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Opinion Editorials

Explaining the controversy surrounding RealEstate.com

There is a medium-sized kerfuffle in the real estate industry that is raising eyebrows. We opine below as to whether or not it is worthy of all this fuss.

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realestate.com

realestate.com

Hubub about RealEstate.com’s re-launch

It’s been described as a market-disrupting “hail-mary” pass that will change the entire real estate industry and the beginning of “crazy town.” I, however, believe that Bruce Lemiux’s thoughts about Market Leader re-launching the RealEstate.com domain with data from the associated brokerages licenses it also acquired last year from Lending Tree were most accurate when he said, “Yawn.”

It’s an 8.25 million dollar example of the larger industry debate about data sharing and how business models for online success in real estate will integrate with (or bypass) real estate agents – “bricks and mortar” if you will. And quite frankly, as has been noted elsewhere, if the website as it stands today represents the “re-launch” that was touted in the company’s buzzword-compliant and SEO-optimized press release, then they just spent a lot of money to very publicly embarrass themselves.

A quick illustration:

As I’ve written about before, I don’t believe that the raw data provides the same amount of value as the local, friendly individual that puts that data into context, and can dynamically filter and adjust it based on something as slight as a client’s non-verbal cues. To make this less personal, let me take an example from my car that might put this all in perspective.

I drive a reasonably-recent hybrid car brimming and whirring with electronics. There are a bunch of computers processing raw information to coordinate the electric motors, battery charging, and gasoline engine status while ensuring my safety through a coordination of a bunch more things like the airbags and brakes. If my car alerted me every time something happened with one of these systems, I would quickly become so overloaded with information that I would promptly park the vehicle and walk away.

But last week my vehicle’s dashboard illuminated the check engine light with a message about my hybrid system. My car was programmed with a philosophy that sometimes less is more and that it should alert me only when it has meaningful and actionable information. In this case I took my car to the repair shop and it was repaired under warranty.

I appreciate that my car spares me the reams of raw performance data and only alerts me when necessary. I do not want information unless it is personally meaningful to me and actionable in my particular situation – and I believe real estate shoppers feel the same way. Knowing a house is for sale is a commodity.

Long before Z/T/R

Long before Zillow, Trulia, or Redfin came along the chatty neighbor would also tell you that for free. Knowing that a house is for sale that fits their bedroom count and can be purchased with their particular financing requirements is more valuable and actionable.

Knowing that a great house is for sale that fits their bedroom count but they should ignore it because of something particular to their search moves even farther up the value chain. Finding a way to successfully overcome, fix, or work-around that one (or three) things that stands between a potential buyer and the house they want notches the value up dramatically.

The Siri era is here

We live in the age of Siri – decades of research and billions of dollars spent have finally delivered a phone that can tell me the weather when I ask conversationally. Someday someone will successfully build an algorithm and launch a business model that takes the raw data of real estate and transform it into meaningful and actionable information that makes sense to consumers in the way they want at the moment they need it (if your Realtor doesn’t promplty return your phone calls, texts, and emails you should fire them, but that’s another story).

Given how long it has taken the technology and telecom industries to build a phone that can answer a simple question about the weather, I feel secure that agents like myself will have an important role to play in the real estate value chain for a very long time.

Zillow, Trulia and other real estate “innovators” aren’t real estate companies that derive their income directly from the purchase and sale of a particular house but are instead advertising companies that derive income when individual agents voluntarily agree to pay them money so they can appear prominently on a page that most likely features someone else’s listing. Zillow, Trulia and similar websites and brands have spent years redesigning and subtly improving their product so that they can sell more advertising and generate more income in their core business – which is selling advertising.

Quite frankly, the realestate.com website looks to me like it was slapped up by a collegiate insomniac who spent $99 dollars for some clipart and $99 for a wordpress theme and pulled an all-nighter to put together a rather sophomoric effort. If this took them a year to design and code, I’d like to know what they did with the other 364 days?

