Online real estate's dirty little secret

You're looking for a steak for dinner, but you're not sure which cut you'd like. You want go to the butcher and see what looks good.

Trouble is, the New Yorks are in one shop, the ribeyes in another. Flank steaks are sold from the back of a van in the alley. And they're past their expiration date. Filets, inexplicably, are nowhere to be found.

Discouraged, you buy a chicken.

Pretty crummy shopping experience, huh? Unfortunately, this is how home search works far too often. It's online real estate's dirty little secret.

What passes for acceptable, even marvelous, in the world of home search is really quite poor. At the search session I moderated at Real Estate Connect, most participants seemed resigned to the fact that buyers use several sites when looking for a home, hopscotching between storefronts to find what they want.

I have harped on this before. But I keep coming back to it. It's too important.

Because many of the leading online real estate sites have opted to source listings directly from brokers, rather than becoming brokers themselves and displaying listings via IDX, there are many gaps in the inventory they display. Consumers are either unaware of this issue, and make life-changing decisions with incomplete information, or throw down their stone and start hopping.

New companies have attempted to solve this by either becoming  brokers (Estately, Sawbuck Realty) in order to get IDX feeds, or working on behalf of brokers to set up IDX sites (Roost, Terabitz) to set up IDX sites.

This is encouraging. But brokers, what gives? Seriously. I know: The big online sites have money. SEO juice. Engineers. But you've had IDX all along. Which means, in most markets, that you have all the listings, fresh from the MLS. You may also have a powerful local brand, feet on the street, and a desperate need to stop relying on costly print advertising to drive consumer engagement.

Why are sites with something less than what consumers really want - a clean and complete view of the homes for sale - kicking your butt?

In the past year, I hear more and more people saying "Listings are now a commodity." This makes no sense on its face, but even if it did, listings searches are certainly not. And brokers could win on this score in their markets. A clean, simple IDX search, marketed properly, could do wonders for a brokerage operation.

Making that happen is not as complicated as it was even a couple years ago. It would go something like this:

1. Destroy existing Y2K-era website
2. Partner with one of the new breed of IDX providers
3. Have a designer create a new custom website design
4, Merge the IDX solution and the new design
5. Add a roster of your agents, and a clear and immediate means of contacting them
6. Add basic information on your firm, with contacts for your office(s).
7. Include a call to action to "Search all the listings in [your market here] at [your URL here]" at every one of your brand touch points, from your office window to the jerseys worn by the local little league team you sponsor.

That's it. Resist the urge to clutter this with bromides. Be clear, repetitive, and true.

The big online sites have their place, but I am starting to think that place is not to provide serious -- and by that I mean actionable -- listings search.

That lies with the broker, like it always has.

-- Brian Boero

The San Francisco Experiment, Part I

(This is part one of a two-part series)

I spoke with Sherry Chris, CEO of Better Homes and Gardens Real Estate, two weeks prior to Real Estate Connect to think through a roundtable session we were tasked with running at the show. We agreed it should be something more than a few folks sitting around a table talking while others listened. That seemed too Web 1.0-sh. We wanted to create something interactive. All-inclusive. Web 2.0-ish. A chance to tap into everyone's collective genius.

With the help of co-moderators Chris Crocker (NRT), Rick Spencer (Windermere), Kevin Doell (BH&GRE) and my business partner Brian Boero we managed to pull this off.

We called it, "Building the killer brokerage from scratch: A think tank."

We split the audience into four groups. Each was asked to reinvent an element of the real estate brokerage. We urged them to think without the self-imposed rules that hamstring every broker. And to dispense with timeworn politics. Skies were the limit here.

The four categories/groups were:

Group 1: The physical office, moderated by Brian Boero

Group 2: The virtual brokerage, moderated by Rick Spencer

Group 3: The business model, moderated by Chris Crocker

Group 4: The consumer experience, moderated by me

Sherry -- who has spent the last nine months actually doing what we were contemplating -- oversaw the whole thing, adding her perspective to each of the group discussions.

The groups were given thirty minutes to brainstorm. They were then given ten minutes to reduce their output down to the three most important components/ideas. Easels, markers and paper were provided.

