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How to Make REALTOR.com a Winning Business

car going over cliff sign I have somewhat given up on REALTOR.com and whether they will ever have a definitive, market leading direction. It seems to me that this site is the worst-leveraged repository of information in the information age's internet real estate site boom. Of course, as an NAR member this is not very encouraging. It seems a classic case of the aircraft carrier unable to maneuver in a war of nimble destroyers and gunboats. Of course, I've so long ago written this off that it's possible something monumental has come out recently and I'm not aware. It's interesting that Fred Miller's recent post of the letter from Mike Long (CEO of Move.com, NAR's partner in charge of R.com) is dated a year and a half ago and quite frankly, for a lot of text, doesn't really say anything, so I guess it should be no surprise that it hasn't turned into anything in the time since its drafting?

The competition certainly seems to have managed to grab the eyeballs of the internet-savvy real estate curious public. However, that doesn't mean those guys have yet found a way to make money off that, and I'm not sure how many of them will survive long-term, even those that have gotten the best recognition (on this site that certainly means Zillow and Redfin), but that's what this post is about.

Is REALTOR.com all washed up? I don't think so. For all the lack of direction that R.com has taken, it still gets millions of people a month and it still has the most vast inventory of homes available and of market data, the later of which is (to my knowledge) still not being used by the site. R dot com wash out

There are invariably going to be multiple sites out there with strong niches carved out for themselves, and no one site can ever be all things to all people. Is there a way to be both big and small? I think there is. Here is just the most simple start of the answer: incubate and sell.

1. Incubate. With $100 million or something like that certainly Move.com/R.com can use a few million here and there to start a few smaller, niche sites, sites that operate separately, but with the support (financial and otherwise) and most importantly, access to the data of R.com. If you can't beat ‘em, join ‘em, or in my opinion, even better - OWN them (or at least a big percentage share of them). That's not to say that R.com should become an internet incubator as a primary business line, but given the huge name they put behind a project it will immediately give it additional credibility to get outside venture capital, the single biggest hurdle these companies face before they find a way to actually make money off eyeballs.

2. Sell. Why are we as REALTORS all paying to have R.com service when it should be paying us for what we give it - all its inventory (homes for sale) and all its data (historic sales information). Why is the Zillow Z-Estimate based on flawed information when all the real data is already sitting in the regional MLS systems read to use (that means sell) and it's almost without flaw. Is this just too obvious or is there a gaping hole in the business plan that doesn't leverage that? There are ways to tie in even to Redfin and those like them (don't stone me for this!).

Why did it take Point2 to create the first national MLS, when REALTORS have had the MLS system in place for the longest time - it's an embarrassment if you ask me. I'm not sure, but I'd guess it's still not too late to partner with them to do one or both of the two themes above. At least that would be going with a proven winner that seems to have a plan, since I think they have well over 100,000 real estate agents now in the US and Canada, who get a lot more from Point2 for their money than they seem to get from R.com.

R dot dinosaur dot com R.com leadership is instead taking that site and information the way of the Detroit auto manufacturers and the steel industry leaders of a generation before them. What both of those industries have seen is that by the time they got (or get) their act together, the world long ago passed them by and they can never regain what they were, ever. The NAR is the largest trade organization in the country, but it's strategic technology partners seem to be taking it the way of the dinosaur rather early on in this "battle" for the internet solutions to residential real estate, while all its members sit here on AR and elsewhere night after night carving out their own niches all alone because their leaders have left them to the wolves.

PS - late add: I just read Lenn Harley's recent post on the now-banned use of the phrase "MLS" by REALTORS who are members of the MLS they are effectively promoting when they put an IDX link on their websites. This is from the NAR, not R.com but in this case it's effectively the same issue...guys you are going backwards, not forwards. :(

Posted by Gabriel Silverstein, SIOR on 12/08/2007 08:53 PM

Comments (15)

opinions, realtor stuff

15 Comments on How to Make REALTOR.com a Winning Business

DEC

2007

Gabriel - ten years ago as Local president of my association I asked my fellow Realtors and surrounding associations to band together to put our own information ourt there and have the people come to us. Everyone wanted to be a Realtor, there job was to sell houses not babysit websites, so they took the easy way out and gave the data away to the enemy. Now they cry cause Realtor.com abuses them,. I served on NAR's MLS committee for four years and it was nothing but frustration. I much prefer to work my Help-U-Sell franchise, have fun in the rain, and do what I know is best for me and my clients rather than save the rest of my industry (it's very freeing when you quit worrying about everyone Elise's success.)

I agree - they could be doing more to promote. When you have the market share an no close competition, there is not a lot of motivation to make it better.

Thoughts to chew on... with Coldwell Banker, we automatically have access to put our listings up through so many different large sites and into our print mags. I had not considered it from the perspective of agents or individuals who were working with smaller or newer companies. I do agree though that many of the hot new "little wannabe" companies (marketing any way they can) will be a flash in the pan, and will fold. All advertising runs in cycles, though. As growing pains turn into maturing stretches, it will be interesting to see how things go.

