A dramatic power struggle at the government’s consumer watchdog agency, new augmented reality tools for real estate apps, the unveiling of the iPhone X, devastating hurricanes and wildfires, iBuyers bringing homeselling out of the dark ages, Amazon asking for the keys to our homes, the most sweeping overhaul to the tax code in decades and more — it all unfolded in just a year’s time with wide-ranging impacts on the real estate industry.
Look back with us on some of the biggest moments that shaped 2017 as we head into the New Year.
New York’s Capital Region Multiple Listing Service (CRMLS) was dissolved during a public auction after four years of litigation between the two trade associations that owned it. The Eastern New York Regional Multiple Listing Service, a new subsidiary of the Greater Capital Association of Realtors, won CRMLS’s assets with a bid of $250,000.
The legal battle was not over. The two associations disagreed on how to split the $250,000 from the auction. The substantial litigation bills of this battle may serve as a lesson for future association and MLS disputes; impasses that end up in court come with a hefty cost to your wallet and time.
MRIS and TREND merged to form Bright MLS. Bright MLS’s new website announced “A new era of MLS is here.” In addition to MRIS and TREND, seven other MLSs will cease operations and join Bright over the course of 2017, likely making it the nation’s largest MLS.
Bright’s coverage area spans 10 million property records and nearly 40,000 square miles. Brokers and agents in Bright’s market who previously belonged to more than one MLS will no longer have to pay duplicate MLS fees.
On Jan. 12, President Trump’s Department of Housing and Urban Development (HUD) secretary nominee faced the Senate Banking committee for his HUD confirmation hearing.
Carson pivoted from some of his past comments on the perils of federal assistance and expressed support for HUD’s core responsibilities and homeownership-driven programs, which seemingly drummed up increased real estate industry support.
Broker Public Portal LLC, a company formed by a large group of brokers and multiple listing services, and real estate technology firm Homesnap Inc. signed final agreements forming the National Broker Portal LLC, a joint venture owned 50-50 by the two companies.
Homesnap kicked in the technology to the project, which intends to compete with third-party portals such as Zillow and realtor.com. The cost? Participating MLSs pay the National Broker Portal $1 per member each month.
A real estate tech startup bounded out of the shadows with $260 million in financing to turbocharge an alternative to traditional listing brokerage. Closely resembling Opendoor, OfferPad buys homes directly from homeowners. The company’s public debut underscored the momentum of iBuyers, companies that leverage technology to make quick offers on homes and close in days, catering to sellers who desire convenience and speed above anything else.
The Consumer Financial Protection Bureau ordered two brokerages and two lenders to pay nearly $4 million total for alleged violations of the Real Estate Settlement Procedures Act (RESPA).
Re/Max Gold Coast allegedly required buyers to prequalify with Prospect in order for their offers to be considered by homesellers — even if they had already prequalified with another lender.
KW Mid-Willamette allegedly gave its agents bonuses for referring consumers to Prospect.
The CFPB indicated that more than 100 real estate brokers had agreements with Prospect to obtain illegal payments for referrals.
Following the CFPB’s $4 million fine on brokers and lenders, President Trump signed an executive order asking the Treasury secretary to work with regulators to determine how the administration could fix issues with rules issued under the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. Media reports saw it as Trump taking a step toward rolling back the law.
The Department of the Treasury ordered title professionals to continue to identify all-cash buyers who purchase properties above different price thresholds in several counties or metropolitan statistical areas in California, Florida, Texas and New York to the department’s Financial Crimes Enforcement Network (FinCEN) through Aug. 22, 2017.
In Aug. FinCen extended its all-cash buyer rules to Honolulu as well.
The debate on whether agents and lenders who participate in Zillow’s lender co-marketing program violate a federal anti-kickback law reignited.
The Consumer Financial Protection Bureau (CFPB) had not issued any guidance as to whether participating in Zillow’s lender co-marketing program violates RESPA, which promoted uncertainty among agents and lenders across the country. And videos from real estate video blogger Brian Stevens restarted the years-long, ongoing debate.
When asked whether CFPB examiners had been telling loan officers that receiving leads from Zillow violates RESPA, the federal agency did not affirm or deny the report and declined to offer a position on Zillow’s co-marketing program or on whether agents and lenders should be participating in it.
