WASHINGTON — The National Association of Realtors has never given transaction management firms other that zipLogix — a firm the trade group partially owns — a chance to compete for its business through price or any other means, according to three of the most popular such firms in the industry.
Instanet, Zillow Group (owner of dotloop), and Form Simplicity all told Inman that NAR has never asked for pricing or other information as part of a request-for-proposal (RFP) process for NAR, neither when zipLogix was first chosen as the provider of a transaction management benefit for NAR members in 2015, nor more recently as the association gears up to ask its board of directors tomorrow to continue paying for the benefit through a dues increase. In an RFP process, an organization will typically ask companies to bid for its business.
Founded in 1991, zipLogix is a joint venture between NAR and California Association of Realtors subsidiary Real Estate Business Services Inc. (REBS). According to zipLogix, REBS owns 57.4 percent of zipLogix and NAR owns 30.2 percent.
ZipLogix itself holds 11.6 percent ownership (not owned by any Realtor association or subsidiary) and several other state and local Realtor associations hold the remaining 0.8 percent interest. NAR and zipLogix have declined to name the other associations.
In November 2015, the NAR board approved a deal to provide all million-plus Realtors with zipLogix’s zipForm Plus software at no additional cost to members. That deal has cost the trade group more than $38 million over three years. That expenditure, plus the $12 million shelled out for real estate data projects Upstream and Advanced Multilist Platform (AMP), have depleted NAR’s reserves by 45 percent.
NAR has proposed raising its annual dues by $30 in 2019, in part to continue funding the zipLogix software as a member benefit for $7.5 million a year, a proposal that has incited controversy and dissent.
This is in part because many state and local associations do not use zipForms and provide their members with competing transaction management products such as those from dotloop or Instanet, therefore, their members will receive no benefit from NAR continuing to pay for zipForms.
At NAR’s Treasurer Budget Forum on Thursday at its midyear conference, NAR President Elizabeth Mendenhall assured hundreds of Realtors present, many of them NAR directors, that the trade group’s staff had “turned over every rock” to save members money before asking for a dues increase.
NAR CEO Bob Goldberg added, “When I came in as CEO I went through every line-item of every budget, line by line, and challenged everything that we do. I felt that was imperative.”
NAR declined to comment for this story.
“Our focus this week is on serving and answering questions from our members,” NAR spokesperson Sara Wiskerchen told Inman via email.
“The information that was presented at the forum is what is currently being made available externally. After tomorrow’s vote we will communicate additional information about the agreement to our members.”
At the budget forum, Goldberg said NAR and zipLogix had signed an agreement contingent on the approval of their respective boards of directors.
He noted that zipLogix took a “43 percent haircut” as part of the new deal because “we had a cap of what we felt that we could pay and afford on behalf of our members.” But that that won’t mean Realtors will get less product for their money, according to Goldberg.
“Zip has been a fabulous, fabulous partner [with a] great product,” he said.
“The capabilities and the functionality that’s there in the zipForm and the Zip transaction platform is what you have today,” he added. “And they’ve got functionality in the queue that they’re adding as just regular product enhancements to be competitive.”
Mark Peterson, chairman of the board for ZipLogix who also spoke at the forum, noted that since NAR partially owns zipLogix, the company had paid NAR back nearly $14 million in dividends.
User count comparisons
Leaders at the forum batted around different usage numbers for zipLogix. Mendenhall put zipForms users at “about 550,000” while Goldberg said “close to 600,000,” and Peterson said “804,000 members,” contrary to earlier statements zipLogix has made that put the figure at “nearly 600,000.” Before NAR made zipLogix software a member benefit in 2015, about 500,000 Realtors already used the software.
Meanwhile, Instanet’s TransactionDesk had more than 427,000 unique users for the 12-month period ending March 30, 2018, the vast majority of which are Realtors, the company told Inman.
During Zillow Group’s fourth-quarter 2017 earnings call, CEO Spencer Rascoff said: “Almost 300,000 real estate agents use dotloop every month. About one-third of all real estate transactions are closed using dotloop software.”
Form Simplicity declined to disclose its user count but said its software is a member benefit for state associations, local associations and MLSs serving more than 280,000 Realtors.
Rivals selling data? Not so fast
Peterson also used the budget forum as an opportunity to knock zipLogix’s rivals for something that is a concern to many Realtors: data privacy.
“The information that we have, there’s protection on that data, so it does not get sold. It goes back to the members only. This is different from our competitors,” he said.
“Dotloop was sold just a little bit before we made this agreement, before it became a member benefit. Dotloop is owned by Zillow. But who knows what happens to that data. This is really, really rich data. And it’s not just information about yourselves. It’s information about your buyers and sellers and everybody you do transactions with so we definitely guard that and do not sell that to put anybody at risk.”
Zillow Group, Instanet and Form Simplicity (which is owned by Florida Realtors) all denied selling user data.
“We absolutely do not sell user data, never have and never will,” said Tricia Stamper, Florida Realtors’ director of technology, in an email.
Errol Samuelson, Zillow Group’s chief industry development officer, pointed out that dotloop’s Data Privacy Guarantee confirms that:
- Dotloop customers own the data they put into dotloop
- Dotloop will not use this data as part of any other Zillow Group products or services unless customers have given the company permission to do so
- Dotloop does not disclose customer data except where required by law or authorized by the customers in question
“This policy was published in 2015. As recently as May 11, 2018, we confirmed with CAR/REBS (the majority shareholder in zipLogix) that this policy is still in force,” Samuelson said in an email.
Patrick Arkeveld, CEO of Instanet parent company Lone Wolf Technologies, told Inman he and his staff “were taken aback” by Peterson’s statements at the forum.
“We have never sold or shared any data and, specifically, have never sold any transactional data from TransactionDesk,” he said via email.
“We appreciate the business of the Realtor community, respect data privacy and take great care to protect the data and documents put into our system by Realtor. We would appreciate it if that statement [from zipLogix] was clarified.”
ZipLogix did not respond to a request for comment for this story.
The company recently caused a stir when it sent a survey question to the NAR board that only let respondents vote for options that portrayed zipLogix in a positive light.