Real Estate Web 2.0 -- Epiphany

Reading Kevin Kelly's post again created a fire storm of epiphanies as I relate his generative points to RE web 2.0.

http://www.kk.org/thetechnium/archives/2008/01/better_than_fre.php

I will take his ideas and twist them a bit to meet my purposes. First, the ideas of "copy" - in a sense all RE sites are a copy of one another -- plenty of listings to look at. What makes one more valuable than the other is the "generatives". I see the free copy stage as the beginning, but just the bare beginning - bang bang bang, site site site - popping up here, there and over there. Now we are entering the generative stage and this is where it gets interesting, where winners joke and losers yell “DEAL!”.

Kelly listed eight generatives, with the first being "immediacy". This is a little vague, but to me it's related to constant innovation, getting ideas out to the consumer, and being the first to experiment with new ideas. One thing I liked about my website provider Point2Agent was its "immediacy" with press releases coming out on a regular basis of new ideas and functions and plans. Now it's lagging, and whoever achieves immediacy will outshine them. There’s a lot to be said for being there, being present, being vital and creative. Zillow is doing a great job with immediacy, and lately Homegain has shown a gift for immediacy. As for my own site, I need to "be there", be vital.

The next generative is "personalization" and this is something I've written about ad nauseum. To me, it's the Big Key to success with Web 2.0. Adding value by personalizing your offer opens the great door that few go through. Kelly writes:

"It is deeply generative because it is iterative and time consuming. You can't copy the personalization that a relationship represents. Marketers call that "stickiness" because it means both sides of the relationship are stuck (invested) in this generative asset, and will be reluctant to switch and start over."

Nothing is truer. Once the generative process of personailzation begins, a relationship is borne between provider and user. It’s time consuming, and this is what makes it valuable. It's one of the big weaknesses of RE sites and the great strength of the individual RE professional. As talked about recently, if these two forces are joined in a meaningful way, great things will happen, and the personalization process will separate winners from copy-cats.

"Interpretation" is what I've called analyzing information. It's one thing to provide information -- it's copied across the net freely -- but it's valuable to be able to interpret information. One of the problems I have with "micro-blogs" that primarily give links to information is that no interpretative value is added. This also fits into my idea of context as the second weakness, along with personalization, that I see holding RE sites back from reaching the monetization stage of growth which will be vital to their survival. Giving meaning to information so that it can be used profitably by the user is a value users truly understand.

I’ll have to stretch a bit with "authenticity". I’ll relate this to Zillow's recent announcement of Mortgage connections being screened up front. This is a great generative value that's been overlooked. NAR and other professional governing bodies are supposed to be the clearing house for authentication, but they haven’t gone far enough. It's time for real authentication that lets the user know "this is the real thing". I wrote recently about a possible scenario where pros have been vetted and have met strict criteria for authentication. Does the agent have the knowledge and experience to be a real "expert" or is the agent a poseur? Whoever becomes a TRUSTED clearing house will be of tremendous value to the user. Homegain also has Agent Evaluator, which is a step, although controversial, toward authenication.

"Accessibility" speaks for itself and those who organize information to be easily accessed the best wins. People want ease of use, accessibility. They want to click and find, no complications, no deep links, no codes, no treasure hunts, they want accessible information organized so that it's easy to navigate. The advantage the big players have is that they can afford talent to devise easy navigation, but small local sites can take advantage of the generative value as well. Make it easy and fast.

Graphics, maps, visualization, videos, and for local agents, face-to-face -- these are the "embodiment" that create value. Of course, local pros have the advantage of having a live body that meets the user, but RE sites can add value by coming alive through graphics, making their sites as alive as possibile over a computer screen. When users can imagine the site as a body, it adds values through a personal touch, a touch that fires up the imagination and builds trust. And, trust is Kelly's theme all throughout.

"Patronage" is a genius concept when we talk about monetization. If a site builds generative value, users will pay small fees to keep it going. A brilliant idea. The reality is that it takes money to exist and survive, and users know this. They will pay if the value is great enough, if for nothing else, out of appreciation for excellence. Further on, Kelly states that ad revenue will not be enough -- ads only come when value is present and users use. If enough value is created and enough users use, sites might be able to keep their "free" model, but the value will have to be extraordinary.

