 Thanks for coming on my talk. So I'm Andy Terrell. I work as a Chief Data Scientist at RECS, which is an online real estate brokerage that doesn't use the canonical real estate data, or aka the MLS, to sell houses. And I'm here talking a little bit about what is the MLS and should it be open. And I was, at first I was gonna talk a lot more about data visualization and data, like the things you could do with MLS type data, but then I heard the talk last night very motivated by social justice and data ethics and things like that. So I only show one visualization, which is what I show to investors of like, all right, if you're in LA, where should you buy? And red is expensive, bigger dots mean that there's more variability in the market. So there's a nice big dot in the middle that's like, oh, that's where you buy today, right? And this is a sort of data that we could show to the public, but we can't because of the MLS data regulations. And I'll go through some of that. Just some caveats first. Most people who know me know me from my open source advocacy, that's not this. Go visit nonfocus.org, love to talk about that, but not in this form right now. My company does have a financial interest in this company, so you can take that as any sort of like, argument in historical perspective that I do have some financial interest. And while I do have a PhD, it's in computational math, not economics or legal scholarship, so you should really regard me as a layperson. With that said, I have three main points. Real estate is in full disruption mode. I don't know if people have noticed this. Yeah, there's a history associated with real estate data and real estate in general. We talked about first peoples at the First Data Conference, and I mean, if nothing else, first peoples for sacrifice was largely in due to real estate rights, I would say. Even the treaty recognized, so who can actually sell that data, or that data, but that time, actual land. So it's been controversial for many, many centuries. And then I wanna talk a little bit about how opening this data might help us. So for disruption, saw this article a week ago. Blue skies ahead, there was a market falling off a cliff. So everyone remembers 2008 when it did fall off a cliff, everyone agrees that it fell off a cliff now. Not everyone agrees that we're falling off a cliff now, but there's some speculation. And in here, there's just this byline, there's many misleading facts being pushed around. First, S&P, which is an index, financial index company. CoreLogic, which is a company that sells data. K-Siller, which is two economists who use open data to predict investment markets. Index, okay, so unravel that finance. Data company professors say that the housing market's cooling for the 11 straight months. Okay, all right, cool. But they only look at investment opportunities. Next line, an hour later, one hour. National Association of Relators, the lobbyist group that represents the real estate industry, released a report saying no, it didn't. Of course, what they're deciding is a report of like actual home sales. Never mind that home sales in the last quarter of last year were significantly repressed due to changing tax laws and mortgage changes and so on and so forth. So very hard to put into an article on a blog like HousingWire, okay. So the market is doing stuff. And just here's the actual report that's maybe the index that like financial people actually trade on and so on. Okay, so that's going on. Traditional real estate is going through a moment. We don't know what that means. At the same time, a few days later, we see this on our beloved New York Times. Real estate latest bid, Zilla wants to buy your house. This turns out to be a phenomena that's generally called the iBuyR platforms that have come up, Open Door, LO, and lots of of these existed. They've existed for very long times. You've seen those signs that say I wanna buy your house, iBuyUglyHouses.com, same thing. Just sexier because it's internet. And we have the CEO of Redfin saying there's a danger in this market and it pours lots of money without having clear idea where you're going and you're actually gonna put a lot of risk into the market. Awesome, great. Next day, Redfin looks to disrupt the real estate again with letting you just buy a home without an agent. So the day ago, the guy was saying, don't let this thing happen because you putting risk in the market is now saying don't talk to these agents because they were supposed to de-risk the market but now you don't need them. All right, so there's two core challenges going on. First, investment buyers are providing faster turnaround for consumers. Nobody likes to be stuck in a house in a changing market as we see. No one knows what the market's doing. So these iBuyers are very attractive because I pay you 20% of my mortgage and I get rid of it in seven days. That's the promise of the iBuyer. But also buyer agents have become less relevant with the rise of the internet. That's where my company kind of comes in. Where buyers' agents are still grasping the market share largely through closing the data. Now they only charge 6% for that transaction which is hey, a lot greater than the investment buyer but the international standard, if you go to Hong Kong or Australia or Europe, it's typically around 2%. So Americans pay more to sell our houses and now we're paying even more to do it faster. Why this matters to me? This is a report put out by the NAR, the lobbyist group. This shows like equity built up in a home. Largely Americans still build their equity through their home. But one trend that's happened since World War II is we start to move a lot more. And if you notice in this graph, the dollar value of how much equity you build in median jumps around seven years to eight years. Jumps huge, like four times. And that largely comes down to the fees that are associated with buying your house and mortgage and all those sorts of things. So if we start living in our houses less because we need social mobility to get to the better jobs but our fees are still the same height, like we're losing the equity which in turn, I believe and