Two new online real estate companies that snuck by me

Crazy busy this week. Not much time for blogging (or eating, or showering...).

But real quick: Here are a couple interesting online real estate sites that launched recently that I somehow missed despite a fair amount of media coverage outside our industry. 

Home-Account

Home-Account is self-described as "Your key to always having your best mortgage." The site allows users to determine whether or not they are getting the best deal on their mortgage by submitting detailed information on their current loan, tolerance for risk, and larger financial picture.

Home-Account is different from most other mortgage-related sites in two ways:

First, the resolve for the consumer is not a hailstorm of offers from mortgage originators (think LendingTree or Zillow Mortgage Marketplace). Instead, they are presented with various mortgage products along with the the level of savings they personally stand to realize. Home-Account also displays loans the user might be able to get if they take certain steps to improve their credit score (which is provided as part of the profile process). Users are also alerted when loan conditions move to a point where action (e.g., a refi) may be warranted -- something like an email listing alert for mortgages

Second, consumers will pay for this service. $9.95 per month to be exact. I like that.

What I don't like is the site's very confusing interface and dialed-to-11 design. It needs improvement.

Nonetheless, Home Account is a welcome addition to the sparsely populated online mortgage landscape. 

RentWiki

RentWiki was launched late last year by Jamie Gallo, who ran Realestate.com for Primedia before it sold the site to IAC.

RentWiki bills its offering as "Social rental search," which it achieves by pairing apartment listings with neighborhood profiles, user-submitted reviews and a nice Twitter integration that captures the ambient online noise about a given neighborhood.

Online rentals is a crowed space. And neighborhood sites haven't exactly been a home run. But RentWiki is nicely executed and offers plenty of cues for anyone looking to create an interesting search experience.

Back to work!

-- Brian Boero

Lots of big news yesterday

It's been an eventful 36 hours in the world of technology and real estate. In case you missed it:

Google launched Latitude, a service that lets users identify their location, and that of their friends, on a mobile phone. We've seen location-aware apps before (from Loopt, Brightkite, Yahoo! and others), but this is of a different order of magnitude. Work in this area has lots of implications for real estate, but just think about the advertising possibilities alone -- targeting may be taken to an entirely new level.

The New York Times released and API that unlocks all the paper's stories going back to 1981. It's hard not to see the parallels to MLS. Marshall Kirkpatrick, writing on Read/WriteWeb, nails it (just switch "newspapers" for "MLSs"):

"It's a transformation moment towards interconnectedness and away from isolation. A quality API could throw the doors wide open to a future where "newspapers" are important again."

Trulia set up an MLS Advisory Board. They've been knocking on MLS doors for a while, but now they're putting the pedal to the metal. It makes me think there is something to this MLS thing.

In a move that should have big brokers everywhere speed-dialing their IT directors, Box.net, the online file storage/management company, announced enhancements to their platform aimed at the enterprise. I ask again, "whither transaction management?"

A big day. Onward!

-- Brian Boero

Real estate lessons from the newspaper nosedive

I caught this on boingboing this morning:

It's kinda funny. But it also reminded me that newspapers, now on the precipice of oblivion, were actually pretty quick to jump on the Internet. This piece is but one example. Newspapers were logging into (albeit proprietary) networks years before the 1990's boom. Early newspaper website efforts like Mercury Center and, later, networks like RealCities, were online early in the game.

But newspapers are nonetheless in dire straights today. Sure, craigslist was a withering blow, but I think there's more to it than that.

I think newspapers, like the real estate brokerage business, tended to approach innovation in a "same thing, different place" manner - meaning structure of the business, and its culture, remained the same even amid significant moves to embrace new media.

So, today, a newspaper can have a great website, yet still have a newsroom full of journalists from journalism schools that prepared them for a world that no longer exists. It can build significant online readership, but fail to effectively monetize it for fear of cannibalizing what remains of its legacy business. 

This is starting to change, but it may be too late.

Think about this in terms of real estate. Is a great website going to save a brokerage unless its structure and culture changes? Can its (independent) workforce be expected to help drive change when they are almost congenitally wired not to?

I have more questions than answers at this point. But the newspaper case seems to suggest that if the real estate brokerage business is to survive, deeper, more structural change -- executed now -- is in order.

What do you think?

-- Brian Boero

The MLS moment

We're bullish on MLS. Or rather, the potential that lies within most MLS organizations. In fact, Marc and I think MLSs hold some of the most exciting possibilities in real estate and technology in 2009.

