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Pilot program could put realtor.com on the rentals map [Exclusive first look]

Doorsteps, owned by realtor.com, has quietly launched a pilot program to see how renters will react to a “hyperlocal content-rich experience,” which we believe will succeed and go national.

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If you’ve ever been to Austin, you know that the phrase “Keep Austin Weird” is around for a reason, and that the enthusiasm about living in the city is palpable. There’s this quiet, giddy smile on local faces as part of an unspoken bond that unites residents like a web. It’s oddly kumbaya-ish as gun totin’ rednecks, inked up art snobs, university students, and philanthropists can sit in any restaurant together, happily eating tacos and chatting about their favorite local swimming holes. According to the U.S. Census Bureau, 110 new people move to the Austin area every single day, and the growth spurt that started in the 80s continues to rapidly accelerate.

So what better place to test a new rental listings program than a diverse city with an influx population, and a very, very, very healthy rental market? And who better to write about such a mysterious pilot program than a native Austinite who also happens to be a renter who might use the site, and also happens to be a real estate writer that will offer an unfiltered first look and the raw product?

Introducing Doorsteps Rent

Introducing Doorsteps Rent, powered by realtor.com. They’re testing what they’re calling a “rental experience,” starting with Austin as the pilot city, and they’re offering a “hyperlocal, content-rich experience” with editorial content alongside listings. You can learn about the flavor of a neighborhood, why the market is so hot (ahem: increasingly expensive), and it’s all original.

If this had existed a decade ago, it would have negated endless content generation real estate professionals have had to do to explain the rich history and current feel of specific neighborhoods.

Take a gander at the screenshots we’ve nabbed, and note that the design is clean, modern, has an urban feel, and is overly simple to use (a win for smartphone-using renters on the prowl):
[vc_row full_width=”” parallax=”” parallax_image=””][vc_column width=”1/1″][gallery_post_embed gallery=”4412″]

So where does all the data come from?

One of the challenges of multi-family rentals is that the software they’ve been using for nearly two decades, adjusts prices by the hour based on supply. If there are two 3-bedroom units left on the property and one leases, the price on the remaining unit instantly goes up. If four 2-bedroom units skip in the first week of the month, the glut pushes the pricing down to move them. This makes it nearly impossible for rental search to be accurate, which is why the industry continues to post price ranges instead of unit prices.

This makes the data flow complicated – imagine if prices of homes for sale went up and down every hour based on a computer algorithm.

Where does all of the data come from? The company tells us that they have the same MLS feeds that are syndicated to realtor.com (so real listings uploaded by real realtors), direct feeds from apartment communities, and data feed agreements with third parties that include apartment communities and single units (for example, we immediately saw listings flowing through Appfolio).

They note that in most cases, their listings are updated every 15 minutes, and they tell us that they are “working towards real time unit level availability and pricing, collaborating with property management software providers on those integrations.” Bingo.

Is Doorsteps going away?

A lot has changed at Doorsteps since its inception three and a half years ago – in 2013, the small company that provided a knowledge base for home buyers was acquired by Move, Inc. (operator of realtor.com, which itself was acquired by News Corp. in 2014), to much fanfare, they launched Doorsteps Swipe, the beautiful app that reminded everyone of Tinder but for real estate.

This summer, founder Michele Sero left to pursue other opportunities, but her team remained and have been hard at work on the company’s evolution, all under the continued theme of humanizing real estate search by educating consumers.

The company tells us that Doorsteps has always been an educational vehicle for homebuyers, but they’re “exploring the extension of that relationship to serve the needs of renters today.”

Why Realtors should care about the pilot

Doorsteps says the idea behind the product is not only to extend that relationship, but to offer a more targeted search experience and better understanding of neighborhoods as a means of yielding better rental leads.

Christie Farrell, Director of Corporate Communications at Move, Inc. tells us, “the rental market is a huge opportunity for Move to do what our vision is – connect realtors and consumers, and to provide consumers with the best possible and most consistent and reliable experience online.”

