Notorious R.O.B.

At REBlogWorld 2010, I moderated a panel discussion on whether the real estate blog was dead or not.  My friend Garron Selliken, a technologist and broker in Portland, wrote up a post that stemmed from a long discussion he and I had with several others in Las Vegas, in which he argues that the “real estate blog” as he defines it is indeed dead as the Monty Python parrot:

When it comes to generating leads from search, the past, present and future of real estate sites is SEO, not blogging, transparency, authenticity and finding your voice.  The way to get clients is to show up where the most concentrated group of most motivated buyers/sellers are hanging out and ask for the business. This is why SEO focused content kills blogging…it is targeted directly at the relevant phrases and lands on pages designed to satisfy needs AND convert into conversation.

Then the brilliant Gahlord Dewald, a SEO consultant and an all-around smart fella, chimed in with his own post on the topic.

Both of them are worth reading in full.

While agreeing with both Garron and Gahlord in terms of what works for lead generation, conversion, and actual revenue generation for a real estate professional… this whole line of thinking raises a couple of questions for me, so I thought I’d puzzle them out with you all here.

Basically, the question is whether a SEO-focused strategy is viable competitive strategy for a real estate agent or small brokerage.

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In part 1, I argued that we are living through a “post-middle” era as far as marketing is concerned, where consumers can be divided into either Thrift-minded, or Aspirational.  Then in part 2, I examined some ideas for how realtors might think about marketing homes for sale given that consumers are either driven by price or by lifestyle aspirations.

In this next part, I’d like to look at how service providers — the real estate agents, the mortgage brokers, the appraisers, etc. — might think about marketing themselves.

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In part 1, I started to talk about marketing in a consumer environment when the middle is disappearing.  My basic hyopthesis is that the American consumer today operates in one of two modes: Thrift and Aspiration.  Thrift mode means a focus on price above all; Aspiration means a focus on luxury, lifestyle, or something more than “mere product”.

To apply these thoughts to the marketing of real estate, I asked a few questions, of which the first one is the topic for this post:

If the Middle is disappearing, and the two dominant modes of consumers are Thrift and Aspirational… have you considered how you are positioning properties not only to demographics, but also to psychographic profiles?

Let me attempt to tackle this question and explore what real estate marketing of a property in a post-middle era might look like.

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Other folks have already praised the new Real Estate Marketing Report Card, which the company was kind enough to alert me to via email.  (/wave at Brian Thibault).  And if you can get Joel Burslem to say the following, you probably don’t need my two cents:

It’s a great promotional tool -  one that’s clearly designed to encourage people towards listing their home on the site (a $299 one-time fee).

The proliferation of consumer search portals has given rise to all kinds of syndication tools like International Listings as well as Listhub, Postlets, vFlyer, Point2 and others, that do the heavy lifting for agents and brokers to get their listings out across the web.

Savvy sellers, who in this market are going to want to see that their agent is doing all they can to move their home, are likely going to be checking the various search sites to make sure that they find their house. A tool like this one, while clearly a gimmick, helps make that possible.

But I blog to please myself, and honesty is more or less the first rule of blogging, so…

I give the Real Estate Marketing Report Card (RE Report Card hereafter) a grade of C-.  That is probably an unpleasant grade, but allow me to explain why.

The Good

The design is very clean.  The tool is actually fun to play with in a way.  And the report card makes excellent use of AJAX in displaying the information in a clean, visually appealing way.

It is simple to use (although, I do have some pet peeves) and the average consumer would immediately grasp what the purpose is and what to do.

The Bad

Given the grade, you probably anticipated that this section would be larger than The Good.

First, the data input has some odd behavior.  Why do I need to put in Zip Code if I’m already typing in the city and state?  Do a lookup, willya?

Second, more substantively, all that the RE Report Card does is to check to see if the listing is syndicated.  The quality of the syndication is not examined (and it isn’t clear that it could be examined by a computer program).

An agent could do a godawful job of listing my house — one dingy, ugly photo, horrible description, outright lies like “Desperate owners!  Going cheap!” and the RE Report Card would still give the syndication a green check mark, and up the overall grade.

For something like this to be truly useful to the consumer — instead of being just a cool little curiosity — there has to be a way of grading the listing & syndicated listing on quality.

Third, even on a straight syndication basis, there is no way to enter other websites.  That the agent’s own website/blog is missing is truly odd in this day and age.  Same with the broker site, or the franchise site (if part of franchise).

The Ugly

The Ugly goes to the heart of agent value.

What RE Report Card does, in my opinion, is to value the listing agent’s efforts strictly on one dimension: as a syndicator of listings.

In an age where agents are trying very hard to brand themselves as local and subject matter experts, picking out this one aspect of their job and grading them on it (and in a flawed way at that) can and will lead to rather unpleasant conversations.  No matter how many open houses you’ve held, no matter how many buyer agents you’ve negotiated with only to have things fall through, the client will simply regard you as B- material because his listing isn’t syndicated to  Lycos.