I know that may sound odd, and more than a little naive. For those of us with a close-in view of the MLS world, it seems at times hopelessly hamstrung by politics. Those just a little further removed see a fragmented, somewhat mysterious assortment of acronyms.

But let's step back for a minute. Way back. Out to Mars. Looked at from this perspective -- with political fault lines and puzzling borders blurred -- we see an industry in a pretty compelling position.

Here's why:

1. MLSs have the most valuable content assets in their entire category. And content, as we know, is King. No one touches them on quantity or quality.

2. MLSs have market share, adoption rates and, as a result, a distribution channel that is the envy of any other business entity on the face of the planet. Never mind why that is. It is.

3. The best and the brightest are lined up outside MLS doors. Everyone wants to do business with the MLS. There must be some value there, huh?

4. It appears as if users of the MLS really need it. It looks to pass the "if it disappeared tomorrow, would you really care?" test. That type of utility means the MLSs are not only relevant, but can solve problems for their customers.

These realities don't disappear when we come back to Earth; we just lose a clear view of them.

That was the crux of a presentation we gave to several hundred MLS executives at NAR a couple months ago: You can kick ass -- but you had better get moving. Click here for the slide deck, or view it below. You'll miss a lot of the details without the discussion, but it's a broad outline of our observations.

It starts with your brand. Yes, an MLS is a brand, and a brand is a unit of meaning. Ask yourself, "what does [my MLS here] mean? If you can't answer that in two seconds, you've identified a core problem.

We offer some ideas for moving forward with this broader perspective, but the important thing is in the stepping back. 

We absolutely believe:

1. Brokers have no better partner for surviving this market than their MLS

2. MLS organizations can take a leadership position in the online real estate category

3. Consumers -- and the Realtors that serve them -- can benefit immeasurably from products built by, or off of, the MLS (API, anyone?).

But that can only happen if MLS leaders step back and look at the bigger picture, forfeit near-term comfort for long-term value, and start messing with the playbook.

Last week at Inman, I moderated a woefully short session on the future or MLS that featured leaders that have done it. David Charron at MRIS [disclosure: 1000watt Consulting has performed work for MRIS] and Bud Fogel at Midwest Regional Data see the big picture and have done the hard work of sharing it with others.

It is my hope that more join them this year. I think they will be rewarded.

Here's the presentation:

MLS: A view from Mars

Publish at Scribd or explore others: Business Presentations & Slid branding real estate

Google's OpenSocial and the future of the MLS

Brian published this post back on November 6th, 2007. The observations he made then about the social implications and viability of the MLS resonate today -- Marc

I’ve been chewing on the idea of Google’s OpenSocial for the past few days. I’d like to draw some direct connections to real estate, but I’d be stretching. As big a deal as it is in the wider world, it seems but a tangent to the real estate sphere at the moment.

Social networks surely hold opportunity for real estate practitioners. ActiveRain has demonstrated that. But the consumer-facing prospects have yet to come into focus. While examples of blogging success abound, cases of leveraging mass-market social networks to grow a real estate practice are next to non-existent (if you’re aware of one, I’d love to hear about it). And while it is certain that some online real estate companies will develop applications using the OpenSocial APIs, I don’t see any game-changing moves on the horizon.

The real value of the OpenSocial announcement for real estate is thus instructive. An object lesson on what might be – for MLS organizations and the NAR in particular.

Here’s one way we might look at this:

Consider that the MLS is really a social network. Its value has always been much more than as a warehouse for listings. It’s the marketplace, the cooperative -- the network of people with similar interests doing business -- that gives it its juice. Hang a few features off the core interface, say, a facebook-like profile with professional preferences and other elements of the “social graph”, and the decidedly uncool MLS starts looking pretty hip – and much more valuable.

This would be a “socialized” MLS. But one that is still walled in, limited by its increasingly problematic geographic boundaries. But what if NAR ceased conjuring a fantastical “gateway” that will take years to build and created a series of APIs -- children of RETS, if you will – that enabled vendors and MLS organizations themselves to inject simple applications into Web-based MLS systems?

Rather than drawing yet another circle around the outside of the listings world, why not create new pathways into it and let a thousand flowers bloom, as they say?

In this scenario, MarketLinx, Paragon and Rappattoni and the like are the real estate equivalents of LinkedIn, Orkut and Friendster – the parties who adopt the API protocols. Like OpenSocial, these APIs would respect the business and community rules of participating partners. Data integrity and ownership would be protected and worlds of new value would be unlocked for MLS organizations and their members.

