Driven by the default market, BPOs play a more important role than ever, with some 10 million orders expected this year, according to NAR.  Through RPR’s relationships in the valuations industry, we have secured a special advantage for REALTORS® who obtain the BPOR certification: enrollment in a panel of preferred BPO providers immediately upon completion of the application, with priority treatment for receiving BPO orders.

How it works is simple:

1. Take the one-day class, “BPOs: The Agent’s Role in the Valuation Process” [enroll]
2. Complete the application at bpor.org
3. Return your enrollment materials as a preferred BPO provider via RPR

Enrollments in the BPO panel began in June, and by July, the average number of orders received by each member on the preferred panel was eight per month.  That equates to more than $400 in additional income per member per month.

Based on current participation in this program, more than $3 million in BPO order income is available each month through RPR to members who complete the BPOR certification.  The course is now available in more than 60 classroom settings around the country, and as of today, has now launched online through REALTOR® University, as well. To learn more and sign up to earn BPOR and receive your BPO orders, please visit the following resources:

How to earn BPOR and receive your BPO orders

NAR press release on the launch of “BPOs: The Agent’s Role in the Valuation Process”

Download the BPOR flyer

Classroom schedule and enrollment information

Take the class online through REALTOR® University

Certification Web site: bpor.org

We encourage you to take advantage of this exciting opportunity to increase your skills and earn a new source of income.

The FDIC is a willing seller, with a goal is to move these properties to the public as soon as possible. There is ample inventory in every property type in cities across the country.

Current FDIC ORE Assets by Property Type

Location of Properties

FDIC has developed a streamlined process, with a special focus on public agency and non-profit clients. To help provide you with a better understanding of this process, we have posted it here, along with the associated forms, which are here.

To help call attention to this unique inventory, here is the schedule of the upcoming FDIC ORE Sealed Bid Sales and Auction Events: http://rpr.me/pMXgdy.

Representative inventory for these events is posted here.

The complete FDIC inventory is posted at all times on the FDIC Web site at http://auctionfdic.com. There is great information on each of the single family residential properties for you to research on RPR, with the commercial and land inventory becoming available later this summer. We encourage you to explore these properties on RPR, and are pleased to be working with FDIC to bring them to you.

If you have been tracking the progress of RPR, you are aware that we have a twofold mission: to provide a comprehensive database of property information to REALTORS®, and to produce authoritative valuation analytics under the REALTOR® brand.  These two goals are obviously interconnected.  I write today to give you a progress report on the second objective.

Our “flagship” product, the Realtors Valuation Model™ (RVM), launched in October, 2010, at the Mortgage Bankers Association annual convention.  In conceiving the RVM, we set out to develop an analytic that would have three, key characteristics:

1. Highest accuracy of any product available in the market
2. Owned and operated by the members of the National Association of REALTORS®
3. Incorporating the skills of REALTORS® through their listing content, reflecting the expertise of their work with customers, on a fully-authorized basis

We are very pleased with how far we’ve come in each of these dimensions.  I’ll review them for you in detail:

Accuracy

Even before the “official” launch of the RVM, testing began in the major lending and government institutions that would ultimately represent its “target” market, to ensure that it lived up to its promise of a high degree of accuracy.  Representative test results are below:

Major lender Q42010 testing. All results are to scale, but competitor names
have been obscured at the request of the lender.

What this chart reflects is that of all of the automated models tested by this particular major lender, the RVM is the most accurate in its ability to predict the purchase price of a residential property, as well as the appraised value of a property in refinance.

“Accuracy” in this context refers to the percentage of estimates that are within 10% of these two benchmarks.  While 10% is a notable range, it is adequate for the purposes AVMs are applied to – typically in equity lending – and this is the standard used by lenders, servicers, and investors.  Increasingly, we also see AVMs used for what financial institutions call “quality control” – which is to say, confirming the results of other valuation products.

