Forget the schools, tell me about the freaks!

My belief that unconventional local datasets or user-surfaced arcana have great value in online real estate was strengthened over the weekend when one of my neighbors raised a stink about "noisy children" riding bikes in her cul-de-sac.

I never knew this person was so unreasonable, but it turns out she has a reputation for telling 4 year-old children and their parents to stay off her street. It's too bad RottenNeighbor did not exist when I was looking for homes a couple years ago.

RottenNeighbor, which allows people to ID, well, rotten neighbors, is one of several hyperlocal sites I covered in my presentation at Inman week before last. I also highlighted Everyblock, which presents data like building permits, liquor license applications and zoning proposals at a neighborhood level. And I talked about outside.in's new Radar feature, which "shows you everything going on nearby, wherever you are—from the stories on your street, to the events in your neighborhood, to the headlines in your city."

Yes, RottenNeighbor is crass. And liquor license applications may seem trivial. But in the context of a real estate decision these things are huge.

They are also things real estate has historically tried to hide.

When I attended the inspection and final walk-through on my first home, the listing agent conveniently arranged to have my neighbor-to-be put her two dogs -- which turned out to be pathological barkers -- indoors. I should have known about it. If the coffee house three blocks down from me applies for a liquor license, I want to know about that too.

This is the sort of nitty-gritty information on neighborhoods you won't find next to the mortgage calculator and map on a broker's IDX feed. And therein lies the opportunity.

While most of your competitors still struggle to deliver listings online in a user friendly manner, you could be engaging people with the stuff upon which buying decisions are really made. While the other companies in your market botch basic email listing alerts, you could be delivering new value to buyers and sparking neighborhood conversations.

Uncovering intelligence and aiding decisions - that's real estate at its best. But as we all know, that's easier said than done, especially at the brokerage level. But you can at least offer up some of this newly aggregated information. Right now, RottenNeighbor, outside.in and Everyblock do not have APIs, but I suspect that may change. Everyblock already displays home listings; outside.in recently partnered with the Washington Post to create "Buzz Maps" of D.C. neighborhoods. This stuff is coming.

Better yet, don't wait for someone else to aggregate the data.Take the person on your staff in charge of formatting that overpriced double-truck each week and have them pull crime blotters, building permit applications and local blog posts. Put the information in the hands of buyers -- and indeed anyone in your market.

Today, you never win by hiding information. Winning is being the best at setting it free.

-- Brian Boero

The San Francisco Experiment, Part 2

This is Part 2 in our recap of the brokerage think tank session that took place last week at Real Estate Connect. Read Part 1 here.

Following are the top three suggestions from our final two groups, which covered the brick and mortar brokerage of the future and the consumer experience this "ideal" brokerage would present.

Brick and Mortar

1. Boutique space. 900-1,200 sq. ft. with hoteling features for agents, decked out conference room, and a multi-use area for public access and events
2. Technology. An internal and secure broadband network for the agents as well as a public utility by way of free neighborhood Wifi anyone can access through a simple, broker branded homepage (What a great idea!)
3. Environmental. Apple Store meets Starbucks. Multi-media enabled.

Consumer

1. Agent scorecard. Like the back of a baseball card, agent profiles on the brokerage website would include stats detailing every single, double triple, HR and RBI by that agent along with any error (complaint to DRE), placing each agent into a very real, truthful and transparent context for the consumer
2. Digital paperwork. Move it all online from open to close
   
3. Flexible commission structure. Consumers would be given a choice of services and levels of expertise to choose from along with a buffet of charges for both

Summation

In just over thirty minutes, 50+ agents, bloggers, brokers, journalists, vendors, CEO's, attorneys and consultants sat around a room and and cooked up dozens of ideas for a new brokerage model.

As co-moderator, I was moved by this event beyond these findings. My takeaway had to do with the experience itself and the great things that can happen when:

√ Competitors collaborate
√ Strangers collaborate
√ Members of an industry are forced to think differently
√ A conference of Connect’s magnitude assembles diverse members of the industry and provides a facility for the partnering, thinking and creative expression.