I'm going to relate "findability" to SEM. It's been talked about extensively, but no matter how valuable an offering is, if no one sees it, it's useless. All RE efforts will have to become expert at being found. The small local site will find it more and more difficult to be seen, this why partnerships with larger sites may be necessary. Partly in seriousness and partly as a joke I wrote an open letter to Google addressing this concern. Hopefully the larger sites will understand the generative value of true partnership arrangements with small local sites -- recent developments are promising.

I’ll close with this quote from Kelly:

“Beneath the frothy layer of advertising, these eight generatives will supply the value to ubiquitous free copies, and make them worth advertising for. These generatives apply to all digital copies, but also to any kind of copy where the marginal cost of that copy approaches zero. (See my essay on Technology Wants to Be Free.) Even material industries are finding that the costs of duplication near zero, so they too will behave like digital copies. Maps just crossed that threshold. Genetics is about to. Gadgets and small appliances (like cell phones) are sliding that way. Pharmaceuticals are already there, but they don't want anyone to know. It costs nothing to make a pill. We pay for Authenticity and Immediacy in drugs. Someday we'll pay for Personalization.”

One of the Best Blog Posts

I've read in a long time:

http://www.kk.org/thetechnium/archives/2008/01/better_than_fre.php

Zillow Nation? Zeelocation?

As I wrote about just a couple of weeks ago, Zillow and other online players have an opportunity to something incredibly different as the national/local problem begs to be resolved. With the new Zillow announcement regarding mortgage connections, the network gets closer to realization of true partnerships. I beleive, and I might be wrong, that Zillow is testing the waters -- mortgages are a safer micro-experiment. It's not that Zillow is creating tough criteria and selecting the best to recommend, but they are establishing criteria.

A couple of more steps and you might have something like this:

Zillow announces today it's new Zeelocation Program. What Zillow will be doing is inviting RE professionals from around the country to join a partnership in an attempt to strengthen its online efforts to provide consumers with cutting-edge home searching experiences, and begin solving the problems of localism, personalization and context.

What does this mean? Well, the main home search experience for consumers will be unchanged. Home shoppers and home sellers still have free acces to listings and all the useful functions Zillow has to offer. However, for those home-buyers who are more seriously and immediately looking for a home and who want reliable local information, Zillow will be creating what is called The Zeelocation Program. Consumers will pay a $15.00 monthly subscription fee for access to a list of RE professionals in the area of the consumer's interest. These professionals have been vetted by Zillow and meet strict requirements for inclusion in the program. RE brokers, Mortgage brokers, RE attorneys, inspectors from all areas of country, after meeting the criteria for acceptance, and after paying the yearly fee that Zillow charges for acceptance, will be local partners with Zillow and will be offered to consumers who have subscribed to the program.

RE professionals will be required to follow strict guidelines dealing with consumers in the Zeelocation program - for instance, all forms of spamming are a violation of the program's guideline and can cause the RE pro to be dropped from the program. Consumers who subscribe to the program will be given a list of local RE pros along with contact information and website adresses. Consumers can then search through these vetted professionals and from their websites and resumes pick the ones they think will be a good match.

Another part of the guidelines the RE pros have to follow is quick response, followup, quailty information and consistent performance. Any RE pros reported for failing to follow these guidelines will be given a warning by Zillow and the second time they will be dropped from the program if the consumer's complaints are valid. 

I know this brings up a thousand questions of how it would work, but I foresee something like this taking place, if not with Zillow, then with another RE company. Like, what would be the criteria for acceptance into the program? Will the criteria be strict or a facade to get as many professional in as possible. I foresee the successful implementation of something like this built on real, strict criteria. If it is real and gains consumer trust, it would be like a seal of approval for consumer protection. However the company implementing this would have to be mindful of litigation issues and it would have to be clearly stated that the company is not responsible and is only verifying the pros have met the criteria for acceptance.

Could this happen? Yes, it could. Is it likely? Probably not. But who knows?

One Way To Compete In The New Real Estate World

If you're an agent who wants the comfort and safety of a large franchise, then this is not for you -- the large franchises have their plan and if you've decided it's a good plan and you want to be a part of it, then more power to you.There's a lot to be said for big. If you're an agent who is considering independence then this is for you. There is also a lot to be said for small.

If you're an agent who wants to use local connections and online lead aggregators to gain listings and have no interest in online buyer agency marketing, incubating buyers, providing designer services for buyers, then this is not for you. Even if you are connected online through your own resources and networking and have only an interest in working with sellers, then, again, this is not for you.

