Last month, the Arizona Regional Multiple Listing Service (ARMLS) sent a concise letter to their 30,000+ members, asserting that tax mapping software, iMapp was “ceasing operations,” which most took to mean they were going out of business, calling the end of the relationship an “unplanned event.”
ARMLS CEO Matt Consalvo’s letter to members reads, “Urgent News About The iMapp Tax System – iMapp has enacted early termination of their contract to provide tax system services to ARMLS Subscribers. It is our understanding that iMapp corporation is ceasing operations. February 26, 2015 is the last day iMapp will be available. We regret to inform Subscribers of this unplanned event and we will send updates as they become available.”
iMapp CEO addresses ARMLS members
Today, iMapp CEO, Bill Rovillo took to the iMapp blog and explained their side. Here is his letter to ARMLS members in full:
“Sadly, once again I find myself having to reach out to the ARMLS membership to right a terrible wrong. Your ARMLS CEO distributed via email to 30,000+ hard working REALTORS false information on the status of one of your favorite information systems and attempted to damage my company’s reputation in the process. I cannot and will not sit on the sidelines and watch ARMLS CEO Matt Consalvo spin his stories to discredit iMapp and push his own agenda.
Here’s the truth: The iMapp system, the iMapp company, and all the great people at PropertyKey, my tech provider and partner for almost 20 years, are not going away as Consalvo would have you believe. While the iMapp company is morphing into something new outside of the tax mapping industry, it is not going out of business and your iMapp system was not going to be shut down. We have gone to great lengths to stay profitable via various strategic alliances and outsourcing of duties pertinent to maintaining an accurate reliable system. Due to contractual terms, I can’t go into detail about some of them and some of these moves worked well, some didn’t. But never was the iMapp system compromised for one second because of these maneuvers. Changes and modifications have been going on for 3 years and was never a point of contention or discussion. It’s normal for businesses to “pivot”, adjusting along the way to counter market conditions. No one really cares how the work gets done, as long as it gets done. Until now.
Last year, I had been asked by PropertyKey to take over all the iMapp system contracts, only if it was acceptable to the iMapp clients, in an effort to keep the iMapp system affordable and competitive and allow me to work on the “next big thing” in real estate outside of what we do now. Yes I am moving on to bigger things, and the iMapp system and PropertyKey are moving ahead too. Every iMapp client in the country understands this and has successfully transferred their agreement to Propertykey. Except ARMLS.
So what happened??
It appears Matt Consalvo wants to save money by operating his own tax mapping system. Which is fine. I’m ok with that. Really. But what he should have done was inform his membership of his true desire. Instead, to protect himself, he decided to write a callous, abhorrent and deceitful email about my company to his entire membership that will land him in serious legal trouble. He wants you to believe that his system is now the only real choice as the other is “ceasing operations”.
Here is what Consalvo is NOT telling you: He was presented with both an iMapp termination agreement as well as a PropertyKey agreement for the iMapp service continuation to be signed concurrently. A simple action that would have been invisible to anyone outside a Board room. He agreed to it in principle verbally and all was well. But in the 11th hour, the day he flew out of the country right before a holiday weekend, he bamboozled everyone. He sheepishly signed the iMapp termination agreement, and tossed the PropertKey agreement. Then he proceeded to spout his vicious lie about iMapp to keep his membership from learning the truth and storming his little castle he has made for himself. This is the truth. Anything you hear, ANYTHING, contrary to what I have said here, is a bold faced lie.
The only reason ARMLS will not have the iMapp system available to you is because Matt Consalvo does not want you to have it- end of story.
So ARMLS members, it is time you do what you need to do. Ask yourself, what type of leadership do you want? If a leader is thoughtless and callous, what becomes of the followers? Do you want someone who lies and tells you only what he wants you to hear? And what type of leader throws your 2nd most valuable vendor under the bus? Consalvo plays the “what, who me?” game very well. He doesn’t fool me for a second, others maybe. I haven’t heard boo from him for months, but the moment I out him on Vendor Alley’s blog for lying, he emails me “gee, did I misunderstand something?”
Really Matt? You email my obituary to your membership without verifying a single word of it with me, the CEO, then you email me your fake concern when I expose you? You are Pathetic. I expect better cover ups from my teenage son after receiving a speeding ticket. At minimum, I find Matt Consalvo’s actions disturbing, unprofessional, deceiving and in this case, legally challenging.
On Febuary 28th, the iMapp system will be turned off for good in Arizona due to the ARMLS CEO’s actions, not ours. Consalvo may have created the next big storm on the horizon, and if it swells to become a monsoon, so be it.”
