All the talk for the past few days has focused on Zillow. Zillow this, Zillow that. Rightfully so, and Zillow seems to be courting the bloggers as well – something that larger corporations (MLS’) would be wise to do – (from an email I received from Zillow):
I’m guessing you might have already heard, but I thought I’d mail you anyway regarding the new version of Zillow that we shipped last night, which includes the ability for homeowners to update and add information about their home, such as a recent remodel or the existence of a waterfront view. From the search page , there are now dynamic heat maps as well. I think the new features are pretty cool- check this post on our blog for more info
Zillow is very, very cool. And useful; I just don’t see it replacing Realtors’ ability to interpret the intangible, unzillowable aspects of a home – I foresee it enhancing Realtors’ interpretation of said data. Opening up their data to the “Wikiality” mindset is a “good thing.” (read more about why here)
I am more concerned with intrigued by Google and their recent change to Google Base, prominently featuring housing on the front page.
Right now, Zillow has the buzz throughout the blogosphere, (and also the critical eye/target) but Google is sneaking up (never thought I would write that!) on the competition, and that competition is the change-as-fast-as-molasses-flows MLS and Realtor organizations.
What does Google do? Collect data.
Who has the the majority of the best data? Realtors and MLS’.
Just look at the simplicity of the above – RSS. Distance Search. Property type. Simple, yet powerful. I wish that I had taken a picture of how many listings were in Charlottesville when I uploaded my first Google Base listing.
If I recall correctly, Merv made the comparison some time ago between the Realtor organization and GM. I think that he may have been quite prescient.
Two questions:
When has Google failed?
What if – Google bought Zillow? Just a thought.
Mark it down – marketing will become less and less a component of a Realtor’s core competency. Representation will.
Note: Charlottesville/Albemarle et. al. are not yet well-mapped, but I expect they will be.
Technorati Tags: blogs, google, google base, zillow
I don’t think it would be wise for realtors to think of their business as interpreting the intangibles. Most of the “unzillowable” aspects of a property are available in pictures on the listing or a quick drive by the property, the others are particular to a very local area (do realtors really want to base their profession on knowing the party habits of potential neighbors). I don’t see why you would pay someone thousands of dollars to find out if a house has curb appeal or if it is on a dead end road when you can find out yourself for free. Not that I begrudge anyone their livelihood, I just won’t pay for something I can get for free. I have been involved in two real estate transactions. Both were without realtors; both were complicated and stressful, but in each case I dealt directly with people who could solve the problem – a title company and a lawyer. If I had a realtor, I’m not sure what they would have done. They couldn’t handle the complications of writing a contract for a unique ownership situation or the case law relevant to passage of title, because then they would be a lawyer. Maybe they could have relayed messages between me, title company, and lawyer, but the process was slow enough as it was.
Professions based on information monopolies are inherently unstable and the MLS monopoly is imploding. I think you’re right that if there is a future for realtors, it will be because they have developed some expertise that cannot be aquired for free or in a three week training course. The recent ads that suggest realtors are experts in “ethics” and “you” are utterly unconvincing. I like reading your blog and I wish you well, I am just glad that I don’t have to figure out what that field of expertise is.
Re: Google failure: It depends on how you define failure. Google Finance and GTalk are both getting killed by Microsoft & Yahoo offerings. However, if you define failure as a signifigant reduction in revenue, as opposed to not succeeding, then Google has never failed.
If marketing does become less and less a component of a Realtor’s core competency, how do you think that’ll change things? Fewer agents? Better agents? Less ad revenue for Google, Zillow et al?
Robbie –
I think that Google have products that are not as successful as others, but they continue to innovate and seek out and purchase innovative products like the “new” writely and then essentially give them away for free (based on their ad revenue model).
Regarding ad revenue for Google, Zillow, et al – I have not even thought of that yet, so I have no idea.
Regarding agents – I expect that there will be fewer Realtors and those who are left will truly represent their clients’ interests from start to finish. Many Realtor’ core competency has been in the recent “boom” years has been to plug a listing into the MLS – frequently inaccurately – and that was it. Those times have changed.
I’ve had some recent posts on my blog http://www.mlpodcast.com/blog that speak to this issue. It has to do with the skill set that is going to be required to do business as a real estate professional of the future. There was some talk at the Inman conference regarding new business models and the chance that the marketing component of the transaction is going to be separated from the flow. Whether that happens or not has yet to be seen. My observation is that consumers are honing their web 2.0 skills at a much faster rate than the majority of the real estate profession. It would seem to me that ignoring the need for new skills and business models is done at the peril of the real estate pro’s future.
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Arthur,
The issue is, I think, that when it comes to valuing anything you have choices. With real estate,you can choose a computer (zillow), an experienced broker, an appraiser, an attorney or your gut. We say that of all the choices, the computer is down on the list because it does not come down to see the property with you. Without seeing the property you don’t pick up the unzillowables, i.e those things which are not numbers (eg a view of the local dump). Your eyes (or those of a pro) will beat zillow and tell you it not worth the price to live next to a pig farm or beside a junk yard. That’s the point.
jf.sellsius,
I do get the point that there is an element that escapes quantification and so escapes statistical models like Zillow. My point was a simply that buyer interpretations of intangibles might be more important to them than realtors’ – contra “I just don’t see it replacing Realtors’ ability to interpret the intangible, unzillowable aspects of a home” – especially when such interpretations are so expensive. Jim’s a passionate, smart, hard-working guy. I am sure he and others like him will be among the last standing, but it still doesn’t look good for the occupation as a whole.
Arthur –
I don’t necessarily disagree with you regarding a Realtors’ interpretations differing from those of a purchasers’ (or sellers’).
Where I see some of the real value that a Realtor (I) bring to the table is experience and questions. I know better questions to ask of everybody who touches the transaction – home inspectors (“Is that quest pipe?” What is that?) Attorneys (“is the title work on order? Have you sent my client the HUD?”) and other general questions that will guide buyers and sellers into better decision-making paths.
There will always be those who are more comfortable and able to represent themselves – whether they are buying or selling a property. I don’t think that everybody has the desire to do so, nor do most people have the time nor inclination to travel that path.
If I were to go to court, I guess I could probably educate myself enough to represent myself, but my time and money would be better spent elsewhere whilst I hired the best representation I could afford. The opportunity cost is something that a lot of people account for when hiring a Realtor, whether they consciously think about it or not.
But yes, the industry will be (in my opinion) drastically different in the very near future, for a variety of reasons. Not least the rapidly-changing and influencing technologies.
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