To clarify my little vision yesterday it will be helpful to explain what I see happening. I see demands for online RE companies such as Zillow and Trulia to do two things: one a demand from investors to make a profit and another demand from consumers for better, more comprehensive information. When I speak of monetization it’s because it’s a reality for them. I think RE companies will be forced to create alliances with local brokers so that good, contextual information is available for consumers to go along with pictures of homes and out of context estimates and partial information.
I’m not really overly concerned about this, it’s just interesting to think about how they will survive and change. I understand the “free” experience of searching for homes without being badgered or spammed by RE agents and vendors of all sorts.
But if they don’t make money, they won’t survive. I hear Homegain is making money and it will be interesting to see how their model evolves.
However, the Network I’m talking about is more in line with with what Greg writes about here.
The Network will not be web 1.5, it’ll be more like web 2.5 and it won’t be designed to feel good about doing good, it’ll be about being excellent and benefitting consumers. The Network will be about individuals connected to other individuals with no power or control over one another, just a recognition of excellence. I say the Network will be 2.5 because personalization and context won’t be mastered for some time.
So it’s not an easy duality of those who are greedy looking to make a buck and those who are enlightened and open and good, it will be a complex variation of efforts that I think will coalesce along several different lines. The RE companies will compete for consumers, and many will compete mainly for traffic in order to advertise. They will have to offer value and someone will need to be charged. If they don’t offer value, there will be no one to charge. I suppose the value of the Listing Sites will be to show listings in more creative, informational ways. This can be done locally much better, once consumers fully understand how to search for local sites that are connected and utilizing the best technology — plus they will get personalization and context if it’s done right. Right now, personalization and context is labor intensive, so the experience is hit and miss — so, it’s easier to find a place like Zillow and work your way through.
However, the more local players connect with others across the web a Netwok is being built, ideas are being exchanged, cooperation is happening and as it grows, that group in my mind’s eye materalizes as an effort of loosely independent, connected players who “get it”. Interdendpency, as Brian Brady calls it. There will be many portals through which consumers connect with The Network. For all the people going online and searching, the magic of long tail will lead them to these portals. Most people in the Network will never meet as they are locally going about their business, but they will being doing business through referrals and their minds will be meeting in blogs along the way.
Consumers will start interacting with the Network and discovering connections, because the best of the Network will have voices across the web, and the best will broaden that voice outside incestuous groups. Consumers will see the value for them locally. How all this will materialize is certainly beyond me, but I see it happening.
Will it materialize into a whole new way of doing business? A virtual company that is not a real company? Will Zillow and Trulia and Active Rain create businesses that solve the local problem of personalization and context by forming true partnerships with local experts, charging them and the consumer to be profitable? If I really force myself to create a duality, it would be between RE companies and loosely connected RE professionals in a Network who maintain their independence.
But this is not a real duality, because nothing is ever that clear cut and neat. There will most likely be many networks and many companies delivering a mixture of services. However, The individual RE professional is empowered and doesn’t need to feel like they are at the mercy of RE companies, they just need to carefully choose their Network. It’s really the other way around, RE companies will be dependent on local RE professionals if they are ever to strengthen their greatest weaknesses.
Mike Farmer says:
Not to be concerned — this is not another long series. Tomorrow I’m getting back to more practical, immediate concerns. I’m tired, now.
February 26, 2008 — 6:17 am
Dave Shafer says:
Very interesting concept. The question is does the consumer get to this point organically or is led there by a marketing plan. Right now, initial research might be accomplished on those web sites you mentioned, but eventually most folks end up in a real estate office talking to an agent. Folks that list with an internet site are having no luck selling their homes in this market, probably because they are overpriced, but also because there is just so much inventory out there that they get lost in the shuffle. When people start choosing their real estate agent because of their web site, not out of convenience, randomness, or referrals is a little way off in my opinion, but you might have a different experience. I think of the mortgage experience, when times were good, and how many people chose their mortgage provider because of the ubiquitous commericals (TV, Radio, Billboards, etc.). Are we in a new paradigm of thinking on this yet? Do people connect the “mortgage crisis” with this behavior? Are people who have lost real estate value since they bought connecting this to the real estate agent they bought from? Usually, it takes something dramatic to happen in order for people to change the way they do business, but sometimes it is just a few little connected things that happen to get it started. So what are we seeing that could point to this change?
February 26, 2008 — 7:00 am
chris el says:
Well all that sounds great.One that is planing to invest in a house (the most expensive investment on the average persons life) taking the info available in Zillow Trulia and Active Rain seriously and base his/her decision on their info it must have his brain examine.
I hate to tell you that so far no one of the “new” platforms is more useful and beneficial to the consumer as the “old fashion” info obtained from the local brokers ,title insurance and personal (investor/buyer) experience of an area.
Now why will a local broker provide info to a company as the above? What is there really for him?
These companies provided false info all alone by providing what they thought to be a value. All they had to do,was obtain info from the local county recorder as to the value of current property sold.
To my knowledge they didn’t.These kind of practice does not benefit any one.
Over the years many “new” concepts and “great ideas” have come and gone for one simple reason:They do not make MONEY.
February 26, 2008 — 8:28 am
Jeff Kempe says:
> …it won’t be designed to feel good about doing good, it’ll be about being excellent and benefitting consumers.
That says it all, Mike. Making money will be the measure of how well things are working, but not the driving force behind the development. If Alice doesn’t get something out of it, nothing else matters.
Here’s Web 2.0 view of the status quo, the dominant view in the industry right now. Note Alice is barely mentioned; what’s in it for…ME! It concentrates on capturing and exploiting leads, on denigrating the worth of social networking; the closest it gets to excellence is the suggestion that, if you really insist on blogging but find you don’t have the time, hire a company to provide content. Indeed. That’ll do it.
Great stuff, Mike; congratulations on your well deserved Odysseus medal. I’ve always said the difference between good and great writers is the latter knows how to use ‘myriad’ in a sentence …
February 26, 2008 — 9:13 am
Mike Farmer says:
I think we are seeing a great change in the way people think about, not just agents and lenders, but real estate in general. We know that their home search patterns have changed to the internet. Whether online agents and mortgage brokers can win the public mind through a new way of talking and walking is to be seen.
I think I see a change as the online conversation grows and consumers are brought into the conversation. I recently did a survey with the prospects in my database — about 25% replied to the question of what they’re looking for from the online experience — almost unanimously they wanted pictures and context(nuanced area information) and personal service that makes sense of the factoids.
February 26, 2008 — 9:20 am
Mike Farmer says:
Thanks, Jeff, I practiced on that “myriad” thing for years.
True, those who shrink from the talk of money are hiding something. Profit measures the success and value of an offering. Another aspect of money is that it will take money for things to development and for the creation of quality consumer service. Consumers know this, at least the grown-up ones do.
February 26, 2008 — 9:30 am
Mike Farmer says:
Chris, I agree that local information given by a local expert is best. Visit my site in a about an hour, I want to show you something,
February 26, 2008 — 11:19 am