The showdown continues
Nerves are clearly raw on both sides right now, so the showdown continues, and we’re watching for the final resolve. We have reached out to Rovillo and Consalvo and will add their thoughts and responses to this story, so refresh the page from time to time today to see updates below.
UPDATE: Rovillo tells us that when contacting him, ARMLS members have been angry. When asked if there are any intentions of filing any lawsuits against ARMLS, he indicated that it is possible.
Rovillo added, “The IMAPP AR MLS contract was due to expire in March of 2016. We would never have accepted the termination agreement without the property key agreement for IMAPP service to continue. It was a deceitful move which broke his verbal commitment. Essentially Matt cancelled the agreement with one year left we did not cancel it.”
We await Consalvo’s perspective.
Zillow seeks a patent to fill out forms electronically – sounds familiar…
(TECHNOLOGY) In yet another broad patent application, Zillow is aiming for ownership of the ability to fill out “transactional documents” electronically.
In yet another obscenely broad patent application, Zillow is aiming for ownership of the ability to fill out “transactional documents” electronically.
The official patent application describes “generating electronic transactional documents using a form generating system” and “using a design tool that allows a user to place data entry fields over an image or snapshot of a transactional document.”
If that sounds familiar, it’s because virtually every website that allows customers to e-sign anything already does this. Some concerns also address the fact that services such as DocuSign – a service in which both Google and NAR invested – and even Google Forms might fall under this category.
Should Zillow see this patent approved, it could spell disaster for a huge operational segment of any real estate sale: the actual signing of a contract.
What’s odd about this patent application is the bizarre, gaslighting-lite language it uses to pitch the idea of something that is already used widely on the internet. In the background section, the patent claims that “Most of the time the parties are not in the same physical location when the offers, counteroffers, and acceptances are signed. Fax machines are often used to facilitate the process, as well as emailing scanned documents.”
The background continues with, “Sellers, buyers, and their agents are often not in the same contemporaneous physical location. Therefore, signed documents are often faxed between parties, with original signed copies being retained for the closing.”
Using the implied inconvenience of a physical fax machine as an argument for the efficacy of electronic documents makes sense, albeit in an obvious kind of way; however, using this argument to support the notion that Zillow should be able to claim a patent that gives them domain overall electronic forms in the real estate microcosm seems particularly villainous.
It’s also worth noting that, should this patent be granted any time soon, the likelihood that the world will still be in the grips of the COVID-19 pandemic is high. From the patent office’s standpoint, restricting the remote signature options of any real estate firm not affiliated with Zillow during a period of time in which purchasing property is already laborious and dangerous shouldn’t even be an option.
Time will tell whether or not Zillow is successful in achieving its bid for e-signing. Other document-signing services may be able to dispute the patent, but Zillow’s history of scooping up unlikely patents is undoubtedly on their side.
Zillow hit with another lawsuit after iBuying collapse, claiming they misled investors
(REAL ESTATE) Stockholders are suing, alleging that Zillow publicly praised the iBuying program despite knowing it was dying, and they claim to “suffer significant damages.”
Zillow Group was hit late Thursday with yet another investor lawsuit on the heels of the collapse of their iBuying program (“Zillow Offers”). Hillier v. Zillow Group, Inc. et al in the Western Washington District Court is seeking class action status in this federal securities lawsuit, alleging that Zillow failed to disclose to investors that they did not have the ability to price homes for their Zillow Offers program, and that paired with a known supply and labor shortage, led to an inventory backlog.
The suit claims that under these conditions, Zillow (ZG) knew they would have to end the iBuying program, which would hurt their bottom line, something investors were not made aware of. In fact, this suit notes that company leadership continued to speak positively in public, making “materially false and/or misleading statements” about the program despite their overpaying for numerous homes and selling them at a loss.
In the Notice of Related Cases filed, Braua v. Zillow Group, Inc., et al., and Silverberg v. Zillow Group Inc., et al. were cited, both of which are seeking damages for allegations of misleading investors. The Hillier suit is specifically seeking to certify a class of Zillow stock buyers who made purchases from Aug. 7, 2020, and Nov. 2, 2021.
The new lawsuit outlines the following (our words, not theirs):
- Zillow launched the home buying program in 2018 to rapidly flip properties.
- By close of 2019, they were in 22 markets, and the program accounted for half of their annual revenue ($1.4B).
- On August 05, 2021, the company released Q2 earnings, citing $772M from the iBuying program, roughly 60% of their annual revenue. In the release, Defendant Rich Barton said that their “iBuying business, Zillow Offers, continues to accelerate as we offer more customers a fast, fair, flexible and convenient way to move” and “is proving attractive to sellers even in this sizzling-hot seller’s market.”