Michael Wurzer over at FBS Blog has examined these issues with far greater insight than I have here. And there are MLS organizations cooking up progressive initiatives. But from my position on the periphery, it looks like far more need to embrace and advocate for the ethos represented by OpenSocial if they are to remain competitive.

-- Brian Boero

On the brighter side: 2 things that suggest a path for online real estate innovation in '09

My post on online real estate innovation yesterday was pretty bleak.

That's still my sentiment, but here's a counterbalance:

I think the single biggest opportunity in online real estate in 2009 lies in improving our grasp on the real estate market at a hyper-local level.

Yes, we have Shiller's index. Yes, NAR cranks out its numbers. And companies like Altos and Terradatum have done a great job using listings on public search sites or MLS data to provide metrics like DOM and price medians.

But still, as the owner of a 3-bed, 3-bath home in the Redwood Heights neighborhood in Oakland, CA, I am pretty much in the dark about my local market. I get a lot of information, but the level of analysis is off. Or the UI is crappy. It's always something.

Two things that popped up yesterday point to ways we may be able to improve on that in 2009.

Realius [disclosure: 1000watt performed consulting work for the company in 2007] announced a partnership with ZipRealty to place its property price prediction application on the Zip site. The idea is simple: Users predict the price they think a listing will sell for. The predictions are collected and run through an algorithm. What comes out is an aggregate prediction based on the "wisdom of the crowd."

I have concerns about accuracy (among other things, including legal bugaboos) but Realius CEO Chuck Teller tells me that, looking back, the model performs very well, which suggests that the model may perform well looking forward.

Which is the point.

We'll see if the idea takes off. HomePredict also plays in this space and has been at it for a while.

Second, REI, the outdoor gear retailer, announced an iPhone application that provides snow reports at ski resorts across North America. In other words: Current conditions at numerous and variable hyper-local "markets." 

I'd love to see a mobile app that applies this to real estate market conditions. To do it right, the data need to be good, the level of analysis needs to be right, and the interface has to be super simple.

The REI app offers some good cues.

I'd love to hear your thoughts on this. I am off base? What am I missing? Where do you see opportunity heading in '09?

-- Brian Boero

Zillow Advice: Innovation deflation

Zillow Advice launched this morning. And I'm feeling apocalyptic.

Seriously: This release, while nicely executed, says a lot about the state of online real estate innovation.

In short, despite a few recent gems, their ain't much of it right now.

It's a straightforward, and long-awaited, parity move. One that was probably necessary. Trulia Voices has been growing uncontested for a while now.

But do we really need another online real estate "community" where hungry and over-eager real estate professionals lunge at consumer questions that so much as graze their area of expertise?

Do more page views and more registrations, however they may be sliced and diced, really help the fundamental challenges at the heart of Zillow's business model?

What new value is created here?

Sorry. Enough with the buzz kill. I'll crawl back under my bridge now.

-- Brian Boero

Roost gets $8 million: I have a few questions

I like Roost. The search experience is really good -- at least until the user is redirected to a brokerage site, which is, in most cases, pretty jarring. The company also provides a nice example of what can be done with IDX when serious UI talent is in the picture.

Congratulations are in order for Alex Chang and his team.

But I have some questions.

First, is now a good time for brokers to make CPC/CPA buys?

The latest research from CAR and NAR show buyers are taking a lot longer to browse for homes before contacting an agent. That's months of paying for clicks with a fairly low conversion rate. With syndication to the point of ubiquity nearly free, selling clicks that are no more qualified than referrals from listings aggregators -- even through an IDX site that is technically the broker's -- may be a tough sell.

Unless the volume is tremendous.

Which brings me to my second question:

Does Roost have the ability to drive the traffic needed to expand the network both horizontally and within markets to a point where they become a market-leading solution?

The company has talked a lot about the coverage benefits of their IDX-based solution versus broker feed-based sites, but said almost nothing about traffic. But I think it is safe to assume they lag far behind the category leaders.

HomeGain did well selling clicks. They grew to be a large, profitable company and had a successful liquidity event. But they had 5 million uniques each month. It is unclear to me how Roost gets here.

Last question: Will the limitations of IDX ultimately outweigh the benefits?

While the upside of an IDX search experience is clear (I've written many times about its benefits), the limitations from a business perspective are pretty daunting. Fields are limited. The content that can be displayed with it is too. There's a reason Trulia and Zillow went the broker feed route. Avoiding these impediments is one of them.