In March, the California Bureau of Real Estate (CalBRE) issued a licensee alert warning that agents who violate state real estate branding laws — and brokers who let their agents engage in such activities — risk significant fines, license revocations and even criminal prosecution.
In addition to California’s concerns, there’s been a South Carolina bill banning the use of “real estate,” “realty” and related terms in agent team names and a bill that makes many real estate signs prominently featuring agents (rather than the brokerage) illegal in Michigan signed by the governor in January.
A CEO announcement or two here, a dip in transaction volume there — bits of news dropped like dots on a map. Connected, they formed a bigger picture: 10 executive-level shifts in nine months, and the makings of a seemingly aggressive regrouping strategy.
That was the situation at one of the biggest titans in the industry — all in the name of jump-starting growth that had been slipping for a few years.
The company planned several executive hires to keep the bottom lines healthy in 2017 and made a succession plan for CEO Richard Smith.
Just in time for Fair Housing Month, a federal court found — for the first time — that the prohibition against sex discrimination in the Fair Housing Act covers LGBTQ+ people.
The case was brought on when the Smith family (composed of Tonya Smith and Rachel Smith, who is transgender, and their two children) sued Deepika Avanti for refusing to rent one of her townhouses to the Smith family in the tiny town of Gold Hill, Colorado, in Boulder County.
The refusal was due to concerns regarding the children and “noise” as well as the Smiths’ “unique relationship,” which Avanti feared would become the focus of the small community and jeopardize her and her husband’s “low profile.”
The Smith’s alleged sex discrimination and familial status discrimination in violation of the Fair Housing Act (FHA) and the Colorado Anti-Discrimination Act. The family also alleged sexual orientation discrimination under the CADA.
The court ruled in favor of the family on all five counts.
Although hailed by the White House as the “biggest tax cut” in history, President Trump’s tax plan was met with fervent criticism from the National Association of Realtors.
“By doubling the standard deduction and repealing the state and local tax deduction the plan would effectively nullify the current tax benefits of owning a home,” said then-NAR President Bill Brown, a sentiment that was echoed until the finalization of the tax plan in December.
With the what-ifs already being heavily debated throughout the industry and the CFPB remaining quiet on the issue, Zillow Group announced at the end of its earnings call that the CFPB had quietly been investigating its co-marketing program for compliance with the Real Estate Settlement Procedures Act (RESPA) for the past two years.
The program, which launched in June 2013, allows “Premier Agents” who pay for advertising on Zillow Group’s apps and websites to invite lenders to share marketing costs by paying Zillow Group to appear as “Premier Lenders” in advertising alongside the agent.
The board of directors of the National Association of Realtors (NAR) approved an additional $9 million in funding for broker data management platform Upstream.
The company behind the platform, UpstreamRE, is expected to repay the funds when it achieves profitability.
After NAR has committed $15 million in funding from member dues, the project is still almost two years behind schedule.
Zillow launched its pilot program in two cities — Las Vegas and Orlando, Florida — called “Zillow Instant Offers,” with the promise that a home sale transaction can be completed in as little as a week.
The new Zillow product allows prospective homesellers to receive all-cash offers from a hand-selected group of 15 large private investors along with a side-by-side comparative market analysis (CMA) from a local Zillow Premier Agent.
An onslaught of agent and broker outrage ensued.
Members of the Realtors Association of the Palm Beaches (RAPB) and Greater Fort Lauderdale Realtors (GFLR) voted to merge to become the Realtors of the Palm Beaches and Greater Fort Lauderdale.
Combined, it formed the third-largest local Realtor association in the country with more than 25,000-plus agent, broker and appraiser members total.
Bob Goldberg was named the next CEO of the National Association of Realtors (NAR).
In a profile about Goldberg, Inman wrote that after he joined NAR in 1995 as COO and SVP of Marketing at Realtors Information Network, the precursor to realtor.com, “Goldberg moved up the ranks to his current position as the senior vice president of marketing and business development, commercial services and business specialties at NAR — several departments that encompass a wide range of responsibilities.”
“I’m humbled and excited to be named NAR’s next CEO,” said Goldberg in a statement at the time of his appointment announcement. “This is a dynamic time for the association and the industry, and I am looking forward to my new role and working with Realtor leaders and staff to advance the association and our members toward long-term success.”
