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All of the details you don’t know about Broker Public Portal (BPP) teaming up with Homesnap

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The Broker Public Portal (BPP), which was designed to create a national MLS consumer-facing property search website, announced today that they will be partnering with Homesnap by executing a binding letter of intent.

Rather than rebrand, BPP will push listings from 115 MLS and broker partners (accounting for roughly 500k agents), will be funded through a $1.00 per MLS member monthly fee rather than advertisements or paid agent placement, and will adhere to Fair Display Guidelines (no one but the listing agent is displayed on a property listing).

Not a reinvention of the wheel

When the BPP idea was initially proposed, it was just that – an idea. Kind of a “for the people, by the people” idea. Nevertheless, many people had heartburn over what was not even a plan, but an idea. Fast forward to a group of brokers and MLSs that pitched in $5k each to cover a fundraising goal of $250K for startup expenses. A year ago, the executive committee was formed, and today, their first big move is to unveil the plan (to partner with Homesnap to move forward).

So how will this work? They’ll roll out first with MLSs (already revealed: Midwest Real Estate Data (MRED) with ~40k members, Connecticut Multiple Listing Service (CTMLS) with ~11k members, Northstar MLS with ~16k members, and Buffalo Niagara Association of Realtors®, (BNAR) with ~3k members) and eventually brokers directly.

You probably remember Homesnap from their 2012 launch at South by Southwest as an augmented reality app allowing you to “snap” a house and instantly get details from the MLS. It was originally a product of Sawbuck, formerly a Washington D.C. based brokerage which raised $2M in 2008 and $2M in 2012.

Partnering with Homesnap instead of reinventing the wheel could put BPP at an advantage since Homesnap already has consumer traffic and a slick mobile app. The project is not without challenges, however, as we all know that getting all brokers and MLSs on board is like herding feral cats – not impossible, just tough.

Competing with traditional portals?

BPP has said all along that they’re not seeking to become a Zillow or Realtor.com competitor and all Board members we interviewed say the same, but let’s face it, today’s announcement solidifies that the goal is exactly that. What else would a national consumer-facing MLS be?

Further, it certainly appears that a group of powerful brokers and MLS execs got together to pursue a dream scenario that they wish had happened with the industry’s operating agreement with Realtor.com. They’re pursuing the dream scenario where they’re in charge instead of stock shareholders and an ad salesforce.

Currently, Z/T/R are increasingly the first point of contact for consumers, so they own that relationship (not practitioners), an issue that has been contentious for many years. BPP’s structure indicates that they want that power back, they seek to own that relationship, they want to feature only the listing agent on a listing, and that they intend on getting one step closer to the consumer.

But is that a realistic possibility with such a small operating budget compared to Z/T/R’s mega millions? If the feral cats are all herded properly, then yes, but that’s the uphill challenge BPP has taken.

How will they compete in the market?

Homesnap CEO Guy Wolcott tells us that they intend to compete not with “Super Bowl ads,” but with their “secret weapon — participation by thousands of brokers and hundreds of thousands of agents,” noting that in the past year, agents using Homesnap Pro have invited over 4 million consumers to join them and scaling that to the number of agents that will use Homesnap through the BPP partnership will handily reach the market. “Agents won’t [invite users] because we pay them, but because it will be the best way to work with their clients and prospects.”

Cary Sylvester, VP of Industry Development at Keller Williams, who also serves on BPP’s Technology Workgroup and is a Board liaison, echoed Wolcott’s sentiments, noting, “By incorporating easy to use agent/consumer collaboration tools, BPP won’t need to drive growth primarily through direct-to-consumer advertising or app store and search engine optimization, but through agents themselves.”

“Our strategy is not to get out ahead of agents, brokers and MLSs – though we will undoubtedly generate plenty of free leads – but to support them by offering a great home search experience they can use not only to acquire clients, but to serve them and keep them for life,” says Sylvester. “Accomplishing that goal will make our greatest advertiser the agent themselves.”

What about the pre-nup?

The operating agreement is not public, and since it’s a private entity and there’s no National Association of Realtors (NAR) involvement, the agreement may remain veiled. As a news organization, of course, we want to sink our teeth into it, but three sources close to the matter tell us that despite not seeing the contract, they trust the “genius” of the executive committee at BPP, which is not the normal response we would hear, so it is certainly thought provoking.