Furthermore, the natural question that arises in my consumer mind is… “I wonder if I can just bypass Ms. Six Percent and do all this syndication myself?”

As it happens, I get a suggestion right at the bottom of the RE Report Card:

Not happy with your listing’s web presence?

Put International Listings to the 30-day test and submit a luxury property listing today. Our real estate listing syndication technology is the best in the business. When you list with us, we’ll work with our extensive list of high-traffic partners to syndicate your listing wherever it’s eligible. Competing sites will list many syndication partners, but then their listings won’t actually appear! You won’t have that problem with International Listings; list through us, and within weeks you’ll see your property all over the Web.

Give us the chance to show you our value for a full month. If you then decide, for any reason, that your listing didn’t meet your expectations, just let us know. We’ll promptly refund the listing fee.

The listing process only takes a few minutes, and your listing is live within hours: Add your listing now! Just $299 – click here.

Um, okay… except that as the disclaimer says:

International Listings LLC is not a licensed real estate broker. We do not represent or negotiate on behalf of property owners or prospective buyers, advise property buyers or prospective buyers regarding real estate transactions, or take actual part in real estate transactions.

So if a consumer actually tried to call International Listings to do precisely what International Listings suggests, presumably they would be met with… what exactly?

If RE Report Card was never intended as a consumer tool, then it needs to be hidden behind some sort of security measure to prevent not-fully-informed consumers from running their house on it and making angry phone calls to their listing agent.

Way Forward

In commercial real estate, listing agents routinely provide the client with a weekly/monthly report of activities.  These reports can be a relatively involved, time-consuming affair.  But when you’re listing a $300M office building, you or someone on your staff had better be spending the time.

I think that’s the way RE Report Card needs to evolve: as an agent/broker tool (sort of as Joel Burslem suggests) with a far stronger qualitative measure.

If I were the customer, I would want my listing agent (who is taking 6% of the sale in my eye, since I don’t know about agent splits and whatnot) to send me an emailed report every week with:

• Listing Views, by site
• Inquiries, by site & total, for the week and month to date or YTD
• “Serious Conversations”
• Actions (e.g., contracts, walk-thrus, showings, home inspections, etc.)
• Buyer comments/thoughts even when deals fall through so I can judge for myself what the market is saying
• Appendix with a screenshot or links to every site where my listing is syndicated, including the agent blog, the agent site, the broker site, the franchise site, etc.
• Updated comps/CMA showing competitiveness with the rest of the market.

Thing is… I’m just not sure that an agent needs some online tool to do this.  An Excel spreadsheet would work just as well.

The issue is the “doing it” part, I suppose.

In any event…

RE Report Card — a beautifully designed, neat and easy to use tool, with serious flaws: C-.

-rsh

I think I might have fallen in love with Larson/Sobotka.  I haven’t the faintest idea who they are, but it looks like they combine some business consulting with legal work with something else involving MLSes and such.  Bears looking into more.

But they have done a great service for the RE.net by compiling a guide to the new VOW policy.  In fact, they call it a clearinghouse for the new NAR VOW rules, and I think it fits.  There’s a lot of depth here, and a lot of breadth.  Check it out in full.

For myself, I immediately zeroed in on this:

What a VOW is

For purposes of the DOJ/NAR settlement, a VOW is:

A web site, or feature of a web site, operated by a Broker or for a Broker by another Person through which the Broker is capable of providing real estate brokerage services to consumer with whom the Broker has first established a Broker-consumer relationship (as defined by state law) where the consumer has the opportunity to search MLS data, subject to the Broker’s oversight, supervision, and accountability. (See Policy Section I.1.) [Emphasis mine.]

Interesting.  The law-school training kicks in and I see at least three questions to be resolved, probably through litigation:

1.  What does “providing” mean?

2.  What sorts of activities constitute “real estate brokerage services”?  Is this governed by state regulations?  Or is this to be under some common law agency theories?

3.  If state law defines “Broker-consumer relationship”, then what to make of provisions like this one from Delaware?:

Entering a name and email address on an Internet or World Wide Web site is sufficient to establish a broker-consumer relationship for the use of that system, but does not in of itself create a broker-customer or client relationship for any other purpose.

Especially in light of the clause that reads, “capable of providing real estate services” in the NAR DOJ settlement, under Delaware law, there may be enough of a relationship created by entering a name and email address to use a VOW but not to take advantage of any of the real estate services provided.  Does that even make any sense?  Isn’t the display of property information itself a “provision of real estate services”?

Or does the NAR-DOJ settlement override Delaware law by operation of the Supremacy Clause?  Even when it specifically says state law controls definition of “Broker-consumer relationship”?

