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So Goggle thinks it’s going to win the real estate search game.  As far as I’m concerned, there is no more meaningless a result in an online property search than a red pin designating the location of a property on a map.  Take the map above in the example - a snapshot of the the greater New York City area with little red dots designating search results.  New York’s a big city with alot of little neighborhoods.  Help me understand how this solution is any better than any of the others? How has Google upped the ante in providing a better solution?

They haven’t.

What I find interesting about the online search game is how many players fail to understand what makes a particular property unique - desirable - a one of a kind.  How does a little red dot convey the weighty significance of LOCATION, LOCATION, LOCATION?  I just read Joe Burslem’s post over at FOREM, regarding how Google is now getting serious about real estate.

Should Zillow and Trulia be worried?  Not if they view search as a value added activity.  SEO juice isn’t necessarily the fuel that runs an effective or valuable search.  The content around the search is key.  What makes a location important?  When consumers seek a home - not a house - what evokes the emotional response?  A view?  The possibility of walking to a farmer’s market on Sunday, while passing a Starbucks?

A street view is a “window” into a location, but it doesn’t define it’s personality.  Location has an identity.  Zillow has already done the homework to identify the boundaries to neighborhoods.  Perhaps a valuable next step may be to better identify a neighborhood’s identity - its personality - or maybe link the characteristics of a location to the attributes of a property.

If a search result can personify a property’s location, consistent with how a consumer lives, the red pin comes alive.  Search is meaningful.

Google - you’ve got your work cut out for you.

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About once a week, someone asks Redfin who built our real estate search site (sometimes they don’t ask, they just take). Since we built our site on our own, we can’t recommend a development partner, but we can offer advice to other brokers building MLS-powered sites.

And our first suggestion would be to bring your wallet. If you include all the employee salaries, benefits, hardware, online services, data costs and hosting costs, Redfin will probably spend $4+ million on research and development in 2009.

Is Technology Tilting the Playing Field Toward Large Brokers?

That may sound like an imposing number but we have costs you can avoid. We spend at least $1 million on commerce tools for tracking offers and listings, so we can give customers the same 24-hour web support you expect from a bank, limiting the administrative burdens on our agents. A traditional brokerage doesn’t have to invest in this area.

We probably spend another $1 million making mistakes you could easily duck by following us at a safe distance of, say, six months. We try to avoid mistakes, but a mistake is often just a good decision outpaced by circumstances.

For example, when we had no money — scratch that, (thanks David Selinger) when no mapping technology existed that supported user-controlled panning and satellite imagery — it made sense to build our own map. Later, Virtual Earth was the best choice because Google was slow to draw hundreds of property outlines on its map. Now the best choice for us is Google Maps because we figured out how to outline all the properties at once. We just switched to GMaps today, and now it’s on the front page of TechMeme.

I think we’re the only folks in real estate who have used Virtual Earth, Google Maps and a proprietary map, so if you have questions on the relative merits of each service, please just drop us a line.

That leaves the cost at around a few million dollars per year to build a real estate search site with national scale, which is still too expensive. While hardware costs decrease every year, and other websites have undoubtedly achieved more with less — often by out-sourcing, sometimes no doubt by just being smarter and faster — it is still true that small brokers are struggling to pay for competitive search sites.

This is a change. Marketing, which used to be the large brokers’s primary advantage, is actually getting cheaper — if Bloodhound has proved anything, it’s that the web has made marketing a question of what you have to say not how much you have to spend.

But the cost of running a real estate search site is rising fast. Large brokers throw money (if not always expertise) at the problem, while small brokers struggle to compete. The small brokers ask MLSs to provide a common set of services, like listing alerts, but the large brokers sometimes block these efforts as being beyond the MLSs’ charter.

And expectations are rising. Consumers now want tax records, bank records, property outlines, school data and neighborhood outlines, all of which are expensive.

The sites a Realtor could work with aren’t always attractive. Realtor.com, the site funded by Realtor dues, is losing market-share. Sites like HouseValues, Trulia and Zillow are gunning to replace Realtor.com, but not all agents who want to be featured on those sites can afford the up-front costs .

It would be a shame if technology — which is supposed to lower the barriers to entry — actually made real estate less of a mom-and-pop industry. I know Redfin is part of that trend, but it wasn’t what we had in mind when we started. Our focus was on competing with Century 21 and RE/MAX, and benefiting the consumer — not hurting the little guy.

What do you think? Is technology creating new economies of scale in real estate? Are small brokerages able to compete just using the public sites provided by the MLS? Will large brokerages be able to use better data access to build the market-leading real estate search sites?

And is it the role of the MLS or of the National Association of Realtors to create a level technology playing field? Will the small brokers get priced out of the technology wars? I don’t pretend to know, but it would be great to hear your thoughts.