A generous thank you to everyone who came to this session!

For more on this event go to CleanSlateBlog.

- Davison

The road to killer

This year, as in the  past, I'm moderating several sessions at Real  Estate Connect. If you've not yet registered, take the time to do so -- it's going to be a great show. One of my sessions is titled "Building a killer brokerage in a Web 2.0 world." I'm devoting this article to part of what that conversation will be about.

What is a 'Web 2.0 world'?

We've all read the O'Reilly manifesto. It's deep, comprehensive and defines how millions of people interact online. Most have no sense of what folksonomy, long tail, open source, and Ruby on Rails are or mean. Nevertheless, these things have changed the way they interact with each other forever.

Perhaps it is simple curiosity that propels most people into social engagement on the Web. Or the challenge of figuring out something new. Or maybe it's a desire to be part of a phenomenon.

Real estate people, on the other hand, are more practical. And at times stubborn. Maybe a bit too much for their own good.

But let's face it, some of what's popular about Web 2.0, while arguably cool, is a bit silly. I get Facebook. But then again, I've never written on someone's wall. What's the point in that? And the notion that I have more than 500 friends is a tad dishonest. And Twitter. Yes, I have an account. But the volume of utter nonsense that streams into it is deafening. And for most agents, Twitter's a game that has no measure of return on it.

So what is it about this quirky Web 2.0 that so many are drawn to? What, if any parts of it, can real estate use to build that "killer brokerage"? We're going to dig into this in my session next week, but for now let's get started on …

The road to killer

I've  isolated five elements of Web 2.0 that pertain to this endeavor. Nail these and  you're good to go.

Design: Think curb appeal. Picture that carefully manicured front lawn. And the unencumbered path that points guests to the front door. That's your home page.

Web 2.0 design is an aesthetic that instinctively creates purpose. It distills a sense of invitation to the site. Specific colors transmit activity. Connectivity. Empowerment. Those oranges, greens and blues throw off a ray of fun. Excitement. Youth. It's an appeal that invites and welcomes.

Real estate, however, still clings to a Reagan-era palette tied to logos developed before there was such a thing as research and marketing.

Web 2.0 design is something that can take your worn-out broker brand and pop it with freshness. If you think your marketplace will be confused by a logo and design redo … ask Lennox Scott if it affected his company when he did it 20 years ago. Better yet, I'll do it for  you. He's on the panel.

Navigation: You may understand terms like "MLS." And "exclusive properties." The user, however, does not. What does "exclusive" mean anyway? Does it mean I need to be special to view it?

Web 2.0 navigation  is simple. Like one entry point to search. Not 10.

Like "Contact Me" offering a dozen ways to make contact. Not one form where I get to tell you how to reach me but you still don't tell me how to reach you. A killer navigator guides people down a clean and simple path. A killer brokerage is one that does that online as well as offline.

Copy: This is also simple in the Web 2.0 world. Unencumbered by saccharine odes to the home and ham-handed hucksterism. It's not long and winding, whistling its own Dixie. And it never tries to take ownership of what it can't guarantee. You don't get to tell me you're my "Realtor for life." You don't own that right, just like Apple doesn't own the right to sell connectivity even though most of its products are built to create it. They cannot guarantee connectivity. But they own "Twice as Fast -- Half the Price."

Killer copy. It's short. To the point. And tells it like it is without sap. And it takes ownership of only those things you can own.

Content: Web 2.0 content is original. Meaningful. Opinionated. Fresh. And topical. If your copy is written by others, and cloned over and over on hundreds of sites … well that's simply not killer. I'm sorry but I don't believe that a "Home Buyer's Guide" should be the same for a site in Santa Barbara and for one in Stockton.

Killer is real content. Written by the people in your company. It taps the brains of your agents who know the community better than any technology ever can. And it leverages that knowledge. A killer brokerage deals with issues. And isn't afraid to publish content that is truthful. Like telling sellers they will never sell their home if they price it too high. That's killer.

