Friday Flash: Whoops | 1000watt

There’s right and wrong, there’s the law, and then there’s appearances.

Or “optics,” as we say now.

Whether you think they’re A-OK or seriously shady (believe me, I am well-versed in both arguments), or however you interpret the law, undisclosed referral fees are indisputably bad optics. Especially given… ahem … events of the past few years.

So, could we possibly imagine a dumber act than last week’s NAR board action (via something called a “delegate body”) to overturn a vote mandating the disclosure of referral fees?

I’m struggling to bring one to mind. 

Inman’s headline was: “Realtors reject proposal to require disclosure of more referral fees.” 

My headline: “Secretive NAR body votes to keep hiding compensation information from consumers in breathtaking self-immolation.”

This vote happened at the very same event where NAR leaders threw everything they had at reclaiming trust, relevance, and less vulnerable legal ground. Instead, the board rang the dinner bell for America’s plaintiff’s attorneys. 

Whoops. 

This episode underscores the core truth of NAR’s dilemma: However smart and well-intentioned its new staff execs are, however full of ideas they may be, the institution is structurally unsound. 

I’ve been very impressed with Nykia Wright, but have come to believe that you could have Winston Churchill, Steve Jobs, or Joan of Arc in the CEO post, and it would be all for naught without a major structural rehab. 

This doesn’t seem to be forthcoming. What a bummer. 

…
This story from Inman a couple weeks back is a harbinger:

I wrote a few weeks ago that I think AI will increase Realtor numbers, not decrease them, because AI makes many things an agent does easier.

Marketing is at the top of the list. Soon everyone will have their marketing and content machines running at full-tilt, slicing, dicing, jump-cutting, dancing, mimicking, repurposing and algorithmically optimizing for maximum … something. 

It’s going to work for a while longer. But eventually we’ll have something like a marketing and content crash. The audience will be cooked. Millions of light rings and little fuzzy microphones will be bulldozed into landfills. Amid the cleared landscape will remain, newly prominent, the towers of enduring meaning: brands, professional skill, and differentiated value. 

I know. A touch dramatic. And it’s not like I don’t view digital/social marketing as valuable. My point: When everyone is telling you “more, more, more!” it’s probably good to take a beat to think a few steps ahead.

….

So, speaking of bad optics, Zillow’s getting sued a lot. Zillow haters are loving this, including Andy Florance, who spent a disproportionate amount of time talking about Z on his Q3 earnings call. 

I’m not a legal expert, obviously. So I have no idea as to the merits of the lawsuits, which center on purported RESPA violations around Zillow Mortgage and Zillow Flex (now “Preferred”) teams, and those pesky undisclosed referral fees. 

What I do know is this: Zillow’s leaders, a) aren’t dumb, b) certainly retain some of America’s finest legal talent, and, c) haven’t been acting as if they’re worried about either of these issues.

On this last point, do we really think Zillow would anchor its present “Superapp”/enhanced market strategy on a referral fee model if they didn’t feel extremely confident about its legal durability?

Do we think Zillow would publish its Flex team requirements publicly if they thought they were legally vulnerable?
We’ll see how it plays out. But litigation is a cost of doing business — sometimes a big one.

Enjoy your weekend.