A representative from each group presented the results to all participants. Here's what they came up with:

The Virtual Brokerage

1. Killer Search. One that dispenses all the listing data. Brokers would serve as a funnel, sending listings to "the cloud" on behalf of agents. Consumers would use their search tool of choice to find listings and agents that meet their criteria. Brokers would provide teams of specialists to support agents (data entry, copy creation, formatting media, etc.).
2. Transparency. An objective preview of the agent's reputation would be offered on the company website along with a similar preview of their “recommended contacts" (mortgage brokers, title reps, inspectors, etc.) for equal reputation evaluation.
3. Choice. Agents would be free to craft their own business models (fee based, hourly, commission). Consumers would receive bids from agents, and choose what suits them. Agents would be free to form teams that provide a variety of models, and a variety of specialized services.

The Business Model

1. Hybrid broker compensation. Agent/broker split with small monthly fees for basic services that reduce broker risk (monthly E+O, tech fee).
2. Menu based service/support pricing. A minimum floor of basic services would be provided to any agent who affiliates with the brokerage. Agents could then opt into menu-based pricing on additional widgets and tools from within a single login agent Intranet. Any agent could choose any combination. All agents would be given the same expense structure -- one that is fully transparent.
3. Transparent cost structure. A production floor would be set for agents so the broker could make a 15% rate of return on expenses and draw the line on "breaking even on brokerage and making it up on affiliated services". The agent would receive a better split once this 15% ROI threshold was achieved. This open communication would create partnership not competition.

As you can see, there is some overlap here. But overall, the common theme is transparency. It's a word used often and arguably abused. However, the notion of openness permeates this new model from broker to agent to consumer.

All in attendance took a hard look at less-than-helpful practices -- dual agency, passing clients off to "preferred" vendor partners, irresponsible marketing tactics and others -- that have pounded broker trust into powder.

It was agreed that the best thing a new model can offer is open access to everything.

Choice was also a major issue. As an industry of independent contractors, agents with twenty years of experience and five hundred sides under their belt felt a set commission diminished their value to the consumer. Most everyone believed there is a better way to establish splits with brokers and compensation packages with consumers.

Some noted the difficulty of implementing these ideas. We cautioned them to let it go -- at least for this exercise.    

This ends part 1. Part 2 will review the recommendations of the other two groups, which cover the physical brokerage and the consumer experience. Click over to BH&GRE's CleanSlateBlog for an alternative take on this event.

- Davison

[Disclosure: Better Homes and Gardens Real Estate is a client of 1000Watt Consulting.]

Lessons from Real Estate Connect

Friday at 2:00 p.m. I opened the door to my home, gave my wife and daughter a hug, apologized, and went to bed until 9:00 a.m. the next morning.

In my suit.

It was that kind of week. Between moderating sessions, hosting meetings in our suite, dropping in at parties, enjoying late dinners and making sure my business partner stayed out of a Percocet-induced coma, I was fried.

But Connect was a blast. What a show! The Inman crew did a great job. And I came away with plenty to think about. Here are just a few observations while I'm still recharging:

• This was the most harmonious Connect ever. In the "old days," the tension between the real estate brokerage and online folks was palpable. Not so now. Brokers love the big online sites for their free distribution and the Internet companies are much humbler.
• While the tension between the tech and brokerage crowds was gone, the space between the two has increased since last year. Solutions are getting dramatically better. Technology is getting cheaper. But too many agents can't even get listing photos right, and too many brokers are getting their butts kicked in markets they could and should dominate with a little money and inventiveness.
• Along these same lines: Someone I respect a lot approached me on Friday to say simply, "The notion that this industry is adopting technology is a myth." Put that in your pipe and smoke it and see if it doesn't ring true after a while.
• Everyone (including myself) coos about their iPhone, proclaiming they have found the future in their pocket. It's a little much -- but basically true. I saw two killer iPhone home search apps at the show being prepped for release in the next few weeks. And remember, this is not just about the iPhone. There are now dozens of handsets that do web browsing well and will be the channel through which most consumers experience real estate in the not-too-distant future.
• Hyperlocal is the future of the category. I believed this going into the show, but am convinced of it now. So much data, so many conversations -- indeed, so many people -- come alive with relevance at the street level. I covered some of the apps and content that get us there in my "20 sites you don't know about -- but should" presentation in Thursday's general session, but there's a lot more coming here.
• IDX is sexy. It is the killer app that's been sitting under every practitioner's nose for ten years, waiting for good implementations and marketing.
• The Tosca is the best bar in San Francisco, and possibly the world. Get there before the hipsters, sip a Venetian Coffee hunkered down in a red vinyl booth, and you'll forget about your troubles fast.
• The relationship between "the real estate blogosphere" and the rest of the industry is interesting but not as meaningful as you might think.
• Generally speaking, time spent Twittering comes at a real cost measured in units of the more meaningful stuff you would otherwise be doing.
• Mapping is not the best way to display listings. It never was. 
• The market is bad, and won't get much better soon. But those with a little cash, a lot of commitment and serious smarts will come out the other side stronger. I met many of them at the show.

