Salvation … or Sellers of Snake Oil?
You can’t swing a dead cat these days without hitting yet another new company, enhanced web site or new product to “help” agents during these lean times. When they release these new or improved products/services/enhancements, are they on to that “thing” that will change the market. Is there a silver bullet that will return us to a vibrant market (or at least one that’s less than dismal)? Maybe.
Are RE Tech companies opportunistic??!!
The bigger question is: are companies taking advantage of agents’ fear of extinction by developing products, websites, software, widgets, etc.? More important, will that new bright shiny wysiwyg truly drive toward solving the core problem? Do the RE Tech companies, or big brand Realtors® really have their fingers on the pulse of what buyers and sellers of real estate need, or are they preying on the fears of agents?
Buyer come back!
People aren’t buying real estate as much now as they were for a myriad of reasons: lack of cash, distrust real estate’s value, uncertain employment, lack of financing options … the list goes on. The bottom line is these factors have created a fearful market.
Fear causes paralysis
Are the RE tech companies and big RE Brokers going the right direction? Is a new widget, blogging tool, a plethora of data (historical, by the way – not necessarily telling as to what will happen in the future) going to instill enough confidence to bring buyers back? I don’t think so.
Nobody has it right. Yet.
How does a blog instill confidence? How does a Zestimate, Trulia Voices, user contributed content, pictures of neighborhoods, walkability, neighbor comments, automated marketing systems, a CMA or software designed to help agents find blue-eyed, left handed investors bring back buyers?
Double dog dare you …
Zillow, Trulia, Cyberhomes, Realtor.com, and big RE brands – Century 21, Coldwell Banker and ReMax – what are you doing to address this? Are enhanced listings or a prettier GUI your answer? Is that honestly enough to reinstate confidence in real estate? The money is out there. No, not the free for all we’ve seen over the last several years, but there are potential buyers out there hesitating out of fear.
Hyundai figured it out
Hyundai’s recent campaign to let people return cars if they lose their income hit the nail on the head. Brilliant example of recession marketing. This struck right at the core of buyer’s uncertainty. Sales of the Hyundai Sonata reportedly surged 85% in January, making it one of the country’s top-selling vehicles.
No, you can’t buy back a house. But, can you offer a buyer’s guarantee? I think it would give me some piece of mind if as a buyer I was guaranteed that after five years my house will sell for at least what I paid (barring damage or changes that devalue the property). I’m sure there are RESPA issues here, and all kinds of arguments about why this won’t work. But, isn’t the idea worth entertaining?
Buck it (the trend, that is)
Come on companies! If a car company can do it, why can’t real estate? Stop worrying about answering to your investors, VC’s, IR or PR folks, and start coming up with real solutions that will give people the confidence to get back into the market!! If we stop worrying about eyeballs, traffic, perceived value, positioning and ego and don’t over analyze or complicate we get to solution.
Rob Hahn
February 19, 2009 at 11:05 am
Brandie –
You’re asking wrong questions to the wrong people. Might as well ask Google how they plan to make banks less insolvent.
There are things that RE companies can do. There are things that RE TECH companies can do.
But restoring consumer confidence is not, IMHO, one of those things.
-rsh
Matthew Hardy
February 19, 2009 at 2:40 pm
Flavor-of-the-month tech tools are sold under subscription models because vendors know the attrition rate in the industry and that non-business oriented agents are looking for an automatic button for success. It’s the perfect world for these vendors… take the monthly fees, keep the important data the agent generates to enhance the vendor’s position, then keep the annual subscription contract in force even if the agent leaves the business. I’ve had plenty of people tell me I’m crazy for not going that route.
But that is not how I use software myself. Sure, there are web-based tools I use and pay for when they’re worth it (ex. YouSendIt, Vonage), but for ALL my business-critical software (particularly data/content creation and management), I purchase licenses. There are no forced upgrades and no monthly fees. I am curious, however, to learn your thoughts on a rent-to-own model. For instance, customers would be offered a 1-month expiring license that could be renewed at any time (allowing for gaps). Thus, a $400 software license could be rented for $40/month – but all payments would cease after 10 months.
fred
February 19, 2009 at 10:49 pm
Funny how most agents don’t like to be compared to car salesmen, but you compare our industry to the auto industry! Ironic… LMAO
Brandie Young
February 22, 2009 at 1:52 am
Hi Rob – Thanks so much for weighing in!
I don’t know … I think I’m asking the right people the right question. While I can see your point on restoring consumer confidence – I respectfully disagree. To whom should consumers/buyers turn but the RE and RE tech companies? If those are, in fact, the experts in the RE market, who would know or be better positioned to seek them out? I do agree that no entity is likely to do it alone, but we are talking moving a mountain with a spoon here, so all small efforts will help restore real estate confidence.
I’d love to continue this offline … have thoughts I’d love to share.
Matthew – nice to hear from you. Great perspective. I hadn’t thought through that far, and would love to chat re: your RTO model. Interesting.
Fred – glad to make you laugh! Actually, I didn’t compare the RE industry to the auto industry. If I were, I’d have said someone in RE hit it from a marketing/restoring confidence perspective, as did Hyundai… That said, I hope to do that soon.
Jack Leblond
February 23, 2009 at 9:13 am
Hi Brandie – question and a comment;
Where does “You can’t swing a dead cat…” come from? Have heard it for years, but it is just weird..why would anyone want to do that?
I can’t say for sure, I suspect that Hyundai’s credit company did a much more thorough job of verifying the income and ability to repay of people that they sold cars to, unlike the home lenders that knew people were borrowing more than they should. These lenders just turned a blind eye, raised rates and *hoped* people would be able to pay.
Brandie Young
February 23, 2009 at 1:36 pm
Hi Jack – as to the origin of “swing a dead cat” I looked it up:
Very little space, cramped quarters, as in There’s not enough room to swing a cat in this tent. This expression, first recorded in 1771, is thought to allude to the cat-o’-nine-tails, or “cat,” a whip with nine lashes widely used to punish offenders in the British military.
Looks like someone added the “dead” somewhere along the way.
Good point on Hyundai – that along with the fact that the note is ~ $20k, isn’t rated, packaged into pools and sold off into secondary markets plus, a car can be taken back and resold more quickly than a home – gives them the ability to offer the guarantee.