Zillow and Trulia are recognized brands at this point, regardless of your feelings about syndication, IDX, or data sharing. I’d be willing to make a friendly bet that when Lending Tree wanted to dump their realestate.com domain and brokerage licenses, they got in touch with every player in the market. It wouldn’t surprise me to learn that Zillow, Trulia, and others passed on the opportunity to spend so much on a domain name because they’ve built enough name recognition that they don’t need the “obvious” domain name to redirect to their own site. NAR would have made a perfect buyer for the domain, but that’s its own column…

Getting to the crux of the controversy

The part of all of this that is fascinating – and probably “smells” the most offensive – is how a company with a valuable domain name and brokerage licenses that once was in the business of earning income on the purchase and sale of individual homes has suddenly transformed into something else entirely: an advertising company with a lot of brokerage licenses that provide it with IDX data feeds so it doesn’t have to rely upon syndication for the data it needs (real estate listings) to sell its new product – contact data for consumers browsing on their very expensive URL.

To me this just smells like bare-knuckle American capitalism at work. We live in a country where Google (the website folks) can buy Motorola (the old-school hardware company) while Apple and Samsung are busy litigating each other senseless. We could wake up tomorrow to headlines of Apple buying AT&T or Wells Fargo buying PayPal from eBay. After all, a coffee company just made a major play in the retail payment processing space (Starbucks and Square). Anyone can buy their way into another industry – but buying your way in the door is entirely different from succeeding once you are there.

Bloggers’ support and criticism of the move:

Matt Fuller brings decades of experience and industry leadership as co-founder of San Francisco real estate brokerage Jackson Fuller Real Estate. Matt is a Past President of the San Francisco Association of Realtors. He currently serves as a Director for the California Association of Realtors. He currently co-hosts the San Francisco real estate podcast Escrow Out Loud. A recognized SF real estate expert, Matt has made numerous media appearances and published in a variety of media outlets. He’s a father, husband, dog-lover, and crazy exercise enthusiast. When he’s not at work you’re likely to find him at the gym or with his family.

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14 Comments

14 Comments

  1. J Philip Faranda

    August 14, 2012 at 7:55 pm

    While I tend to feel that it is a mistake to underestimate your adversary, I think Matt here is probably right for a variety of reasons.
     
    In my experience, the best way to be profitable in real estate brokerage is to list and sell lots of homes. I have yet to see this uber-IDX business model be organically profitable on its own.  Millions in venture capital makes a splash, but does not equate to sustainable long term profitability. . 

  2. J Philip Faranda

    August 14, 2012 at 7:56 pm

    While I tend to feel that it is a mistake to underestimate your adversary, I think Matt here is probably right for a variety of reasons.
     
    In my experience, the best way to be profitable in real estate brokerage is to list and sell lots of homes. I have yet to see this uber-IDX business model be organically profitable on its own.  Millions in venture capital makes a splash, but does not equate to sustainable long term profitability.
     

    • MattFullerGRI

      August 14, 2012 at 9:57 pm

       @J Philip Faranda I think “ogranically profitable” goes to the heart of this debate about various business models. Venture capital or other external funding can be a great starter or source of leverage, but if you can’t pay the bills then the lights eventually have to go out…

  3. StuSiegel

    August 14, 2012 at 8:54 pm

    @gregrobertson How does that explain anything?

  4. JonathanDalton

    August 14, 2012 at 8:57 pm

    Real life lesson – I get a ton of IDX rental leads. Clients that come through on the IDX, because they are shopping homes and not agents, tend to be more than a little flighty. And that’s okay, as long as you know what you get.
     
    RealEstate.com’s plan isn’t much different than what I’ve long planned should Arizona ever open a state-wide MLS. I’ll be the most referringest mother you’ve ever seen. Still won’t pay the mortgage on its own, but it’ll give a little bit of a bump.IDX is very, very helpful in obtaining the David Knox prototypical “just be there” transactions. But since it all comes down to being in the right place at the right time, sustainability is tough. A consistent listing base still is the key – the buyers agents can do whatever they want to attract buyers and, honestly, we ought to root for them. Because when they do their job, we get paid. Not a bad set up.(Quick note – please spare me the b.s. totals about the tremendous number of leads you get through IDX, okay? You’re like the guy in Singles who collected 20 numbers of 20 women you’ll never call, never see in the daylight, 20 numbers you got just so you can say you got 20 numbers.) 

