Real Estate on the Web
Ed: This article from Spring 2006 – but still pretty relevant
Anyone in the business of guiding consumers in big-ticket purchases has felt the impact of the web. Stock brokers, Travel Agents, Auto Dealers and even Optometrists have scrambled to meet changing demands as consumers have increased adoption of broadband-enhanced services at home.
These are permanent alterations of habits, as well as the expectations, of these consumers. If they know the nationwide average paid for a car or can intelligently assemble investment portfolios online in minutes, salespeople must find other ways to add value if they wish to remain relevant.
One of the last frontiers of information brokering is Real Estate, namely the output of multiple-listing services or MLS by real estate agents. Property information contained in databases run by the National Association of Realtors (NAR) has long fed information-hungry home buyers or sellers, but always through registered agents. As the Internet evolved, practices within the NAR have raised the eyebrows of consumers’ groups and politicians as expectations of information access proliferated.
“….A key factor in traditional brokers being able to maintain high, fixed commissions is their domination of home listing services of large firms and those of unregulated multiple listing services since these databases are the only ones that include most listings,” read a recent report by Consumer Federation of America, a liberal consumers’ group in Washington, D.C.
Late last year, the Department of Justice’s filed suit against the NAR policy of allowing brokers to keep their listings out of search results for competing agents. The Internet whetted the public’s appetite for information, and they will go where they can the best information for the least cost in terms of time and money.
So it’s inevitable that competition to the traditional MLS would emerge and interest was red-hot at Real Estate Connect, a conference in San Francisco held last week. It was standing room only when sessions were held relating alternatives to the MLS for home data search. To rattle nerves further, rumors of a new open-source MLS alternative have been circulating widely in developer communities. Such a system could possibly invite all-comers to both contribute and partake in the home listings data nationwide for free.
One conference session was given by Zillow.com, co-founded by Rich Barton who started travel site Expedia. Zillow is an innovative home-value website that gives consumers the ability to estimate and track the value of properties online. It powers Yahoo! Real Estate and has 66.8 million homes, but it is not yet covering Lexington or Louisville. Using the integrated Microsoft’s birds-eye view map system (which is available in Lexington already via http://local.live.com ) house-hunting trips feel like helicopter tours. And Zillow is unaffiliated with any real estate entity.
“The real estate boom on the Internet attracts new entrants almost daily with the promise of better assisting consumers in research and helping brokers market properties more successfully. The end result: brokers and agents are simultaneously presented with an abundance of opportunities and competitive threats” says Trulia.com, a search engine which is giving away free plug-ins for agent websites that offer powerful map searching capabilities without any programming.
Trulia’s recent partnership with fast-growing real estate franchisor Help-U-Sell, which uses a model without percentage-based commissions, shows what can happen when new systems are switched on. Using Trulia’s search tool, Help-U-Sell franchisees offer customers a fixed-fee menu of choice for their agent-provided services, bypassing completely the traditional model.
There’s more. Early as April of this year, eagle-eyed bloggers reported unusual links on Google for a real estate search, and screen shots circulated around the web. Just last week, Google-sleuth Tony Ruscoe located Google Real Estate in a secret test account. All evidence points to imminent launch of the largest independent vertical real estate search system, surely funded by agent advertising.
So are real estate agents still important. All signs say “absolutely,” but their roles are changing. Even Google’s Justin McCarthy, Strategic Development Manager for Real Estate embraces their importance “This is a huge transaction that needs hand-holding from a real estate agent.” A study by NAR showed 77 percent of consumers used the Internet to search for properties, but 81 percent still worked with an agent for the purchase.
It’s the agents and brokers who shun Internet technology who will find things unfriendly. A search for Lexington agents resulted in “page not found” errors, broken links and bounced emails. When Google and others do index agent websites, they need to be well-designed, map-integrated and responsive.
Those who use web technology to their advantage will come out winners. As Burke Smith of Prudential California Realty puts it so well in the conferences’ best quote, “Technology won’t replace agents. Agents with technology will replace agents.”
Other great articles:
Written Fall 2005