Frustrated by the lack of choice in lockbox products, some real estate associations have taken matters into their own hands and designed their own systems. With a careful eye on the Supra patents on lockbox technologies, at least two associations are nearly ready to debut products for use by other real estate associations.

Currently, few options exist in lockbox technologies as the market is cornered by Supra and Risco, both subsidiaries of GE. Supra owns numerous patents on lockbox technologies that have boxed in competition. The industry is so locked to this one company that associations, in response to Supra's forced use of new products by turning off support for older products, are seeking alternatives. The California Association of Realtors, for example, formed a special task force specifically to look into alternatives to Supra.

At the time, Gary Thomas, head of the CAR task force, told Realty Times that the purpose to the task force is to "air the grievances of associations about lockboxes and to get Supra to honor the spirit of its contracts with California associations, and to look at alternatives to Supra in the lockbox field."

At least two associations, The North Shore Association and The National Association of Realtors, says Judith Lindenau, executive vice president of the Traverse Area Association of Realtors in Michigan, have decided not to wait for better terms from GE/Supra/Risco.

Among the complaints against the GE/Supra products are too much technology attached to the lockboxes at too great a cost to the associations and individual agents. An association buys a lockbox SYSTEM, which must be maintained and compliant with membership records and other administrations. The association and the members are then dependent on the lockbox vendor. If billing or bookkeeping systems aren't well maintained, or there is no redundancy plan when the lockbox server goes down, nightmares begin for both association staff and Realtors attempting to access the system. In addition, the individual agent must refresh his/her "key" nightly.

"Terry Penza and the North Shore Association have developed a new lockbox which I have previewed, and which is real slick!," says Lindenau. "The box I saw is quite elegantly simple and usable. It's functional and affordable, and doesn't require much maintenance from the association. It is a push-button, coded box made of high-impact plastic. Each box is individually secure, and the listing agent only gives the code to the folks he schedules for a showing. The entry code only lasts for two hours, then a new one must be obtained from the listing agent. Each lockbox has 300 codes which are specific to the lockbox, and the agent may refresh the sequence at any time. The most the association might want to do is keep duplicate records if the agent loses the sequence for the lockbox. There's no expensive infrastructure to maintain and update, so trying to keep track of all the members and their status is not an issue. Plus, at $60 per box, and no annual key lease, its reasonably priced!"

Lindenau says she is ordering some to try out.

Meanwhile, at the NAR leadership conference in Chicago, Lindenau heard it first along with other leadership that the NAR is producing its own lockbox solution known as Sentrilock.

"NAR's product will be available by March of 2004," says Lindenau. "It will be a smart card technology...with a few enhancements which brought cheers from the audience. The card is refreshed through a card reader attached to a personal computer, so gone are the Supra keys that have to be refreshed every evening. The smart cards will apparently be refreshed on demand by the card holder. The lockbox has the ability to store the names of 70 visitors which can be retrieved by the listing agent via the smartcard, and can also be programmed by the homeowner to keep from being used when the homeowner wants privacy."

She says, "It looks like a very spiffy product...lots of bells and whistles. Of course, there's no indication of price as of yet, and I will be curious to see how the program is administrated. It looks like -- as with Supra -- there has to be a central network to verify keyholders and issue a certification that they can continue to use the key. For associations, this is what is the difficulty: this information has to be integrated with the membership base somehow and maintained in a timely fashion."

Supra has announced a combination lockbox/PDA/phone combination that will be released in November, says Lindenau.

"Supra also introduced a new product: the Kyocera smart phone/PDA/Lockbox infrared product. This technology features the all-in-one device which currently retails at about $400 per key," she says. "I am not sure what the infrared lockbox costs. The all-in-one unit will require the agent to own one, and to subscribe to a web-enabled phone service as well. Supra's vision is to have MLS software on the web-enabled phone (as TAAR does now) but add photos to that data so that the agent can use his/her phone as total MLS access with photos, the lockbox key, and have all of the other PDA functions as well."

"That's certainly a vision of the future," says Lindenau. "Supra will release this product in 2004 with the official announcement being scheduled for the November convention."

So far, all the new lockbox products are "vaporware," says Lindenau except for the North Shore product. "Northshore is taking orders now, with delivery scheduled within a week or two," she says. "I have ordered a few boxes to test through the winter and see how they hold up. I think they will be of great potential for many of our members, particularly those in outlying areas and those with properties in multiple board jurisdictions: the listing agent has complete control of the access, so no more multiple systems in a market area!"

"The northern Michigan winter weather is always a test," Lindenau says, "and I think that the whole lock box industry will be radically changed by the entry of these new products. Both NAR and those local associations are to be given some big kudos for these products."

According to a NAR spokesperson, the NAR has taken a majority interest in a company called Sentrilock, LLC which is producing the lockbox product known as "Sentrilock." "We are doing this to respond to the need expressed by thousands of Realtors to add some competition in the marketplace," said the spokesperson.

Cincinnati Association leader Gene Snavely says, "We have worked with this company before. They are very innovative and we are impressed with their capabilities."

He adds, "We are 100 percent for competition in the lockbox field. It will make all companies perform better and price their products properly, so we very much applaud the fact that there will now be major competition in the lockbox arena."

Will the NAR/Sentrilock product compete with Supra? "MLS is a feature that some people like but the majority don't download into Palms and for those people if they like it more power to them," says Snavely, "but because it isn't a major segment, the Cincinnati company chose not to include that feature in its product."

Would that lower the cost barrier of entry for more associations and individual agents? "The Realtor boards will look at product and price and determine what makes the most sense for their members," says Snavely. "Some want bells and whistles and some want a good solid system that is state of the art."

Published: August 19, 2003

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