Much more later. I need to catch up, play My Little Pony with my daughter, and go to bed early for a few more nights. 

-- Brian Boero

Real Estate Connect NYC: Shades of gray

Last week's Real Estate Connect was fantastic. Brad and his Inman team delivered a first rate show for the 1,000 + attendees. But the mood of the event is hard to characterize.

The tone was reserved, if not quite somber. The enthusiasm for online innovation was still there, though it never approached the blog-drunk rapture of last summer's San Francisco event. There's also no clear "story" coming out of the show. And I guess that's ok -- if you're comfortable with shades of gray.

So here, then, are my own rather discursive observations on the event and the State of the Online Real Estate Category as of early January 2008:

• It's been nearly two years since Zillow launched; Trulia is on year three. And most still talked about them last week as if they were launched yesterday. It's a testament to their execution, but also the failure of anyone to make a truly big play in this space since 2005.

• "Listings are a commodity" is settling into a cozy place in our conventional wisdom. And with all the classifieds and real estate listings sites sucking up broker feeds these days, it makes a little bit of sense. But there is another (and, I would argue, better) way, amply displayed at the show by HGTV's FrontDoor (Disclosure: FrontDoor is a 1000watt client).

• Further along these lines, two deals announced at the show - Trulia co-branding its search for newspapers and the Zillow/Trulia/Yahoo! embrace of a listings standard - make it ever more clear that listings are fast approaching the sort of ubiquity that demands differentiation along lines of service and experience. It will be interesting to see who nails it.

• People in the industry are starting to get that "Web 2.0" means much more than blogging and mashups. You saw this in many of the sessions, where brokers and franchise execs talked with more nuance about the sensibility underneath the Web 2.0 phenomenon than they had at earlier conferences.

• A company selling both stealth websites and a neighborhood social platform for Realtors had a big booth in the exhibit hall, thus providing a physical monument to the struggle of those in the industry confused by change.

• The MLS category is hot! And, no, this is not just the jetlag talking. I'm here to tell you that there was more progressive talk among the EO's and service providers in this space during the three days at Inman than there was all last year. My belief that 2008 will be the year (some) MLSs flex their muscle continues to grow.

• Destination websites in our mobile, fragmented industry are a tough sell - with consumers and pros alike. The coolest things I saw were those apps that reside within broker sites or serve up useful information to consumers on the go.

My martini at the King Cole Bar in the Saint Regis Wednesday night cost more than dinner for two at Katz's Deli Tuesday night. God do I love New York!

That's it. For now.

-- Brian Boero

Nothing lasts forever

Sometimes, during the course of the here and now, we transcend forward in thought.
We take what is and ponder what could be.
We’re taught this is how to fashion our future.

Sometimes, the stress of the present or the fear of the future forces us to go a different direction.
To a place of comfort. Where it’s safe. Where we are reminded of who we are in the face of losing ourselves in the swirl of the moment.

The past. I found myself back in time last week at Connect.
I found it to be a worthwhile endeavor.
If only for only a brief moment.

It gave me the running room I needed to blast forward.

Nothing lasts forever

It's early Friday morning. Just past 1:00 am. The second long day of Connect 2008 under my belt. Earlier, dinner at the Noho Star was as it always is. It’s a place that never lets me down.

Down the street, east from the restaurant, sitting boarded up under a dimly lit streetlamp was CBGB's. While our group contemplated our next destination, I stood facing my past in silent memorial. I've seen more shows there than I can count during the 70's and performed on stage there more than I probably remember during the early 80's.

Like so many things that once define us then fade into the past, this one was particularly hard to reconcile. A club among a sea of clubs, it rose to great importance. It became a symbol for an entire generation. My 6-year old now wears his CBGB’s t-shirt as a fashion statement. Back then I wore one because it represented change. And gave birth to something new.