- In October, RBC Capital Markets began cooling on Zillow, lowering their price target for the stock, warning that Zillow Offers would likely miss quarterly expectations, dragging ZG down from $91.40 on October 01 to $85.68 on October 04.
- Shortly thereafter, in October 2021, Zillow announced they would be halting the program through year’s end, and stocks continued to slip.
- In November, the company released their Q3 financials and simultaneously declared an end to the program and a 25% workforce cut.
It appears that the crux of the Hillier case is that leadership continued to praise the program even as it declined, right up until the Q3 earnings statements went public and it could no longer sustain the program.
“As a result of defendants’ wrongful acts and omissions, and the resulting declines in the market value of the company’s securities, plaintiff and other members of the class have suffered significant damages,” the suit concludes.
As recently as this week, InvestorPlace said, “it’s going to be a while before ZG stock could make a comeback,” noting that Zillow’s house is not in order.
Zillow nixes iBuying program and cuts 25% of staff, consumers go wild
(REAL ESTATE) After Zillow hit pause on their iBuying program, they’ve now cut it altogether and laid off staff. Can Zillow haters gloat yet? Maybe not…
Today, Zillow Group announced their plan to shut down the Zillow Offers program (known as their iBuying initiative), also announcing a cut in their workforce of roughly 25%.
With a backlog of over 9,800 homes (several thousand more than they reported just days ago) that need to be sold, and a current 8,200 under contract that they’re still moving forward with purchasing, the company can’t simply cite labor and raw materials challenges.
The rapid escalation of the program in the past quarter is part of the subsequent sunsetting wherein they’ll be eating a $304 million in losses, and another $240-$265 million expected additional losses on pending properties.
They’ve instantly become famous for using their algorithm to wildly overpay on a ton of product, then losing their shirts for it.
Zillow Co-Founder and former CEO said earlier this week that he assumed purchasing would resume in Q1, but fellow Co-Founder and current CEO, Rich Barton stated, “We’ve determined the unpredictability in forecasting home prices far exceeds what we anticipated and continuing to scale Zillow Offers would result in too much earnings and balance-sheet volatility.”
Barton added, “While we built and learned a tremendous amount operating Zillow Offers, it served only a small portion of our customers. Our core business and brand are strong, and we remain committed to creating an integrated and digital real estate transaction that solves the pain points of buyers and sellers while serving a wider audience.”
This combination of conditions has plenty of real estate professionals (that have long hated Zillow) gloating on social media.
We recently urged our readers to not get excited about their last announcement that they’d be pausing the iBuying program, and we stand by that today for several reasons:
- Fully 25% of their workforce got a pink slip today and that is nothing to celebrate – they’re people whose lives were just upended. But not Rich Barton’s, he’ll be just fine.
- This program is one of many for them and these losses don’t matter much in the bigger picture – it was a very small piece of their pie.
- Even if Zillow stopped getting every listings feed on the planet and every Realtor stopped giving them their money, they’ve created a scenario where they’ve applied for (and been granted by the federal government) nearly every conceivable generic patent on real estate online. Their evil genius will help leadership to survive any storm, like it or not.
Does the shutdown of this program spell doom for the iBuying model in general? It could be seen that way, or it could be seen that they moved far to quickly, or simply that economic conditions collided to make the perfect storm which wasn’t in their favor.
Either way, from our vantage point, the program has always felt like they were playing with Monopoly money, or like they were enjoying being WSB bros, and it’s now over and a lot of people are out of work today.
What will always remain consistent is real estate practitioners reminding each other that they’re who have fed the beast since day one, like this Realtor:
The only real downside for Zillow is the public relations hit they’re taking with consumers who are going wild about the news:
So you're telling me I could have tricked Zillow into buying my house no questions asked. pic.twitter.com/I1zBfBYPv6
— Khalid 🦃 (@buhakmeh) November 3, 2021
When I saw this on Tiktok I felt so powerless. I thought nobody would listen and that Zillow would gobble up half the houses in the US and nobody could stop them.
I'm so glad they're fucked.
— Daiv (@TheBoves) November 3, 2021
Zillow thought they were the smartest kids in the room https://t.co/jz3VaTcoMn
— 𝗣𝘂𝗻𝗸𝗥𝗼𝗰𝗸 & ᶠᵘᶜᵏ ᵗʰᵃ ᵖᵒˡⁱᶜᵉ (@PunkRockClub) November 3, 2021
Zillow a villain lowkey
— JWET ADDICT 🇭🇹 (@A1_vakabon) November 3, 2021
Stay tuned for what money moves Z makes next. This story isn’t over.
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