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Traditional Real Estate Brokerages vs. Online : Online is winning

The real estate brokerages website traffic represented in this chart that are not dropping off a cliff are all of the online, "non-traditional" variety.

Little tiny 100 person company Redfin is about to surpass Coldwell Banker? Zip Realty has almost as much traffic as the next three largest brokerages combined? What does this mean on the local level? What are the big brokerages doing to correct this?

They must recognize this is a serious problem and innaction is not an option.

(Note: Please don't talk about what you charge for commissions or what should be charged on ActiveRain. Price fixing is illegal, M'kay?)

Posted by Jonathan Washburn on 01/16/2009 05:13 PM

Comments (79)

Business Models in the Online Marketing Channel

Originally posted at: For when life moves you: Traditional Real Estate Brokerages vs. Online : Online is winning

79 Comments on Traditional Real Estate Brokerages vs. Online : Online is winning

JAN

We must be nimble and we must be quick.

The megas with the hugh overhead are drowning in rent payments. Also, they are not tapping the Internet for new business, training agents in traditional "bottom feeding".

OTOH, the "online" companies often don't offer good representation may have the new business inquiries, but they lose them to agents who provide good service.

A combination of the two, lean/mean brokerage structure, online business generation and good personal client services is a good way to go.

Works for me.

But, don't spread it around.

Hi Jonathan,

This is great to know, but not surprising.

I'm enjoying reading your stuff.

TD

Hi Jon! Well, what can I say other than I ditto Lenn's remark! I have been preaching to agents in my firm about the internet for a year and no one will listen. The way I look at it, I'd rather double my leads and my income by maintaining a solid internet presence and continuing to work my sphere. Many agents continue to rely on their sphere only or simply blind luck! That just doesn't compete anymore. Thanks for the graph--the proof is easy to see within!

Debe in Charlotte

Hi Jonathan~ I am not surprised that online brokerages are winning. They are a much cheaper option than "the bricks and mortor buildings" that in the long run, is a expense that is not really a necessity. Technology has just about reduced the need for a actual office being needed and the overhead eats up a lot of the profits.

Jonathan- Your graph indicates ZIP REALTY is winning the battle online. I've noticed they are running a serious Google AdWords campaign which I suspect is the reason. The real question is, are they winning the war, i.e. sales? In my niche market of Hopkinton, MA, ZIP REALTY was the #22 in market share for 2008 having sold 3 units out of 193 for a dollar volume share of 0.52%.

ZIP REALTY Market Share Hopkinton, MA 2008

Buyers use the ZIP REALTY website, no doubt. Still, when it comes time to make a purchase, consumers continue to seek out local expertise which ZIP REALTY has been unable to provide.

-Kathleen Buckley

Right you are Jonathon, just talking with someone today about how it wasn't too long ago all the local newspapers here were predicting the death of all the smaller shops, and how the big guys were taking over. Kind of reminds me about when the dinosaurs ran out of food. The little critters survived.

Hey Jonathan, Thanks for this piece of interesting graph, the result is not surprising, online is winning. Since our city the Big Apple does not have MLS (thank goodness), According to our company stats, we receive about 2 million and more online visits per month. The company Prudential Douglas Elliman is one of the largest firm here in New York city and the CEO and her marketing team are spending mucho dineros on the web/internet presence...! I am curious to know what the online statistics are like for us...

Interesting. I was going to write something in a similar vein, but in my market Redfin is not as prevalent. I know they are here, and will be here. I guess I feel that the agents and brokers here offer a variety of online services that we have not become has beens yet.

This is a very interesting graph for sure! I think Lenn has a point. The big companies have cut back on marketing to pay the rent!

Jonathan: I'm not sure if this means much. Although it's nice to think that people choose their realtor, mortgage person online, I don't think that's the case. I think it's important to have a strong online presence because this is where the search starts. But nothing can replace the face-to-face interaction needed on a big transaction. Most business is done by referral and I've often thought of Redfin ,etc. although fine companies, as the do-it-yourselfers Costco approach. Although the customer may save money, they get less in the way of service. To me this is paramount. if Redfin is being used as a tool (such as Zillow) as a part of a real estate professional's total business plan, then this is useful. So although I don't disagree with you about Windermere, etc. needing to have sticky websites, nothing will ever replace the personal relationship that needs to be built with the customer. I use my online presence to try and build my presence as an expert. But I also insist on meeting all my borrowers. The fit has to be right and this is something online has not solved yet. It's a little impersonal for my tastes. Take care.

