Coldwell Banker CEO: Building tech for real estate is a ‘nightmare’

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In 2013, Inman News editor Brad Inman envisioned a simpler, faster real estate transaction that would be as easy and seamless as ordering a latte. But how close has the industry come to that vision in its nearly decade-long history of a flood of venture capital into real estate?

Not very, according to panelists at Inman Connect New York on Thursday.

In a session titled “Are we confusing movement with progress?” panellists M. Ryan Gorman, CEO of Coldwell Banker Real Estate, and Brian Donnellan, CEO of Bright MLS, answered overwhelmingly yes to this question.

“There’s a lot of movement and not a lot of action,” Donnellan told attendees.

“We’re taking way too long to get where we need to be and I think there’s a lot of reasons for that.”

First, he said, developing technology for brokers and agents isn’t easy. Bright, the nation’s second-largest multiple-listing service, experienced multiple outages for several days earlier this month, causing trouble for some subscribers.

“In our market we have 100,000 independent contractors, each doing something different and asking for something different,” he said.

“You move a thing and half the people hate it.”

The transaction itself is also complicated and companies need to ask themselves what specific problem they want to solve, he said. Old technologies often get in the way.

“I think there’s progress,” he said. “It’s just very slow.”

Most agents and brokers in the industry don’t actually see certain problems because they belong to only one of more than 500 MLS, while companies like Coldwell Banker belong to virtually all of them, according to Gorman.

“It’s an absolute nightmare trying to please people,” he said. “A lot of the dissatisfaction people have, like helpdesk tickets [with] People who call and say, ‘Hey, that thing isn’t right’ goes back to master data management standards or something we didn’t agree to.”

For example, if an MLS subscriber wants to buy a specific product they saw on Connect, Gorman said that doesn’t mean they will be able to.

“You can’t have it because it’s not in your MLS,” he said. “It’s in about 180 MLSs, but not yours. I’m glad you’re excited [but] They have to wait three and a half years or maybe for MLSs to merge, which is this weird brute force attack, to try and actually get to a place of standards that we could get to if we actually just work together and focus on that The problem is just trying to make work easier for everyone.”

That barrier isn’t something agents face as consumers of other products, Gorman pointed out.

“When was the last time you downloaded an app and they said, ‘Oh, sorry, this service isn’t available to you’?” he said.

“We get annoyed when an Uber takes 13 minutes and a human actually comes to us, let alone technology that you can download and use.”

Venture capital, which has revolutionized other industries, made no real difference to the deal, according to Gorman.

“Billions of dollars,” Gorman said. “We’ve invested more in improving the transaction than we probably spent on the first trip to the moon, and it’s basically the same as it has been for, I don’t know, 15, 20, 180 years.”

“It’s a pretty slow movement, partly because I don’t know if people really know how good it could be,” he added. “And if you don’t know how good it could be, how motivated are you really to engage in some of the dialogue that’s necessary to get to that place?”

According to Donnellan, too many people invest in the status quo.

“We have a lot of selfish people,” he says. “We have to admit what’s wrong with what’s happening here and actually get to a place and fix it, otherwise someone else will do it and it probably won’t be the players who are in this room here. It will be someone else.

“But there are people who are investing in what they have today. And that doesn’t help us. Frankly, it probably prevented venture capital from moving faster because of the fragmented parts of the business. But eventually everything will be digitized and someone can roll it up.”

The “organizational” part of organized real estate — the agents, brokers, brands, MLSs, and industry bodies — shouldn’t stand in the way of progress, according to Gorman.

“We swim in the organization,” he said. “But we don’t seem to have really clear targets to chase down really aggressively and I think that can make a big difference. If we do that, venture capital can move faster. Complexity benefits established companies. One reason for the resistance, I think, is a certain awareness of it.”

Trying to work your way through the logistics of organized real estate is a “nightmare,” Gorman added.

“We’re an established company and a leader in most of the markets that we’re in, so we’d kind of benefit from things staying broadly the same, but if we really get to a place of standardization then there’s all of that those unintended positive consequences that come with it,” he said.

“Less money wasted. Greater efficiency. The ability to move faster and deliver extraordinary experiences. Sure you may have a smaller moat, but the experience you deliver is so much more beneficial.”

As someone who has acquired hundreds of companies, Gorman said consolidation isn’t the most efficient way to get there.

“Actual collaboration on some of these standards would be much quicker and could then also allow for faster standardization or even faster consolidation,” he said.

Donnellan noted that sometimes he calls Gorman with an idea and Gorman says, “That’s great,” but that he can’t do it because he would have to coordinate with 500 other MLSs.

“It’s a real problem trying to actually help some people solve problems,” Donnellan said. “The consolidation thing is, in my experience, probably one of the worst conversations I’ve ever been a part of, but it has to happen. That’s where speed happens, where [brokers] can actually do something and really start building a great customer experience because they can actually do it faster. They can actually evolve faster.”

The lack of standardization keeps even the best developers from entering the real estate space, according to Donnellan.

“The best cannot excel in these areas,” he said. “It’s something we really need to address: How do the best actually get an easier way to make things happen?”

Finding the perfect standard can hinder consolidation if one side or the other is convinced that, according to Gorman, there’s only one right way to represent something like the number of bathrooms in a home.

“There is a thought that we must achieve the best standard; like, not really,” he said. “I think a lot of people are looking for Esperanto out there. According to the motto: ‘Let’s just keep talking until we have developed the perfect standard and then roll it out everywhere.’”

Donnellan agreed, noting that when MRIS and TREND merged into Bright, “there was a holy war over ranch, rambler and anything else. It brought almost all consolidation to a halt.”

Panel moderator Sam DeBord, CEO of the Real Estate Standards Organization, noted that both Coldwell Banker and Bright develop their own software, but Gorman said his company doesn’t build because it wants to.

“For example, if there’s a really unique experience that we can create, we build for it, great, we look forward to it,” he said. “Or if we need something that just isn’t being delivered, we usually do a pretty big RFP and talk to everyone in the room and hear all their many promises about how they can actually scale to meet our needs, just to see.” how they collapse. This process means that we have to develop things.”

If third-party companies could scale across the country and “not spend all their time actually trying to fix breaks around MLSs or different data feeds and whatnot, where they invest a lot of time,” Coldwell Banker would use more third-party companies. party products “and just invest our magic in the truly unique differentiated experience,” he added.

Gorman said he’d like to see more standards about who actually owns a listing.

“We would have standards for assigning listing agents, which is obviously close to my heart, but should be close to everyone’s heart,” he said.

“But we don’t do that. If we [did], everyone would just have to take it. I don’t care how awesome your app or website is, you would have to stick to that standard because that’s our standard. We as an industry have decided that the listing of the broker is presented and attributed in a certain way and everyone has to abide by it. It’s easy for someone to walk in and basically not do that now because we’re a mess.

Donnellan said the next few years will be critical to what the industry looks like five years from now, and attendees should explore how they can be part of solving those problems.

Gorman encouraged attendees to demand action from their management teams and broker associations.

“Are you asking for answers as to why my MLS area isn’t on the list of providers I just saw at the conference,” he said. “There are very specific reasons for this, and I guess when you hear them you’ll be completely unimpressed.

“Demand to know what the answers are, and then say, ‘Well, that [sounds] like finger pointing, can we just get past that and actually get to a better place?’ If you do that…we’ll all be able to move faster and get better stuff.”

Email Andrea V. Braambila.

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