- The new head of NAR is calling for working with, not against, industry innovators.
- He says programs like RPR and Upstream will have to provide enough value to Realtors to justify the dollars spent on them.
Realtors can be a fearful lot, seeing threats in new technologies and new business models that might change the way they do business.
The National Association of Realtors (NAR) has in some ways encouraged this mindset, often disparaging companies such as real estate tech giant Zillow Group.
But new NAR CEO Bob Goldberg, who is determined to paint himself as a change agent, is striking a more inclusive tone at the beginning of his tenure. In an interview with Inman, Goldberg said those thought of as “disrupters” should be invited into the “tent” of organized real estate in the hopes of turning them into Realtor advocates.
Goldberg’s plans for change in regard to technology don’t stop there. They extend to Realtors Property Resource (RPR) and Upstream and whether they can justify their existence.
Will agents and brokers take their cue from Goldberg? Time — and Goldberg’s results — will tell.
On embracing disruption
As Goldberg sees it, whether it’s called disruption or innovation, it’s always been a part of life. But the real estate industry hasn’t reacted well to it.
Bob Goldberg
“We as an industry tend to take change and look at it like, ‘Oh God, there’s somebody that is a disrupter.’ We put a label like they’re the bogeyman or something,” he said.
“And the reality … is we have to be fearless in how we approach this as opposed to fearful. That means that the tent that we live in in this industry in organized real estate needs to be a larger tent where we’re more inclusive in bringing in those players to the table to help our industry and to help our members become successful.”
Instead of putting up a wall and thinking that will keep them at bay, what happens is “those outside players … are going to play in a tent of their own and create their own world and that’s not good for this industry,” Goldberg said.
“So my idea there is that the way we embrace that change is encourage it — because it’s going to happen with or without us.”
In order to enlarge “the tent,” Goldberg will create a new strategic business and technology group whose sole purpose will be to go out and find potential Realtor partners.
“We’re talking about mega companies that are out there who maybe have not turned their sights yet on real estate,” he said.
“If we go out proactively and try to find the best types of companies at what they do and maybe even encourage them, maybe even mentor them, even advise them on what we think can help make them successful, then we should proactively help bring them into the picture because they’re going to come here anyway at some point.”
Goldberg pointed out that NAR already has experience doing this with its REach tech incubator.
“We’ve taken 40-plus companies that are potential disrupters with great products and we’ve turned them into our advocates for this industry,” he said.
What will be NAR’s pitch to the bigger companies it hopes to bring in?
“We want to help you be successful in this industry. Work with us as organized real estate. We’re the world’s largest trade association. We’ve got great members. We’ve got great brokers. We’ve got great infrastructure. We think we can help make you successful,” Goldberg said.
Will that big tent include companies such as Zillow Group and Opendoor?
Goldberg declined to name specific companies, but said the tent has to be big enough to have conversations with companies that NAR members have chosen to serve them.
“Some of those companies have tens of thousands or sometimes hundreds of thousands of our members as their customers,” he said. (As an example, Zillow Group has some 80,000 Premier Agent advertisers, many of whom are likely Realtors.)
But that doesn’t mean NAR is suddenly going to start talking up Zillow’s products to its members.
“When I say ‘broadening that tent’ that doesn’t mean we’re endorsing every one of those companies, that doesn’t mean that we’re supporting them actively by marketing what they’re doing,” Goldberg said.
“What it means is having open dialogue collectively in this industry and not puffing out our chest and saying, ‘We don’t like what you’re doing or we don’t agree with you, so therefore we’re not going to talk to you.’ We have to be a collaborative, open organization, so that the tent is open enough to have them in there with us for conversations and dialogue.”
In that vein, NAR is creating a strategic think tank made up of experts inside and outside the industry, not NAR staff, to get their input on how to approach potential threats or build or encourage models that would attract them to the industry, Goldberg said.
This will be totally separate from NAR’s current research department, which costs NAR over $4 million per year and conducts economic research and strategic profiling, according to Goldberg.
When asked how iBuyers, such as Opendoor, will change how Realtors do their job in the next one to five years, Goldberg said he thought there would be an “impact,” but that he needed to spend more time on the issue.
“That has not been my first immediate focus,” he said.
A hard look at RPR and Upstream
As part of his emphasis on embracing technology companies, Goldberg touted a philosophy he called Not Invented Here (NIH). That means NAR won’t try to build technology products for itself or waste money trying to outdo venture capital-funded tech companies, according to Goldberg.
But NAR does own a tech company: RPR. And it has partnered with Realtor-owned companies, such as zipLogix, to try to compete against Zillow Group’s dotloop. So what does this philosophy mean for them? NIH doesn’t apply to them, apparently.
“So when I said Not Invented Here, I didn’t necessarily state that it doesn’t mean that they can’t be Realtor-owned entities,” Goldberg said.
“The best example is SentriLock. We’re a 100 percent owner of a lockbox company that is the fastest-growing lockbox company in this industry. Forty percent market share and growing rapidly.
“But the technology, the innovation is run 100 percent separate from us with technologists that have built that product. NAR does not run that company.”
NAR has some 350 staff members, not counting its subsidiaries, and Goldberg said NIH meant not building up that staff to try to compete with other companies.
As for RPR, Goldberg and the NAR leadership team will be taking a hard look at its profitless, for-profit subsidiary.
“We have to take a look at everything we do, RPR and every other budget that we have in this organization, and determine what is the value proposition that our members are receiving and does it make sense for us to spend the dues dollars that we have delivering any respective product,” Goldberg said.
“RPR is a fabulous product. But the question has to be asked: Does it deliver the value that it needs to to enough members to justify the dollars that are spent on it? That is a challenge I have to undertake with myself and our leadership team to look at this and everything else that we do to make sure that we can justify what it is that we’re all about.”
When will this assessment of RPR happen?
“It’ll go through the next budget process the way every other program at NAR does, so that process will start right after the first of the year because it’s been funded fully for the next year and a half in the current budget process,” Goldberg said.
RPR funding is 12 percent of NAR’s operating budget. NAR will spend a total $215 million on RPR by the end of 2019. That does not include the $12 million in funding the NAR board approved in 2015 for the development of two RPR projects in 2016 and 2017, a back-end MLS system called Advanced Multilist Platform (AMP) that may be a new revenue source for the company and a broker data management platform called Upstream. NAR’s board approved $9 million in additional funding for Upstream in May.
After two years, Upstream has yet to officially launch and announced a pivot in May, dramatically shrinking its scope. How does Goldberg feel about the project’s progress?
“I just met with several of the players and they say that they are on target with the schedules of the pilot and the deliverables working hand in hand with the Upstream board of managers. The proof will be in the pudding. We have agreed to fund it through 2018. And then it’s got to be self-sufficient and run on its own to justify its existence,” Goldberg said.
When Upstream chose RPR as its tech vendor it was in part to leverage RPR’s existing technology and therefore move more quickly than they otherwise would have. Did NAR anticipate the current timeline for Upstream?
“I don’t have enough information about where they were because I did not work with it directly before I took this position 12 [or] 13 days ago. So I still have to get my arms wrapped around the deliverable and the timing, which is one of my top priorities,” Goldberg said.
“I’ve actually started the discussions with that and meeting with the team just to understand where everything is in terms of timeline against the plan.”