Conversation: Lets face it: Few of us are mired in endless debate over the merits of Euripides and his progressive portrayal of the intelligent woman versus those of Aeschylus and Sophocles, his counterparts who together made up the trilogy of great tragedians of classical Athens.

Most conversation is simple. Sometimes even trivial. Regardless, people have a dire need to converse. A killer brokerage gets itself in the center of that conversation -- especially if it's about the community. Brokerages have scripted a tragedy of their own these past 10 years by distancing themselves from the conversation by virtue of Web 1.0. The consumer went somewhere else. But they are still conversing. Trulia Voices proves that. A killer brokerage should own the voices of its own community.

A killer brokerage in a Web 2.0 world

A killer brokerage is one that inspires oneness. Internally with its independent agents and externally with its customers. It's a culture.

Picture the Yankees. A team of independent free agents. But when they put on the pinstripes and step out onto the field they become one. Better than many other teams. That's what I mean by killer.

Building that killer brokerage in the Web 2.0 world also means it must be profitable. And it must borrow from the ethos of what lies at the heart of what real etate is  - service, community,  assistance and yes the godfather of all Web 1.0 practices some semblance of lead generation.

There is more to real estate Web 2.0 that some bright colors a cool design and an RSS feed. What that is, what it looks like and who is going to do it is what this session is about.

I will be moderating this panel of killer people that includes: Guy Wolcott of Sawbuck Realty; Henry Shao of Movoto Real Estate; Lennox Scott of John L. Scott Real Estate and Matt Fagioli of Diamond Dwellings.

Come join me. Take part in the conversation. Tell me who your favorite ancient Greek playwright was. And get on the road to killer.

- Davison

More thoughts on real estate branding

Brokers and agents are caught in a tug of war, each manning the rope of their own issues. They’ve become blind to all that really matters. Blind to the crowd on the sidelines - the consumers. The tighter each side pulls, the more rigid the rope. No slack. No give. No resolve. Every once in a while, one side gains a slight advantage. And so it goes.

Someday the rope will tear. Both sides will fall back and tumble. From the dust, a new real estate industry will emerge.

If you employ agents of varying degrees of expertise that charge the same commission, that market using individual brands, that voice a message different from that of your company while housed in locations that all look different, then you are part of a matrix not long for this earth.

While the real estate train is still largely a graffiti laden wreck of vanity, lead capture traps, photo-less properties and superfluous links to useless content, the number lighting up the path toward a new way is growing.

Real Living’s approach to branding a full service real estate company is one example (disclosure: Real Living is a 1000watt client). The brand they have created flows from the top down like lava to all their network partners. They have an unpolluted identity. Locations that are as consistent as Starbucks’ and an understanding of how to deliver a quality experience at every consumer touch point. Their brand is their most valued asset and respect for it is militantly enforced. When they enter a new market, the consumer notices. They see and feel something distinctive.

Redfin, whatever you may think of their business model, effectively targets specific demographics and earns their loyalty with a clearly differentiated value proposition and an experience tailored to their sensibilities. The customer attaches to the brand because it stands for – it means -- something. The number heading down the new path is growing.

Promises broken, promises kept

For all the money large real estate companies spend to promote themselves, consumers are hard pressed to find local service people who match that national message. These disconnects cannot be sustained much longer.

A recent Century 21 TV commercial tells us what humble servants their agents are. They race to airports to meet foreign clients. They learn salutations in other languages practiced precisely for that event. The purpose of that commercial is to make us believe that this agent can be found in every C21 cubicle in America. Is this promise kept more often than it is broken?

 

Today, real estate consumers don’t want to be “sold” anything. They want truth. Consistency. Uniformity. Transparency. Most companies aren’t delivering this.

I know agents are independent. I know franchises have a hard time controlling what their individual franchisees do. Enough already. McDonald’s has thousands of franchisees who tow the brand line down to the very last salt packet in your drive through bag.

I’m not suggesting there is no room for independent brokers and agents in the future. The basic principals of branding apply across board.

There’s room for all who focus on the crowd.