I enjoyed this post. It was great to see what I had already suspected but did not have the facts for. Thank you

Good post, but it looks to me like no one is "dropping off a cliff" in the chart? It would be great if the chart also compared company sites to the megastars like google, yahoo, truilla, zillow, and realtor.com.

I interpret this as traditional brokerages being unable to maintain their stranglehold on the market because they don't understand how to transition online. The only large brokerage I've seen do this relatively well is PrudentialRand.com. In a brokerage race the online guys (and gals) are winning but what about individual agent sites? How are they doing on a local level compared to the big names?

Jonathan, I think it is just incredible that Redfin has that much traffic!! Glenn certainly knows what he's doing when it comes to marketing, websites and creating a buzz.

And ZIP Realty is also doing an awesome job.

Zip Realty has almost as much traffic as the next three largest brokerages combined?

Is all that traffic turning into transactions? My clients never mention Zip as serious competition.

So what does it mean, we all should stay at home and get on the internet. I like the ad that says 83% of people start searching for a home by using the internet and then their is the one that says 73% of all caskets are sold online. I wonder if they deliver. Come on people start everything online but they will or have to call an agent. I can tell by how many signs I have up as to how many sells I am going to have and they far out weigh how many sites, hits and e-mails I get. But hey that me.

Jon - Zip Realty's total revenue for the first nine months is about $82 million. Any thoughts on whether that's good or bad given the level of their web visits?

Not so sure they are "winning"...I think they've already won the online race. The very essesence of the online firms is their UI, they should be ahead. The only thing keeping the traditionals' websites competitive is their brand identity. It'd be interesting to know whether increased online activity equates to more transactions for the onlines? The onlines have other issues to contend with, like profitability, which could ultimately affect their ability to remain online.

On a local level, personally, people come to my website via Google not through the company's website. I suspect that may be true for the hundred's of thousands of traditional agents (which aren't reflected in the graph). Do I care how my broker's website traffic compares to another company? No, not really. The broker's website does very little for me in respects to generating business, and I would never rely on the broker's website.

There are three kinds of Lies!

Lies! Damned Lies.... and Statistics!

Sam

I guess all of those stats would matter if money was made based on the amount of web traffic generated. I personally love Zip Realty. Many of my best clients come to me already knowing the 4-5 houses they want to see from searching their web site. It makes my job easier. Zip Realty spends a fortune on pay per click advertising and pays their agents just enough money to be broke. Doesn't sound like the perfect business modeal even though they appear to be doing well by web traffic standards.

The internet is the information super highway. People want information. There is a big difference between getting someone to visit your website and getting them to buy a house, through you.

The only statistic that I would care about would be to see the number of leads vs. the number of leads converted to sales. If any of the online companies converted more leads to sales then me then I'll be worried.

Most RE/MAX agents are very independent and many have their own web sites that get a lot of traffic that isn't going to show up in your chart here. I really don't know if Zip agents are allowed to have their own sites or whether they have to rely on the corporate site.

If all the Zip agents only get their leads from the main site, then I don't think those comparisons are really that meaningful.

People also use online sites to shop for cars but they end up going to a local dealership when they are ready to buy.

Jon- Interesting to see, but doesn't mean anything in local market share. Nor does it mean anything to a consistent top producer. Personal sphere, repeat business, intelligent local personal marketing and great customer service will always trump the "Latest and Greatest" threat to our incomes. Redfin is non existent in market share here on Long Island. Look at all leads that turned into TRANSACTION, that's the ONLY REAL indicator. Give me two calls from my local pennysaver ad versus 5 internet leads, ANYDAY!

Is a very interesting stat and graph ! Will be interesting what will happen. The way I look at it is simply the best online and offline !

I'd agree that the web traffic is important, but I don't think that web traffic alone is everything nor does it necessarily give a complete picture. What I would glean from this is that brokerages need to understand that upgrading their web presence needs to be a priority.

The implications for not getting it right are likely to grow, not lessen in the future. However, there are many services which relate to the purchase and sale of real estate which are significantly enhanced by the full services provided by a traditional brokerage mode. I am online a lot, but I don't buy my groceries from the web...

It all about providing quality information and bringing prospects back to the website.

That's definitely a sign of the times. I think that no matter how many people look on the internet for properties most will be looking for someone to help them through the transaction. We just need to be there in front of them when they start looking on the internet for that someone. Thanks for the post.

Jonathan, what amazes me on your charts is what is going on with zipRealty?? That is an amazing trend. The heck with Redfin, still noise level, but for their size I suppose it is an accomplishment.

