Is RE.Net becoming RE.org?
In the past three years, weâ€™ve seen plenty of new entrants, lots of Venture Capital money and endless blog posts extolling the benefits of the new transparency that Web 2.0 brings to the real estate industry.
Recently, Realtor Magazine also jumped on the Real Estate 2.0 bandwagon.
Despite the hype, so far I have not seen any empirical evidence that it is working. This may be because the appearance of Web 2.0 technologies coincided horribly with the collapse of the general real estate market.
Or, maybe not.
Perhaps, it may be time to start calling â€śDot Bombâ€ť on Real Estate 2.0.
Hereâ€™s why Web 2.0 for Real Estate isnâ€™t working:
1. Real Estate 2.0 Has Only Shown Anecdotal Successes
To date, to the best of my knowledge, no Web 2.0 Real Estate company has shown a profit. In, addition, I am aware of just three blogger/professionals making money directly from their craft â€“ Jay Thompson, Diane Cohn and Brian Brady (all HomeGain guest bloggers).
For RE 2.0 to claim success we need to see people other than conference organizers, a handful of Realtor bloggers, consultants and blogging software providers making money. While RE 2.0 can claim a fair number of individual successes we are not seeing widespread success.
So is the Web 2.0 crowd just talking to itself? Pete Flynt, co founder of Trulia, asked a similar question (â€śam I just talking to myself?â€ť) while touting the effectiveness of Trulia Voices recently at Real Estate Connect in New York.
Mr. Flynt explained how a desperate seller met a real estate agent late one night on Trulia Voices (Jeopardy for Realtors) leading to a closed transaction. Check out Mr. Flynt at 15:50 of the video as he tells a compelling Trulia Voices success story.
The isolated individual successes of RE.net remind me of a kid who with just a stick and string catches a whopper of a fish and is ready to declare himself to the world primed to go toe to toe with the commercial fishermen and their large fleets and nets.
In contrast to the anecdotal successes of Web 2.0 for real estate, HomeGain agents, using HomeGain (Web 1.0) products have closed over 10,000 transactions in the past two years. Click here for an example of the success of HomeGain Agents on just one of our products.
2. The Consumer Experience is Too Good
Many RE 2.0 sites have great consumer experiences that donâ€™t seem to translate into much of anything other than lots of unique visitors, page views and blog mentions.
Web 2.0 real estate sites seem to be missing a critical point â€“ their websites donâ€™t really promote Realtors or their services. Rather, they promote cool features like heat maps, mash ups, blogs, loads of listings, aerial photos and user generated content all in an effort to drive page views so they can sell ads. For many Web 2.0 real estate websites, the Realtor is a side show where WeightWatchers and Netflix ads are displayed prominently.
Sure, Web 2.0 real estate websites have great free content, but so does the public library and neither turn a profit.
At HomeGain.com, we feature the real estate professional. Our BuyerLink program sends HomeGain.com visitors directly to real estate agentsâ€™ or brokersâ€™ web sites, AgentEvaluator promotes the benefits of finding a Realtor, and AgentView features real estate agents exclusively around our content with no extraneous ads, just a direct pathway (email, lead form, phone call) for HomeGain.com visitors to connect with them.
Critics of HomeGain say, â€śthe consumer experience is not that goodâ€ť. We have limited content by design. We are not trying to wow our visitors, but rather to get them to connect with our Realtor customers.
I am reminded of an Italian restaurant, Dominicks, that I used to frequent in the Bronx on Arthur Avenue. The first time I dined there I asked to see a menu. The waiter, in declining my request in pragmatic southern Italian fashion, asked â€śDid you come here to read or to eat?â€ť
Similarly, I have to ask â€śDo you go to a real estate site to be entertained or to find a Realtor to work with? If consumers want to visit an entertaining real estate site with a â€śgreat consumer experienceâ€ť or to â€śparticipate in the conversationâ€ť, HomeGain is not for them; there are plenty of Web 2.0 sites consumers can visit for entertainment or a participatory real estate experience.
We did not design our web site to encourage the excessive viewing of listings, the participation in forums, or the voyeuristic viewing of the valuations of neighborsâ€™ and celebritiesâ€™ homes. HomeGain takes the view that real estate is not entertainment, but serious business best conducted with the help of a professional Realtor.
Besides, what better overall experience, consumer or otherwise, is there than visiting a web site and finding a Realtor that helps you get your home sold for $600,000?
3. Social Media and User Generated Content Are Not Suitable For Real Estate
RE 2.0 is trying to apply Social Media concepts to a category that doesnâ€™t lend itself well to it.
User generated reviews of movies and restaurants provide a good counterpoint to the limited points of view of professional critics. Many people have seen dozens of movies and eaten at scores of restaurants and their opinions are generally unbiased and rooted in experience. If the reviews of movies or restaurant come from a trusted network of â€śfriendsâ€ť in your social network, you may give their reviews or recommendations higher credibility than those of professional critics.
