it’s easy to see why these moves are a huge deal. For the latter, it’s also important to note that every sector is bolstering their websites, their social media footprint, everything that can be done on a laptop is happening – one new job at a time.

As the tech scene develops and changes from a strong west coast-driven model, Texas is benefiting from the change. Many Californians are moving to Texas, which is an article to itself, but one thing remains: the Texas economy has never been stronger, and it’s only improving. The story of tech in Texas is a continual work in progress.

We’re not going to overtake California next year, but we’re making a stand, and people are noticing. If the current economic growth is an indicator, the famous Dairy Queen saying is potent with it’s accuracy: “That’s What I Like About Texas.”

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Opinion Editorials

How one podcast is giving a voice to veterans everywhere

(OPINION EDITORIAL) Veteran and former Paralympic skier begins volunteer podcast as a way to give voice to fellow veterans.

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“Tough times don’t last, tough people do,” is the mantra that Joel Hunt lives his life by. As an Army veteran, who was injured during his third deployment, Hunt has seen his fair share of tough times.

After suffering a traumatic brain injury and partial paralyzation in his left leg, Hunt left the army and was in the care of his parents. They encouraged him to try Paralympic skiing as part of his rehabilitation.

While he was initially against the idea, he eventually warmed to it and wound up skiing in the 2014 Paralympics in Sochi, Russia. This accomplishment helped lead him to the path he’s on now, which is dedicated to helping fellow veterans.

Hunt is now the host of The H-Train Show, a podcast he produces in his Denver, Colorado home. His work on the podcast is done strictly through volunteering, and is dedicated to giving veterans a place to communicate.

“It’s something that helps keep me busy and makes me feel good,” says Hunt. “[It helps] to erase the past.” The podcast airs on Military Brotherhood Radio and has had a variety of guests – all dedicated to the significance of veterans.

In addition to the podcast, Hunt also assists veterans through organizations such as Project Sanctuary.

Hunt recently co-hosted an event with former Denver Broncos wide receiver, Brandon Stokley, that brought ten injured veterans to the Broncos training camp for a meet and greet. Accompanying Hunt at this event was his service dog, Barrett, who Hunt has taught to fold and do laundry.

Hunt explains that all of his efforts are dedicated to helping fellow veterans recover from the tragedies of war. While he says that, due to his brain injury, he does not recall deployment, he still carries the tragedies of losing fellow Army members.

Now, being retired both from combat and skiing, Hunt states, “My heart is to help other veterans avoid the fights for life I did. Not everyone can enjoy all the success I achieved, but at least I can help make the journey less of a struggle.”

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Opinion Editorials

DNA ancestry tests are cool, but are they worth giving up your rights?

(EDITORIAL) DNA tests are all the rage currently but are they worth potentially having your genetic makeup sold and distributed?

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By now you’ve heard – the Golden State Killer’s 40+ year reign of terror is potentially over as the FBI agents used an ancestry website DNA sample to arrest their suspect, James DeAngelo, Jr.

Over the last few years, DNA testing has gone mainstream for novelty reasons. Companies like Ancestry.com and 23andMe have offered easy access to the insights of your genetics, including potential health risks and family heritage, and even reconnect family members, through simple genetic tests.

However, as a famously ageless actor once suggested in a dinosaur movie, don’t focus too much on if you can do this, without asking if you should do this.

When you look closely, you can find several reasons to wonder if sending your DNA to these companies is a wise choice.

These reasons mostly come down to privacy protection, and while most companies do have privacy policies in place, you will find some surprising loopholes in the fine print. For one, most of the big players don’t give you the option to not have your data sold.

These companies, like 23andMe and Ancestry.com, can always sell your data so long as your data is “anonymized,” thanks to the HIPAA Act of 1996. Anonymization involves separating key identifying features about a person from their medical or biological data.

These companies know that loophole well; Ancestry.com, for example, won’t even give customers an opt-out of having their DNA data sold.

Aside from how disconcerting it is that these companies will exploit this loophole for their gain at your expense, it’s also worth noting that standards for anonymizing data don’t work all that well.

In one incident, reportedly, “one MIT scientists was able to ID the people behind five supposedly anonymous genetic samples randomly selected from a public research database. It took him less than a day.”

There’s also the issue of the places where that data goes when it goes out. That report the MIT story comes from noted that 23andMe has sold data to at least 14 outside pharmaceutical firms.

Additionally, Ancestry.com has a formal data-sharing agreement with a biotech firm. That’s not good for you as the consumer, because you may not know how that firm will handle the data.

Some companies give data away to the public databases for free, but as we saw from the earlier example, those can be easy targets if you wanted to reverse engineer the data back to the person.

It would appear the only safe course of action is to have this data destroyed once your results are in. However, according to US federal regulation for laboratory compliance stipulates that US labs hold raw information for a minimum of 10 years before destruction.

Now, consider all that privacy concern in the context of what happens when your DNA data is compromised. For one, this kind of privacy breach is irreversible.

It’s not as simple as resetting all your passwords or freezing your credit.

If hackers don’t get it, the government certainly can; there’s even an instance of authorities successfully obtaining a warrant for DNA evidence from Ancestry.com in a murder trial.

Even if you’re not the criminal type who would worry about such a thing, the precedent is concerning.

Finally, if these companies are already selling data to entities in the biomedical field, how long until medical and life insurance providers get their hands on it?

I’ll be the first to admit that the slippery slope fallacy is strong here, but there are a few troubling patterns of behavior and incorrect assumptions already in play regarding the handling of your DNA evidence.

The best course of action is to take extra precaution.

Read the fine print carefully, especially what’s in between the lines. As less scrupulous companies look to cash in on the trend, be aware of entities who skimp on privacy details; DNA Explained chronicles a lot of questionable experiences with other testing companies.

Above all, really think about what you’re comfortable with before you send in those cheek swabs or tubes of spit. While the commercials make this look fun, it is a serious choice and should be treated like one.

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