The important context here is that at this moment in our still very uncertain economy, as William Goldman once famously said about a different industry: “Nobody knows anything.”  In the current housing market environment, this means that lenders, investors, and government agencies are challenged as never before to understand the real, present value of the assets they hold – so they are buying more of every product they can to check, cross-check, and triple check their math.  This is good news for REALTORS®, upon whom the institutions have always relied for two of three, key types of valuation products – appraisals and BPOs – and now, with the RVM, they can rely NAR’s members for a third category, automated valuations.

Ownership

The RVM is not the only automated valuation product that incorporates listing content, but it is the only one owned by REALTORS®.  This is an important point, because lenders rely on automated valuations to make decisions that ultimately impact the overall health and liquidity of the housing marketplace, which affects your prosperity, and the condition of your clients.

Some competitive valuation models use listing content that has not been authorized for this purpose, provided by parties who are not entitled to sell it.  In simple terms, this is theft – a misappropriation of the intellectual property you create through your contracts, resold to third parties without your authorization.

Beyond the moral issue, there is the question of the accuracy, completeness, and timeliness of this purloined listing content.  Because certain aggregators, Web site vendors, or MLS users with shared passwords are generally the source of it, it is not always updated regularly or completely, thus skewing the view of the inventory that is being provided.  So to the extent such content then ends up being sold to financial institutions that then use it to make decisions about loans and transactions, the “collateral damage” (sorry for the bad pun!) compounds the question of misuse, creating even greater harm to all of the parties in a transaction.

Of course not all of the actors are bad, and generally it can be said that the banks that purchase listing data in this “gray market” do so based on representations from the providers that they are authorized to resell it.  But the simple and unambiguous fact is that as a REALTOR®, this is your data, and you should be involved in ensuring what it is being used for, and by whom – particularly in cases that can affect the flow and efficiency of your transactions.

Impact on the market

The RVM is a component of a Grand Strategy – one that will not take shape overnight, but can nonetheless have a consequential impact right away.  Better automated valuations represent one, short-term outcome.  Heightened awareness of the unintended consequences of listing re-syndication is another – beneficial no matter what.  The connections to the rapidly evolving housing policy and regulation debate – much of which is focused on who will be at the center of housing asset valuations going forward – could not have been predicted when we first set out to build the RVM – but they have never been more important.

In some ways it seems to me, as a strictly personal observation, that the entire basis of our housing market is being challenged now as never before – the institutions, the practitioners, even the question of whether homeownership itself is a goal we should set for our society, to any significant degree.  We know from the high level of engagement that exists throughout our industry in such discussions (and from human nature) that how they get resolved will ultimately be a function of two forces: politics, and information.

The RVM plays a narrow role – one that is squarely and exclusively in the latter category.  But I can report to you that having observed firsthand the eagerness with which the financial institutions with which we interact have embraced the concept of the product – and then been very impressed with the results, on top of that – should give us all good cause for optimism about the role it can play.

More importantly, the fact that the RVM is owned by REALTORS®, and based on the work of REALTORS®, and provided under the REALTOR® brand, is what gets the market’s attention in the first place.  The name is credible when much else is uncertain, and it amplifies what would, under circumstances, just be a product with excellent results.   While this is only a beginning, and there is a lot of work to do, it is a start that we hope will make you proud.

One of the outcomes of all of the MLS content licensing activity has been a number of changes to our agreement that were negotiated by different MLSs. Some of these changes were posted to our blog back in February. Today, we are releasing even more.
Our reasons for doing this are simple: we believe that each of our MLS licensors should have the benefit of improvements made through discussions with any of the others. The revised document is posted below. Separately, we will also provide an amendment to “catch-up” our current licensors on all of these changes as well; if you represent one of these MLSs, our Industry Relations representatives will be reaching out to you with the amendment.

Here is an overview of the key changes:

1. More specific definition of the RPR Website, RPR Offerings, the Realtors Valuation Model (RVM), and the Match & Append service
2. Expanded definition of MLS Services
3. Revised the definition of authorized RPR Website users to REALTOR® and REALTOR-ASSOCIATE® members only
4. Added Most Favored Status provisions related to product functionality, and any future potential payment of fees or revenue sharing
5. Offered to provide licensor MLSs with a quarterly report on RPR Customer activities

To arrange a presentation or discussion of RPR with your MLS, please contact info@narrpr.com.