would argue, contributes to the income inequality of the country. So reduce fees, you also increase potential buyers of your home, making a more liquid market and you save people who need to go to better jobs and actually distribute the jobs to a wider audience. I didn't include this in here but there's like case studies of this happening in Hong Kong and like liquidity in the market has just jumped dramatically as soon as you reduce fees. Same thing happened in the stock exchange. As soon as you changed from a brokerage firm where you went and had a single broker to a platform, we saw lots of liquidity in the market. So that's why it matters to me. I think that we could have more people participating in home ownership and building their wealth through home ownership and reduce these fees. Okay, so how did we get here? So I wanted to give a little bit of history about what is the MLS and where it came from. So essentially the real estate market data is the MLS is actually a collection of about 800 entities. So if you think about that, if you're going to chart to do a national sort of site or things like you have 800 people to talk to 800 lawyers and so on and so forth. So the distributed nature of it is makes it hard to kind of grasp and people just kind of call it the MLS but it really is 800 individual entities that have different policies and different requirements for working with them and so on and so forth. They do have a common representation by the National Association of Realtors which I showed some of their data earlier and it is a DC lobbying group that likes to sue a lot of people. And actually there's a follow up articles about them suing a few other people because of the things that are happening today. So now to access data you have to accept not just, you don't just have to pay people for it, you have to accept terms of like your business practice. For one, all your data, if you accept any other data all your data must be uploaded to their platform and any transaction fee that happens on your data or any transaction will have to pay other members of that referral fees and reciprocate cooperation. There's a lot of different types of ways they talk about this fee. An excellent way to maintain a sustainable database. So it becomes a resource that lots of people want to get to and to be in it you have to play along. Seems fairly nice except that it does have this aspect that you have to play by their rules completely. Which I believe is what causes some of the problems. But where did the MLS come from? Essentially it was just local organizations of people coming together and wanting to buy and sell their houses. Late 19th century it used to be you would have an association where buyers and sellers would have representatives come together and say, hey, what's for sale? What's not? And so on and so forth. Seemed like a fairly ground up grassroots movement to actually help people buy and sell houses. But the problem is that's a backroom deal. And backroom deals, as we know, have a large proclivity to corruption. Thus, in the last 100 years we've seen lots of regulation come up kind of far. In fact, you used to even see industries like escrows, inspections, title insurance, home warranties all come up to like protect the consumer in this transaction. If I asked five people in the room, like what are all these things mean? I bet there's only two of you who actually know every single one of these details. And it turns out they're changed per state. So New York is way different from California, way different from Oregon, and even more different than Texas. And so it becomes kind of a mismatch. In 1974, Congress saw the corruption and passed called the RESPA, which is the Real Estate Settlement Procedures Act, which in essence just ended kickbacks. So you can't enter into a bad deal because somebody's getting paid to make you enter that deal. So all right, everything's fixed, right? Sort of. The business model's completely changed at that point. So here's a point where, all right, we're going to change how data can be used. The industry do, it basically broke off the agent and the broker completely. The agent now becomes a 1099 contractor. Hello, good economy, 1974 style. And they effectively only get paid a set fee in a contract. Awesome. So now the buyer knows exactly what they're paying, 6%, and the broker, well, nobody knows what they do. Turns out they still do, they become the holder of the data, generally continue the practice of referral fees, but you don't really care because your fee is fixed. I would challenge anybody who actually works with the Real Estate Agent to find out how much money they make off your data when they pass it up and how it gets resold by the brokers. So in the end, consumers still lose. Buyer agents, in addition, buyer agents now seem to represent the buyers and in the early days when it was just that nice association with people coming together, very much like the buyer was the one that got paid for the opportunity to meet sellers. Now, not so much. Buyer agents, as been shown by many economic studies, are incentivized to get customers, consumers into deals as quickly as possible. And there's incentive to hide those fees, to promote bad valuations of homes. I can point to dozens of legal suits now where the valuations of those homes in that 2008 period were radically off. And ignore things like your inspection report and whatnot. So the consumer is, so the data might have this nice model, but it's actually hurting everybody in our opinion. And so give you kind of a view of like what actually happens to the data, like in reality. So the homeowner enters an exclusive licensing agreement with a broker and an agent. Usually it's, you think it's just the agent, but it's usually the broker you're entering an agreement with because that agents is just the 1099 employee. They really have no fiduciary duty to you. So it's really the broker you're entering the conversation with. You give the rights to use your images and facts about your home to the agent to market your home. All right, that agent writes a description. These become very important in the marketing