Darryl Davis on Google’s expansion into real estate listings

HousingWire

On today’s episode, Editor in Chief Sarah Wheeler talks with real estate coach Darryl Davis about Google’s nationwide expansion of their real estate listings inside mobile search and what that means for the MLSs, top brokerages and consumers.  Related to this episode:  Google went national. Now who negotiates for the MLS? https://www.housingwire.com/articles/google-lsa-mls-listings-cmls/  HousingWire | YouTube⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ https://www.youtube.com/channel/UCXDD_3y3LvU60vac7eki-6Q  More info about HousingWire https://lnk.bio/housingwire  The Top 5:  What to look for in Kevin Warsh’s first Fed meeting https://www.housingwire.com/articles/warsh-fed-hawks-oil/  FHFA pushes for direct power to sue for mortgage fraud  https://www.housingwire.com/articles/fhfa-sue-mortgage-fraud/  UWM fails to submit revised bid for Two Harbors, seller says https://www.housingwire.com/articles/uwm-revised-bid-two-harbors/  Unlock CEO Jim Riccitelli says home equity investments need ‘purpose-built regulation’ https://www.housingwire.com/articles/home-equity-investments-scrutiny-unlock-riccitelli/  Why hazard insurance is becoming a housing market constraint https://www.housingwire.com/articles/hazard-insurance-housing-markets/  The HousingWire Daily podcast brings the full picture of the most compelling stories in the housing market reported across HousingWire. Each morning, listen to editor in chief Sarah Wheeler talk to leading industry voices and get a deeper look behind the scenes of the top mortgage and real estate.

Transcript

00:07Welcome, everyone. My guest today is real estate coach Daryl Davis to talk about Google's

00:12nationwide expansion of their real estate listings inside mobile search and what that

00:17means for the MLSs, top brokerages, and even consumers. I'm excited to have this conversation

00:23about a potentially seismic shift in who gets to the consumer first. But first, let's start

00:28with a recap of the top five trending articles on housingwire.com. First is Logan's article on what

00:34to look for in Warsh's first Fed meeting, followed by FHFA pushes for direct power to sue for mortgage

00:41fraud. Then we have UWM fails to submit revised bid for two harbors, and a great interview with

00:47Unlock CEO Jim Riccitelli about home equity investments and why they need purpose-built

00:52regulation. Rounding it up, we have why hazard insurance is becoming a housing market constraint.

00:58All right, we are ready. Daryl, welcome to the podcast.

01:02Thank you, Sarah. Thank you for having me, and thanks for what Housing Wire and you all do for

01:07the industry. It's incredibly important. Thank you.

01:09I appreciate that. Thank you for, you've been a really prolific columnist for us,

01:14contributor for us, you know, for the last year, but especially the last couple of months. I feel

01:18like as things have heated up in the, across the real estate space, you have, you have met the moment

01:24with, uh, some really great op-eds too. So thank you for that. I know our, um, audience really

01:28appreciates it. And that's why I wanted to have you on because, wow, there's a lot going on. And

01:33from my perspective, the thing that is, has really caught my attention over the last, say, you know,

01:39week is the fact that Google announced that it was, um, expanding its, its listings nationwide,

01:45right? It had a pilot program. Now it's going to be, uh, working with, um, house canary on having,

01:51um, you know, these listings. And to me, it's like, this is, this is everything who gets to

01:57the consumer first. And, and up until now, it's like, well, Zillow has kind of been the,

02:03you know, the person who, you know, the, the company that owns that. Well, guess what? Before

02:07it ever gets to Zillow, if Google decides it's going to, you know, you can do all that within

02:11Google, it never even gets to Zillow. It never gets to these other things. So tell me your take

02:16on this whole, uh, you know, how big of a threat is it to the way things currently operate that

02:22Google is, is, uh, really expanding nationwide here. All right. Well, I guess, uh, Sarah, the,

02:27the good news first is that of all of the different options that Google could have, uh, approached,