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In a comment at the Future of Real Estate Marketing, our friend Tom Johnson delivers a fatherly lecture on the facts of life:

This is the free market and unintended consequences at work. There is a reason that the commission rates have been stuck for years where they are. The contingency nature of the listing relationship drives the business. The consumer is unwilling to pay for service that does not result in a sale.

Pouring VC cash into the real estate space has improved technology. The RE.net came on the scene with plans to disintermediate the real estate brokers by tapping into the commission honey pot. This put pressure on commissions forcing brokers to cut costs, so the RE.net responded by giving the services away for free. Free outbound doesn’t earn a return inbound. The cash burn continues, brokers continue to cut costs by not buying RE.net products causing more cash burn and layoffs.

As transactions slow, the commission honeypot shrinks. Brokers will cut cost and redouble efforts to get salable listings, by using the free tools that are provided by RE.net.

It seems to me that the RE.net did indeed disintermediate, but it was not the RE brokers that were disintermediated, but the print media. So here we are, marketing listings for free on the web. Because of the fractured nature of the RE space, it takes unimaginable amounts of time to manage all that free stuff, so we are where we were. The consumer is still unwilling to pay cash for RE services on a non-contingency basis. So, we tweet and blog and facespace our listings, to get a transaction started, and then the real work begins-getting the contract to the closing table. That is the part of this industry that the RE.net sort of forgot about and the cash burn continues…

Indeed. We have seen the future of real estate marketing — and it is us.*

As might be obvious, I don’t have a lot of time for other RE.net sites right now, but it is worthwhile to note that tFoREM has four whole posts this week, a huge number by comparison to recent performance. Makes me wonder if we should be on the lookout for layoffs in Emoryville, too.

 
[*That joke is built from two pop-culture references. A virtual lollipop to the first person to name both.]

Technorati Tags: disintermediation, real estate, real estate marketing, technology, Zillow.com

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The market crunch has hit the Seattle real estate scene hard this week.  First there was Redfin announcing it was laying off 20% of its employees earlier this week and today we get Zillow’s announcement that they’re cutting 40 jobs (roughly 25%).   You can read about it on the Zillow blog.

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Okay here’s the good news: You have another opportunity to garner a do-follow link from Zillow.com.

And here’s the bad news: For that link to do you any good, your best bet is to be a really bad listing agent. The more listings you can accumulate on Zillow.com — which implies listings that don’t sell — the higher your ranking among your peers.

Yikes!

Or: Too frolicking stoopid…

Zillow’s Professional Directory is new as of this night, so — who knows? — maybe it will get better. In the neighborhoods we understand, it’s an exceptionally valuable glimpse into the world of lister dysfunction: Who can’t sell how much real estate how slowly? If you want to know for sure who cannot sell the greatest quantity of real properties over the longest spans of time, Zillow.com has the answer.

It gets worse: The “Top Zillow All-Stars” are, for the most part, bubbleheads. Everything is measured by contributions, where what Einstein does and a cat-box deposit are equally “contributions” — equally additions to Zillow.com’s great big cat-box of crap.

This is wicked-dumb, far dumber than the usual agent-rating schemes. Where those other “tools” can be gamed, Zillow’s system is based on measuring, first, a meaningless metric, and, second, by actually rewarding incompetence. Quantity not only is not quality, the number of listings a Realtor is carrying is very often a negative indicator — a symptom not of quality performance but of its absence.

Even acknowledging this, measuring velocity of turnover would not improve things, particularly since this is a metric that could be gamed. And even adding in true — meaning verified — list price to sales price ratios might not be enough. Readers here can correct me if they think I’m wrong, but I don’t think there is any reliable, objective way to rank Realtors by quality of performance.

And that’s as may be. It remains that graduating them by their inability to move product is inarguably a terrible way to rank real estate agents. The Professional Directory is a truly amazingly tone-deaf addition to Zillow.com.

As you might have deduced by my absence from these environs, I am very, very busy — with buyers, so my quality of performance would not even register on Zillow’s inverted thermometer. Since I may not be here to counter David Gibbons’ indefatigable flak-catching, I’d appreciate it if you would encourage him — politely — to improve this brain-dead “innovation.”

Technorati Tags: disintermediation, real estate, real estate marketing, technology, Zillow.com

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Hither. The weblog will be an adjunct to Zillow Mortgage Marketplace, with a crew of loan bloggers and frequent ZMM mortgageurs providing the content. Our own Brian Brady and Tom Vanderwell are early contributors, and Zillow’s man on the job, David Gibbons, will be looking to add more writers as time goes on.

Visit the site for more info.