Competition for agents, especially top producers, is par for the course among real estate brokerages. But a jury found that one prominent firm crossed the line — and made the firm pay dearly for it.
After a four-week trial and a two-year legal battle, a jury awarded Douglas Elliman Real Estate $4.75 million. The ruling was issued after finding that, in early 2015, competitor William Raveis Real Estate and former Elliman branch manager Lisa Theiss, while still employed by Elliman, “schemed” to “unlawfully” move 11 agents, including four top producers — who represented about half of the office’s closed sales in 2014 — to Raveis’s then-newly opened branch office in Armonk, New York.
The Real Estate Board of New York (REBNY) launched a single, centralized syndication feed to distribute listings from its own version of an MLS, the REBNY Residential Listing Service (RLS), to third-party websites starting Aug. 1.
Citing reduced costs and increased efficiencies as their motivation, firms that intend to participate in the syndication feed include several big names in the city: Bond New York, Brown Harris Stevens, Citi Habitats, Compass, The Corcoran Group, Core Real Estate, Fox Residential Group, Halstead Property, Leslie J. Garfield & Co., Stribling & Associates, Town Residential, and Warburg Realty, among others, according to REBNY.
The participating REBNY syndication firms combined account for about 70 percent of listing inventory in New York City, according to Brown Harris Stevens.
Zillow Group rejected REBNY’s RLS feed, citing content licensing terms the company said would “degrade and limit the consumer experience.” Realtor.com operator Move Inc. announced in August that it would be the first national portal to receive a direct syndicated feed from REBNY, which includes the residential for-sale and rental listings from more than 600 leading New York City residential brokerage firms.
Some big New York City brokers at the time cut off their listings to StreetEasy and Zillow Group websites in a boycott. But in September, real estate giant Realogy extended a listing feed agreement with Zillow Group, tacking on a provision that allowed its New York City brokerages to feed listings directly to NYC listing portal StreetEasy. The deal marked a big setback for the boycott by providing a way for The Corcoran Group, Citi Habitats and local Sotheby’s International Realty brokerages — all owned by Realogy — to send for-sale listings and rental listings directly to StreetEasy and Zillow Group’s network of search sites.
What happens to listing photos after a property sells, and who has rights to them? That’s been the hot debate between Zillow Group and VHT in a years-long legal battle over the former’s use of tens of thousands of real estate photos. In July, both sides announced they’d take the fight to the 9th U.S. Circuit Court of Appeals to overturn a lower, district court’s final $4 million judgment.
Redfin has traveled a long and rocky road, learning how to, in the words of CEO Glenn Kelman, “fight like wild animals,” while navigating the roadblocks of a deeply entrenched industry.
Credited with a popular property search website and digital tools enabling agents to serve up a low-fee, tech-powered experience for buyers and sellers, Redfin migrated toward a more traditional brokerage model while deploying innovative technologies.
Redfin filed its S-1 to go public on June 30 and went into its July 28 IPO anticipating issuing up to 10,615,650 shares priced between $12 and $14 per share and bagging as much as $148 million in a sale that values the company north of $1 billion.
However, Redfin shares closed at $21.70 on its first day of trading. That’s up roughly 45 percent from Redfin’s IPO price, and it pushes the high-tech brokerage’s market cap over $1.7 billion. It was a big day for real estate and clearly for Redfin.
After being named the next NAR CEO in June, Bob Goldberg took office Aug. 1, assuring the trade group’s 1.2 million members that his tenure would not mean business as usual.
“Bob’s appointment opens a fresh chapter in our association’s 109-year-old history, a chapter undoubtedly to be hallmarked by discovery, innovation and progress. A revolution is brewing on almost every level of organized real estate, driven by legislative, MLS, technology and market forces,” NAR 2017 President Bill Brown said in today’s video welcoming Goldberg.
Connecticut MLS (CTMLS) and the Greater Fairfield County CMLS merged in just seven month’s time, enabling its 17,000-plus agent, broker and appraiser members to log on to a brand-new combined database covering the entire state of Connecticut.
The MLSs first started merger talks in December 2016. They legally consolidated and became SmartMLS on April 1.
On Aug. 1, SmartMLS officially launched full, live operations.