02:33uh, as far as how to get into our business, they chose the MLS. So, uh, like I said, in

02:41my

02:41article is that acknowledges how important our data is in our MLS system here in the United

02:48States. I've always said this before in other parts of the world, where the envy, the United

02:53States of these other countries, because of our MLS system. Now it's been under attack quite

02:59a bit. And that's what I've been also screaming about. Uh, and this is a time for MLS is to

03:04come together, which we'll talk about in a second. Um, so that's the good thing is that Google

03:09kind of blessed saying of all the things they could have done. They chose MLS. The, the,

03:14the drawback is before how it used to be. Imagine a mall and you go into a mall and you

03:22have all

03:22these different stores. Um, Google was the mall and all the portals were the stores. Now Zillow

03:30having the big square footage in the best location, but now what's happening is, um, you're not going

03:38in the front door of the mall anymore. You're going through, let's say Macy's to get to the

03:43mall. And Google is now Macy's with only one entrance because everybody civilians use Google

03:51in some fashion when it comes to real estate. And so instead of Google passing it off to

03:55realtor.com, Redfin or whoever, Zillow, especially they're now in it. Um, the, the bad thing is this

04:03is probably going to be Zillow all over again. Um, you know, Spencer Raskoff, um, uh, the CEO of,

04:12uh, Zillow when he first was prospecting our industry for our data. Um, I have a quote from

04:19him and we created a marketing piece around it says, we come in peace. We're not a real estate

04:24brokerage. We're an advertising platform. We don't want to get into the real estate business. Um, well,

04:30we see how that turned out. And so we're seeing that again with Google, you know, we're just an

04:35advertised search function place. We're going to run some ad money, but no, it's going to go to the

04:39listing agent until it doesn't. And so this is a calling. If there was ever a time, if there was

04:47ever a time for God's sakes, I wrote a white paper on this. I, I gave it to Jessica Edgerton,

04:52who's now

04:52going to be the new CEO and she's a powerful, smart, intelligent person, um, on the MLS's need

04:59to band together and create, um, uh, uh, a governing board that is helps, um, bring us all together,

05:08all the MLS's. And, um, so that's what I think is what we need to do. I think that's such

05:14an

05:14interesting point because right now, um, you know, it's like, Oh, Google, you know, so if you're,

05:19if you're a, an agent, it can, you can be within Google, they can send you the, you know, the

05:24listing right away, all of that. You made a point in one of your recent stories that house

05:30canary is not just a tech vendor here, that they are in fact a brokerage. So maybe talk

05:35about that a little bit about why, how this could quickly change. Well, you know, as of

05:41right now, um, from what I understand their business model is that house canary is really

05:46a data, um, business that has real estate brokerage licenses so they can help with their

05:53data and their technology. But as far as them listing and selling real estate, that's not

05:58their business, uh, until it, it, the main part of the business until it isn't. So there

06:05is a concern with that. The other concern is EXP cutting a deal with come home where they

06:12can actually, uh, show their coming soon listings. And so that's a detriment because if we start

06:20allowing the coming soon or the private listings in on this national portal thing, uh, that could

06:28be a problem as well. But you know, uh, here's what I think. I think that what's happened right

06:34now so far is that Google has signed contracts with my MLS and a couple of others. The problem

06:42with that is that the more these, these MLS is cut their own contract deal with Google.

06:49And we've seen this before. Then all of the other MLS is have to basically comply. Say,

06:55all right, well, I guess I have to. Um, but if there was a governing body that whole, the MLS

07:00has come together and say, hang on a second, this is what we want. We don't want you reselling

07:07our leads to our paying members, the listing agents. Um, you can make money in other ways,

07:12but you cannot keep our data. Our data is our data and we're lending it to you, but you can't

07:18maintain and keep it. So there's, if we can come together collectively like that, we will

07:23take back our data and take back our industry. And I think that's what needs to happen.