Technorati Tags: blogging, real estate, real estate marketing, technology

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Have you been watching Zillow.com lately, in the press? They’ve done a nice job at selling the mainstream media that they are the “real estate statistics” firm of choice. With the introduction of Zillow Mortgage Marketplace, they are aggregating real-time live quotes and are positioned to trump other media sites for accurate mortgage rates reporting.

I”ve admitted that I’m a Zillow-phile. As a mortgage wonk, I love the data they gather and the reports they publish. I read Spencer Raskoff’s Active Rain Blog, weekly. I’m constantly comparing my terms offerings to the realistic quotes on ZMM (I’m a few hundred bucks more expensive but a helluva lot cheaper than the average quote-ask me why sometime). Their Zestimates are getting more accurate as they rewrite their algorithms and gather more market data. As a reporting service, Zillow could and should take the national lead.

Lately, I’m starting to see Zillow try to emerge as an advisory firm of sorts which is fascinating to me. I’m not speculating here, watch what’s happening:

I started reading Spencer’s blog with this post about trading commissions; I realized that we had a common background and that we probably speak the same language. This recommendation confirmed that thought.

This was the first time I saw Zillow offering its data as analysis, by Zillow economist Stan Humphries. Then, Spencer Raskoff suggested that Zillow would have prevented the rampant speculation, from 2004-6. Interviews on Bloomberg, radio shows, and CNBC, all “reporting” about the rapid decline, with really cool granular data. Most recently, I spotted Spencer on Bloomberg, reporting about the decline and offering his prognostication about the market. Today, Spencer took a well-deserved pot shot at the NAR economists.

Silly Active Rain chatter? I think not. It’s my opinion that Zillow.com is fashioning itself as the econometrics firm for real estate, I call it “REconometerics” just to give it a name. Where will they take that “new” product? They can:

• Publish the data, like a newspaper, as interesting content for readers,so that Zillow can sell more ads.
• They can create an investment advisory service, helping wealthy landowners properly manage their real estate assets.
• They can create a research service/newsletter, destined to become an industry standard.

Maybe I’m wrong but I’m watching the wonks at Zillow start to make market predictions. I’d like to see them publish their predictions rather than criticize the other economists. We can start right here, on BloodhoundBlog Radio.

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So far, in 30 months since Zillow.com launched, precisely one client has shown me a Zestimate. I mention the site all the time, just as a matter of casual conversation, but only the INTx types know what the hell I’m talking about. Last night on the the phone with Brian Brady, I equated the Realty.bots with model trains: We fool around with these model train layouts because they’re interesting and fun — and then we get up and go back to our real jobs on the railroad.

That’s not completely fair. I’ve been using Zillow more and more in my own real estate practice, as one of my pre-listing tools. Because our current MLS system sucks so bad — it’s gone on July 28th — often I will go to Zillow first.

One thing I’ve wanted and missed at the site is Google’s Street View.

Guess what we’re getting today? That link is dead for now, but I’m not under any embargo, so here’s the news:

Even though it uses Microsoft’s satellite imagery, Zillow will also be adding Google’s Street View technology for exterior elevations of homes and views of the streets and surrounding areas.

The other bit of Zillow news this week was the announcement by Zillow.com CFO Spencer Rascoff that the start-up will not be going IPO in 2008.

The problem? All of Zillow’s services are built on an advertising-based revenue model, and it is struggling to sell enough ads.
 
“There’s an online advertising recession right now, and we are not immune,” said Rascoff. He did not show any signs of departing from the company’s advertising-based business model, or its eventual plans for an IPO.

Street View doesn’t seem to be turned on yet, as I write this. The IPO spigot may be turned off for quite a while.

Technorati Tags: disintermediation, real estate, real estate marketing, real estate photography, technology, Zillow.com

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About a month ago, Zillow started showing the number of contributions you have made to their data base in your profile. Up at the top you see the total number of contributions, and down below you get a running total of recent contributions.

It was obvious where they were headed, a de facto ranking system based on user contributions. In the co-branding information released earlier this week, Zillow made mention of “badges,” and one of the pix they released showed a badge in the co-branding area.

But… I didn’t actually dare to think that I would qualify as a Zillow All Star…

There’s a point at which it’s kind of funny — does it come with a secret decoder ring? But even so, I don’t hate the idea. Active Rain built something that might someday be a business on a completely brain-dead points system. There is no way to make a brain-dead contribution to Zillow. Everything matters.

And thrusting everything associated with the sale of real estate to the side, I love the idea of Zillow becoming fully-populated with data. There may come a day when the Zillow data base is the de facto museum of residential real estate. Hundreds of biz school PhD theses could emerge from that vast store of information.

