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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 brings decades of experience and industry leadership as co-founder of San Francisco real estate brokerage Jackson Fuller Real Estate. Matt is a Past President of the San Francisco Association of Realtors. He currently serves as a Director for the California Association of Realtors. He currently co-hosts the San Francisco real estate podcast Escrow Out Loud. A recognized SF real estate expert, Matt has made numerous media appearances and published in a variety of media outlets. He’s a father, husband, dog-lover, and crazy exercise enthusiast. When he’s not at work you’re likely to find him at the gym or with his family.

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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

How strong leaders use times of crises to improve their company’s future

(EDITORIAL) We’re months into the COVID-19 crisis, and some leaders are still fumbling through it, while others are quietly safeguarding their company’s future.

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Anthony J. Algmin is the Founder and CEO of Algmin Data Leadership, a company helping business and technology leaders transform their future with data, and author of a new book on data leadership. We asked for his insights on how a strong leader can see their teams, their companies, their people through this global pandemic (and other crises in the future). The following are his own words:

Managers sometimes forget that the people we lead have lives outside of the office. This is true always, but is amplified when a crisis like COVID-19 occurs. We need to remember that our job is to serve our teams, to help them be as aligned and productive as possible in the short and long terms.

Crises are exactly when we need to think about what they might be going through, and realize that the partnership we have with our employees is more than a transaction. If we’ve ever asked our people to make sacrifices, like working over a weekend without extra pay, we should be thinking first about how we can support them through the tough times. When we do right by people when they really need it, they will run through walls again for our organizations when things return to normal.

Let them know it’s okay to breathe and talk about it. In a situation like COVID-19 where everything is disrupted and people are now adjusting to things like working from home, it is naturally going to be difficult and frustrating.

The best advice is to encourage people to turn off the TV and stop frequently checking the news websites. As fast as news is happening, it will not make a difference in what we can control ourselves. Right now most of us know what our day will look like, and nothing that comes out in the news is going to materially change it. If we avoid the noisy inputs, we’ll be much better able to focus and get our brains to stop spinning on things we can’t control.

And this may be the only time I would advocate for more meetings. If you don’t have at least a daily standup with your team, you should. And encourage everyone to have a video-enabled setup if at all possible. We may not be able to be in the same room, but the sense of engagement with video is much greater than audio-only calls.

We also risk spiraling if we think too much about how our companies are struggling, or if our teams cannot achieve what our organizations need to be successful. It’s like the difference in sports between practice and the big game. Normal times are when we game plan, we strategize, and work on our fundamentals. Crises are the time to focus and leave it all on the field.

That said, do not fail to observe and note what works well and where you struggle. If you had problems with data quality or inefficient processes before the crisis, you are not fixing them now. Pull out the duct tape and find a way through it. But later, when the crisis subsides, learn from the experience and get better for next time.

Find a hobby. Anything you can do to clear your head and separate work from the other considerations in your life. We may feel like the weight of the world is on our shoulders, and without a pressure release we will not be able to sustain this level of stress and remain as productive as our teams, businesses, and families need us.

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Opinion Editorials

Declutter your quarantine workspace (and brain)

(EDITORIAL) Can’t focus? Decluttering your workspace can help you increase productivity, save money, and reduce stress.

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It’s safe to say that we’ve all been spending a lot more time in our homes these last few months. This leads us to fixate on the things we didn’t have time for before – like a loose doorknob or an un-alphabetized bookshelf.

The same goes for our workspaces. Many of us have had to designate a spot at home to use for work purposes. For those of you who still need to remain on-site, you’ve likely been too busy to focus on your surroundings.

Cleaning and organizing your workspace every so often is important, regardless of the state of the world, and with so much out of our control right now, this is one of the few things we can control.

Whether you’re working from a home office or an on-site office, take some time for quarantine decluttering. According to The Washington Post, decluttering can increase your productivity, lower stress, and save money (I don’t know about you, but just reading those three things makes me feel better already).

Clutter can cause us to feel overwhelmed and make us feel a bit frazzled. Having an office space filled with piles of paper containing irrelevant memos from five years ago or 50 different types of pens, has got to go – recycle that mess and reduce your stress. The same goes with clearing files from your computer; everything will run faster.

Speaking of running faster, decluttering and creating a cleaner workspace will also help you be more efficient and productive. Build this habit by starting small: try tidying up a bit at the end of every workday, setting yourself up for a ready-to-roll morning.

Cleaning also helps you take stock of stuff that you have so that you don’t end up buying more of it. Create a designated spot for your tools and supplies so that they’re more visible – this way, you’ll always know what you have and what needs to be replenished. This will help you stop buying more of the same product that you already have and save you money.

So, if you’ve been looking to improve your focus and clearing a little bit of that ‘quarantine brain’, start by getting your workspace in order. You’ll be amazed at how good it feels to declutter and be “out with the old”; you may even be inspired to do the same for your whole house. Regardless, doing this consistently will create a positive shift in your life, increasing productivity, reducing stress, and saving you money.

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Opinion Editorials

How to ask your manager for better work equipment

(EDITORIAL) Old computer slowing you down? Does it make a simple job harder? Here’s how to make a case to your manager for new equipment to improve your productivity.

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What is an employee to do when the work equipment bites.

Let’s be frank, working on old, crappy computers with inefficient applications can make the easiest tasks a chore. Yet, what do you do? You know you need better equipment to do your job efficiently, but how to ask the boss without looking like a whiner who wants to blow the department budget.

In her “Ask A Manager” column, Alison Green says an employee should ask for better equipment if it is needed. For example, the employee in her column has to attend meetings, but has no laptop and has to take a ton of notes and then transcribe them. Green says, it’s important to make the case for the benefits of having newer or updated equipment.

The key is showing a ROI. If you know a specific computer would be a decent upgrade, give your supervisor the specific model and cost, along with the expected outcomes.

In addition, it may be worth talking to someone from the IT department to see what options might be available – if you’re in a larger company.

IT professionals who commented on Green’s column made a few suggestions. Often because organizations have contracts with specific computer companies or suppliers, talking with IT about what is needed to get the job done and what options are available might make it easier to ask a manager, by saying, “I need a new computer and IT says there are a few options. Here are my three preferences.” A boss is more likely to be receptive and discuss options.

If the budget doesn’t allow for brand new equipment, there might be the option to upgrade the RAM, for example. In a “Workplace” discussion on StackExchange.com an employee explained the boss thinks if you keep a computer clean – no added applications – and maintained it will perform for years. Respondents said, it’s important to make clear the cost-benefit of purchasing updated equipment. Completing a ROI analysis to show how much more efficiently with the work be done may also be useful. Also, explaining to a boss how much might be saved in repair costs could also help an employee get the point across.

Managers may want to take note because, according to results of a Gallup survey, when employees are asked to meet a goal but not given the necessary equipment, credibility is lost.

Gallup says that workgroups that have the most effectively managed materials and equipment tend to have better customer engagement, higher productivity, better safety records and employees that are less likely to jump ship than their peers.

And, no surprise, if a boss presents equipment and says: “Here’s what you get. Deal with it,” employees are less likely to be engaged and pleased than those employees who have a supervisor who provides some improvements and goes to bat to get better equipment when needed.

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