07:28And I'm, by the way, if I can, can I go on just a little bit more, uh, in this

07:34white paper that I

07:35wrote, I point to examples of industries that did that. So for example, when bank of America first

07:42came out with a credit card, all of these other banks were going to be fighting. They realized they

07:48needed some kind of platform behind the scenes that kind of brought it all together. And that's

07:54how Visa got created. Visa originally was just a whole bunch of individual banks creating the rules

08:03and regs on how to operate these credit cards. Ace Hardware is another example that still exists

08:09today. Ace is not a franchise. Ace Hardware is individual companies, the store owners that come

08:17together to bargain collectively to, but each store is not a franchise. They privately owned

08:25and Ace is a, is a governing body of these mom and pop stores. Um, uh, there's another one. Oh,

08:32APR news, the same thing. So this is what we need. We need to have this governing body and CMLS

08:40is perhaps the best. It's already exists there. And that's why I reached out to Jessica as I hope,

08:46I hope this is part of the business plan. So, you know, the, the larger conversation here is

08:51why don't we just have a national MLS, right? Like, because even at this point we see MLS is

08:57competing with other MLS is they're, they're growing their, their range and all that kind of stuff.

09:02I know you're not a fan of the idea of a national MLS, but from the outside standpoint, like I'm,

09:08I'm not a realtor. I'm, you know, mostly a consumer on this. Of course we cover a real estate a

09:12lot,

09:13but I don't understand how it wouldn't be better for the consumer. And in many ways for everyone

09:19in the business to have just a national MLS it's, it's about data. It's about facts. So what, why,

09:26why shouldn't we just do that? Yeah. And you want to know something when you think about on the

09:32surface that makes sense, right? That, wow. One MLS where everybody in the United States has the

09:41same fields, has the same codes and abbreviations. Um, and, and, um, every realtor in different parts

09:50of the country, they won't feel like confused because it's all the same forms and everything

09:57else. And you know, who else would love that one airline, one airline would love that they were

10:03just the one airline to be a lot easier for people in traveling. Or how about one, I one phone

10:09that

10:10there was only iPhone. There was no other phones. Or what about one, um, telephone company or one

10:15utility? There's a reason why having one is a bad idea because it hurts the customer. It doesn't help

10:21them. It doesn't create competition. Go ahead. But in this case, I feel like what is the service?

10:27There's such a huge difference between say multiple listing service in an airline, for instance,

10:32and in the many ways that an airline can differentiate itself in the service it provides,

10:37what is the differentiation that would happen that happens now with, with multiple that wouldn't,

10:42wouldn't be beneficial? Because from my perspective, again, maybe I'm ignorant of this,

10:47but it's like, it's, we're talking about data. We're talking about listings. We're talking about,

10:50so why is that not, you know, something that could, you know, how, how do we need a whole

10:55bunch of different people doing that? Well, Sarah, that's a brilliant question and I appreciate it so

11:00very much. And, and, and you're right. Maybe it's not apples to oranges, the airline analogy. So let me

11:06give you just the factual answer to your question. When you have one national MLS, the, the, what your,

11:14the danger is, and I have to mention their name because it, it, I have to, um, is you'll have

11:21the, the brokerage that has the most members of that national MLS will control that national MLS.

11:29And right now the largest brokerage is Compass and, and the anywhere purchase. What happens,

11:35and I'll explain a little bit further, what happens with, uh, 489 different MLSs,

11:42they're silos that have their own governing body, their own votes, if you will. And it's impossible

11:50for one national brokerage to take over 489 local MLSs. So it becomes these, these moats,

12:00if you will, it's a little chaotic. There's a little confusing sometime because you've got all these

12:05different rules for all these different MLSs. But that weakness is what its strength is.

12:10If you do away with the locals and you have just the national, you'll have one brokerage,

12:16the biggest brokerage, who's going to have the most controlling stock in that relationship.

12:22And I'll give you an example of this. We just got a taste of what that's like in Illinois.

