Web 2.0 - This Time, It's for Real

By
Real Estate Broker/Owner with HomeTracker USA

RISMEDIA, May 25, 2007-Where Web. 1.0 basically mimicked the traditional business model online, Web 2.0 has not only the ability to gain information instantaneously, but also to interact with anyone, anywhere, at anytime via instant voice, video or messaging. Web 2.0 is all about sharing and collaboration, not just striving to inform but to get something done. How does that play out in real estate Web sites?

The first generation of the Internet is widely accepted to be 1995 - 2004. In 1995, there were 23,500 Web sites of which 4,000 (17%) were real estate related. Today, Netcraft estimates that there are 100+ million Web sites of which about 48 million are active. Some academics estimate that approximately 6% of all commercial Web sites are real estate related and, if that is accurate, then we may be approaching 3 million real estate Web sites. Google, meanwhile, lists real estate as its top search category offering over 325 million search results for the term "real estate."

Zillow has been the media darling this year, Redfin dominated the CBS 60 minutes show last week, while Sequoia Capital just gave Trulia another $10 million in funding yesterday. All three of these companies were identified as "Top 10 Trendsetters" companies to watch and were listed in the 2007 Swanepoel TRENDS Report that was published in January 2007.

Even NAR announced earlier this week a plan to raise $60 - $100 million in the next 3-5 years for the creation of a technology corporation.

So, real estate is big on the Internet, but what is the industry going to do about it this time around?

"Web 2.0 is a different kind of Internet as a result of ubiquitous broadband, cheap hardware and open-source software," says Stefan Swanepoel, author of the annual Swanepoel Trends Report. Published by RealSure and RISMedia, the Report discusses in detail the growth of real estate as an information-based service industry and how brokers and agents were previously the exclusive holders of "home for sale" information. But today this has changed, and with the advent of Web 2.0, the sharing of information and collaboration with others has become common place.

The Web 2.0 wave is stimulating ongoing innovation upon earlier creation and is constantly searching for the next ‘big thing' says Swanepoel. "Don't be caught off guard again and think that Internet companies will again fizzle and not impact your business," he says. "This time around the Internet is going to finish what it started a decade ago and the new breed of business models, many Internet based, will collectively re-engineer the home buying and home selling process," Swanepoel said.

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Rainer
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Steve D. deGuzman
HomeTracker USA - Lone Tree, CO
Where Home Lives
Anyone out there have any comments on the concept of delivering savings to clients from tehcnology benefits???
Jun 12, 2007 02:24 AM #1
Rainer
9,088
Steve D. deGuzman
HomeTracker USA - Lone Tree, CO
Where Home Lives

From The Wall Street Journal Online

The Federal Trade Commission accused two operators of multiple-listing services in the Detroit area of restraining competition by discriminating against a type of service often offered by discount real-estate brokers.

The agency's complaint will be subject to an eventual ruling by an administrative-law judge.

The FTC also announced that it has reached consent agreements with multiple-listing services operating in parts of Colorado, New Hampshire, New Jersey, Virginia, and Wisconsin, avoiding further legal action with them. Those companies have discontinued the practices being challenged by the agency, which in July reached a similar agreement with an MLS operator in Austin, Texas. The policies in question block certain listings of homes for sale from being displayed on Realtor.com and other Web sites often used by consumers to search for homes.

The FTC maintains that restrictions on such listings deprive consumers of the right to save money by using limited-service brokers. Some MLS operators have argued that they have the right to establish rules deemed to be in the interest of the brokers that set up and own the MLS.

The two Michigan MLS operators charged by the FTC are Realcomp II Ltd. and MIRealSource Inc. Karen Kage, chief executive officer of Realcomp, denied that the firm's policy is an illegal restraint on competition. "Our obligation is to protect the interests of our Realtor members," she said. MIRealSource CEO Virginia Bratt declined to comment pending a review of the complaint. The NAR said it doesn't agree with the FTC actions but is seeking to cooperate with the agency in an effort to resolve the issue.