> Davison, Boero

Heidi Fleiss and the future of real estate

The escort business has brokers (madams) who oversee a stable of independent agents (escorts) who deal in very expensive and intimate transactions. All kinds of escort services coexist; luxury brands charging $10,000 a session to independent brands with rates that can be negotiated based on street market conditions. Like real estate, there is also a FSBO market of sorts where clients handle the transaction themselves without the assistance of a professional. 

Heidi Fleiss is an interesting case study for real estate. During a boom in her industry where competition was fierce, she decided to build a luxury model and charge the highest prices in the marketplace.

But the reverse occurred during the real estate boom. New entrants built discount models despite the fact that America was consumed by a luxury brand mentality.

Hour for hour, Heidi’s services were vastly more expensive than what consumers pay for real estate brokerage. Yet no one ever accused her of “stealing” from the consumer. In the midst of a profession rife with discounters, Heidi never worried about a deathblow from a street pimp.

So why is “traditional” real estate worried about Redfin, et al?

Seppuku

If a deathblow befalls the traditional real estate pricing model, it will undoubtedly come at its own hands, the culmination of a decades-long muddling of the public’s perception of what full service real estate really means.

Despite the hundreds of millions of dollars Realtors collectively spend in self-branding each year, can anyone tell one from the other? Confusion creates a global stereotype with a dense fog around commissions and value. It is here, inside this muck of Realtor independence, that the deathblow marinates.

Samurai were uniform. Systematic. They excelled on that account. Today business is adorned by Samurai beliefs. Starbucks. Quiznos. Starwood Hotels. UPS stores. Warrior models with a ladder of benefits that slay the millions of new decisions we’re faced with daily.

This ideology eludes real estate. Everyone is independent. Two million individual brands inside tens of thousands of broker brands inside dozens of corporate brands resulting in millions of individual credos and promises.

Aside from a few stellar exceptions, real estate companies have not aligned themselves to the consumer. We’re left struggling to make sense of it all. We hate doing that and that’s why we end up doing stupid things like buying homes without representation and paying unqualified agents to sell our most cherished asset. Consumers want leaders. And they’ve proven over and over that they’ll pay for it.   

The paths toward Princeton

Traditional pricing will eventually crumble in the absence of perceived value. Today, consumers can’t spend money fast enough buying high-end services & products. Enough bestsellers have made this clear. It’s the elusive value of real estate services that drives consumers away. The

The way I see things, no model puts another out of business. The only reason a model goes out is because it failed to make adjustments to meet the times.   

Even the strongest brands must continue to uplift public perception so value is clearly understood. Your current pricing model is safe as long as you continue to deliver a ladder of valuable benefits that differentiate you from cheaper models. If a madam can do it, you can.

A good place to start is here:

• Build a W2 model that works so you can mandate consistency and service propositions across the board.
• Embrace the ethos of Web 2.0, which is fundamentally about talking with rather than talking at friends, family, prospects and clients. There’s never been more opportunity to demonstrate value.
• Enhance customer service to Zappos-like heights.
• Forbid newly licensed agents from representing anyone on their own. Apprenticeships must be enforced.
• Mandate agents upgrade everything – tech tools, websites, education, etc. -- so they are perceived to be a better value than their competition.
• Mandate and control branding. Forbid agents to use any unapproved material across the board. More damage to consumer perception is done by this one action that anything else.   
• Rework all advertising so that your ads aren’t interchangeable with your competitors’.
• Insist all agents stop spending $10,000 to create useless tri-fold brochures that depict them “as human” -- playing tennis, hugging their dog and walking on the beach with their spouses. Not one consumer cares about that. Instead enforce investment into continued education.
• If you cannot enforce agents to comply, show them the door and send them and their bad habits to your competitors.
• Accept the fact that the consumer believes you charge too much money and respond by creating more value.

If you don’t want to suffer the deathblow you have to prove value. Wal-Mart will never put Neiman Marcus out business and Help-U-Sell will never put Coldwell Banker out of business … as long as the differences between them all are crystal clear.      

-- Davison and Boero

The "Big Bang" of Social Networks

Following Connect my social network sphere expanded like the universe after the big bang. The only difference is I don’t view anything out there as space debris.