It's all about the Real Estate porn. I think Redfin's growth can be contributed to it's UI, it's off the hook! All the others just plain suck. I can say my MLS, MRIS has a beta that will give them a run for the money though. I like that, especially since I subscribe to their service. :-)

Wrong comparison. Show me the money/production.

Website traffic is an interesting metric but without a metric on sales and correlation of these sales to the web traffic it only remains an interesting metric.

JW,

The consumer may visit Zip`s site,but I assure you in Florida they do zip for business...

The graph isn`t relevant! It doesn`t give any indications of closed sales,which at the end of the day is what truly counts!

Zip Realty's total revenue for the first nine months is about $82 million. Any thoughts on whether that's good or bad given the level of their web visits?

John,

Great question! Here is the way I would go about figuring it out based on the ready data that I have.

By eyeballing the graphs below I would guess that ZipRealty saw an average of 4.75 million monthly visits, with 1.5 miilion monthly unique visitors. I would guess that 1.25 million of the 1.5 million unique visitors visited ZipRealty for the first time on any given month. I would also guess that they convert about 12% of all first time visitors to their site. (Through some easy tweaks I bet I could increase their conversion rate by 3%)

So based on the above assumptions I would estimate that they generate about 150k leads per month. Of those 150k they should have at least a 1% closing ratio, and based on the markets they are in and the clientele they service I would guess that the average sales price is around $350k. So maybe $525,000,000 in home sales per month, with maybe a 2.5% average commission, minus their 20% rebate, would equal about $10,500,000 in revenue per month.

Hopefully that's not all they make though! They've been in business for 10 years now and should have established a solid book of past satisfied customers, and their agents should be generating business from their sphere as well. If I was Zip's CEO I would not be happy unless at least 1/2 of our business was generated through a source other than the leads. So add in another $10,500,000 in monthly revenue for past clients and sphere of influence.

Coming back to your questions: No $82 million dollars in revenue would not make me happy. $180 million would though.

Jon...

I don't understand how web traffic translates to sales ... we had several start-ups here that failed miserably because in the end, web traffic has no correlation to closed sales.

Richard,

Web traffic is one component of potential sales. The second component would be how effective you are at converting that traffic in to 'leads' (although I hate that word.....maybe we can use prospects?). From there you then need to look at how successful you are at converting leads into sales. If any of the two subsquent pieces are missing then it's easy to see how a company could 'fail(ed) miserable'.

I have heard many good things about RE/MAX and their 'Lead Street' program that does an effective job in helping agents convert leads to sales. So a company like that might be better equipped to convert the traffic they get into sales. Even though I haven't seen the back end personally, I'm sure that Zip has similar systems in place. How well an agent executes on those systems will ultimately determine how successful the company is and RE/MAX probably invests more in training their agents to use the systems effectively than Zip. Small companies that can generate traffic generally don't have the resources to effectively train agents on the sales techiniques required to convert the leads and that's where they fail.......

Coming back to your questions: No $82 million dollars in revenue would not make me happy. $180 million would though.

Hi Jonathan,

Thanks for an interesting discussion! Either number is substantial, for the owners of Zip. However, I don't see the benefit to their agents. I'm curious about where they're doing all this business. They seem to be flying under the radar. I guess I need to dig deeper.

Reading all the post is quite revealing! The majority of seasoned agents don't believe Zip Realty web traffic converts to an increasing market share.

My two cents: that's what Microsoft said about Google ten years ago "Will it convert to market share and revenue?". The big brands are just resting on their name in my opinion.

Zip Realty may not be the one to crack the code but, some innovative entrepreneurial web based outfit will.

I have seen much the same thing as Kathleen (i.e. buyers love to use their site, but they are not selling that much here, the best that I can tell). I even had an agent candidate that I interviewed this week who told me that he loved to use their site, but had no intention of working for them.

The important data is sales not website traffic. On a personal (agent) level, I've seen sites that were great (#1 in fact in several keywords) at driving people to their sites. However, they weren't so good at converting that traffic to actual closings, as they weren't anywhere near the top tier of agents in their area.

The online guys that I know of (and neither of the ones mentioned are even in my area), seem to go after quantity over quality. The limited service types have made a small (tiny) in-road in my area and they just want to collect their $499 flat fee and move on. Real service is still King.

Real Service is King and will always be king but, inch by inch webbased information can provide that Real Service. Will it make it all the way to the "close"? Only time will tell.

Interesting comparison!