    • MattFullerGRI

      August 14, 2012 at 9:52 pm

       @JonathanDalton 

    • MattFullerGRI

      August 14, 2012 at 9:55 pm

       @JonathanDalton In my experience, the leads I get from a certain unnamed partner program tend to be the most skeptical and hardest to win over, but depending on the complexity of the transaction they can quickly become big fans. I’d very much agree with you that building a business on IDX is all about volume, and definitely a challenge. My experience with IDX leads hasn’t been that they are more flighty, just less serious shoppers overall. Which is perhaps a different way of saying the same thing. You can only sell a house once (unless you want it to cost you more than your commission) so I’ll take 1 solid lead over 50 flaky ones any day of the week…

      • 365frederick

        August 15, 2012 at 11:13 am

         @MattFullerGRI We’ve flitted about from various third party partner programs over the last 20 years, some have paid off for a while, some not at all. The leads from those sites are not the best leads, no doubt. I do think, however that the actions of consumers have changed, and the days of the domination of the Trulia’s and Zillow’s are numbered. Melinnials have grown up with search, and are seeking much more in-depth information. Information about neighborhoods, lifestyles and local expertise. These are the specialty of the local agent, not the big national information brokers. Just having massive amounts of listings on your site, although a draw, isn’t enough.

  5. kenbrand

    August 15, 2012 at 1:12 pm

    Human nature views competition as threat.  But is it really?  I guess it is if you don’t have Top Of Mind Awareness as a trustworthy go to pro within your network.  Or you don’t have a network your rule, or people don’t like you, then you have to rely on leads from strangers. If you do rely on leads from strangers than instead of earning trust and choice, you pay for a contact and take your chances.  The challenge is if you don’t rule a network and people apparently don’t trust you, you’re not going to hot-dog your way to the bank chasing strangers because as most research, experience, observation and feedback from actual consumers at events like Hear It Direct all point to the same thing – the vast majority of consumers (me and you) we don’t like to be harassed by strangers.  Strangers chasing strangers who don’t like strangers is a hard road to hoe.  Bottom line, who cares.  Care about the people you know, the people you work, play, socialize with and around.  Make yourself the go to person for everything home, family, community, lifestyle and real estate.  Sure people may shop around the interent to dream and research, when it comes time to buy or sell, most of us would chose  a trusted pro……if we know one.  The question is are we know that way.  My 2 cents.  Back to work now people.  

    • MattFullerGRI

      August 15, 2012 at 2:51 pm

       @kenbrand Ken – I think most agents would agree with you. I guess the question is do you think it will be possible (in the next 5 – 10 years) to replicate the trusted network you describe with an online site along the lines of something in the ZTR model? 

      • kenbrand

        August 15, 2012 at 4:40 pm

         @MattFullerGRI Who knows Matt.  We have to keep our head on a well oiled swivel and minds and imaginations wide open, even when we think some of the satellite schemes are dumb things for dummer people.  It’s not likely that ZTR will replace what it takes to create Top Of Mind Awareness anytime soon, but it does prey on the an army of hopeful soliders who have to buy attention and opportunity, instead of earn it or create themselves. Facebook is an example of a modern tool that when used well helps to create Top Of Mind.  So, who knows.  I sleep with one eye open.  cheers
         

  6. michaeltudorie

    August 15, 2012 at 6:46 pm

    @RealtyNinja very very informative articles. RT

    • RealtyNinja

      August 15, 2012 at 7:50 pm

      @michaeltudorie thanks michael 🙂

  7. Sean Goerss

    September 11, 2012 at 2:57 pm

    Matt, just read this article after referencing a similar one my tech tuneup I do with agents, great stuff, I’m going to share it!I think we have to be real careful about differentiating a vendor from a competitor.  