Here’s the beauty of social networks:

I connect with 10 close friends.
Each one of those friends has 10 close friends (of which I am one).
By connecting with each of those 9 friends my network of 10 friends grows to 90 friends.
Each of them has 10 friends. And on it goes.
Do the math.
I did.

Cynics ask: 

How are you going to manage all those relationships?
How will you distinguish yourself in that maze of connectivity?
How can this possibly replace my old networks?
Who has the time to devote themselves to social networks?

Attention cynics: 

Managing all those relationships. Easy. It’s called technology. One sentence messages. Comments. Quick posts. I'm getting more done, relating to more people and making new friends faster and more efficiently than ever. 

Finding the time. Last time I looked you were complaining business is dead.

Replacing old networks. What old networks? The few hundred clients in your database you’ve been sending recipes too? Nothing will replace face-to-face, but old-school electronic marketing to a network or farm is receding like a rapidly melting glacier. If your prospects are under 62, chances are 20-40% of them are members of social networks. Chances are most of those people also have a cookbook.

Distinguishing yourself. I distinguish myself by actively engaging the network. By having friends post on my Facebook wall or leaving recommendations on LinkedIn. People need other people and social networks allow members to seek each other out for jobs as well as other socially critical needs. Ever check out Craig’s list?

A real estate fable

There’s a reason why Aesop’s fables resonate today. They delve deep into the human condition with gentle songs of pin-pointed truth. Consider the fable of the North Wind and the Sun:

The North Wind and the Sun argue over which is stronger. A competition ensues to see who can make a passing traveler uncloak. The North Wind goes first. The harder it blows at the traveler, the tighter the traveler wraps himself. The Sun goes next. Its golden rays part the looming clouds. Its warmth reaches down in a gentle embrace. The traveler removes his cloak. 

For me, this is now a real estate fable -- a parable that explains the Web 2.0 flowering that took place last week at Real Estate Connect.

The North Winds of real estate

Saturday - After returning from Connect I’m sifting through emails, noting those sent in from non-attendees. They are all the same: “So tell me what’s hot and new for real estate?”

I didn’t answer. It was too soon. I was still comatose. This morning I had it sorted out. Here goes:

The North Winds of real estate have been blowing for years. Huffing and puffing. A tornado of insufferable narcissism. A hurricane of questionable value carrying the detritus of brand blunders. A blistering gust of fees that run afoul of consumers’ perception of what is fair.

What’s hot in real estate is the end of that nonsense and the beginning of a new industry. Here are some of the things that will define it:

Web 2.0. Everything that real estate is going to become revolves around this phenomenon. Web 2.0 is real estate gathering everything it ever was, every ounce of respectability it once possessed, every service proposition, every conversation and every bit of knowledge and taking it online. It’s about flushing the forms, the dubious propositions, the bait and switching and the ridiculous vanity marketing down the drain and getting back to what real estate is really about - welcoming people who are interested in real estate to become part of a conversation.

The death of lead “capture”. This frigid, useless, pointless residue of a really bad idea based on placing a headlock around an unsuspecting customer, flipping them onto the mat of bad service and pinning them with a ridiculous barrage of dripping nonsense is over. Fizzled. Goodbye.

Real Estate Connect. Real estate’s Fountain of Youth. It needs to last a week and be attended by more people.

Listings distribution. Sellers want their home promoted everywhere. Agents and brokers, if they’re honest, want their listings promoted anywhere. Anything less is dramatically insane. That’s finally starting to sink in.

A new role for “Vendors”. Once upon a time, outside service providers groveled for business peddling donuts. The term vendor itself was an epithet in real estate. Those days are numbered. Real estate is now web based. Branding and differentiating require superior online marketing techniques and applications. I walked the corridors and met the innovators. Most are super bright with great products that can make a huge difference. Brokers, open your doors. This time, you buy the donuts.

The moment. Instant gratification. Instant knowledge. Instant access. Instant information. Quick ping. Blogging. Texting. Poking. Real estate companies are starting to get that catering to the individual needs of their customers – the moment they want something -- is where it’s at.