12:28We had this fight with MRED and Zillow. And because this is, Sarah, this drives me crazy that

12:38Zillow banned nine of Compass's listings in other states that MRED has nothing to do with.

12:48But MRED said to Zillow, you have to put those listings back. If not, we're going to cut your

12:56feed, which is what they did. So MRED was fighting for their number one client called Compass.

13:04Because it was Compass's listings, MRED cut the feed and disrupted the industry for a couple of days.

13:11That is an insight to what a national MLS would look like. That's just the tip of the iceberg.

13:18And I think that that is a very potent example. But I also just think there are ways to set

13:23this

13:23up where that doesn't happen, right? Just like there are ways right now that it's being manipulated,

13:28if you want to say it, for one MLS to do that. There are ways to set up a national

13:35MLS.

13:37Because here's the thing. I just feel like at some point, this is going to happen. If the MLS

13:44decides it, or a big tech company decides it, or it's Zillow, or it's Google, or it's whoever,

13:48it's like, you should get ahead of this. I know that you would say, well, they need to be on

13:53the

13:53negotiating table and come together to be the negotiator. But how much more powerful is it if

13:58it's a national MLS? Then I feel like they have a lot more negotiating power than they do right now,

14:05coming as all these different people with Google.

14:08You're right. And that's what the governing board would do, Sarah. The governing board would

14:13collectively bring all of the MLSs together. And instead of having 489 different contracts with

14:20Google, or 489 different contracts with Zillow, you would have this one organization where their

14:27negotiating power would be off the hook. It would take back our industry. Now, to answer what you said,

14:34though, about you think it's going to happen no matter what, that we should put that together,

14:40a national MLS. Well, who? Who's going to put that together? I'll tell you who's doing it now.

14:45And it's Robert Refkin and Compass. They just gave 100,000 of their agents to the three MLSs that have

14:55gone national because Robert has said it. He wants a national MLS. And the reason why he wants a national

15:02MLSs is because he's going to be controlling it and he benefits from it. Now, I know what he says

15:07about he wants competition in the local boards, but that's not what he's doing. He's playing chess

15:13when everybody else is playing checkers.

15:16I agree with you on that. I mean, I agree with you that the fact that he's a super smart

15:19guy,

15:20incredible businessman, and the moves that he's made make all the sense in the world for his

15:25business. I can't say, I don't know what the ultimate goal is, but for any business person,

15:31it would be to have your advantage, right? To make sure that you're advantaged.

15:35Absolutely. Robert's doing what he needs to do, which is his fiduciary responsibility is to

15:40his shareholders into the company. And he may not like me saying this, but I have total respect for

15:47him. I kind of look up to him. I think he's a brilliant tacticianer and everything that that

15:52man has, he worked his ass off for. Can I say that on that?

15:55Oh, yeah.

15:56So I totally, I think he's, I'm so impressed with Robert and I've always said that to him,

16:02but if he has a choice between what's best for Compass and what's best for the industry,

16:07he's going to pick what's best for Compass. And that's not always what's best for the industry.

16:12Now, I believe Robert believes everything that is best for Compass is best for the industry.

16:18So I think he's, he feels he's on moral ground there, but, but I disagree with that. That's not

16:25always best. All right.

16:26Well, let's, let's take even a broader look, right? Because we're, we're arguing over,

16:30not arguing, but we're, we're having the discussion about like what this should look like

16:35between portals, between Google, between companies. And the fact is that all of this

16:39might be moot if, you know, large language models can go in there and scrape all the data

16:44and send it straight to, you know, like if I'm, if I'm going into my chat GPT, my personal one,

16:50and I can be like, show me all the listings in this, and it can go and scrape things and

16:54show it

16:54to me directly. I have, as a consumer have bypassed all of those things. Right. So tell me about that

17:01because, uh, I know that we, we say, oh, okay, well, you know, the MLS owns these, this data owns