There are some unresolved issues with this BPP/Homesnap partnership, though. The most pressing is – what is the pre-nup? What happens when the partnership agreement is up for renewal, or is the agreement in perpetuity? Couldn’t Homesnap just be built up by BPP (thus brokers and MLSs) and become a legitimate player to compete with Z/T/R, and say “no thanks, we’re big enough that we don’t need you” and take all of the work BPP put into it and build relationships on the back end and go public to make it a Z/T/R/H situation?

Wolcott assured us that their model was inherently “pro-industry” so it can’t go off the rails, and that because they already operate on the BPP model of “your listing, your lead” scenario that is on an “MLS-by-MLS basis,” the goal is to never relive past experiences of other portals. “The BPP didn’t have to ask us to change our stripes. We already had the right stripes.”

John Mosey, NorthstarMLS President & CEO, elected to the BPP Board of Managers tells us, “We entered into this agreement with our eyes wide open and antenna fully raised to the risks of getting engaged, then married to the wrong partner. Months of due diligence and what if scenarios were endured to find the ground on which we felt most secure that we are both in it for the long term.”

“During the process,” Mosey adds, “one of our negotiating team commented that the experience of building the terms of this agreement was also an exercise in building trust, mutually. That trust is the foundation for a future together that neither side believes will come undone. Nonetheless, we have a mutually acceptable pre-nup in place that protects the interests of the real estate community in the eventualities that you ask about and others.”

Show me the money

Another potential concern is the flow of money. How is it split between Homesnap and BPP? Wolcott tells us all money MLSs pay them for the BPP goes toward the suite of projects, but will BPP executives not see compensation? If a broker sends listings directly, can they opt out of the per-member fee at the MLS level? Are there plans for Homesnap to acquire BPP or BPP to acquire Homesnap, or will it remain a partnership?

In an internal document (but not the “pre-nup”) obtained by The Real Daily, some answers regarding the private agreement are made clear, thus explaining the aforementioned unresolved issues. The two companies will create a new company, and the Board will be comprised of 3 Homesnap representatives, 3 BPP representatives, and 1 third party rep (chosen by BPP). Each brand will own 50 percent of the company, revenue will be split 50/50, and under the direction of the Board, Homesnap will be responsible for maintenance of the site and apps, innovations, and marketing.

All that said, will people even care about the money flow if it means a nimble national MLS that is powered by industry insiders on the cheap (for a dollar per member per month)?

The tone of all appears to be hopeful

Overall, Wolcott tells us he is most excited just “thinking about what is possible when the entire industry is all rowing in one direction – and what awesome stuff we can build at the scale this will enable.”

Of the inevitable critics, Sylvester says they’ll handle it by delivering results.

The bottom line is that the overall tone of industry insiders we spoke to is hopeful, the verdict seems to be that competition is good, and that this is a reasonable plan for the BPP project. Now that the Homesnap partnership has been unveiled, we anticipate the secrecy is over and BPP/Homesnap is about to get aggressive. Stay tuned.

#HomesnapBPP

Lani is the Chief Operating Officer at The Real Daily and sister news outlet, The American Genius, and has been named in the Inman 100 Most Influential Real Estate Leaders several times, co-authored a book, co-founded BASHH and Austin Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.

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Real Estate Corporate

How big box stores are stalling Whole Foods expansions using leasing contracts

(CORPORATE NEWS) As Amazon begins its Whole Foods expansions, other big box competitors are trying to put the wabash on them using their leasing contracts.

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Over the summer it was made known that Amazon was buying Whole Foods then a few months later we learned that the new owners were revamping store pricing and poaching competitor’s customers.

Despite only having 450 locations, Whole Foods is slowly turning the supermarket market in their favor. However, some of the older, bigger players aren’t having it and have figured out that they can use their own real estate contracts to level the field with Whole Foods.

Apparently it is common practice for bigger retailers in commercial real estate to sign leases with conditions that prevent their landlord from renting to other businesses that would create competition.

For instance if a Starbucks is renting in one location they might include a term that says no other coffee shop can be adjacent so if an Dunkin’ Donuts wanted in next door they couldn’t.

For Whole Foods that means because they are now selling Amazon electronics like Echos or AmazonFire TV, their usually docile neighbor Best Buy could go track down the fine print of their leasing contract and forbid Whole Foods from selling those products.

It’s like they always say — All is fair in love in retail. Well, you know what I mean.

If we’re being honest an Amazon + Whole Foods team is pretty enticing. It makes a whole lot of sense that other retailers that can only offer half of that package would resort to any means necessary to impede their progress.