In the mean time, your Zillow All Star badge is another co-branding trinket you can put on your weblog.

Technorati Tags: disintermediation, real estate, real estate marketing, technology, Zillow.com

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Do you want to see something huge in the guise of something that might seem quite small at first?

Click here.

This is new software from Zillow.com. It’s supposed to go live at 9 pm PST, but it’s already working for me.

What’s different?

Look up in the upper left hand corner.

C’est moi! A photo of Odysseus. A link to my Zillow profile. A link to my email. My phone number. And a link to our brokerage’s weblog.

Even cooler is that button in the upper right hand corner:

A quick-click button to take you back to BloodhoundRealty.com.

So what’s going on here?

As of tonight, Zillow.com is “co-branding” with anyone who links to it. “Co-branding” is the kind of wine-and-cheese-PR-event deal big companies make with other big companies, but Zillow is extending the idea down to the lowliest of grunts-in-the-trenches.

(We can take a moment to snicker behind our hands. Trulia.com is building its reputation on being niggardly and hostile toward ordinary working real estate agents, so what better way to throw the whole issue into the starkest possible contrast? I don’t think Zillow approaches things this way, but the irony can’t be lost on them.)

Why does this matter? Because it’s a very reasonable response to an objection. If someone says, “Providing or promoting content on Zillow.com improves their garden but not your own,” Zillow can offer up the perfect counter: If you shed attention to us, we will make you our partner for that entire visit, and we will entreat your guest to return to you with every page that person views.

This is brilliant every way you think about it, and, of the wannabe Web 2.0 players in the real estate industry, Zillow seems to me to be the only one who really gets the whole bundle of Web 2.0 concepts: You give to get, wealth is abundant, the expectation of good behavior yields good behavior, etc.

There’s more. Zillow.com is about to introduce a ton of new widgets and gadgets, each one of which will be co-branded to the end-user. You’ll be able to post real-time mortgage quotes, for instance, and anything built with the Zillow API will be eligible for the program.

Zillow is also going to make performance-based badges available to Realtors and lenders — ranked by the number of contributions you have made to the site, I would presume — and these will also be co-branded.

What are they up to? They are rewarding you for linking to them and helping them build out their site. They are doing everything they can think of to “partner” with individual Realtors and lenders. I’ve written before that Zillow.com’s ambition is to become a net.institution like Ebay.com, Amazon.com or Wikipedia.com. This is one more step in that direction.

Not everything is sweetness and light. The Zestimate has become the favorite tool of scammers gulling thoughtless investors into thinking that there is a huge upside to be realized in lender-owned dumps. Because the Zestimate is a trailing indicator, in a declining market the Zestimate can be far higher than the actual market value of the home. I foresaw this abuse two years ago, but by now it is epidemic. Zillow is ripe with disclaimers now, where it was not in August of 2006, but fools abound.

Here’s an action item for people who are not fools: Every one of your links to Zillow, past, present and future is available for co-branding. All you have to do is add the code “/?scrnnm=YourZillowScreenName” to every link to Zillow. In other words, you can retroactively “co-brand” all your past links.

There is a sense in which this is a link-baiting strategy on Zillow’s part — and Zillow.com already has over two million Yahoo backlinks. But even looked at that way, it’s an amazingly generous gesture. It will be interesting to see how this plays out.

Technorati Tags: blogging, disintermediation, real estate, real estate marketing, technology, Zillow.com

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Hi,

First I want to thank all of you for making me feel so welcomed as one of the newest members of the Bloodhounds.   I’ve felt very welcomed and I appreciate that.   I’ve also learned a lot.

As Greg said when we kicked off Project Bloodhound, he’d let all of the pups take the opportunity to properly introduce themselves.  I’m going to attempt to do that.

First the basics: My name is Tom Vanderwell, I’ve been married to my high school sweetheart and best friend for 23 years (well it will be 23 years in 11 days).   We have 5 children.  The oldest (21) is living and working in Ohio as a call center rep.   My 18 year old will be attending Calvin College in the fall to pursue a nursing career.  She plans on going into third world nursing, specifically at this point in Haiti.  Our 16 year old will be a junior in high school.   Four years ago we adopted two more kids from Haiti (www.glahaiti.org).  They are currently 6 and 7 (the 7 year is the only boy besides for me in the whole family!)   Let’s just say life is never boring at our house!

One of the questions that I enjoy asking others in the real estate world is “How did you get into the real estate business?”   So here’s my story.  In 1988, I was running the showroom of a local furniture rental store (not a rent to own, but a temporary leasing store) and got let go because I refused to lie to the customers (go figure?).   One of my customers was a Realtor and she made a comment to me, “You should think about selling real estate.”   Well, after a couple of months looking for a job, I decided to pursue the idea.   I ended up selling real estate for 3 1/2 years.  I don’t know how many of you were around during the first Persian Gulf War, but I didn’t sell a house for 6 months during that.   Needless to say, it was time to look for something else.