Anybody left? Okay, here's how to compete and make a good living. Become an excellent boutique shop designed to work with those who crave and value good service. Some might say that an agent in a large franchise can create the same kind of service, and I won't argue; however, I'll be addressing the small, independent company that's flexible, responsive, nimble and service oriented.

The way I see it is that there's going to be a tremendous need for localism in buyer agency services as home buyers become educated through all the knowledge being shared on the internet. All across the country hundreds of thousands (millions?) of home buyers are gearing up to move. It's my prediction that in the next twenty years we're going to see a tremendous re-shuffling of the population in this country and we're going to witness a huge increase in foreign buyers purchasing real estate in the US.

Setting aside for a minute compensation issues, let me say that value will be placed on those who have the buyers in a representative system/network that's trusted. True buyer representation has been a hit and miss effort. There are certainly individuals across the country who provide valid, quality buyer representation, but for the most part there is confusion of roles among agents and consumers -- some of it having to do with compensation methods, but most of it having to do with lack of knowledge, lack of training and lack of trust that quality service will be provided.

Buyer agency organizations have been fighting for years to educate agents and the public on the true benefit and purpose of buyer representation, but the controversies, the public voice of perception of RE agents and all the internal squabbles have been louder than the buyer agency advocates.

Little by little, though, the message will hit home with the public, especially as the need for good, local information grows with increased movement around the nation spurred by baby boomers and increasingly diverse employment opportunities outside the huge metropolitan areas.

As the demand for quality local information and relocation services grows, so will grow the opportunities for agents trained in buyer representation. I believe the representation will have to be exclusive, or either the agent will have to convince the buyers there is no conflict of interest if the agent maintains a few listings. I think, though, exclusive representation is the better way. The first four and half years in real estate, I was an exclusive buyer agent, and I'm working my way back to that after 8 years of doing some listing, but mostly representing buyers -- by the end of the year, most likely I'll be exclusively representing buyers again and will refer all listings out.

But let me be clear about being an EBA: It requires a lot of work; it's not as simple as finding a cousin or a friend who's looking for a home and jumping in to get a piece of the commission. What I'm talking about is being connected online and offering boutique services to out-of-town buyers who you might have to incubate and care for months before they buy. Oh, yes, you might attract local buyers who want representation, but most of them know people, or have a friend or family memebr who's an agent and the business will be slim. In order to be successful through volume and value added service, you'll have to carve a relocation niche where you are attracting many, many online home shoppers who need good service and want representation.

Once you've placed yourself as a true EBA, you'll have to perform. Following up with online leads is time consuming and requires systems that are efficient. But getting a good contact magement sytem together will help you manage the process. The most important thing is convincing home buyers that you know what you're doing -- it requires that you know, not just one farming area, but the whole area. It requires you being an information specialist -- you must know how to expertly gather, process and analze information. Information transformed to knowledge is the key to success and it's what the out-of-town buyer wants and needs -- those who do this best will succeed.

So it's:

Integrity: no conflicts of interest

Knowledge: knowing all about the area and larger real estate market, being an expert

Performance: consistently providing quality service day in and day out

As for compensation, it appears there will be changes in the years to come. It doesn't matter as long as you are providing a valuable service -- the compensation changes will reward those who provide valuable service. I won't get into the controversy about being paid by the seller in a commission split, if you are an EBA who does a lot of transactions, even if you offer a lower take on your side of the commission to show good faith, you'll do better than the average listing agent. Compensation will be worked out, but the present compensation arrangement doesn't denigrate or de-value what a well-trained, knowledgable EBA offers. You'll have to face these controversies with honesty and without defensiveness and accept a better form of compensation if it arises.

The fact is that nothing happens and no one gets paid until a buyer buys, and if you have the buyers and are truly representing their best interests to find the best house at the best price with the best conditions, then you will have performed a valuable service, and your future success will be insured.

From St Paul to Savannah, Chocolate Lovers Unite

There are some topics that touch the soul in a way that brings people together. With all the turmoil in this tense and over-wrought world, one topic reaches across the divide to bring us all closer together -- chocolate.

Here is a group you can join if you'd like to be a part of the effort to establish harmony and understanding - http://www.squidoo.com/groups/chocolate

I would like to thank Teresa Boardman for awakening my spirit this Friday morning -- she is truly a force for good.

May we all go forth today a little more peaceful, a little more fulfilled.