I’m writing this brief post here, as the Facebook group I got this from isn’t exactly the widest-read one out there. But the issue posed is both interesting and important.
Basically, the question is whether or not the most important function of the MLS in the minds of brokers is to simplify the sending of listing information to portals. This is new to me, so I thought I’d post this to ask my brokerage audience.
This is one of those posts I write from time to time to figure out what I think about an issue. For now, that issue is trying to discern the possible direction of the residential real estate industry in the U.S. If you’re an agent and only care about something that will have a direct, immediate impact on your day to day business, I’d skip this post and go read this and this instead.
Basically, what I’m wondering is if the bull case for Zillow — that it will someday be worth $50 billion, as its largest investor has suggested — has any basis in logic. There are a whole lot of very smart Wall Street folks who think that Caledonia and others are simply out of their minds. A lot of brokers, agents, and industry folks would agree. If I had a nickel for every time I read or was told, “Zillow is worthless without our data”, I could retire now and buy that ranch I’ve been wanting ever since moving to Texas.
So for this post, I’m going to look at what has to happen in order for Zillow to be worth $50 billion at some point in the future. This doesn’t necessarily mean that I am bullish on Zillow. (And I own zero shares of Zillow or any of its competitors, unless one of my funds owns it without my knowing about it.) I’m doing this because trying to make the bullish case for Zillow results in some really interesting thoughts/observations about the industry as a whole.
James Dwiggins, CEO of Nexthome, has become one of my favorite commentators on the state of the industry. He’s extremely smart, has years and years of experience as a broker and now as a franchise operator, and is without question one of the tallest men in the real estate industry. (Maybe Walt Baczkowski, CEO of San Francisco Association, and Curt Beardsley of Zillow might give James a run for the height award… but that’s about it.)
Notice that James is sitting down, because if he were standing, his head would be out of the frame of the photograph. Anyhoo….
His most recent article for Inman is entitled “Zillow Group’s Game of Chicken” (Inman Select only) and lays out a few things. The most interesting of them is his recommendation for how Realtor.com, now under new management, could “get competitive with Zillow Group”:
Start a national Realtor advertising campaign called: “It’s your data, and, therefore, those are your leads.”
Showcase all listings on the site immediately — or, to put it another way, remove all competing agents from each listing. Make Zillow Group’s business model more contentious than it’s ever been. Send all buyer inquiries directly to the listing agent. Display the listing agent’s photo, contact information, social media links and brokerage information, and make it all extremely Realtor-friendly.
Advertise these benefits extensively to the Realtor membership. Sure, Realtors will need to pay for additional products and advertising opportunities to make up for lost revenue, but not when it comes to inquiries on their listings. The Realtor community would start to rally around realtor.com if everyone were receiving these benefits. (And Realtors would consider pulling their data from other sites that don’t follow suit.)
Provide the traffic data on every listing back to the agent, brokerage and franchisor. Give it to them in different formats and make it easy for the agents to provide this information to the seller in traffic reports. Use ListHub to your advantage — you already have the product.
Put a home value estimation tool on the site. Make it extremely Realtor-friendly — in other words, make sure the consumer truly understands that it is an automated tool and simply a starting point in determining a home’s value. Show a percentage range of expected accuracy by ZIP code.
Ask the consumer to create an account on realtor.com to receive an actual CMA (comparative market analysis) from a local Realtor to help balance the automated valuation. Realtors can pay for this service to receive exclusive seller leads. Realtors need to be the focal point of home valuations, so give the consumer an estimate and follow it up with a real CMA or multiple. By giving consumers an actual CMA, Realtors increase their value proposition, and they will love you for it.
Go read the whole thing if your’e an Inman subscriber. Become one if you’re not. (Go go gadget subscription model!)
I suppose it’s up to curmudgeons like me to point out the obvious. Well, it’s obvious to me at least.
I know some folks think I’m a Realogy homer. Well, given that’s where I got my start in the industry, maybe I’m a little bit guilty of that whole “cut me and I bleed blue” thing. But I think I’m actually calling things as I see them; I’ve been plenty critical of Realogy when they’ve done something deserving of criticism, and I’m complimentary when they’ve done something right.
The newest Realogy initiative that’s making waves is HomesForSale.com, a “national” portal for the NRT, Realogy’s company-owned brokerage operations. I mentioned it and some screenshots yesterday, when I was really talking about some issues that the MLS probably needs to address. Since then I’ve seen all sorts of discussion about HomesForSale, about NRT, etc. etc. both publicly and privately.
Almost all of the commentary thus far has been negative. The main thrust of such criticism is something like this:
If this is the best that Realogy can do to compete against Zillow and Trulia and Realtor.com, it’s farcical. There’s nothing innovative or new here, and the site isn’t even mobile responsive, and the color scheme sucks too!
Or something along those lines.
Thing is, I think this line of criticism is almost wholly unwarranted, because it is based on a misunderstanding of the strategy behind HomesForSale. I actually think HomesForSale is a nice move, one that could fail of course like any initiative, but it’s solidly grounded in strategy.