In 1991, I made the switch to mortgage lending and went to work for what is now part of the JP Morgan Chase originating mortgages.  To me it was a logical move and it ended up working very well for me.   Over the last 17 years, I’ve worked for what was, at that time, the 5th largest bank in the country, 3 smaller community banks, and now Fifth Third Bank which is known as a “super regional” bank.

So, how did I manage to last this long in an industry where the average “life” of a mortgage lender is around 5 years?  Let me explain:

In 1995, I was getting burned out by the “sell, sell, sell” atmosphere at the bank, seriously enough that I was considering a change in career.  I was talking to a friend of my parents (kind of a mentor thing) and he said something that really changed my career.   He told me, “You know, Tom, God needs good people in the finance world.”   That changed things for me.   Rather than looking at my job as someone who sold money, I look at my job as an opportunity to help people.   How does that play out?

I’m spending the time to make sure that people get the right mortgage and “do” their real estate transactions right.  It really changed my perspective on things.   Now, my outlook isn’t “sell sell sell.”   Instead, I look at it as “How can I make a difference in someone’s financial picture today?”

That means that:

1. I treat the older couple looking to move their mortgage from their house to their cottage so they can sell their house to their daughter on a contract with the same amount of time, attention to detail and persistence as I do the doctor building a cottage.
2. That I take the time to discuss what a prospective borrower’s both short and long term plans are in regards to that particular property and the debt so that we can make sure we’re doing the right thing.
3. That also means that, on the rare occasion that it happens, that if someone else (aka the “other” lender) has a program that would work better for this particular clients needs, I’ll practice what I preach and talk straight and tell them that it’s a better deal.

Especially in today’s market, it’s never been more important to deal with a professional who puts your needs and wants first (you know, people like Dan Green and Brian Brady).   Someone who takes the time to figure out all of the angles and takes the time to do things right.

Oh, and that’s why I started my blog, Straight Talk About Mortgages and Real Estate, because I believe that we wouldn’t be in nearly as much of a mess right now if we had more mortgage lenders who talked straight and put their customer’s needs first.  (You know, people like Dan Green and Brian Brady.)

So, there you have my “mortgage story.”   Besides for a house full of kids and a busy mortgage business, what do I like to do in my spare time?  I’m on the board for the orphanage we adopted our two youngest kids from, love to play golf (but don’t have much time for it), enjoy reading, coaching my son’s soccer team, swimming in the pool and camping.

A couple of additional thoughts about me and my business:   1) I’m an e-mail/cell phone/IM/twitter junkie.   I spend way too much time on them, but it’s important to keep in touch with the people who need you and important to keep my finger on the “pulse” of what’s happening in the markets.   Real estate doesn’t happen strictly 9 to 5, so mortgages don’t happen strictly 9 to 5.   2) The bank I work for is licensed to write mortgages in 37 of the 50 states.   I’ve done mortgages in 11 of the states but I’d love to do more states.

2) I’ve set up a feature on my blog that I call House of the Week.   What is it?   A series of posts (one per week - duh!) where I’d like to feature houses from all over the country that are currently for sale.   Why?  Because I think houses are cool and I think the different types and styles of houses in different areas are intriguing.   So if you have any listings that you’d like to feature on the house of the week, send me up to 700 words and up to four pictures and I’ll put it on with a link back to your site

Okay, enough “commercials” (maybe too many?).   I look forward to hanging out with you guys and learning more about the standards of excellence and the best ways to take care of clients.   I consider it a privilege to be part of the Bloodhound Blog gang and I hope that I can not only learn from the rest of you but also add an experienced mortgage lender’s perspectives on what’s happening in the mortgage and housing markets.

If any of you actually read this far, I’m really impressed and flattered!

Tom Vanderwell

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Jeff Corbett announced that he launched Ratespeed this week:

What is it? An anonymous, automated, transparent, mortgage program and interest rate pricing pre-qualification Search Engine widget, thingy.

Why is this important? For the first time anyone can transparently access wholesale direct mortgage interest rates and program quotes without having to talk to a licensed mortgage professional first. Yep, this is important to a lot of people.

I”ve been thinking about how to improve a mortgage shopping experience for consumers and am enthralled with both Jeff’s offering and the Zillow Mortgage Marketplace. Both platforms are trying to better display information to consumers about loan terms. Zillow approaches it from a “live market” while Jeff Corbett focuses his efforts on yield spread premium.