We translate that to mean that this is one more way to keep consumers focused on the realtor brand and fill the pipeline earlier on in the process.

How long will the pilot last?

The company does not have a set date for the pilot program to either end or blossom into a national offering, but we were assured that it would be months, not years.

They’re currently looking to measure the impact and effectiveness of Doorsteps Rent and see if the hyperlocal content resonates with renters – this process doesn’t take place overnight.

Monetization of the product

Based on who owns it, Doorsteps is officially a media company, which means they bank on advertisers. There are no current ad products on the site, and the company has not finalized their offering, but here is where it gets sticky.

The big pink blowup elephant in the room is multifamily budgets – rents have gone way up nationally, and especially in Austin, so the properties must be rolling in extra cash, right? Not really – they’re actually reinvesting that money into remodeling units, building new amenities, and improving the property. Our sources tell us that marketing budgets have changed very little in the last decade, despite increased profit margins.

Why does it matter if Doorsteps Rent is another line item on a budget sheet for a property manager? Because Austin is this rare little town where thousands of apartment locators (many of whom are licensed realtors) live on this same marketing budget. The rental market is so hot here, that many properties have already cut locator commissions simply because they don’t need them. It’s already a struggle.

If properties’ marketing budgets are gobbled up by Doorsteps Rent, so are the incomes of locators, and we can’t imagine that a realtor-branded product would ever intend on damaging their constituents.

So if the advertiser isn’t the property, then who is the advertiser? Realtors and apartment locators that want to have their headshot posted up next to rental listings? Or will featured listings be the bread and butter? Perhaps banner ads will hit the sweet spot. All Move models are free to consumers, so the end user won’t be the one padding the coffers, but the direction they head with the monetization will dictate whether or not the real estate practitioner backs it.

The product speaks to the greater good

If you’ve searched for rentals on the big portals, you’ve already seen that there are some serious accuracy problems. Spend five minutes searching sites that don’t rely on MLS data, and within that time span, you’ll find listings that aren’t real, or are straight up scams. Trust me, it only takes five minutes.

This has done a lot of damage to the rental industry – portals allowing bad listing data to be uploaded has abused the consumer and destroyed the trust between real estate practitioner, consumer, and even search portals.

If a consumer spends time on Doorsteps Rent and finds the data to be accurate (and we hope it is, even though unnamed third parties will be feeding data to the site), this could play into the national campaign between realtor.com and the National Association of Realtors to re-establish trust and faith in the industry.

What we hope the future holds

There are three things we hope the future of Doorsteps holds: Swipe update, UGC, and AI. Let me explain.

First, if Doorsteps Rent does not lead to a Swipe product for rentals, I will literally lose my mind. If you aren’t familiar with Swipe, go spend five minutes on it and tell me you’re not hooked and suddenly in the market for a house .

Second, it would make sense for this to finally be the place where some user-generated content (UGC) is opened up. It can’t exactly be done on realtor.com, because a random consumer adding comments to a listing could be extremely tricky, given how highly regulated it is. But, I imagine Doorsteps Rent could very easily be the Yelp of neighborhoods, with consumers adding pictures of what they’re up to in the area, the newest fish taco place (eww, but whatever), or how the new highway development is impacting commutes, and so forth. I doubt there will be any star ratings, but I predict that consumers will be invited to participate in the process not only for the added benefit of unfettered content, but because their creating a login to do just that means one more contact opportunity for realtor.com and the incubation of consumers much earlier in the sales cycle.

Lastly, I should note that this pilot marks the first step in personalization for renters, an often overlooked segment of the population. After this step comes geo-targeting and maybe the acquisition of a company like Nextdoor, a private social network that enables members to communicate with neighbors. After that, I hope the ultimate evolution of Doorsteps Rent will include more predictive search that understands a consumer’s desires based on their past rental experiences, but that’s like hoping for the site to be complete with artificial intelligence. A girl can dream.