Talent. We’re not all born to be rock stars or brain surgeons -- or real estate practitioners. If you can’t blog, brand, market, list, text, multi-task, or partner, how will you compete against those who can? I suspect most brokers who attended Connect are going to have a hard time reconciling the crowd at their next sales meeting with what they saw in San Francisco.

The warmth of the sun

I asked the speakers sitting on the social media session I moderated what doesn’t work in the Web 2.0 world. Each, without hesitation, said “the hard sell.”

That’s the wind. It was quelled at Connect and replaced by the warm sun of progressive thinking. The soft embrace replaced the headlock, the conversation supplanted the pitch.

You should have been in San Francisco. If you weren’t, sit tight. The 2,000 who were are heading back to their corners of the world with their brand new rays of sunshine.

- Davison 

The logic of collective action in online real estate

Every once in a while my training in political theory helps me process things in my business life.

So it was that I came to understand the phenomenon I witnessed at Real Estate Connect last week.

It was the week Web 2.0 went mainstream in real estate. The bloggers, the Facebookers, the innovators and other members of the Twittering class crashed the gates of the real estate establishment and rocked their world.

It started Tuesday night with the Zillow Party. Those in attendance experienced a collective “Holy S____” moment … my god, where did these people come from?

It turned out to be a moveable feast, as the hugging and idea swapping moved a couple blocks to the Trulia party, where conference veterans stood pinned to the walls wondering at the raucous group that all seemed to know one another.

The party never ended, really. For three days, the new breed dominated the discussion. Bloggers gave lessons on viral marketing and branding to seasoned executives; founders from Web 2.0 startups explained to veteran real estate brokers that the web is really about a conversation; at night, entrepreneurs no one had heard of a year ago held forth at restaurant tables throughout The City.

Something big happened last week. The social, participatory, democratic web that surfaced between last year’s Connect and this one obliterated many of the barriers to collective action – the sine quo non of change – in our industry.

If you haven’t read Mancur Olson’s, The Logic of Collective Action, I highly recommend it. Its central thesis – that small groups can act upon common interests much faster than large ones – explains much of what’s going on in our industry right now. It also helps explain the success of real estate social platforms like Active Rain, which grew like a weed by not only grouping people with shared interests, but providing them all, as individuals, with clear benefits.

The genie is out of the bottle. The roiling, churning burning kinetic phantasmagoria that was Real Estate Connect last week is the new normal.

Let the good times roll.

-- Brian Boero

Persuasion vs. Force

Sit tight. We’re back from Connect with a huge story to tell.
Web 2.0 is here and it’s now exploding in real estate.

Those who aren’t all about it are in real estate for the wrong reason.
That will be become increasingly evident as time goes on.
Persuasion is going to replace force. 
The era of I, me, mine is over. 
Brian and I had a blast.
Our suite was meeting central.
We met with heads of many companies, offering our interpretation of the Web 2.0 phenomenon in real estate.

Buckle up folks. This is going to be one incredibly fun ride.

- Davison

Quick Real Estate Connect observations

Not much time to blog. Been holed up in the 1000watt suite. Much to share next week. Here are some quick-hit observations:

1. Great event, great vibe.The shadow of housing and mortgage market gloom hasn't encroached upon the Palace Hotel. As the person who ran the conference for Brad for years, I can say this may be the best Connect ever.
2. Full service, flat-fee, cut-rate -- I don't what you call it, I've had enough of the ritual beating of this dead horse. It's distracting. There's so much more that matters going on right now.
3. Brokers have reached the boiling point. The profitability problem has become an emergency, forcing them to re-examine their position vis-a-vis agents. Crazy splits, dead wood and brand abuse are becoming intolerable.
4. The thumbnail effect: I recognize two thirds of the crowd -- not because I've met them, but because I've seen them smiling at me on some social media platform.
5. No killer app: I've looked at dozens of new companies this week, but nothing has struck me as a category killer. Which is not necessarily a bad thing. The field is still wide open.

Much more to come ...

-- Brian Boero