Little more insight into Redfin... We're actually only at 75 full time folks (our lead agents and associate agents are all full time salaried folks), have done over 2500 transactions since launch, spend nothing on advertising, and take great pride in our customer service (Glenn recently blogged about how we measure customer satisfaction).

I started out with EXPERT realty...which is now defunct...and I believe they are now ZIP realty. They do have a fantastic training program, however, I wonder how many sales. EXPERT was a situation where you were paid x amount of dollars for the sale, x amount for the mortgage and x amount for the title...then it was tough to get paid...I never did get paid...what was owed. I question as are others how many sales they are doing.

Ahhh, and Glenn...his last name? I'll bet Cohen?

Excellent Post!!! I'm not sure how old you are Jon, but the attention you generated and the pages of market-share, visibility, outcomes, statistical accuracy, etc. conversation and debate here is a fantastic example of the undeniable influence technology has had on all sales. I've been a licensed agent for nearly two years and am putting together some forums to try to do similar. Please...keep everyone's attention! This inevitabely leads to networking beyond a traditional SOI, thereby encouraging agents to behave with more uniformity and less conflict arising from simple misunderstanding. Century 21 may not have the highest numbers on that graph...but it doesn't look like many of us will need a dramamine when we retire! Well done!

Jonathan.... I love it to a certain degree... what I love about this topic is that it proves that the internet is powerful and used more than what people think. Lenn and a few others make a great point. You can capture potential clients online and as Bob Stewart mentioned, you need to convert. Let me take this one more level...

@ Paul M. .... I am going to semi disagree with your statement, that nothing can replace a face to face interaction on a big transaction. How day traders do you meet face to face, when buying stocks? Let's take it a step further.. yes, real estate is probably the biggest investment in your life. People tend to be busy and can't always meet face to face. If you are better than good at what you do, and people trust you, you can sell from any where in the world. 90% of my closings in 2008 were done over the phone. 85% of my closings were done out of the state of New Jersey. If you put your mind to it... write quality, performing material.. educational pieces, and let people get to know you on a personal level and show passion... you can't get all of that face to face.

Overall... I love the internet... I love AR.. and I love my outside blog... that combination and now getting national attention from all over, can make you not only powerful, but able to capture a larger audience than ever before. Such companies as Redfin, Zip Reality, Zillow, etc, etc are proving this. What they lose is that personal touch and that quick, to the point information that is 99% true and reliable. Just my .02.

jeff belonger

I also have noticed the massive adword campaigns zip is doing - that can't be cheap either. Around here we hardly see or hear of them - we always ask buyers what sites they like to do their searches on and none have mentioned zip + I have only seen 2 yard signs in about 1 yr from them. I have a gut feeling that they may be drastically tapering off sometime in the future - nothing scientific - just gut. ~Rita

Johnathan... Very interesting graph here. Always good to see the real numbers !

Not familiar with "Zip Realty." Would be curious to see how Weichert Realtors stacks up against those coompetitors. The Weichert Lead Network program brings in major #'s.

Online is making a huge difference for me in bringing in business as well as my client base.

Matt,

So what you are saying is that Redfin at only 75 employees has about as much web traffic as Century 21 does? If I'm doing my math correctly, that's like 1000 times more web traffic per real estate agent than Century 21?

JAN

I've been in this business long enough to have asked hundreds of agents about their "web traffic." I have met very few (I can count them on one hand) who have actually consummated a transaction by converting an on-line lead. Period. I have no reason to believe that web traffic = paycheck. In these tough times, if one's web traffic = business then web traffic is producing fewer transactions per agent, not more.

Here's a graph that illustrates the actual productivity of brokerages from the Northwest MLS in the last two years. When we start to see Redfin & Zip Realty (and other similar businesses) rise to these levels of productivity, then we can conclude that Online Brokerages have arrived.

Let me add, I believe the whole nature of our industry is going to change, soon. I don't know how the large, traditional brokerages can survive. The business model is not sustainable. Agents will need to bring value to their clients in new and creative ways. This may involve web traffic but professionalism and competence are more important.

Note to James Lupori,

Since you're KW, you should attend Mega Agent Camp in Austin this year. Then you will meet top producing agents who convert many transactions by using on-line leads.

Jonathan, love this topic so thanks so much for posting this. I am convinced more than ever that the entire future of this industry is in how we integrate online presence into our marketing efforts. It seems to already have gotten to a point that agents with excellent web exposure are winning hands down versus the traditional agents and print ad marketing campaigns. Lead generation in the online world has become big business and there is no doubt it will continue. I make concerted efforts to be found everywhere online that I can possibly think of and continually ad to that list. I say embrace the Google machine and squeeze every bit of juice out of it that you can. Take care and happy blogging!