Even Target is getting in on the defense reportedly not allowing Amazon Lockers to be installed. I get it, you want people there to shop at your store, not to pick up merch they bought elsewhere.

Granted with Target’s new collaborations with companies like Brit + Co, May Designs and Magnolia Market, I doubt they have too much to worry about.

At any rate, this sort of fine-print legalese defense seems like a pretty large indicator that other retailers are feeling the heat from this merger.

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Real Estate Corporate

Discount stores are banking on the bad days of underclasses

(CORPORATE NEWS) Despite brick and mortars closing, discount stores seem to be doing well. But that success seems to be at the expense of the downtrodden.

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Few sights are as ubiquitous in rural America as the simple yellow and black logo of Dollar General, and this is not going to change any time soon.

In a signal of the times, Dollar General’s marketing executive Jim Thorpe said that Dollar General’s best customer was the low income, government assistance recipient.

By the fact that Dollar General’s expansion strategy is to create more stores in small towns and cities, that’s a signal to many that the business world is not expecting incomes to rise in the heartland of the United States.

“Essentially what the dollar stores are betting on in a large way is that we are going to have a permanent underclass in America,” Garrick Brown, director for retail research at the commercial real estate company Cushman & Wakefield was quoted saying.

“It’s based on the concept that the jobs went away, and the jobs are never coming back, and that things aren’t going to get better in any of these places.”

Rival discount stores Dollar Tree Inc. and Family Dollar (also owned by Dollar Tree) are also operating out of the same principles to give Dollar General a run for their money.

While they do not enjoy as much market share as Dollar General, these discount stores are also trying to compete for the stretched dollar of the $35,000 salary household. These same households may find it difficult to travel out of their town to do their grocery shopping due to the cost of gas.

Dollar General, in its confidence of a permanent lower class in America, is also alleviating the problem of food deserts.

According to the Centers for Disease Control (CDC), food deserts are areas that lack access to affordable fruits, vegetables, whole grains, low-fat milk, and other foods that make up the full range of a healthy diet.

Dollar General, while not having a full and robust grocery section with many fresh fruits, are offering more than what one can get in a gas station for certain and are alleviating the lack of affordable, moderately healthy options.

With U.S. income inequality still on the rise, Dollar General’s market share is not going anywhere, and the discount store chain might just become the next small-town staple in rural America.

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Real Estate Corporate

To reinvent leasing, Airbnb is creating branded apartments

(CORPORATE NEWS) Airbnb originally set out to disrupt the leasing world but has decided now to just reinvent it.

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Airbnb doesn’t like being thought of as your friendly neighborhood disruptor and has found a new alternative to the more traditional rented house/apartment/room (or castle, a tiny house, treehouse, converted barn loft, etc…): branded apartment complexes.

San Francisco based home-sharing partner group Airbnb has formed a partnership with Newgard Development Group (known as “Niido Powered by Airbnb”) to create the space-sharing concept, which will be comprised of 324 units, starting with Kissimmee, FL (just south of Orlando) and is slated to be available for move-in sometime in 2018.

The units will have amenities of a hotel such as keyless entry and an app that will allow tenants to check-in remotely. On-demand cleaning and luggage services will also be available, making the process much more streamlined for both guests and tenants.

Upon signing an annual lease, residents may rent out their apartments through Airbnb for up to 180 days, and thus must of course, remain as full-time residents for at least half of the year.

This should help to cut down on issues where landlords were replacing tenants’ leases and rental agreements with a full-time Airbnb gig.

The setup of the branded apartment complex encourages home sharing, and offers a communal environment in which all neighbors are either hosts, or guests.

Okay, so while it kind of sounds like a hotel rather than an apartment, (a timeshare, even) Airbnb does still want to keep that “hominess” aspect that defines the brand, intact. It’s been reported that they will be providing some design assistance, though will remain hands-off in ownership interest in the building.

It’s too soon to say how lucrative a spot in one of these elusive buildings will be or how much a spot will cost, but it can’t be helped to wonder at what point does this sort of expansion stop Airbnb from being… Airbnb?

With this many parties involved, it does sort of lose its charm as being a unique travel experience people have come to expect with Airbnb. I mean, it’s not a yurt in Alaska, after all.

Expansion for the branded apartment complexes will be prioritized in Miami and the Southeast, but is expected to branch out into other cities such as Nashville, TN, Charleston, SC, and “cities in Texas.”

CEO Harvey Hernandez stated that the plan was to build over 2,000 units over the next couple years. Lookout world, The Grand Budapest Airbnbs will be hitting a city near you.

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