Over the past few years the industry has been fully engaged in a battle over the ownership and control of listing data. Each month the conflict has grown more combative and intense. At the present time both lives and fortunes are being invested by industry players who are incorrectly being advised that listing data flow control and ownership will be the single most important factor in determining business success or failure moving forward. It is this author’s opinion that such efforts are short sighted and fail to take into consideration the precious opportunities being lost and time being wasted. In the alternative the obvious priority would involve searching for solutions to the more likely challenges to the traditional orders of industry control and ownership.
Upon close examination both the leadership and the misguided direction of these efforts bring to mind the ill conceived efforts that gave rise to France’s Maginot line in the 1930’s.
In terms of both lives lost and property destroyed, France suffered mightily at the hands of German forces during World War II. Fired by national pride, personal ego and a monumental lack of vision and military intelligence, French leaders became obsessed about a concept known as the Maginot Line; the theory involving the construction of a vast fortification system that ran along the French/German common border. The project was magnificent but unfortunately incorporated engineering and military knowledge about such matters gained, not from a study of the future, but rather from a review of the effects and impact of WWI military strategy and tactics that had been developed during the late 19th century.
The events surrounding the decision to build the Maginot Line offer an even more compelling and relevant lesson. Three specific leaders were influential at that point in time. Charles de Gaulle recommended that France adopt offensive rather than defensive military strategies. Marshall Petain, who had come to fame as a WWI general, argued that France should build a long line of fortifications along the whole French/German border, which would be both long and deep into France. Andre Maginot, the Minister of War, supported Petain. The results of this debate are self-evident.
The Maginot Line’s place in history was sealed not by the fact that it protected France from a German invasion at the onset of World War II but by the fact that the French leaders had totally missed the technological development and tactical advances required to create a new tactic called a “blitzkrieg.” In committing this colossal error and investing its human and financial resources through the Maginot strategy the French leadership actually lent assistance to the enemy’s cause.
The real estate industry today appears to be caught in a similar quandary except it has no Charles de Gaulle. The traditional leadership element is advocating the creation of defense systems that use outdated strategies to protect the status quo. There is no evidence that the decisions being made by this group have had the benefit of any study regarding the trends and forces that, even now, are creating the Industry’s tomorrow. In other words, it appears as though they are being guided by pride and ego rather than reasoned sense and research.
The listing data wars are nothing more than a red herring, something that distracts attention from the real issue. At best it will ultimately, at a ridiculous cost, resolve the ownership issues and even then without the clarity necessary to exert complete control. At such point those who own or control will end up selling the data to those who require it. It is just the nature of business. With a bit of luck such an arrangement will last long enough to repay a portion of the cost of defense.
If those in control of the present dynamic are looking for a more relevant historic reference they might consider “follow the money.” The event at which both the money and all of the pieces come together is the transaction itself.
It is the transaction that creates consumer satisfaction. It is the transaction that determines brokerage, lender and title profitability. It is the transaction that offers regulators the perfect spot to launch a devastating ambush.
The current transaction is an unsatisfying piece for all involved. Consumers emerge sensing that they have just played a role in a really bad movie. Lenders can only hope that their interests have been protected through a last minute flurry of changes and modifications. Brokers and their representative agents have once again been unable to enhance their value proposition. The closing team walks away from yet another “close miss.”
Your author recently received the honor of becoming a member of a team dedicated to reforming and re-engineering the transactional process. To date this multidisciplinary group has come to the conclusion that the best starting point for this work will be to focus on the consumer experience in the closing transaction. Starting at the end of the process is sometimes the best way to go. This approach was made almost automatic upon learning that the probable sources of regulatory engagement will come from the consumer perspective.
The objective of this new project is to create a more positive, convenient, predictable and transparent experience for the consumer in the real estate transaction process. The more specific objectives will be to create both an improved consumer experience and a more efficient transitional process that seeks to incorporate both appropriate technologies and obvious connectivity to benefit lenders, brokerages and those responsible for the final closing.
Only through this process can the industry ultimately exercise a meaningful participation that both promotes consumer satisfaction, advocates brokerage profitability and provides some ability to impact and influence regulatory interdiction. These must be the objectives that we work together to achieve.
The industry’s current path of destruction and disruption may well create a few heroes and in all likelihood an even greater number of fools. It will however be nothing more than a delay on the road to the inevitable. Let’s focus on what counts, not what annoys. We can do this!