I think the answer lies in a combination of a suggestion Todd Carpenter made, about eliminating all yield spread premium disclosure, and the Bank of America No Fee Plus Mortgage. I demonstrated how the No Fee Plus Mortgage was no real bargain today, after I visited my bank.

There is an answer. Isolate one variable; rate. Make loan originators guarantee all third-party fees, as well as their fees, when quoting mortgage terms. ABN-AMRO (now Citigroup) tried this some 3-4 years ago when they offered the “Guaranteed One Fee Mortgage“. When you do a side-by-side comparison with rates and loan programs matched up, you’ll get a true cost of credit if the originator is required to manage the closing costs and disclose them as one fee.

Banks or brokers will only disclose two things to the consumer: rate and one fee. It would be stupendously simple to understand.

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Mike Mueller is leaving the Zillow Mortgage Marketplace. A poor consumer performance review drove him to do just that.

From the consumer review on Zillow Mortgage:

Rating: 1 / 5
Comment: I asked for conforming quote, got sent jumbo quote with huge fees. I even specifically noted the request in the ‘notes’ section due to the newly raised conforming loan limits. If a lender cannot start off paying attention to the customer’s needs there’s no reason to go further.
Reviewer: srg418

Is Mike a crybaby? Hardly. Mike Mueller’s one of the real pros out here and that’s what has me worried about Zillow’s mortgage offering. In their effort to be consumer-centric, they are forgetting that the the “truth” lies in a lender’s opinion of the borrower. If the truth (in this case) is the loan terms, then why are we letting consumers wreck lender’s reputations for delivering it?

Mike delivered the unpalatable news that the “new” jumbo conforming rates were different from the conforming rates. I did that about two months ago to a customer and was equally admonished for my “deceitful tricks”…until the customer started applying for loans. Fortunately, the customer was fair-minded enough to tell me that he funded his conforming-jumbo loan with another lender…at a higher rate than I quoted him. Nobody won- he paid more and I lost money because of his inability to deal with the reality of mortgage guidelines.

The problem lies with the one-way mirror used on Zillow Mortgage Marketplace. Like a perp in an interview room, mortgage professionals are criticized by consumers with predetermined bias. It is the bias of “needing to be correct” that stems from an inadequacy to deal with the truth. That sort of bias convicted Ruben Carter and I’m afraid that it hung Mike Mueller as well. Now, Mike won his case on appeal and fortunately it didn’t take 22 years for the truth to come out. From David G, in the comments thread:

I’ve deleted the review. Borrowers on Zillow can only rate lenders that they’ve worked with but I must also say that I thought your response to the review was excellent. We make it clear to borrowers that we don’t want them reviewing quotes. I hope that this doesn’t happen again but if it does, please click “flag content” below the review and we’ll remove it.

Justice prevailed. It is the one-sided rating system that causes these problems. Mortgage providers are not allowed to directly confront their “accusers”; they must “flag” the comments for inaccuracies and plead their case to Justices Gibbons and Meyers. While The Supreme Court of Zillow is fair-minded, the conviction stands in full view of the marketplace until the accused notices it and challenges. That will drive quality mortgage providers away.

Don Polletta, agreed with my original suggestion (in the comments thread) that the transparency be mutual:

Until Zillow gets the prospects to expose themselves more fully name, email, phone they are free to do what they want, ignorant or not. I still say that in order for the program to work it has to benefit all parties, and right now I don’t see the benefit to loan officers. These are not leads they are quote requests and in my opinion there is a big difference.

Full transparency is what will make Zillow Mortgage a marketplace. A consumer verification system, like an independent credit score and verified Zestimate, will require a financial commitment from the consumer. The anonymous function can still be protected by Zillow and the financial commitment displays intent. A marketplace is comprised of two willing individuals with an intent to buy or sell. Today, the intent is only displayed on the lender’s side.

If a marketplace isn’t the goal, then a consumer-facing social network should be. Successful social networks self-police. If social networking is the goal, then real-time rebuttals from mortgage professionals should be allowed. Mortgage providers should be able to rate or comment about specific consumers. This will make the community aware of bad apples and educate the community about changing loan guidelines.

Zillow is on the brink of something huge with the Zillow Mortgage Marketplace. Verified financial information can allow them to offer better demographic information to their advertisers. While the consumer verification process could reduce the number of page views, the more granular information allows advertisers to better target consumers.

The potential eyeballs Zillow Mortgage Marketplace can attract are astounding. Quality, however, should be the goal over quantity.

MEMO TO ZILLOW: Verified consumers will attract more quotes and eyeballs.

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I think that there may have been a time, in the blue-sky days of gray-skyed Seattle, when people with two-digit badge numbers at Zillow.com actually thought they might be able to disintermediate Realtors — much as Expedia.com had disintermediated travel agents. No one at Zillow will admit to this, but I suspect that a notion like this could have been in the original design parameters for the hypothetical software they were brainstorming in those days.

