The real estate profession is experiencing considerable change as a result of technological innovation and competition.
Quietly, large media companies and private equity groups are entering the picture and purchasing real estate related ventures that serve their interests. Their mission in life is to get between you and potential customers. Why? -- because they have found a way to monitize the home search process and convince consumers that they can help save them money.... at your expense. What most consumers don't realize is that these companies add no value in a real estate transaction and actually increase their overall costs.
Many are chasing ad revenue as more and more home shoppers go online. Major web portals such as Yahoo, Google and AOL all now have their own real estate divisions.... not to mention Zillow. They want to capture the consumer "upstream" in a real estate transaction so that they can sell ads to companies that seek to influence buyer/seller decisions early.
Banks, mortgage companies, title companies, software companies, etc. are all going after the real estate industry because there is money to be made. Technology is allowing some of them to earn large fees from the ability to sell leads back to you. Many times this is done using property information you placed in local real estate publication. You've seen commissions erode with the national average rate dropping from 6% to 4.9%.
It may not seem like it now, but our industry has reached a critical juncture. These companies will continue to capitalize on our information and make inroads into the real estate business until consumers are given better choices.
Consider these transactions of note:
- CitiVenture Group Purchase of parent of The Real Estate Book for $380MM
- Scripps aquires uswitch.com for $366MM in cash
- Classified Ventures purchase of Homegain.com for $105MM in 2005
- Apollo Groups proposed purchase of Realogy Realogy.com
- Ebay's purchase of a 25% interest in Craigslist.com
- Ebay's purchase of Rent.com
- ServiceMaster agrees to $4.7 Billion Buyout
- Dominion Enterprises purchases Advanced Access
- Dominion Enterprises purchases eNeighborhoods
- Lucero Summit bought out by First American Title
- ActiveRain takes investment from HouseValues.com
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