Lessons remembered—learn from leaders where tomorrow’s opportunities and threats lie.
By Steve Murray, publisher
While The Realty Alliance is not as large in members as most national real estate organizations, what it lacks in the number of members it makes up for in the reach and influence of its membership. The Realty Alliance has been instrumental in affecting policy at NAR, was at the core of the effort to start and launch Upstream, and some of its membership were also instrumental in founding the Broker Public Portal (BPP).
Cheatham has both a Bachelors of Arts degree from Harding University and a Master’s of Business Administration from Samford University. He worked for several years for a newspaper, then was COO of a state association of Realtors® and, just before assuming his role at The Realty Alliance, he was the CEO of the international federation of real estate regulatory agencies known as ARELLO. Under Cheatham’s leadership, The Realty Alliance has grown to 68 member firms throughout the United States and Canada. We caught up with Cheatham to find out what he sees ahead. Here’s what he had to say:
REAL Trends: How is Upstream proceeding from your point of view?
Cheatham: As brokers continue to understand what Upstream is and is not designed to do, support from real estate practitioners grows significantly, and that is vital for such an ambitious project. In fact, the best way to steal a headline these days is to play the outlier and question whether Upstream is needed. The latest trend is for outside vendors to issue press releases that incorrectly claim their new product will do what Upstream plans to do.
However, every vendor attempt to help clean up real estate’s data problems falls far short of what brokers have set out to solve by working together through Upstream. Outside vendors focus on listing data and on working through MLSs. While Upstream will work with MLSs and handle listing data, those aspects are just a small part of a broker’s data management responsibility. In early 2017, we will expand from the current five test markets to several more and momentum will build throughout next year as more brokers—of all sizes and business models—in more markets get a taste of the huge potential of the Upstream project.
Vendors and MLSs will continue to make progress and launch improvements in data management, but our industry will never completely solve its data limitations with any solution short of the broker-owned, broker-managed Upstream cooperative.
RT: What about the Broker Public Portal project?
Cheatham: For an initiative with such tremendous potential to alter the conversation in our industry, chatter around the Broker Public Portal has been incredibly quiet. The Realty Alliance and our industry coalition partners are excited to see a site that complies with our “fair display” standards (fairdisplay.org/guidelines.html), which will keep this portal from misleading or confusing the public. The structure and contracts between the industry players and their chosen vendor are complicated and take time to draft and negotiate.
My best estimate is that these will be locked down around the time of the 2016 National Association of Realtor’s Convention. Homesnap.com’s site design will require some tweaks, but it has a great head start. So, once the agreements are finalized later this year, I expect the Chicago market to push the site harder and then additional markets to launch in fairly rapid succession as we get into 2017.
RT: What are the major concerns of your members these days when they look out ahead?
Cheatham: Lack of job creation and inventory ultimately could threaten the health of markets if nothing significant changes over the coming months. An increase in interest rates later this year would erode affordability and hurt momentum. Increased regulation over the last several years, which was designed to help consumers, has instead made things more difficult, time-consuming and expensive for the public. Our members will be concerned if that trend continues with a new administration. We have some hope that the courts will help swing the pendulum from egregious and ineffective regulation back to something more balanced and reasonable for all involved.
RT: What new technologies or business models are you watching closely? What do you think your members might say on this?
Cheatham: Tools that help our sales teams connect with people earlier in the transaction timeline and help keep them in contact long after the transaction closes are the most valuable technologies. We are moving earlier on that timeline by analyzing data to identify the future buyers and sellers who are closest to making a move.
We also are moving later on that timeline by using technology to maintain those relationships as customers for life. Few, if any, of the new technologies, platforms or business models that generate headlines these days actually make any substantive, lasting impact on our industry. Firms in The Realty Alliance continue to focus on building solid relationships and delivering excellent service, which is why they have been around for generations and only grow in market share while others fade. Technologies that protect consumers, agents and brokers from fraud are in great demand today, as our data and transactions—especially wire transfers—seem under attack.
RT: What do you think the market will bring regarding consolidation activities?
Cheatham: Increased, downward pressure on real estate margins will keep us moving toward even greater consolidation as the economies of scale offered by larger models may be the key toward future profitability. And, as many brokers move closer to retirement, putting their life’s work in the hands of a strong, capable company can make a lot of sense as an exit strategy. Mid-size and large real estate firms will be buying firms, not just the traditional holding companies, in the years’ ahead.
This article originally appeared in the November 2016 issue of the REAL Trends Newsletter and is reprinted with permission of REAL Trends Inc. Copyright 2016