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Opinion Editorials

AT&T hit with age discrimination lawsuit over using the word “tenured”

(EDITORIAL) 78% of workers are victims of age discrimination. As awareness arises, lawsuits show what may constitute discrimination, including verbiage.

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Older man at cafe representing age discrimination

According to the AARP, 78% of older workers have seen or experienced age discrimination in the workplace. As awareness of ageism increases, lawsuits that allege age bias can help employers understand what constitutes discrimination. A recent case from the U.S. Court of Appeals for the Fifth Circuit, Smith v. AT&T Mobility Services, L.L.C., No. 21-20366 (5th Cir. May 17, 2022), should give employers pause about using other words that could potentially be a euphemism for “older worker.”

What the lawsuit was about

Smith, a customer service representative at AT&T, alleged that he was denied a promotion because of his age. His manager told him that she was not going to hire any tenured employees. The manager wanted innovative employees in the management positions. Smith took this to mean that he was being denied the promotion because of his age. He sued under the Age Discrimination in Employment Act and Texas law.

The district court found that Smith failed to exhaust his administrative remedies as to one claim and failed to establish a prima facie case of discrimination as to the other two claims. Smith appealed. The Appellate court affirmed the district court’s decision, but they did say it was “close.” AT&T did not discriminate against Smith by using the word tenured, because there were other employees of the same age as Smith who were promoted to customer service management positions.

Be aware of the verbiage used to speak to employees

This case is another example of how careful employers need to be about age discrimination, not only in job postings. It’s imperative to train managers about the vagaries of ageism in the workplace to avoid a costly lawsuit. Even though AT&T prevailed, the company still had a pretty hefty legal tab. Don’t try to get around the ADEA by using terminology that could screen out older workers, such as “digital native,” or “recent college grad.” Remind employees and managers about ageism. Document everything. Pay attention to other cases about age discrimination, such as the iTutor case or this case about retirement-driven talk. You may not be able to prevent an employee from feeling discriminated against, but you can certainly protect your business by doing what you can to avoid ageism.

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Opinion Editorials

Writing with pen and paper may mean your smarter than your digital peers

(EDITORIAL) Can writing old fashioned make you smarter? Once considered and art form, handwriting is becoming a thing of the past, but should it be?

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Writing on paper job titles.

When I was in college, in 2002, laptops weren’t really commonplace yet. Most students took notes by writing with pen and paper. Today, most students take notes with laptops, tablets, cell phones, or other electronic devices. The days of pen and paper seem to be fading. Some students even wait until the end of class and use their cell phones to take a picture of the whiteboard, so in effect, they are not absorbing any of the information because they “can just take a picture of it and look at it later.”

Is it easier to take notes on an electronic device? I think that largely depends on preference. I type faster than I write, but I still prefer to take notes on paper.

According to researchers at Princeton University and the University of California, Los Angeles, students who take handwritten notes generally outperform students who typed them.

Writing notes help students learn better, retain information longer, and more readily grasp new ideas, according to experiments by other researchers who also compared note-taking techniques.

While most students can type faster than they write, this advantage is short-term. As the WSJ points out, “after just 24 hours, the computer note takers typically forgot material they’ve transcribed, several studies said. Nor were their copious notes much help in refreshing their memory because they were so superficial.” So while it may take a bit longer to capture the notes by hand, more likely than not, you will retain the information longer if you put pen to paper.

As I teach English Composition at the University of Oklahoma, I would also like to say that while I find this to be true for myself, every student has a different learning style. Typed notes are much better than no notes at all. Some students detest writing by hand and I understand that. Everything in our world has gone digital from phones to cable television so it makes sense, even if I don’t like it, that students gravitate more towards electronic note taking than pen and paper.

While I would like to see more students take notes by hand, I certainly won’t require it. Some students are navigating learning disabilities, anxieties, and other impediments that make taking notes digitally more advantageous.

I imagine the same is true for other areas as well: instead of typing meeting notes, what would happen if you wrote them by hand? Would you retain the information longer? Perhaps, and perhaps not; again, I think this depends on your individual learning style.

