OpinionMLS & Associations

Upstream CEO answers broker questions from the campaign trail

'When I meet with an MLS, it starts with concern and skepticism'

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This post by Upstream CEO Alex Lange originally appeared on upstreamre.com.

I’ve been on the “campaign trail,” shaking hands, kissing babies and most importantly, spreading the word about Upstream. The actual word so that we can reduce the misconceptions resulting from a lack of information. I’m only a third way through my travel schedule but so far have spoken at/with:

  • Leading RE Board and MTAC Meeting
  • MRED Strategic Planning Meeting
  • Chicago Realtor Magazine
  • Realtor Magazine
  • CAR Strategy for Thought Leadership
  • Second Century Ventures (NAR) Portfolio Summit
  • Inman
  • Private conversations with Bob Hale, Dave Charron, the Zillow team and many others

The reception has been good overall. Settings filled with brokers have welcomed me with open arms. Still uncertain about the details but hopeful and supportive.

By the time I leave, we are a stronger collective. When I meet with an MLS, it starts with concern and skepticism. When I leave, there’s a new understanding, new and entirely different questions and a general feel that we can work together after all.

Most of the initial questions are germane to understanding Upstream better. What is it? When will it launch? How will this change my day to day?

There are a handful of specific questions that come up time and time again so I thought I’d address them here in a post:

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How will this change how we enter data today?

One of the primary directives of the product management team is they must minimize the impact on both the individual inputting the data or an MLS.

With that said, we first incorporate all of the MLS business rules into Upstream. We then integrate with the MLS system provider and “insert” Upstream into the Add/Edit functionality. Regardless if your brokerage has adopted Upstream, you can continue to log into your MLS and select the Add/Edit function.   The only difference is which screen you see next.

Our goal is to minimize impact so your experience and workflow will be very similar. Additionally, you have the ability to leverage Upstream as a standalone system, and its mobile applications so that you can update a listing from anywhere. It’s your choice.

What do you mean “single source of truth?”

This is clearly a strong and polarizing comment if taken out of context. The idea was simply this: if you have more than one database in which you’re entering data, the odds that you’ll continue to update all synchronously is extremely small. The result is “dirty data” that can proliferate. A single data entry point ensures your data asset remains pristine.

What is NARs involvement, and is NAR trying to create a single MLS?

Realtor Property Resource (RPR) was chosen to be the technology vendor after reviewing the RFP [request for proposal] responses.

The first consideration was RPR’s platform which proved to be comprehensive, reliable and sophisticated.

Second, RPR understands the industry and the needs of each stakeholder.

Lastly, the National Association of Realtors saw the vision and embraced the benefit for the industry.

NAR leadership demonstrated their support by funding RPR’s development and launch activities through 2017. It is neither a loan or an investment and does not require repayment.

Upstream will begin to pay RPR for ongoing operations and support in 2018. Brokers, franchise systems and referral networks who embrace Upstream’s vision continue to generously fund all other operations.

I had a great conversation with a senior (SVP level) NAR staff member about this topic specifically. His response on why NAR was involved was better than I could ever imagine.  [This is my paraphrasing] He reminded me who pays association dues.

He clearly delineated all of the functions, services and staff that was in place to serve an association member. He said they realized that brokers, who were also members, weren’t served as well as the individual agent, and this was a deliberate act to serve them better. I believe the answer is somewhere between altruism and great PR, but either way, it’s good for the brokers.

I don’t believe NAR has intentions of creating a single MLS. My intuition is they want “clean hands” regarding any such activity. Is some consolidation a good long-term answer? I’d think you find it difficult to find anyone who disagrees. I think NAR would like market forces to be the catalyst.

If Upstream is successful, what is the purpose of an MLS?

This question continues to surprise me. An MLS is a corporate entity that offers services for the betterment of their subscribers for a fee. Upstream is a database. It will never offer the services such as compliance or offers of compensation and cooperation. It will never negotiate with third-party vendors on behalf of smaller brokers in collective bargaining.

Upstream offers a platform that every MLS can leverage without concern of management involvement. The service is more akin to Google Drive. We all can leverage the service and determine what documents we can share. We can add or revoke privileges at will. Google only provides the enabling ecosystem. This is Upstream.

How will an MLS edit records for compliance?

If an MLS has the broker/agent update their records if they find an issue, it will happen the same as it does today. If the MLS has staff that updates the records on behalf of their constituents, they will be provided an update screen to correct data easily.

How will you monetize?

To be perfectly transparent … I don’t know yet. I have multiple business models that I evaluate with each broker and MLS interaction.

Don’t mistake a lack of decision with a lack of planning or forethought. The Operating Agreement mandates we not make a profit, operate at a break-even and be capital efficient so we can offer our services at the lowest cost possible.

In 2018, we will begin to pay RPR for ongoing operations. I will receive an estimate in 2017.

Until I know the expenses, I can’t back into a break even. There are models where this could be free for brokers. I simply won’t know until I see the estimate. What I promise our members is that I have been taught by some of the greatest negotiation instructors available (from people close to the Cuban missile crisis to the COO of the Patriots). I will get us the best price.

Why are there only two women on a board of 21?

I understand and share the concern about the anemic representation women have in executive roles. I was raised by a strong mother and three sisters who ensured I’d never perpetuate male privilege. The current board of managers are the original founders. They weren’t selected; they simply defaulted into the role.

There are many facets of the agreement that ensure brokers of every size have equal representation:

  • Any broker can become a member. They simply need to be a system user and pay the $100 membership fee. Each brokerage can only purchase one unit (so brokers of every size have an equal vote). Think of it as a co-op.
  • The board of managers requires each sub-category (franchise, network, large, medium and small brokerage) be represented (currently 21 members).
  • Board members are voting in by their represented sub-class (i.e., small brokers-members vote in their representative, medium vote in theirs, etc.)
  • Each board member has a term limit.
  • I’m additionally forming two advisory groups (practitioners and MLS) that will have no requirements other than being a practitioner or MLS representative (they don’t even need to be “members.”) I welcome any suggestions you might have as well.

I hope this answers some of the questions you might have. Stay tuned for more updates.