Bamboo Realty was a brokerage that catered first to rental clients and later experimented with a pay-what-you-want commission deal for real estate transactions. It eventually became known as a “for millennials by millennials” brokerage.
After closing its Houston office in December 2016, Bamboo closed its doors in Denver, Colorado; Raleigh, North Carolina; and Dallas, Texas, for good in August.
In the mid-1990s, Nick Bailey was a rookie agent at Century 21 Real Estate (C21). Little did he know that 21 years later, almost to the day, he would be named CEO and president of the company at the age of 42, his career coming full circle.
The former Zillow executive’s new gig marked “the beginning of a new era” for C21, according to CEO and president of parent company Realogy Franchise Group, John Peyton.
A Zillow Group shareholder filed a lawsuit alleging the company and its two top executives defrauded investors by misrepresenting its co-marketing program’s compliance with an anti-kickback law, thereby artificially inflating the real estate giant’s stock price.
The lawsuit sought class-action status on behalf of other Zillow Group investors and came as Zillow Group headed into settlement talks with the Consumer Financial Protection Bureau, which had recently concluded a two-year federal investigation of the company’s co-marketing program for compliance with the Real Estate Settlement Procedures Act (RESPA).
Another Zillow Group shareholder filed a federal lawsuit against the company in September, and it appeared the real estate giant could face a slew of similar suits.
After Hurricane Harvey struck in mid-August, some of the industry’s biggest names stepped up to help with relief. Keller Williams International’s charity arm, KW Cares, sent three 18-wheelers packed with generators, nonperishable food, diapers, cleaning supplies, wheelbarrows, flashlights and more.
Realogy originally pledged to match up to $50,000 for Red Cross Hurricane Harvey relief for funds raised via the Realogy Charitable Foundation. After passing that goal, the company increased its total match to $75,000.
On the local level, Coldwell Banker’s D’Ann Harper in Texas launched a fundraiser in concert with the American Red Cross to help families by raising funds, volunteering and working with local shelters.
Exit Realty Corp. International was another large real estate player to step up, announcing Aug. 30 that it would donate a total of $300,000 to the hardest hit by Hurricane Harvey.
A reported 90 percent of homes in the Florida Keys suffered damage and a quarter of homes on the group of once-paradisal islands were destroyed.
Don’t believe the rumors that the Florida Keys region is flattened and never coming back, said prominent Realtors in the area in the spirit of moving forward as quickly as possible.
Not surprisingly, Hurricane Harvey’s torrential rains and fast-rising floodwaters dealt a heavy blow to a real estate market that was on track to set new records, according to August data from the Houston Association of Realtors (HAR).
“Home sales were humming throughout the first three weeks of August, but the moment Harvey struck the region, everything came to a screeching halt,” said HAR chair Cindy Hamann.
Apple’s iOS11 included ARKit, a new framework for developers to create augmented reality experiences for iPads and iPhones, the latter starting at version 5s and going all the way up to the latest version, X.
In contrast to virtual reality (which requires separate, sometimes awkward equipment and creates an entire artificial world), AR overlays information on top of the real world and is available through the mobile devices people carry around every day. Think Pokemon Go but for real estate.
With 15 years of industry experience under Julie Leonhardt LaTorre’s belt, she is the new COO of Sotheby’s International Realty (SIR). LaTorre has worked closely with auction houses and luxury brands and will lead SIR’s global servicing and operations.
The Sotheby’s International Realty franchise has approximately 21,000 associates across 900 offices in 68 countries and territories.
This isn’t the first executive appointment for SIR in 2017. In March, the company also hired a new chief marketing officer, global luxury marketing executive Kevin Thompson.
First Irma, then Maria: Hurricane season packed a mean one-two punch for Puerto Rico, home to 3.4 million American citizens.
While communication has been limited, real estate firms with affiliates on the island reached out to their real estate agents dealing with the devastation, while the National Association of Realtors (NAR) and franchisors worked to provide additional aid.
Although some areas, such as San Juan, are now showing clear signs of recovery, NPR reported on Dec. 22 that many are still waiting for both electricity and federal aid.
The first-ever property purchase to occur through Propy — an international real estate startup founded around the digital currency Ethereum — took place.
Rich DeNicola became the new COO of Better Homes and Gardens Real Estate.