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While Brian may have been disappointed by the document, he has approached both the legal and business issues in good faith and with equanimity, and gave us a lot to chew on. Perhaps more importantly, however, he elicited a decent amount of public reaction, and offered to create a forum for those who wished to speak anonymously. While I’ll admit to having been naive about the reasons why smart people with opinions would be nervous about expressing them in public, Brian did us all a favor by offering them a place to speak behind the screen.

In addition to everything happening online, we have now handed the agreement out to more than 150 MLSs which requested it and have begun to receive their feedback as well – both individually and from certain collectives.  A few themes emerged – ranging from technical to broader business and policy issues.  And there was enough consensus on many of them to merit a revision of our template, which we have done and which is linked from this post for you to see in comparison form to the earlier document so that you can easily make note of all of the changes.

What’s new:

• Made explicit that the RPR Website will be made available for free to all of the Participants and Subscribers of a Licensor’s MLS.
• Added further definition of the user access policies governing what content non-Subscribers to a Licensor’s MLS will see, and what Participants/Subscribers who are not NAR members will see.
• Provided options for Licensors to open up or restrict their content differently than called for under the user access policies.
• Made explicit that there is no consumer access to RPR, except through reports that can be created by an authorized user.
• Incorporated the RPR Website Terms of Use, under which all users must access the system.
• Added language on security measures RPR will take to protect the licensed content.
• Clarified the designation of confidential MLS information and stated that it will not be used on the RPR Website (unless requested by a Provider).
• Made explicit that broker consent, if required, must be obtained by Provider.
• Added specific and clear definitions of the analytics products that will be produced by RPR, specifically: the “RVM” and address file matching services.
• Added express restrictions of any analytics product that: i) could result in the sale of the Licensed Content back to a Realtor, ii) could result in the marketing of services to a Realtor, or iii) could result in the marketing of services to a consumer.
• Provided an option to restrict RVM sales to county assessors.
• Made explicit that all analytics work will be performed exclusively on RPR infrastructure, and that Licensed Content will not be exported.
• Added clarifying language regarding the destruction of all Licensed Content upon termination.
• Extended the offer not to compete with MLS providers to three years if RPR terminates the agreement.
• Made explicit that Licensed Content will not be used to compete with Providers should they terminate the agreement.
• Added provisions for first-level end-user support, and tier-2 support of Providers.
• Clarified that roster fields are only required insofar as they are already supported by a Provider’s MLS.
• Clarified that provider may determine the method of data access.
• Provided a reasonable standard for suspension or termination if the Provider believes the data is being misused by RPR.
• Expanded language on confidentiality.

No less importantly, what has not changed: there is no formula for revenue sharing with an MLS provider.  While the reasons for this have been described and discussed in dozens of forums since RPR was first announced, our thinking behind this remains that as a NAR member benefit, in which NAR members have already invested, it is critical that RPR be able to sustain the services that we will provide to the members without charging them for access, enhancements, advertising, or services.  Recently, we have begun to engage large brokers – both individually, and in several brainstorming groups – who have generally supported the rationale behind this approach.  Also, there is now a competitive offering which compensates the MLS providers without offering anything to the members, and we are pleased for the line between the two to have been drawn as brightly as it has been.

Finally, our own discussions with MLS providers large and small about the original agreement confirmed that the key issue for many, if not most, was not actually licensing revenue, but the use of the data once it has been licensed to RPR.  That has now been addressed through specific and narrow definitions of the RPR offerings in the revised template that we have included in this post.

While ordinarily it might seem a bit strange to post revisions to a contract out in the open, it made sense to us given the level and tone of the debate over the past few weeks.  We hope it is helpful both as a show of responsiveness and in terms of opening up the discussion even further, and we look forward to knowing your thoughts about these changes.

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