Heh.  I love regulations written by lawyers, don’t you?

But Larson/Sobotka has more riches in store for us:

• An IDX site is not a VOW. IDX is an MLS policy under which a brokerage firm participating in MLS grants permission to other brokers participating in MLS to advertise its listings on their web sites, in return for their permission to advertise their listings on its web site. IDX sites are governed by MLS IDX rules, which are entirely unaffected by the settlement. Note that a brokerage firm can operate both an IDX site and a VOW at the same location on the web. (For example, the brokerage can show the consumer some information on its IDX site but then require her to register to see the information available only through its VOW.)
• Zillow, Trulia, and other national aggregators and commercial distributors of listings are generally not VOWs. (Note that these sites are not IDX sites either, and the data feeds that some MLSs provide to them are not “IDX feeds,” as they are sometimes erroneously labeled.) These companies may receive listing data from brokers or MLSs, but display of those listings is subject to the agreements between the brokers or the MLSs and the aggregators. Neither the settlement, nor any of the policies imposed under it, applies to any of these types of sites. Note that if Zillow or one of these other sites were to become licensed as a brokerage firm, become a participant in an MLS, and actively assist consumers in buying or selling real estate (or both), it would be eligible to operate a VOW.
• MLS public consumer-accessible web sites are not VOWs. (Note that these sites are not IDX sites either, as they are sometimes erroneously labeled.) A VOW is by definition the web site of a real estate broker. An MLS could operate a VOW only if it were acting as a real estate broker – we are aware of no MLS that claims the right to do so.

If for nothing else, Larson/Sobotka deserves some sort of award for spelling these things out so clearly.  Now, to be sure, these should be construed as opinions of one law firm until litigation gives us definitive court rulings, but they strike me as being largely correct.

Assuming that Larson/Sobotka’s interpretations are correct, there are many implications that flow from the above three observations.

One, if IDX is entirely ungoverned by the settlement, then as Brian Larson points out, one can expect that the industry will begin to move towards VOW websites and away from IDX sites.  That could, in theory, be a Very Bad Thing for brokers and agents, however, as the plain fact is that imposing a “signup requirement” to consumers (especially if defined under state law, and that state law is onerous) will drive consumers away from such websites to those that are far more user-friendly.  How that will play out is wholly unknown.  Perhaps MLSes start relaxing IDX rules in response; perhaps brokers start working through their Real Estate Boards to change state regulations; perhaps something else altogether.  But this could be huge.

Two, if Zillow, et. al. are not VOW sites, then they do not fall under the protections (if that’s what they are) of the NAR-DOJ settlement.  So brokers or MLSes can explicitly prohibit its agents or members from giving data to these national aggregators without running afoul of the Settlement. Now, before you shrug, I happen to think there’s a fairly high likelihood of this happening.  Why?  Because of #3 –>

Three, if public-facing MLS websites (such as www.har.com) are not covered under the Settlement in any way, then they also don’t have to follow the “Broker-consumer relationship” rule either.  Which means that of all of the possible websites out there, only the MLS or Realtor Association websites can have all of the property info on every single listing without being subject to IDX rules, and without having to share any of those privileges with anyone else.

In other words, unless I’m totally misreading this, it seems to me that we now have a situation in which HAR (just to use an example; not that they would do this) could

1. display all of the listings info on HAR.com without limitation, and without the “signup” requirement;
2. prohibit all members of HAR from sending any data to Trulia, Zillow, or any national aggregator; and
3. force brokerages to use either shut-from-the-public VOW requirements, or ass-backwards IDX rules filled with purposely inane requirements to discourage the use of IDX.

Wow.  Just wow.

If this is a correct reading, then I differ with Brian Larson only in that even if there are 10,000 VOW’s by 2010, there will only be 50 websites by 2010 that any consumer goes to.

And how does this impact Realtor.com?  As Brian points out, nothing in the Settlement even mentions Realtor.com at all:

The settlement between DOJ and NAR makes no reference whatsoever to Realtor.com, either in the settlement agreement, in the attached VOW policy, or in the attached policy regarding the definition of “participant” in MLS. (In fact, the DOJ press release makes no mention of Realtor.com, either.) The DOJ lawsuit, and its settlement, deal almost exclusively with “virtual office web sites” which are by definition web sites of brokers participating in MLS offering brokerage services to their customers/clients. Realtor.com is not a VOW.

So Realtor.com is not a VOW.  Does its special relationship with NAR give it the same access that all of the local associations and MLSes now have? Will it be the sole national real estate website that can offer all of the information on a listing without requiring a consumer-broker relationship?

I’m thinking the answer might be Yes.

Talk about a seismic shift in the online real estate world.

Am I missing something crucial here?  Am I misinterpreting things?

-rsh

PS: I’m definitely adding the MLSTesseract to the blogroll.  A great site if you’re into some of the details of this stuff.