Jun 12, 2007 02:35 AM #2
Rainer
9,088
Steve D. deGuzman
HomeTracker USA - Lone Tree, CO
Where Home Lives

I thought this Wall Street Journal article really shines the light on whats taking place. 

I think there is mass resistance by the big national brokers to offering any savings or rebates to any clients.  I have sat in many staff meetings and heard many agents out there calling the Online Broker models "a fad".  I also recall that being the adjective to describe another company- Amazon.com.

 What think? 

Jun 12, 2007 02:39 AM #3
Rainer
31,354
Jason Lopez
SmartRealty Solutions - San Diego, CA

I never understood how using the web equated to discounts.  Why did most of the online firms seem to take this route?  Afterall running a web based brokerage is an expensive proposition and building in such thin profit margins just makes no sense to me.  Couple that with the downturn in the market and now your volume based outlook falls by the wayside.  My thought is that because most of the online companies had no "brand name recognition" they really had nothing to offer other than discounted fees....which did not equate to enough of a competetive advantage.

Oct 08, 2007 03:46 AM #4
Anonymous
Steve deGuzman

It cost significantly less to operate an online brokerage if you understand the technologies available.  It wont work if you cant make money, we all know this. 

 Left to its own devices it is only a matter of time before businesses begin to pass on the costs savings to consumers to generate business.  For example, all things being equal, if you and I were competing for the same buyer and I offered to give them 50% of my commission back in exchange to doing business with me whcih one would you expect them to choose?  Mind you that they will follow some very basic procedures in order to receive this rebate but on a $500K home thats usually around $7500, correct?

Check this video out:

http://link.brightcove.com/services/player/bcpid1138430469

What do you think?

Oct 11, 2007 01:26 AM #5
Rainer
31,354
Jason Lopez
SmartRealty Solutions - San Diego, CA

I disagree with you Steve. I run an online brokerage and while we do have traditional office space, the online lead generation, marketing, and call center costs far outways the "space".  And again, even if it costs less, why discount?  If that is all you bring to the table then my experience has shown me I can earn that customers business almost 100% of the time.  And the small percentage I don't, it's probably more due to the fact that I don't want it.  And if the situation you describe above was the preference of most consumers than we would all discount, right?  It's about selling your service.  After 15 years in real estate I have learned you get what you pay for.  It has never been a problem for me or my agents to win over customers when competing against discounters.

The other issue is this model must be a volume based proposition, therefore it oftens leads to missing the big picture.  If you are always chasing that next deal, it's common to lose sight of what's really important, building a referral and repeat business base.  I talk about this all the time when recruiting agents.  Rarely do they mention commission structure as one of their top 3 issues when looking at a new office.  And yet when push comes to shove that is all they want to talk about.  The reality is you can walk into just about any office with a license and a pulse and get an 80% split.  But what good is that if you only sold 3 homes last year?  In year 3 of my online brokerage, 35% of my revenue will be a result of referrals I get from online leads we closed the previous 2 years.  And all with zero discounting.

Oct 14, 2007 06:17 AM #6
Rainer
68,078
Epcon Communities Epcon Columbia
Epcon Columbia, SC - Columbia, SC

If you look at what has happened in the other field of online brokerage -- stock brokerage, I think you will see the traditional model did not die.  However, Realtors are challenged to find new ways to augment current services with additional services in order to justify the fee being paid.  In the end, service providers who are truly experts in their field will always be valued, be it for 100 shares of GE or for a home on a golf course.  Staying ahead and providing value is the key.

Integration with the technology is all important.  History shows those that resist change are run over by it.  Those that adapt to change thrive!

Jan 19, 2008 02:38 PM #7
Rainer
9,088
Steve D. deGuzman
HomeTracker USA - Lone Tree, CO
Where Home Lives

Thats not an online Brokerage.  The realestate.com gig is hardly an online Broker.  These guys are cannabilizing your own leads.