I'm pretty glad they aren't in my area but I'll know all about them when they get here thanks to AR.

My neighbor works for zip ...she said they are doing well but I'd love to see their books to back up truth in their actual revenues. Remax leadstreat to me is worthless...it never seems to work properly at least for me and people in my office have voiced their displeasure on how effective it really is.

Same with me. I enjoy reading your posts.

Don

Jon - Yes these on-line company are ahead with lead capture but I would be more interested in the conversion and customer service. Also as mentioned earlier many agents have their own sites which provide them their leads. Depending on the Traditional Brokerage site would leave them starving.

I dont' think we have Zip Realty here. If so, I have not heard of them. Maybe I am just out of the loop!

I would have to agree with some of the other comments here. It's not about visitors. It's about visitors converting into business. In our market Zip Realty has almost 0% market share.

Online is the today. Get used to it.

Very interesting. I agree with Kathleen that Zip must be spending a hefty amount for their online placements. They rank right on up there in most of the markets I've checked. Except mine. I've got that one cornered due to my AR blogging. LOL

So anyway, if they have to spend that much it certainly cuts into their bottom line and may not be as effective as thought. Although I have to admit that I get lots of calls from Zip agents to show my listings, so whatever they're doing to attract online buyers is working.

Jonathan,

My accounting background makes me always think profit margin, the bricks and mortar business model or Zip Realty - the way real estate is done today has changed for sure, but who is really raking in the coin?

I keep a small but nice office, but the most visitors I have daily is on my website!

Thanks for the interesting data.

Kent Davis

Hi Jonathan - I didn't mean to suggest that it's not possible to convert on-line leads (let's call them people) into sales. My fellow bloggers here at Neighborhoodsundressed.com have met clients on-line and completed transactions with them. This was due to the nature of blogging rather than volume website prospecting.

What's so interesting to me is how few agents I know are blogging. Most spend their days complaining that a) no-one is "turning themselves in" on their webistes or, b) their web generated leads end up being busy work with no business potential. In short, it all seems like so much high-volume farming with little result. When I suggest they blog, they don't want to put in the extra effort to actually demonstrate expertise/personality/etc. via a blog.

In today's marketplace we are seeing, first hand, how so many business models are breaking down because of the internet (the Newspaper business is a perfect example). Our industry is in the midst of such a paradigm shift. As I mentioned above, I can't see how classic brokerages can survive. I am a bit skeptical;however, that our business can or should be strictly on-line. I think it will ultimately be a hybridridized animal. We're not there yet.

To Bob, yes, that sounds right. Keep in mind that one of our challenges is converting all that online traffic. It's something I spoke about at Inman NYC this year on one of the Internet Marketing panels. But we've also found that because of how we structure our agent teams we're able to have our "lead agents" handle many more deals than agents at other brokerages.

To James, our internal calculations on NWMLS market share should put us on your chart.

For those interested in ZipRealty check out their 2007 annual report . They generate 16% of their leads from Google, 21% from HomeGain and 37% from people visiting their site directly. Their sales and marketing costs were $38 million for 2007.

I always think of that line in that song "It's the end of the world as we know it" when I think of real estate brokerages.

We listened to our agents and we changed with the times now offering a simple 100% comm. Older model brokerages are still the first choice for some people, but others are really doing well with the new models, ie 100% comm., online only models, and the like.

I can really see the change happening even quicker, it's about offering what's needed and constantly evolving. Today every commission check counts and the ones getting the higher hits are the ones with the slits more favorable to the agents.

Interesting stats though... thanks for the post!

Sadly, I do not know of any agent in my office, let alone my previous office, that actively utilizes what the internet has to offer. Some have blogs on Active Rain but there are either no posts at all or just listings posted.

Most of our buyer leads come in through email or website submissions (not the company website, but our own website).

Jonathan,

I work for a traditional "bricks and mortar" company. Tops in the market and great agents. They are finally getting the idea that they have to bring their website to the top of the search engines and they are working on doing so. Our regional MLS is doing the same thing with leads sent back to listing brokers. Eventually they will get to the top on the web and then they will have an unbeatable combination because they will have the online leads plus great experienced agents to handle them. I think it will be easier for a traditional company to make sales out of online leads (once they get to their sites to the right point) than it will be for online companies with lots of leads but no experienced agents on the ground.