If this is true, then, to their credit, they came to their senses. Presumably, they realized, first, that the National Association of Realtors is a ferocious criminal mob that will do anything to destroy perceived competition, and, second, that, as simple as it might seem from the outside, real estate representation is too complicated to be automated cost-effectively, at least for now. Instead, Zillow.com made a conscious and thorough-going decision to partner with real estate agents and lenders, offering them exposure on its platform in exchange for building out its content.

You could argue that Trulia.com made a similar resolution, but it seems more likely to me that the San Francisco start-up is simply aping Zillow’s partnership with individual practitioners without really understanding it.

From a distance, the differences in the partnering relationships of the two companies could not be more stark. At Trulia, the most important kind of partner is the one who can deliver the most listings. The hierarchy runs from brokerage chain to brokerage to broker to agent to seller.

Zillow’s hierarchy is the other way around: The most important source of information about a home is that home’s owner. Next comes the agent, followed by the broker, the brokerage and the brokerage chain.

In both cases, higher parties on the hierarchy have the power to override — and thus usurp — the contributions of lower parties. What this means in practice is that sellers and their listing agents are regarded as being the least authoritative sources of information at Trulia — and therefore the last in line to receive practical benefits from the leads that might be generated by the on-line reiteration of the agent’s listing of the seller’s home. At Zillow, the opposite is true: The seller and then the listing agent are regarded as being the sources of the most authoritative information about the home and are therefore first in line to receive inquiries about the listing.

That by itself is significant, since — ignoring all other factors — it argues that sellers and listing agents should devote more of their time to improving their listings on Zillow, and less to toiling in Trulia’s fields.

But what is more, real estate listings on Zillow.com offer significantly greater opportunities for improvement than do those on Trulia.com. Moreover, the improvements that can be made on Zillow yield substantially richer opportunities for making contact with potential buyers than do those on Trulia.

I’m not beating up on Trulia. They have every right to do business however they choose. I believe that their refusal to link back to the canonical sources of their listings is symptomatic of an overall hoarding mentality, contrary to the spirit of the net.economy. But if they are wrong, the marketplace will mete out the appropriate punishment.

But the interesting thing to me is what we might expect as a consequence of Trulia’s having been wrong.

For example, it seems plausible to me that, over time, consumers are more likely to prefer real estate listings that are richer in information, as against those that are poorer in details. If this is true, by giving sellers and agents valuable incentives for improving its content, Zillow would seem to stand a much better chance of winning the battle for eyeballs in the long run.

This disparity of quality of information and quality of contact opportunities is replicated throughout both sites. Zillow provides more opportunities for practitioners and consumers to connect, Zillow provides a much richer — and infinitely more link-rich — profile page. And Zillow does not “muzzle the ox that treadeth out the corn” by refusing to link back to the sources of the information it displays.

Both sites want practitioners to flesh out their content with on-the-ground details, but Zillow not only provides many more opportunities for doing so, it pays substantially higher link benefits for having done this work.

And here I am not pimping Zillow. Both of these companies are venture-capital-funded start-ups. There is no guarantee either one will survive. The point is this: Which model is more likely to induce individual sellers and practitioners to provide added-value content? And which model is more likely to appeal to information-seeking consumers?

Technorati Tags: disintermediation, real estate, real estate marketing, technology, Zillow.com

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We talked quite a bit at Unchained about profiles on Social Media Marketing sites. Once you’ve made a commitment to a site, you’ll be adding a significant amount of content to that platform. When someone comes across something you’ve done, their natural impulse is to click through to your profile. If they do, what will they see?

Chances are, when you first signed up for that site, you blew right past the profile page, plugging in the minimum necessary information to get your registration done. You wanted to get to the content, after all, to find out if that site even met your needs. You discovered over time that it did, but you probably never thought to go back and complete your profile.

This is a mistake. Your profile is the space that web site provides for you to sell yourself. At a minimum, you can direct interested people back to your own weblog or web site. Some sites will provide multiple links. Some will let you flesh out a free-form “about me” section, so that you can say exactly what you want in your own words. Some will permit fairly elaborate HTML coding, with links back to specific landing pages on your web site: You can sell relocation to relos, rentals to investors, re-fi’s to the equity-enriched.

A couple of different times, I mentioned my Zillow.com profile. Zillow is pretty liberal in the kind of coding you can do — allowing links and photos in the “about me” section, for example.

Vance Shutes asked me to share my Zillow profile with him. I thought it might be better to take up the issue in the blog. I can talk about what I’m doing, you can talk about what you’re doing, and we all can learn better ways of building Social Media Marketing profiles.