The final verdict

Doorsteps Rent is an important piece in the puzzle. For years, the image of real estate practitioners in the rental field has been tarnished by the bad behavior and greed of non-MLS search portals, and consumers have been left to use subpar sites with subpar information.

Personalizing the process with this gorgeous, urban design, brings future homebuyers into the fold much earlier, which is a huge win for realtors.

Ultimately, the success of the pilot depends on the monetization strategy, a strict devotion to data accuracy, and quality content that resonates with renters.

We believe the pilot will succeed and anticipate that it will become a national offering. We predict that it will ultimately lead to a Doorsteps Rent Swipe product, future acquisitions to better connect neighborhoods, and the evolution of the site into a Yelp/Doorsteps hybrid.

Lani is the Chief Operating Officer at The Real Daily and sister news outlet, The American Genius, and has been named in the Inman 100 Most Influential Real Estate Leaders several times, co-authored a book, co-founded BASHH and Austin Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.

Real Estate Corporate

Has REX Homes finally ceased operations?

After two rounds of layoffs, a restructure to join MLSs, and swirling rumors regarding leadership, staffers tell us the company has crumbled.

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Empty office REX Homes

Real estate brokerage REX Homes became famous in recent years for spearheading an anti-trust lawsuit against Zillow and the National Association of Realtors, accusing them of being a ‘cartel’ to edge out non-MLS participants. But it appears that as of today, the company has ceased operations.

Numerous staff reached out to us directly to indicate the company’s last day was Tuesday and that a companywide call on Friday outlined the end of REX Homes. While the entity of the brokerage still exists, we are told there are no longer offices, staff, leadership, or agents.

Staff at the Austin, TX and Woodland Hills, CA offices (both in Texas) have confirmed that as of today, the doors are literally closed. It is unclear what REX’s plans are for wrapping up any current contracts that haven’t closed.

The company’s website remains live with no notification of any service interruptions and there have been no changes to the faces that appear on the staffing page.

Many Glassdoor users have begun leaving reviews asserting that operations have ceased. To thicken the mystery, we’ve already seen several recent reviews disappear, but it is unclear if that is Glassdoor or REX’s doing.

Several LinkedIn users formerly employed at REX Homes are putting their #OpenToWork signs up, stating the company has closed – some indicate departments dissolving, others that the entire company has collapsed.

What has been especially interesting with this company is staff’s consistent fears of CEO Jack Ryan, consistently citing a fear of retribution not just professionally, but personally, and several told us we should worry about our own personal safety, having been the only news outlet covering REX’s unraveling.

Also consistent is that everyone we’ve spoken to in the last year has cited an imminent demise of the company as a whole.

In August of 2021, REX Homes laid off 60 staff without severance, and on October 7th, 2021, REX Homes had their second round of layoffs – both times, staff said they were not initially given severance pay, but report to us that after our coverage, they began seeing payment.

Also in October of last year, they shut down their New York and Chicago offices, and announced internally that they would be joining MLSs. They called it a restructure. The joining of any MLS shocked many as the premise of their structure was always that their magical proprietary tech as well as their bypassing of the MLSs to save consumers thousands of dollars.

They earned several rounds of private equity funding and never went public. Several staff told us that going IPO had been a talking point from Ryan, often used to lure them to the company in the first place and accept lower pay with the idea that shares would soon be coming their way.

Between the August and October layoffs, they closed their Series D round of funding, but never disclosed the amount, closing date, or investor. It is therefore unclear how their investors feel about the company’s status, but it is also possible that they’re who initiated the pulling of the plug.

It is also unclear what this means for their ongoing lawsuit against Zillow and NAR and how a non-existent company can pursue a class action lawsuit, but no filings have been made in the past week regarding the case.

As with all REX stories, we have reached out for comment. Because we track all emails, we have always seen them open every press inquiry within seconds, but it is of note that our current request for comment has yet to be viewed

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Real Estate Corporate

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.

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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.

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Real Estate Corporate

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.”

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Zillow landing page on laptop

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.

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