New technology may be panicking some in the real estate world, but others are getting stuck into selling on the web. By David Berlyne
Technology panics people. Many thought that televisions would emit lethal rays to unsuspecting viewers, while my mother is still wary of eating anything “nuked” in the microwave. Lately, there has been a bit of a hoo-ha over the likely effect of e-commerce on traditional real estate brokerage.
Exploring the possibilities
Consider the CDs, books, toys and airline tickets that are selling like hot cakes on the internet. Clearly, the public has little desire to see these goods before buying them. The most likely items to sell well are cheap and with no “look and feel” at all – disposable contact lenses are a good example.
The less a product conforms to this profile, the longer it will take to market it effectively on the web. Property is just about at the opposite end of the product spectrum from the disposable contact lense. It is expensive, immovable and highly prone to subjective appreciation of its qualities. To market property effectively, an online brokerage service would have to allow users access to an up-to-date database of properties as expansive as all the estate agent listings in the local rag combined and a mechanism to schedule viewings online.
Illuminating the reality
You will not be surprised, therefore, to learn that, currently, there is no online site that even attempts to do that. The most accomplished property website to date is Microsoft’s HomeAdvisor (homeadvisor.rnsn.com). But, although impressive, it is little more than a virtual shop window for American estate agents. Users can find all listings in their desired locale that conform to their selected specifications – maximum price, number of bedrooms, bathrooms etc. But the point to note is that the listings you are viewing are predominantly those submitted by local estate agents, not the owners themselves.
The latest US edition of Time’s Digital magazine featured some 32 other US property sites. However, six were less impressive versions of HomeAdvisor, 12 provided specialised listings only (such as apartments or retirement homes), six had home financing services only and four were the digital storefronts of bricks and mortar agencies (for a full list go to www.pathfinder.com/time/digital/reports/ecommerce/realestate.html).
The four sites that did not rely on brokers’ submissions had 452 properties between them in all the 62 counties and 49,108 square miles of New York State, and 368 were on just one site, owners.com. None dealt in commercial properties.
What the industry is saying and doing
So the all-singing all-dancing online property brokerage service is a way off yet. But the web is already making itself felt on New York residential real estate brokerage. I mentioned in a previous article
(4 September 1999, p52) that Corcoran Group have had a good time selling NYC apartments over the internet: $45m of sales in six months! There are also other bricks and mortar agencies who have achieved considerable success.
Established in 1995, the Coldwell Banker agency’s site (coldwellbanker.com) was the first of its kind. It lists over 200,000 properties throughout the US and Canada, almost 100% of the franchise’s inventory. The result: 6m to 9m hits weekly, 2,000 of them producing leads to local offices in the form of e-mails from prospective buyers.
Valerie Mercurio, director of interactive marketing at the Century 21 agency franchise, says its site (century2Lcom) gets over 1m hits and 12,000 leads a month. Century 21’s website is the mother lode of its leads, eclipsing the company’s freephone number. The new challenge, says Mercurio, is to respond quickly to e-mails so as not to lose the one-to-one relationship that is part and parcel of the traditional buyer/agent experience.
Mercurio is unperturbed about the threat of an exclusively online service. Having a good agent to carry you through a transaction from start to finish and beyond will always be a lot more valuable to a buyer than a service which stops at providing the right listing.
See: Analysis
David Berlyne is a property lawyer in the New York office of US law firm Weil, Gotshal & Manges LLP. Weil has branches in London and Europe