John, I know, it's frustrating, but it's not the local level that the leadership and vision needs to come from, it's at the top, at the national level. Focus groups are great to get local opinions and help shape that vision to best serve the members, but the rest has to come from someone that is paid a lot of money to do it right - and someone is already being paid a lot of money, they just don't seem to be doing it right

Adam, the competition is truly here, it's time they get it in gear.

Kae, this effects people in big national franchises as well as the small guy - R.com is all of our property as members of NAR (or should be).

Gabriel, I've just subscribed- these annoyances need further information. THANK YOU!

Great post.

There are so many flaw with realtor.com it is unbelivable.

I think that they have gotten "fat" and have slacked off and it will not be long before they start loosing market share unless they start acting quickly.

Gabriel, Very eye opening. Thank you for posting this info - especially point #2. Joe

Laurie, Don and Joe, thanks for stopping by. Perhaps, since the NAR has us contact our congressional representatives over issues they push in state and national legislatures, we should start lobbying our local and national NAR representatives and let them start to feel the heat from their membership to do something - before it's too late.

I agree that R.com is totally missing the boat.

Gabriel, this may be one of the best posts on real estate issues I have ever read! I LOVE your #2. I am CONSTANTLY amazed at how few of my clients from this year are surfing for homes for us to see on realtor.com. Serious, internet savvy peeps, yep, they are my clients and they are not using them! I sometimes even say, did you go to realtor.com and they say no I don't really like that site. I am intrigued with your idea about niche sites, but not sure where they would go with that. Kind of like LLC guys who 'redo' a home badly and then you say, do I want to ask them to fix it before we make an offer or is it better to ask for money cause who knows if they will do a good job.' meaning, no faith that they will.

I hate that I have to provide them info and then they want me to pay ---- you hit the nail on the head with that one. I'm flagging this for a star! You rock.

DEC

2007

Thanks, Carole. Maybe someone at NAR and/or Move.com will read your reaction, especially the part about your clients not using R.com, and take it to heart.

Gabriel. Thanks for the link.

Of course, we are talking to each other and preaching to the choir.

We in the trenches see competition from non-Realtor sites day after day gain a competitive edge for the eyes of the consumer and see our market share of that all important "first contact" just slip away. The sheer numbers and lack of Internet savvy does not work in our favor.

Then the NAR promulgates a rule that jerks the run right out from under our feet.

It's sad. Just plain sad.

Do they, the NAR, just assume that the public really believe that they are accessing the same listing source that we agents use. I don't believe the public even think about it. The public just want to look at homes for sale. The consumer doesn't not even think, am I accessing the same system that REALTORS use????? Or, am I accessing a system designed for the public??

The consumer not only doesn't think about it. They don't even care.

Unlike Carol, I don't use Realtor.com because I'm not a listing broker. However, I agree with her 100% because Realtor.com is generating profit for their shareholders on the backs of Realtors. So, NAR gets 15% of their "profits". Was that a reason to give Realtor.com an advertising advantage over real sentient, oxygen breathing REALTORS?????

I am a buyer's broker. So, this rule is particularly harmful to agents who use Internet advertising for buyers. It's the lead generating web sites that will use the term "Search MLS", generate buyer leads and then sell them back to us, the Realtors. The folks that drive 35,000 miles a year showing properties, writing contracts, managing the services for buyers and sellers that make our industry work.

I wonder if the NAR even thought about that fact of our hard working lives??

Lenn, I get the impression more and more that the NAR has become governmental, not private enterprise. I don't see any result from the (minimal) 15% of the profits they get on R.com showing up for you, me (a commercial guy who is also a buyer's agent not a listing agent) or anyone else, even listing agents. In my opinion they are completely out of touch with their constituents and unlike politics, it doesn't seem like there is any chance for the membership to effectively unelect the leadership every few years if they don't do their jobs well. Instead of feel-good conferences, maybe they should do something that puts them back in touch with the real estate agent on the street again.

DEC

2007

Gabriel,

I could not agree more with your insights.

It is time we as members voice our opposition to the direction our organization is heading and get involved.

If we as members do not voice our concerns and provide a uniform, beneficial environment for all members, we our performing a disservice to our customers, ourselves and the entire real estate industry.

NAR's vision is certainly not mine, and it appears it is not that of others as well. They must be told this and they must adjust their vision.

Personally, until I see NAR benefiting my business and not hindering my ability to compete with non-members, I will not follow their requests for action to law makers. IMO, it is another of their ploys to misdirect my focus on issues.

One has to consider and wonder, whose interests does the NAR really want to protect.

A petition is needed on our part as members to make changes. It appears the leaders of NAR are not interested in providing needed services, information and member oriented business benefits to it's paying members! This has to stop and it has to stop now!

Not being able to vote on directors and committe members is a significant indication of the type of organization NAR has become.

I am a paying member of many other organizations, all of which allow me to voice my opinion and vote on crucial issues that effect the direction and management of that organization.

There is currently a petition at freethemls dot com to modify the lastest absurdity of the organizations code of ethics. I urge all concerned members to get involved, voice your opposition and let's make a change for the better and the future of our businesses and OUR organization.

Jessie, great comments. I have put a hyperlink here to the freethemls.com site. I was unaware of that site and petition, thanks. It will be interesting to see if NAR listens, or if they instead try to kill this citing trademark and other issues on the use of their name and the MLS in the website name, etc.!

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