The senior VP of franchise sales at BHGRE since 2013 holds an MBA and officially entered the industry 14 years ago when he joined Realogy, BHGRE’s parent company. In fact, he’s worked for every Realogy brand, which include a slew of major real estate franchisors.
While at BHGRE, DeNicola has brought the number of franchisees up to close to 100, with 350 offices and more than 11,000 agents in the U.S. Canada and the Bahamas.
Having come from a real estate family, he joked that he started doing floor duty at age 5.
Days before Paul Manafort was arrested on a host of charges related to special counselor Robert Mueller’s federal investigation into the Trump campaign’s ties with Russia, an Alexandria, Virginia-based Realtor, Wayne Holland, who worked with the former Trump campaign chairman, was forced to testify before a grand jury in connection with the probe.
Housing in beautiful wine country was already scarce before flames ravaged 245,000 acres across Northern California and burned down 5,700 structures in their path. According to Pacific Union International, real estate agents in the region were already witnessing the effects of heightened demand.
The firestorm has wreaked more devastation — $4 billion worth of damage and at least 42 lives lost — than the San Francisco Bay Area’s last major wildfire 26 years ago in Oakland.
In October, Realogy announced that former Capital One exec Ryan Schneider will replace Richard Smith as CEO of the real estate giant, effective Dec. 31, 2017.
Amazon wants the keys to your home, wait what? True story. With the rollout of Amazon Key, Amazon invited Prime subscribers to install smart locks to the doors of their homes so that delivery people can then unlock it with the apps on their phones.
The goal is to let delivery people drop packages off inside your home when you’re not around, offering more “security” than leaving them outside or in an apartment building lobby/hallway, according to Amazon.
Season 10 of Million Dollar Listing LA aired on Nov. 2 with a new cast member: Tracy Tutor Maltas.
As there’s only been one other female real estate agent on a Million Dollar Listing franchise, Samantha DeBianchi who starred in eight episodes of MDL Miami, this is a long awaited and much called-for addition. (Do the math, 10 seasons of just one of the franchises, eight episodes with a female cast member … )
Elizabeth Ann Stribling-Kivlan called out Bravo, the franchise’s home network, in May for its lack of the double-X gene.
All we can say is: it’s about time.
“The Future of the Realtor Party” presidential advisory group (PAG) is recommending spending an additional $25 per member each year on political campaigns, bringing Realtor Party spending to $65 per year.
Realtors were given six months to tell NAR what they think of the PAG’s recommendations.
After much debate in the days leading up to the bi-annual meeting of the National Association of Realtors board of directors, the board passed four multiple listing service policy changes with little fuss, including a broker-backed policy known as “MLS of Choice.”
The changes prevent MLSs from requiring agents to pay for their service even if they don’t want it, so long as agents can prove they subscribe to a different MLS.
MLSs will be required to provide a no-cost waiver of all MLS fees for such agents, and MLSs may, if they choose, require agents and their brokers to sign a certification for non-use of their MLS services, which, if violated, can include penalties (such as back-billing) and termination of the waiver.
Sixth-generation Columbia, Missouri-based Realtor, Elizabeth Mendenhall was named president of the largest Realtor trade organization during the NAR conference and expo in Chicago.
Mendenhall has 20 years of Realtor experience. She’s currently the CEO of Re/Max Boone Realty.
She’ll replace current President Bill Brown.
With a three-month extension of the National Flood Insurance Program set to expire within the month, the real estate industry cheered the passage of new House legislation that would reauthorize and reform the ailing 49-year-old insurance plan.
Richard Cordray, the first director of the Consumer Financial Protection Bureau (CFPB), resigned.
The Obama-era appointee, who drew ire from real estate industry leaders after the federal agency fined two brokerages and two mortgage lenders for what it called an “illegal kickback scheme,” was considered a target of Congressional Republicans and President Donald Trump.
Cordray is expected to run for governor in Ohio, his home state, according to news reports.
Following a non-binding agreement signed in September, the Denver area’s REcolorado and Northern Colorado’s Information and Real Estate Services (IRES) signed a binding merger agreement with approval from REcolorado’s board of directors and IRES’s board of managers. Now, only association shareholder votes are needed to make the merger final.
Although the two MLSs had hoped to hold the votes in December, they have been postponed until January while attorneys for all parties review the merger documents.