So: Between the horizontal rules is the code we use on our Zillow.com profile, as well as on other sites:

Our Phoenix real estate practice is a boutique real estate brokerage working in Central, North Central and Suburban Phoenix. We would love to help you buy a home in Phoenix or to sell the Phoenix home you already own. If you’re relocating to Phoenix, we’ll show you some hi-tech tactics we’ve discovered to save you time and money. And if your goal is to invest in Phoenix-area rental homes, we’ve helped dozens of investors realize their financial goals.

We work a lot harder than the agents we compete against. As an example, take a look at everything we do to list historic, architecturally-distinctive and mid-century modern luxury homes for sale. No one does the kinds of things we do, and we’re just as detail-oriented — and exuberant! — when we work with buyers. Day by day, task by task, home by home, we want to get as close as we can to perfect performance as Realtors — a virtual virtuosity in real estate representation.

We write, too — could you have guessed? BloodhoundRealty.com is our main real estate weblog, but we also publish DistinctivePhoenix.com, which is devoted to historic and architecturally-distinctive homes in Central and North Central Phoenix. Our most famous weblog, though, is BloodhoundBlog, our nationally-focused real estate industry, marketing and technology blog — which puts us in the vanguard of hi-tech real estate brokerage.

But that’s all just credentials. We’re thoroughgoing Realtors, contemplative Realtors, innovative Realtors, very hard-working Realtors. We’re definitely hi-tech Realtors, and the internet, surely, is the second best tool a Realtor can deploy — and we use the internet better than any of our competitors. But the best tool — always — is integrity, and without integrity there is nothing.

We believe in clear, detailed, complete communication. Where other Realtors might hope to dazzle you with pretty pictures, we bend over backward to tell you the whole, unvarnished truth about real estate transactions — how they succeed and why they sometimes fail. It can be a comfort, at times, to ‘leave it to the experts.’ But real estate decisions can have very costly, life-long consequences. If you want to know every detail about your transaction, we want to share them with you.

Our passion is to do the best we can do, to find the best house at the best price, to find the best-qualified buyer for your home, to negotiate the best terms, to help our clients reach the best decisions, making the best possible investment. We’re not about doing deals, we’re about forging relationships. We want for you, as our client, to be so delighted by our efforts that you could not conceive of working with another Realtor.

Above all, we are about family — yours and ours. And while we might be a small business, there is nothing small — or small-time or small-minded — in the way we do business. We want to be your Realtor for life. We will do everything we can to make that happen.

Want to find out more?

Please do!

You can visit our main real estate web site at BloodhoundRealty.com or you can pick up the phone and dial 602-740-7531. (Outside of Arizona? Dial 1-800-508-5430.)

Either way, we’re proud Bloodhounds at your command — devoutly loyal, smart, frisky and eager to please…

Okay, so what’s going on here: This is a long-copy ad, in the sense that we’re taking the opportunity to sell our brokerage at some length to self-selected volunteers. Early in the copy, I’m trying to peel off people with a specific interest: Buyers, sellers, relos, investors. In each of those cases, I’m sending them to a specific landing page on our blogsite, rather than to the front page of the blog. If someone is specifically interested in relocating to Phoenix, I want for them to find that specific information.

We believe that our long-term future is in listing distinctive, historic and luxury homes, so I’m taking the opportunity to tell people everything we do that none of our competitors do to market high-end homes.

If I haven’t pushed you off to one of our weblogs yet, I’m going to take one more swing at the ball, in this case directing traffic to the front page of one of our three real estate blogs.

By now I think you’re a hard case, so, if I can keep you reading, I’m going to show you some stunning photographs while I talk in a general way about how we do business: Hi-tech, integrity, communication, relationships, family.

When I wrote this copy, Brian Brady really liked this section:

We’re definitely hi-tech Realtors, and the internet, surely, is the second best tool a Realtor can deploy — and we use the internet better than any of our competitors. But the best tool — always — is integrity, and without integrity there is nothing.

Further down, this is copy that I wrote and have reused since we first built a BloodhoundRealty.com web site in 2003:

And while we might be a small business, there is nothing small — or small-time or small-minded — in the way we do business.

I think that’s a lot more effective than a Fair Housing logo.

Finally we close with one more outbound link and a call to action. If someone has read that far, my hope is that they’re ready to act. If they are, I want to make taking action as easy a possible.

But: What say you? What are you doing differently? What should I be doing instead? The profiles are infinitely malleable, so what can we do to make ours — and yours — better? If we work on this, we can come up with some insanely great ideas.

Technorati Tags: blogging, real estate, real estate marketing, real estate training, technology, Zillow.com

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