CB’s is now a memory. Gone. Like childhood. Like all good things from our past, we paste them inside our life’s scrapbook. Every so often, we take them out and stare at them wistfully.
No one noticed as I fought back a tear.
Nothing lasts forever.

Everything was once a nickel

Wasn’t it just yesterday that I was that little curly haired troublemaker walking these very same streets? Grandpa would take me on strolls holding one hand as I ate B&W cookies with the other. He’d tell stories about when he was young and growing up on the Lower East Side. Each street held a tale that yearned to be told, he would say.

He was a spokesman of the past.
About how things were.
Back when movies were a nickel.

Seems like everything was once a nickel.

Tonight, I conjured up grandpa. As we all walked, I became the spokesman for the past.
Filling the group in on what it was like when I was young.
Back when movies were $.50.

Seems like everything was once fifty cents.

The evening’s gentle rain served me well. It cloaked the few tears I shed reliving a time when everything seemed so perfect. When life was fun. Exciting. When it all made sense. And when it didn’t, there was someone there to put it back into perspective.

If only I could live in that forever.

Even ghosts enjoy a late night stroll

New Yorkers love to walk. We escape by getting sucked into the sea of anonymity. We recharge by stepping inside those invisible footprints we left years ago as children.

For a time, during tonight’s walk from Bond and Lafayette up past Washington Square Park, I walked inside my own footprints of the past. As we headed up 5th Ave, Grandpa joined me.

You see, even ghosts enjoy a late night stroll.

Grandpa gently cupped my hand in his. Whispered stories I had forgotten.
I chose to leave the B&W cookie out of the fantasy.
When you hit a certain age calories tend to seep in just thinking about them.

Up by Union Square our little group stopped at Starbucks for coffee. These days it’s referred to as a tall, drip. Add in some steamed milk and a flavor and you’re down $4.00.

I don’t remember coffee tasting this good.
I don’t remember when Union Square looked this good.
I don't remember when the present did either.

Winter Connect 2008

The Real Estate Connect conference this year will be remembered as a sobering event. I overheard many conversations about real estate’s recent past. About the good times. About the way things were before a decade of carelessness exploded, splattering its rancid heart over the strong and the vulnerable.

Attendees weren’t there to party like it was 1999 or lose themselves in the sorts of comfortable fictions in which the National Association of Realtors persists. It wasn’t about stoking controversy for the sake of entertainment. We’re all in this together now: Realtor, broker, technologist, social network architect, Vendor, MLS and consumer.

The parties were also low key. The discussions were grounded. Listening to Coldwell Banker's Charlie Young and Better Homes & Gardens CEO Sherry Chris speak on behalf of the consumer on stage was truly uplifting. It was real. It was honest. It marked a departure from a past that once was, but is, thankfully, fading.

As they spoke, I reflected on what was: buyer frenzy, lender frenzy, recruitment frenzy, launch-any-idea frenzy. Real estate’s past is boarded up now. Like CBGB’s, it's sitting under a dimly lit streetlamp waiting for a new tenant.

Onward

Everything changes: the economy, the market, our ways, our practices, our beliefs. Everything. It’s important to cherish that. To hold the past dear. To conjure it up fondly or with regret and reflect. If only for a brief moment. To fire up our forward thrusters.

As you can probably tell by now, I’m sentimental about a great many things. But I’m going to draw the line with real estate. There is little worth holding onto. There is much more to strive towards.

As I stepped out into the rainy NYC night with my $4 cup of coffee, I chose to let go of grandpa’s invisible hand. And of real estate’s past that is no longer. It was OK to hold onto both for a while but now it's time to move on. There’s a future waiting that I think is worth working towards. Granted, it includes $10 cups of coffee, but what can you do about that?

I left for home early Friday morning. California. It's where my wife and kids are. It's where 1000Watt is. It's where my present waits and my future beckons. Up until now, its streets never spoke to me.

I think I'm going to do something to change that now.

- Davison

25 things to web 2.0 your company

Following the keynote on opening day at Connect 2008, Brad Inman chatted with Sherry Chris, Charley Young, Don Lawby, Kevin Boer and I on the subject of how to web 2.0 your company. We were to discuss the 25 things you need to do to web 2.0 yourself but never quite got there. Still, it was a good conversation.