I would like to suggest that if you are one of the more “electronically-minded” writers, use a flashcard app, or other studying tool to help you review your classroom notes or meeting notes to make them “stick” a bit better. While I find this type of research intriguing, if you enjoy taking your notes electronically, I wouldn’t change my method based on this.

If it’s working for you, keep doing it. Don’t mind me, I’ll be over here, writing everything down with pen and paper.

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Opinion Editorials

5 reasons using a VPN is more important now than ever

(EDITORIAL) Virtual private networks (VPN), have always been valuable, but now, more than ever, entrepreneurs and businesses really should have them.

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VPN

Virtual private networks (VPN), have always been valuable, but some recent developments in technology, laws, and politics are making them even more important for entrepreneurs and businesses.

A VPN serves as an intermediary layer of anonymity and security between your computer and your internet connection. Your Wi-Fi signal is a radio wave that can ordinarily be intercepted, so any data you transmit back and forth could be taken and abused by interested parties. VPNs act as a kind of middleman, encrypting the data you transmit and protecting you from those prying eyes.

Top10BestVPN.com offers a selection of some of the best-reviewed VPN services on the market; there you can see the different approaches to security and anonymity that different brands take, and get a feel for the price points that are available. But why is it that VPNs are becoming even more important for business owners and entrepreneurs?

These are just five of the emerging influencers in the increasing importance of VPNs:

1. The rise of IoT. The Internet of Things (IoT) is already taking off, with a predicted 8.4 billion devices will be connected to the internet by the end of the year. All those extra connections mean extra points of vulnerability; hackers are skilled at finding tiny entry points, so every new channel you open up on your Wi-Fi connection is another opportunity they could potentially exploit. Using a VPN won’t make your network completely hack-proof—user errors, like giving your password away in a phishing scam, are still a potential threat—but VPNs will make your network more secure than it was before.

2. The popularity of ransomware. Ransomware is growing in popularity, seizing control of devices, sometimes for weeks or months before activating, then holding the device “hostage,” and demanding payment in exchange for releasing the files that are stored on it. These attacks are fast and efficient, making them ideal for hackers to use against small businesses. Again, using a VPN won’t make you immune from these types of attacks, but they will make you harder to target—and hackers tend to opt for the path of least resistance.

3. The escalation of attacks on small businesses. Speaking of small businesses, they happen to be some of the most frequent targets of cybercriminals. About 43 percent of all cyberattacks target small businesses, in part because they have fewer technological defenses but still have valuable assets. Protecting yourself from cyberattacks is a must if you want your business to survive.

4. Political attacks on net neutrality. Politicians have recently attempted to attack and eliminate net neutrality, which is the long-standing guarantee that internet providers can’t violate user privacy by collecting and/or reporting on certain types of data, and can’t create “slow lanes” that throttle certain types of traffic. If net neutrality is abolished, you could face slower internet traffic and decreased privacy on the web. A VPN could, in theory, protect you from these effects. First, your web traffic would be anonymized, so internet providers couldn’t gather as much data on you as other customers. Second, you’ll be routed through a private VPN server, which could help you get around some of the speed throttling you might otherwise see. It’s uncertain whether net neutrality will ultimately fall, but if it does, you’ll want a VPN in place to protect you.

5. The affordability and diversity of VPNs available. Finally, it’s worth considering that VPNs are more affordable and more available than ever before. There are specific VPNs for all manner of businesses and individuals, and they’re all reasonably affordable. Inexpensive options can be yours for as little as a few dollars per month, and more robust, secure options are still affordable, even for frugal businesses. If you try a VPN provider you don’t like, you can always cancel and switch to another provider. This availability makes it easier to find exactly what you need.

If you’ve never used a VPN before and you’re confused, try not to be intimidated. VPNs sound complex, but connecting to one is a simple login process you can use on practically any device. The hardest part is choosing a reliable provider that suits your business’s need. With the influx of coming changes, it’s a good idea to get your VPN in place sooner rather than later.

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