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Will real estate soon be sold online like a commodity?

Social commerce online and real estate

Could social commerce be coming to real estate? Could we be near the day where homes are a commodity like shoes or purses? Could the world of “I’ll only buy it if I know the seller” over-transparency make it to real estate soon?

A new startup is being announced today, Copious, which simply prompts people to “buy from and sell to people, not strangers” and after logging in with Facebook (to eliminate anonymity), users can see not only the face of the seller but how they are connected via the Facebook social graph (who they have in common) and who of their friends have bought from the seller before. This is the ultimate transparency in commerce- seller reputation is not linked to some made up name, it is their actual Facebook personal profile.

This concept is being labeled disruptive but we see it more as modern- whether we like it or not, people are looking to their social graph online to validate everything from where they eat to what they wear to where the live.

Copious will be integrating a “social pricing” option which allows sellers to give discounts and incentives for people sharing listings on Facebook and will have integration with Twitter and other marketplaces like eBay (for reviews), blogs, etc. and the site will recommend products to buyers based on their history of Facebook “likes” as well as what their friends have bought through Copious.

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Facebook has a marketplace but the focus is selling between friends whereas Copious is simply designed to add a social layer to the transaction regardless of social connections (or lack thereof). It’s the ultimate empowerment for your inner creeper.

How Copious impacts real estate

Today, we introduce you to Copious as a hypothetical scenario for real estate. You as a Realtor would not post a home on Copious because (a) users expect the actual seller to be the item poster and (b) there is a 10% transaction fee which is unreasonable for a major purchase like a house (although there is no listing fee).

Copious (along with Facebook Marketplace) add an element to the world of commerce that is newly emerging- the social graph. Currently, if a buyer is really a creeper, they can search tax records for a home owner, search Facebook for their profile and creep them that way, but few buyers have thought to do this, rather startups are opening the door to that train of thought.

A consumer doesn’t need to be connected directly to a buyer, but there is a rising interest and trust being put into social connections. Consumer thought is starting to look like this: I’m looking for a couch. I see a couch for sale on Facebook by a friend of a friend, so there is accountability. If baby rats come out from inside the cushions, I can yell at my friend for having a crappy friend who sold me the sofa.

The social graph is rising in importance, but real estate should focus on how trust is being defined in modernity- it is becoming less about reputation and more about connections via the social graph. There is good and bad to this- the good is that shedding anonymity in commerce ideally leads to a cleaner transaction and gone are the days of fOakleys and Prrada bags but the bad is that the social graph can be gamed by people who spend the day adding hundreds of friends in hopes that half will friend them back, grow their social graph and who cares about reputation, they’re connected, thus stamped as trusted.

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Although Facebook is expanding internationally at a rapid rate, it lost six million American users last month, the first time in over a year that the site has experienced an American user loss. Most cite privacy concerns and people we know personally that have left cite “drama.” Facebook is not the end all be all to marketing despite its behemoth size. Many are scaling back their number of connections, especially the early adopters who have tired of spam.

The takeaway

Because behavior on Facebook is just now beginning to change and go back to a more small town feel that it started with (despite how big it is), trust is important and startups like Copious will do well, but adding the “trust” between a house buyer and seller doesn’t seem realistic to us, regardless of the price.

People put more trust in the Realtors representing both sides because they handle the transaction, not the actual buyer and seller, so we reiterate as we have in years past that real estate is not a commodity, regardless of shifting trends online. There are some neat concepts to think about, but there are only so many ways to buy and sell a box/house.

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Lani is the COO and News Director at The American Genius, has co-authored a book, co-founded BASHH, Austin Digital Jobs, Remote Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.

43 Comments

43 Comments

  1. Sandra Bundy

    June 15, 2011 at 1:11 pm

    I am constantly amazed by the ways social media is being used throughout our culture. If a friend speaks to me in person and recommends something I certainly listen but in the social sphere for me I use caution.

    As for your hypothetical 'copious' for real estate you are absolutely right. While experienced professionals play an important role in the home buying/selling transaction friends and money don't mix.

  2. Fred Romano

    June 15, 2011 at 1:20 pm

    It seems unlikely that homes will ever be sold online like a pair of shoes. There are too many factors involved and too many steps to complete before closing.

    It is foreseeable that real estate agents may get cut out of the loop if the MLS ever becomes obsolete, but it would take a catastrophic shift, like Google creating an online real estate service equal to the MLS for sellers and buyers to use.

    I still don't see that happening, and I hope it never does 🙂

  3. Jill Kipnis

    June 15, 2011 at 1:53 pm

    Lani, I agree that it is difficult to picture the buying and selling of homes being done in this manner because it is the largest transaction most people ever make. A professional Realtor, knowledgeable in your local market, will always be a necessary and critical part of the home buying and selling process.

  4. sfvrealestate

    June 16, 2011 at 7:11 pm

    Lani, I totally agree with you.

  5. Mike Woods

    June 18, 2011 at 5:20 pm

    I can see a time, in the not to distant future, that people may negotiate to purchase a property based on a video and other information subject to their satisfaction with a physical inspection.

  6. Steve Nicewarner

    June 18, 2011 at 6:04 pm

    I don't think you will ever see homes sold like a commodity [except in the bulk REO arena]. Where something like Copious might work, however, is in forming an informal "Buyer's MLS." Imagine a site where I can post "Hey, I'm looking for a 3-bedroom home in Durham." and friends of friends can tell me people they know who are selling. That would add an interesting twist to the real estate market.

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