Follow the consumer, we are slammed with business.  How about you?

May 20, 2008 11:51 PM #8
Rainer
9,088
Steve D. deGuzman
HomeTracker USA - Lone Tree, CO
Where Home Lives

The rehava Real Estate Store Announces Grand Opening in July

Although fully operational and open, the rehava ~ Real Estate Store has scheduled a Grand Opening date for July 10, 2008.

Charleston, SC (PRWEB) May 19, 2008 -- From its store front office in one of the busiest mall locations in the state, to its state-of-the-art technology, to the buyer's rebate it offers, the rehava ~ Real Estate Store (http://www.rehava.com/) is reinventing home buying and selling and aiming for complete customer satisfaction.

The company was founded last year by Broker-In-Charge Steve deGuzman (http://www.stevedeguzman.com/) and opened its doors in the spring of this year at 5060 International Boulevard. Although the Grand Opening is in July, business is well underway. 

"Essentially this is a retail residential real estate store," says deGuzman. "We have a high-end gallery in front of the Tanger Outlet Center, and we focus on the residential real estate market."

Following a Department of Justice lawsuit against the National Association of Realtors over competition and commissions, deGuzman says it is not legal to give a commission to anyone who is not a licensed agent, but since June of 2006, it has been legal in South Carolina to offer a rebate to the home buyer. On the west coast, companies have been rebating their clients for years. rehava has taken this idea to the next level with the only retail store front of its kind in the United States. 

One of the more innovative aspects is the buyers rebate. "You receive a check at closing for 50% of the buyer's agent's commission when you use one of our licensed Client Advocates to buy your next home," he says. "But if you buy AND sell your home with rehava, you can receive up to 70% of the total seller's fees back in rebates and commission reductions." 

deGuzman says the company further sets itself apart from the standard real estate agency by paying the Client Advocates a salary rather than commission. "It's a real focus on service to the client."

"All of our Client Advocates are licensed agents and realtors, but they're non-commissioned," he explains. "That's how we can best advocate our client's position. In fact, we don't go to the closing. In South Carolina, the attorney represents you at the closing. And in this case, the buyer is the one who receives the rehava rebate check."

The company has developed its own technology, with a real estate search tool and videos, which deGuzman says helps keep the costs down.

"We are search engine marketing experts," he says. "I am not aware of anyone who offers more distribution channels for selling your home than rehava. Our clients see their listings on search engines like Google, Yahoo, Facebook, Realtor.com, Craigslist, Trulia, Zillow and others. We furnish this data as an XML feed that automatically updates when the local MLS board updates its information. According to the NAR, more than 80% of the people who buy a home, initiate their search online. We make that process easier and we are rewarding the consumer financially for starting the search online."

During the grand opening period, rehava is offering to sell its first 100 buyer's homes for free.

"rehava is a foundational change in the way real estate is transacted. By giving the consumer some of their equity back, we are making a real impact on their personal financial position, sometimes as much as 2.5 percent of the sales price," said deGuzman.

The rehava ~ Real Estate Store intends to grow regionally before seeking national expansion. deGuzman says that future growth plans have become attractive as more Brokers and Agents are introduced to the concept. Saying he has been 'encouraged' by the overwhelming support from the local business community, deGuzman hopes to announce new locations soon.

About the rehava ~ Real Estate Store (http://www.rehava.com/)

The rehava ~ Real Estate Store offers an innovative 50% buyer's commission rebate to home buyers when they purchase their primary residence using one of our Client Advocates. Located in Charleston, SC (http://www.rehava.com/), the rehava ~ Real Estate Store is a full service residential real estate Broker.

For more information contact:

rehava ~ Real Estate Store

steve.deguzman @ realtor.com

843.864.3432

Fax: 866.745.5718

###

 

Contact Information
Steve deGuzman
http://www.rehava.com
843-864-3432
May 31, 2008 07:47 AM #9
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