17:07these listings, whatever. But in this day and age, I think it's, it's a question who owns anything of,

17:13of the data, if it can be scraped, like it is currently, uh, being able to do that. So how

17:18do

17:19we, how do we fashion something that is going to be, you know, sort of MLM proof, like the AI

17:25chatbot

17:26proof? Yeah. So, um, I guess I have two answers to that, which, um, or, or one answer for two

17:33questions, cause you brought up something else that I didn't address. I just want to go back to,

17:37and you said a national MLS, maybe there's a way to set it up. So not one broker has that

17:45control or,

17:46um, and, and so I want to just go back to this governing body idea that I'm going to keep

17:52pushing

17:52of all of the different MLSs. That's the way that you create the rules and reg for a national MLS.

18:00Um, so, uh, and, and I don't know if I was clear on that. I do believe in a national

18:06MLS in some

18:07respects, but not when it's a real estate brokerage driving the bus, it has to be the MLSs themselves

18:14that come together collectively. Um, now with that said, going to your question, I, I, I think

18:21there's still the limitation of AI and LLM systems where the individual MLSs control

18:30how their data is put out there. This is a little bit above my pay grade when we're starting to

18:35talk

18:35at this level. Um, me too. So I'm, I'm not exactly sure, but, but here's what I know, right. Is

18:41that

18:42all of, you know, everyone's content is under attack at this point from, you know, uh, from the

18:48content that our newsroom does, um, the content that, uh, you know, an artist does. So at some

18:54point, if it's not right now, the, the content, which is the data that lives in these different

19:00things to me, it seems like, and, and different people have brought this up, it's going to be

19:04available whether they want it to be or not. And I think that to me, it's like, this is the

19:09time.

19:10And I, I feel like you, you said this in a, in a recent post where you're like, you know,

19:14this is a time for people to act and say, what do we want it to be like and take

19:18the reins and make

19:19this something that they have a say in versus it's just going to happen like this one company

19:25or, you know, the LLMs or like, let's do something collectively now before the, before it's no longer

19:32something that they control even. I agree. Well, and geez, I'm going to sound like a broken record,

19:38but again, um, the, the, the MLS is coming together would have some, have a lot of power

19:44and say in that process as well, collectively. So I do, I do think that one thing to say about

19:50the MLS is, is like, they, they are, are, they function as like the source of truth. Right.

19:56And so one of the things that you said about like, we are the envy of other countries is you

20:00do want

20:00a system. That's like, we know that, that we are putting out factual information that, you know,

20:07aligns to, uh, we're all saying the same things like that we can count on that. And I think that

20:12whatever comes next or whatever iteration, you have to have that sort of, um, backbone or structure

20:20within this so that that's what makes it great. And if you just open it up in a way that

20:24that's not

20:25MLS, I mean, we've seen this already with private listings and, and coming soon and a lot of other

20:30things like it gets really murky, really fast. Absolutely. I, I agree with that wholeheartedly.

20:38Well, Daryl, anything else you want to say, tell, tell our, uh, listeners what you, uh, what

20:42you think here? Well, I, um, the, the only thing I would say is, um, to keep reading housing

20:48wire, because you guys are always ahead of the curve. And you know, when we had the, um,

20:55the, the settlement, the, um, the NAR settlement, uh, you guys were one of the, the top, um, places

21:01that I went to get my information. So that way I can get on my soapbox and argue and scream

21:08about

21:08the chaos in our industry. So, um, yeah, everybody should be checking in with you guys once a day to

21:14find out what's happening in our industry. So thank you again for what you guys do.

21:17I appreciate that. And we really appreciate you, um, contributing and, and giving us your,

21:21you know, the expertise that you've, uh, gotten through decades of being in this business and

21:26being a coach in this business and saying, you know, like, here's the big picture. So

21:29we'll continue to feature that. We appreciate that. And thanks for being on.

21:33Yeah. Thanks for having me. I appreciate it, Sarah.

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