I will have to come by to read all of the comments but I wanted to weigh in since I am a RE/MAX agent. While RE/MAX does get leads out to agents on a fair and consistent basis and has a great back-end, I think the decline may have occured when they started to require information from the visitors to better scrub the leads. I think asking for so much information so soon is a turn-off to those searching online. Plus, I believe more and more home searching is coming to our blogs...I have quite a few clients how use my IDX to search for homes.

Jon- I read most of the comments here, and all of the ones from you, Bob, and the Refin guy.....my gut is telling me someone is trying to sell someone something :) Does all this have anything to do with AR's lead generation tool? Just curious......

Hi Kathy,

In hindsight I can see how you could think that we were trying to telegraph something but that is not the case. My goal is to keep my blog as honest and straightforward as possible. I will not hesitate to post something that hurts my personal interest, if it is the truth and benefits the industry as a whole. If that is the case then I will take that as a cue that I need to change.

We are in no talks with Redfin or anything in that realm.

However, the big brokerages do need to get off their duff and get in the game. They are doing the 1 million + Realtors in our country a very big disservice by not being more aggressive with their online strategies.

Love, love, love this post! Excellent example of bringing a visual to what is happening in the industry. The more you can give a consumer online, the longer they'll stay and more likely there are to pick up the phone.

James Lupori wrote: "I have met very few (I can count them on one hand) who have actually consummated a transaction by converting an on-line lead. Period."

My agents and I have closed over 2,000 online leads since 1996 and I closed my first in 1995.

Hey Jonathan,

On your next graph, I suggest you include Lenn! :)

All this is traffic. I would like to see actual sales. That is what I care about. Zip Realty has had many complaints about their service in my local market. I want sales, and not just traffic. That is all zip and redfin have is online.

Hey, I'll have what Lenn is having!!!!

In all seriousness, this is a timely and important conversation. Lenn, I imagine your company has been successful with the on-line leads because you adopted the technology early and you've got longevity with the model. I have no doubt that on-line real esate is in every successful agent's future. But, as in any business endeavor, it takes a clear vision and skill to make a strategy work.

I find it interesting that you think RE/MAX needs to "get off its duff" when they use a multi-faceted approach to gaining mind share and market share. Online may be a major player, but so are other avenues of advertising for getting people to consider your firm. RE/MAX has over 50% market brand name recognition and is the largest single brokerage in the world. Taking one piece out of an overall strategy and then attempting to blast a firm for not being #1 in a category each time is like taking a specific sentence out of a whole interview and interpreting what it means without context.

It might be interesting that they have lots of online hits but that doesn't always translate to sales. And, believe me, many of us are more than working hard in a number of venues to make ourselves known to the public and to keep our client base up to speed on what we do, online and otherwise.

Jonathan,

The big shops are so big that to make meaningful changes will take a long time. In the meantime the boutique operations navigate nimbly toward the top and increased market share.

Debe,

I agree 100% that the internet is definitely the way to go these days! I've been preaching about it myself too ! Well if you snooze you lose!

Thanks

Tom Davis.

JAN

I came back - love the conversation going on - and agreed Lenn needs to be on the next chart LOL. I for one feel changes in the air. We'll see what happens to the large B&M brokerages. Adaptation - maybe? ~Rita

JAN

We have a mixed feeling about this. While online traffic is great, conversion is still key and the big brokerages are still winning that battle as a whole. But they are doing this more through their referral networks. If you check your local mls you will probably see that many of those top online companies are not actually doing as well as the traditonal modeled agencies. There's no doubt however, that an office is no longer a necessity and is currently causing many problems for the big guns because of the overhead of maintaining such an office. 2009 is not going to be the start of the 100% online model. While each year real estate inches closer, it has done so at a snails pace. This can be easily affirmed when taking a look at STATE statistics such as PA recently put out.

Try to remember what the point of the post was showcasing while at the same time looking at actual local data to affirm the reality of things in each market as it will vary. There's definetely going to be a larger conversion rate in markets such as California where word got out years ago.

It's definetely not a bad tme to be an independent real estate brokerage :)

FEB

It seems that the opportunity for "the agent" is to recognize the difference between site traffic and site satisfaction. I do my best to gauge the interest a visitor would have in visiting a real estate site in my small and specific market. I don't try to be a one size fits all, I try to be a my size fits you. It is still a numbers game, but I look at the visits and the statistics that accompany them as reviews and constantly do my best to tweak and tune. My results have been very good in a down market and my longterm strategy is to develop a service that works in a down market and to enjoy it in an up market.

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