of things and like there's studies that show that that can like boost the value of your home by 10% at least. Data is generally uploaded to a company. The current like managing like large conglomerate that manages this data is called CoreLogic. They were on that first slide where they were working with the S&P and Yale. So they're independent from NAR and they certainly get sued by NAR a lot too, but they also manage their data. And MLS rules dictate that all data uploaded in this manner belongs to agents in the MLS, of that particular MLS. So who owns this data? As you can imagine, this process creates a very complicated nest of questions. First and foremost, facts are not copyrightable. Thank you, Supreme Court, 1991. You can't, somebody can't tell you that you can't represent your facts on another website. Just can't. But CoreLogic's database is protected as a compilation. So if someone was to take CoreLogic database and replicate it, well, there's problems in that. And then there's a lot of gray area between what those two things mean and that hints lots of lawsuits. But where like a lot of the political or like legal angst comes from is around these images. Usually produced by a professional who's hired by a broker who has paid fees by the buyer's agent and actually hired by the homeowner. NAR likes to call this a fractured model. Most of us just say the homeowner owns the images. I mean, the logical sense is like, it's my home. I told you to take my pictures. I should own those images. But the legal world doesn't work that way. If you really want to have a fun story, Google co-star copyright lawsuit and see how many, like there's already, the co-star in the commercial states has sued, all right, seven litigations this year on commercial real estate. So if you see a picture on the internet of like a McDonald's or any local business, co-star probably owns that image because they realize that's how you control this data. So I'm running a little bit behind, so I'm going to skip some things. So just go a little bit fast. The internet comes to play. So now we start putting things on the internet. Zip Related was the first one to do this. They got sued out of existence. Zillow launches and Zillow changed the game. They first, they encouraged homeowners to engage directly with homeowners. And that actually got around a lot of these legal rules and made the agents actually dependent upon that just because when you look at the thing that really did it was the Zestimate because now everybody goes and looks at like what's my home worth? Of course, that's problematic because that's not an actual valuation and go back to those actual valuation problems. Like the Zestimate, very, like what it represents is not clear to me as a data scientist. I'm sure there is some margin of error on some number that it's very good at, but I don't know that's always the consumer's interest. But it did require the MLSS to respond and start working with them. And so other companies such as Redfin, Trulia, Easy Street and a lot of others have followed along suit and started to go directly to the consumer for the data. NarBuiltReader.com, now Zillow and Nar start like stop suing each other and they start to start working together and there's like a restriction of programmatic access. And for the most part, Zillow exists on pleasing customers and selling referrals to agents. And so they become a big advocate to get your data to a wider market. But access to CoreLogic database still must be MLS member and will still dictate the business model of the average real estate brokers and Nar still controls the data. How we believe opening this data will help. First and foremost, this system stifles real estate market. You have to charge the same fees as everybody else. There's dozens of companies trying to get around, even Redfin started by not charging the fees for your buyer agent. If you find them on Redfin and the seller agent gets you in the door, there's no reason for you to pay the buyer agent fee. And Zillow has done this truly, no, Trevora and Rax and several others. And it also forces you into unfavorable terms that you often don't even know about such as the images of your home on the internet that you can't really control because it's this kind of strange legal network. But also, so by not requiring membership, I say you will pay less fees, lower transaction of buying a home or reduced legal overheads buying and selling a home. There's other effects as well, such as today assessors, thank you. Assessors like county assessors typically do not price your home based on market rates. And I had a nice big thing with the Austin Board of Relators going after CoreLogic because the Williamson County or Travis County, the Texas County had access to their data somehow. All right, so yeah, we don't like paying taxes at the same time, if we don't get access to the data that tells us exactly how much taxes we should pay, like there's a disjunct. And I understand from the cab ride to this conference that that exists fairly real here in Portland as so many people move to Washington to avoid some of these property taxes. So it's a very real issue, we would have better policy based on having better access to that data. Also, like that first plot I showed you, it was great for investors, but it's also the reverse, gentrification, where is it happening? You can tell very clearly by looking at the market data, market data that you don't get to see unless you have some sort of access to MLS data in some sort or some aggregate viewpoint of it. And so if you want policy makers to have actual trends to help build better society, give them the actual data that the market is using. And also watchdog organizations avoid compliance and regulation of real estate marketing. We've already talked about like Facebook and how digital marketing has not abided with civil acts, civil liberties acts. And that sort of thing, it's hard to monitor without like actually looking at what's the market for sale versus what's being advertised and so on and so forth. So all in all, we believe that opening this data will help our community enlarge. Any questions?