The Greater Las Vegas Association of Realtors announced it would shut off a listing feed to realtor.com on Dec. 18 after negotiations between the trade group and realtor.com operator Move Inc. fell apart, according to a notice sent out to GLVAR’s 14,000-plus members.
The nonprofit, nonpartisan think tank, Information Technology & Innovation Foundation (ITIF), called for federal regulators to investigate multiple listing services that restrict data from listing websites for possible antitrust violations.
The Washington, D.C.-based think tank also asked for state lawmakers to require brokers to provide free, unrestricted access to real estate listings.
Can a castle have two rulers? Probably not, and neither can the CFPB.
After Richard Cordray’s mid-November resignation, the real estate industry watched with fascination as White House budget chief Mick Mulvaney sought to wrest power from the agency’s acting director.
Donuts in hand, Mulvaney reported for duty that Monday morning. He sent a missive introducing himself to the banking industry regulator’s 1,600 employees after its acting director Leandra English sent her own office-wide email.
Citing separate, conflicting federal statutes over the weekend, Mulvaney and English both claim to be the rightful director of the agency, and English filed a lawsuit to block the appointment.
A federal judge denied a request by the Consumer Financial Protection Bureau’s second-in-command Leandra English to block White House budget chief Mick Mulvaney from taking over as the legal interim head of the watchdog agency.
In his resignation letter, former CFPB director Richard Cordray named English as his heir apparent, but President Donald Trump countered later with Mulvaney as his nominee.
At least 12 former Bamboo Realty real estate agents in Colorado and Texas filed a lawsuit against the now-shuttered millennial-focused brokerage, alleging that its free-spending owners withheld $140,000 in commissions.
In the Nov. 17 lawsuit in Denver County District Court, agent Andrea Lightfoot of Houston and 11 other former Bamboo associates claim cofounder Sarah Jones and her husband Brian Jones repeatedly failed to pay them on time or, frequently, not at all, according to court papers.
As Christmas neared, the biggest of the handful of wildfires plaguing Southern California in December, the Thomas fire, was close to becoming California’s largest wildfire on record but was no longer endangering homes or towns, according to the latest from the Los Angeles Times.
As of Friday, Dec. 22, the blaze was 65 percent contained and had scorched an incredible 272,800 acres, claiming two lives. Since Dec. 4, the fire had destroyed 1,000 structures, according to the Los Angeles Times.
The fire began in Ventura County where it did the most damage, spreading to Santa Paula and the sleepy community of Ojai, and a week later triggered thousands of evacuations in Santa Barbara County in the well-heeled communities of Montecito, Summerland and Carpinteria. People in Ventura County and nearby were being allowed back in their homes in but some had no homes to return to.
On Dec. 13 Republican leaders in the Senate and House of Representatives reached an agreement on a unified tax reform bill after months of back-and-forth and revisions.
On Dec. 20 both houses of Congress successfully passed the GOP-led tax reform package, the largest set of changes to the tax code in a generation. The changes stand to have huge impacts on the real estate industry and all of American life.
Tax reform changes include:
- Mortgage interest deduction caps for primary and secondary residences at $750,000 (down from $1 million today), while capping state and local tax deductions (SALT) at $10,000 (there’s no cap at present), according to language in the new law.
- Pass-throughs, often used by brokerages and other real estate entities, will be locked into a 20 percent deduction — a substantial savings given that pass-through owners currently pay taxes on these profits through the individual income tax rate.
- Corporate tax rate lowered to 21 percent, from a current rate of 35 percent, effective next year.
- Top individual earners will inherit a tax rate of 37 percent, down from the present value of 39.6 percent.
Many of the compromises to the original GOP bill stemmed from an ambitious lobbying campaign spearheaded by the National Association of Realtors that inundated elected officials with more than 300,000 emails leading up to the vote.
President Trump signed the bill into law on Dec. 22.
Inman’s Person of the Year isn’t human at all, but it does represent a phenomenon that sparked the most revolutionary change in the homeselling process since the advent of the MLS.
The label “iBuyer” refers to a group of institutional investors leveraging technology companies to purchase homes instantly from sellers who desire convenience and speed, and who may willingly take a price discount in exchange for a fast sale — in some cases as short as three days.
Last year’s Person of the Year was “the Everyday Realtor.”