Practically speaking, this limits what Roost might do to address the traffic question. The widgets, content and link structure that have been key to Trulia's kick-ass search engine effort are largely off-limits to the company. 

Moreover, the tension between stickiness and referrals most online real estate sites face (meaning, the judgment as to how long a site keep can or should keep the visitor engaged before sending them off to the listing partner) is very taught. Unlike Zillow, for example, which offers basic listings display for free, and thus has wiggle room to monetize the user through ad impressions, Roost is getting paid for clicks. That means traffic-building content and fora don't make a lot of sense.

That's what comes to mind for me. I would love to be convinced that I am off base on all of this because, lord knows, we could use a few happy real estate stories.

-- Brian Boero

Cut print, but fill the value vacuum

If years of business turbulence and dubious ad performance weren't enough to move you to eliminate your print newspaper spend, yesterday's Tribune bankruptcy may be the signal you've been waiting for.

The Los Angeles Times killed its once-great real estate section three months ago. Now they're bankrupt. There are lots of sad things about this, but none of them have to do with brokers who have paid too much for too long for ads that are, as Google's Avinash Kaushik would say, "Faith-based initiatives."

Truth be told, most brokers know continuing to pour money into print makes no sense from a strict ROI perspective. These ads don't sell houses. There are two major barriers that come up time and again in our discussions with brokers struggling with the need to right-size and update their marketing budgets to reflect reality:

1. Sellers expect to see their home advertised in print

2. I need to be in papers to maintain my brand

These are legitimate concerns. Cutting print off at the knees probably will hurt you if you do not take action to fill the void of perceived value you create by doing so. This action cannot be taken in isolation.

Most brokers don't yet know how to fill the void and thus remain handcuffed to the old way they know makes no sense. They may cut a little here, shrink a little there. But the P&L still tells the same story.

It need not be so.

The embrace of listings syndication by brokerages was a step in the right direction. But it's just a start. A new marketing plan needs to be built upon the ruins of the old model. One that can be presented compellingly to consumers, the performance of which can be measured, and the value of which hangs not so much on money spent, but expertise and technology leveraged.

I refuse to accept that most sellers -- the median age of whom was 39 last year -- aren't open to a well-thought out electronic marketing strategy in lieu of the quarter-page ad in which their home shares center stage with an agent head shot.

As for the branding question? We've known for ten years that the first place consumers go in the real estate process is online. Plenty of room for branding there, even, despite what you might think, in the sterile world of CPC. 

So, the reasons why many brokers persist with print are valid -- but only for those unwilling to to take commensurate action to replace it.

It can be done. We're working with several companies right now to do it. They've stopped writing the big checks and sleep well for having done it.

-- Brian Boero

Hell breaks loose in the new listings war

I returned from my vacation last week to find my inbox and reader filled with talk about listing coverage, comprehensiveness and quality sparked by a somewhat ham-fisted PR gambit by Roost.

I had just written about this the week before. It's been a pet peeve of mine for a long time. The fact that many of the most celebrated and trafficked real estate sites offer consumers a woefully inadequate view of the market is problematic.

Offering 70% of the inventory is OK when you're selling, say, digital cameras; it is not OK when you're claiming, with full--throated cries of "transparency" and consumer love, to help people make the most important decision of their lives.

Real estate has always claimed a certain kind of exceptionalism. Homes are not airplane tickets. Realtors are not stock brokers. And not seeing the perfect home in the next neighborhood over carries more consequences than not getting that new pair of Crocs in the color you really wanted.

I know: IDX is not perfect. And offering a full picture of the market dictates following Redfin's lead by offering MLS listings, foreclosures (many of which are in the MLS as well), and FSBO's side-by-side. But online real estate can and should do better than the gossamer fiber of broker feeds holding together otherwise great sites like Trulia and Zillow.

At the risk of sounding like a pedantic buzz-kill, I must admit that I found it hard to get truly excited about Trulia's nicely executed iPhone app and smart commitment to mobile, when I know, sitting on my deck searching "all homes for sale" on my phone, that what I am actually getting is something different.

I am left feeling that this sort of innovation is akin to a restaurant that obsesses on the dishware -- the means of delivery -- but drops the ball on the food.

I am not picking on Trulia. I just wish they and others would circle back to and nail down some basic content requirements.

So I hope the debate continues. It's healthy - and necessary.

-- Brian Boero