Further, unless the reviewers are the owners of the restaurants or directors of the movies, they have no vested interest in convincing you to eat at a particular restaurant or to see a particular movie, other than as a friend who wishes to share a similar pleasurable experience.
In contrast, buying or selling a home is not a social event. It is a very personal transaction that most home buyers and sellers would prefer to keep private.
The same type of qualified social network that exists for reviews of movies and restaurants does not for real estate. The average person may have seen a fair number of movies and eaten at a great number of restaurants, but most people have not bought or sold many houses, so their opinion on the home selling and buying process is far less qualified than that of a professional Realtor who has participated in dozens of real estate transactions. While, what Charlie from Arkansas may think about a particular movie may be relevant, his views on buying and selling homes are probably less so.
The type of user generated content on RE 2.0 sites is also far from unbiased. For example, take Zillowâ€™s Make Me Move feature, that allows consumers to add information about their homes so they may generate an ad for their homes to convince other consumers to make an offer.
These Make Me Move entrees read like biased advertisements. They generally donâ€™t include any negative comments from the owners, whom after all, are trying to sell their homes. Consumers canâ€™t add any counterbalancing comments, because unless they have been in the home, theyâ€™ll be unaware of either the selling points or the pitfalls of the home. Thus, one of the highly touted benefits of user generated content, transparency, is missing in this RE 2.0 example.
Besides not being transparent, the success of the Make Me Move feature also appears to be anecdotal. Zillow lists three Make Me Move success stories on their web site. Their names are Laurie B, Ron G and Nick C.
A line from a Simon and Garfunkel song, â€śThe Boxerâ€ť comes to mind when thinking of the Web 2.0 Real Estate crowd when they only highlight but a few examples of success. â€śA man hears what he wants to hear and disregards the rest.â€ť
4. Real Estate 2.0 Smacks of Smugness
Early adopters always and deservedly get a bad rap. They tend to think of themselves as â€śchanging the face ofâ€ť â€śre-writing the bookâ€ť or â€śrevolutionizingâ€ť something or other. In the case of RE. 2.0, something far less earth shaking is actually happening.
RE 2.0 adherents are putting pins in maps and displaying neighborhoods and calling them â€śmash upsâ€ť; they are displaying videos of homes and naming them â€śvirtual toursâ€ť; they are writing their points of view and calling their cyber megaphones â€śblogsâ€ť; they are asking for comments on their blogs and web sites and calling it â€śuser generated contentâ€ť; they are getting people together and calling it â€śsocial networkingâ€ť and they are keeping a record of everything ever said in their social networks and calling it â€śsocial mediaâ€ť.
Revolutionary for real estate? I think not.
Real estate is still a very personal and manual process that no amount of blogging is ever going to change.
Questions that may seem relevant and hyper cool today like, â€śare you blogging?â€ť will soon become arcane and laughable. What would you think of someone who asked you today if you were into or â€śonâ€ť the Internet? or asked if you had your OWN website?
How about if they asked you if you were â€śonâ€ť Email? AOL? CompuServe? Or, if you were into Faxing? CB Radio? (whatâ€™s your handle?) the Telephone? Electricity?
Early adopters like to describe others as â€śnot getting itâ€ť. This helps cement their unique position as one of those among the few that do. We hear from the RE 2.0 crowd things like â€śThey donâ€™t get the netâ€ť or â€śthey donâ€™t understand the power of social media or Web 2.0 conceptsâ€ť.
The early adopters try to impress us with their erudition by spouting phrases like â€śin todayâ€™s Web 2.0 world there are a multitude of distinct, viable ecosystems being spawned.â€ť
While Web 2.0 is perhaps not yet ready for prime time, it does hold promise. We will be watching it closely and so should you.
To learn more you can try:
In a series of one day seminars, Dustin Luther and Jim Marks will cover social networking, blogging, Internet marketing strategies and web site conversions.
Los Angeles, March 6
San Diego, March 19
Orange County, March 31
Bloodhound UnChained Social Media Marketing Conference
The two day Unchained Conference will bring together real estate practitioners to help other real estate practitioners with practical advice for their online marketing efforts. The Unchained Conference is the brainchild of Home Gain blogger, Brian Brady and guided by Bloodhound Blog founder, Greg Swann.
Phoenix, AZ, May 19, 20
Or you can try the granddaddy of them all, what I call the Bloggerâ€™s Ball â€“ Inman Real Estate Connect
San Francisco, CA, July 23-25
Also check out Web 2.0 real estate consulting firms:
Principals â€“ Pat Kitano and Kevin Boer
1000 Watt Consulting
Principals â€“ Brian Boero and Marc Davison
Ok, time to back off the hammer. See you on the backslide and Iâ€™ll have my ears on.