Let’s Go Back Two Years
Just over two years ago, the real estate world was rocked by several startups on the west coast. Fueled by an overheated and deteriorating market, disruptive business models began to take shape and focus aim at the traditional mainstream real estate industry. It was difficult for any of these disruptive ventures to attack individuals, or even big brokerage houses, so instead, they targeted the faceless Realtor brand.
Many bubble blogs began to pop up all around the country in response to the instability in the housing market and rally voice against traditional real estate practitioners (including NAR’s Chief Economists David Lereah, and subsequently Lawrence Yun) echoing that the markets were sound, and the world was fine, when reality was proving to be otherwise.
Big Media Never Misses a Crisis
In response to the revolt against established real estate, blogs began to take shape all around the country in self-defense of the bubble bloggers- traditional and non-traditional practitioners responded in kind in a back and forth volley of rhetoric aimed to discredit, all while the aforementioned disruptive brands added a top heavy pressure in the name of “consumer advocacy “against tradition.
Redfin Hijacks The Housing Bubble
On May 13, 2007 CBS NEWS aired “Chipping Away At Realtors’ Six Percent” and reporter Lesley Stahl featured Seattle venture Redfin on 60 Minutes. Suddenly, offline agents not paying attention to the online war between traditional and non-traditional real estate were thrust into the middle by questioning (sometimes outraged) consumers. Online blogs lit up with angry consumers and with Realtors defending themselves and their brands. The National Association of Realtors caught off guard simply responded with talking points and very little guidance, still reeling from the fall of David Lereah. Local and State boards were inept to respond as their means of communication were still traditional in nature- help would be far away, or none at all. Disruption was winning, as the online fight was one sided- few agents blogged, or even knew what a blog was, but for the next year, blogs and national media would be the battle ground while those offline (therefore uninformed) would be the most impacted.
Most notable of the companies set on traditional brand destruction as a paradigm in real estate were Craigslist, Redfin, Zillow, and now defunct Iggy’s House also known as Buyside Realty.
They Love to Hate Us
Today, as thousands of agents have entered the online marketplace, the economy has tanked, bubble bloggers and some agent bloggers vindicated, the voice of disruption has become but a murmur. The big media companies have become your buddies, the NAR has put David Lereah behind it, and Redfin looks a lot like a traditional brokerage.
Those of us that were online during that time will never forget how this quiet and docile place we call the real estate space came to be, and how you as a real estate professional can now enter it without jeers and attacks. A few of the more prolific real estate bloggers of that time are still around, as well as many of the antagonist, but many have moved on as the thrill is gone.
Manufacturing a Revolution
What changed in the Real Estate Revolution? Not really that much. Perception being reality wasn’t truly reality once the dust settled.
From the 60 Minutes Interview:
Kelly Engel (then Redfin agent); “I had done quite a few deals where I spent maybe five hours total working on the deal. I never saw the house. My client found it online and, you know, I would make $12,000 for four hours of work. And I thought this cannot keep going on like this. Someone, I felt like I was going to get caught! You know, someone’s going to see that this is happening and I think a lot of them hold that truth inside of them right now. They’ve got the clients that are finding houses on their own. They make $20,000 and did 10 hours of work,” she says.
It’s easy to spot the manufacturing of a revolution by venture companies even in quotes like the one above where a subtle shift of a person’s point of view shifts blame from a single person to an entire industry. At the time, it would be hard to see any good outcome from such a vicious attack, but believe it or not, some good outcome is occurring.
Consumers Win Despite Tech Upset
The fire ignited by Redfin and others sparked a real, unintended, unforeseen revolution- one inside of the real estate profession where expectations are growing on the infrastructure not only locally, but nationally to modernize. Agents are competing more and more online with national chains and with each other, smaller more nimble brokerages are being born every day, and consumers have some real online choice.
While the expansion of blogging into micro-blogging has scattered the crowds once hell bent on destroying you as a business, it is now providing even more opportunity for you as a business to define your own brand paradigm and reach new audiences once leery of you as a professional… as it should be. In this economy consumers are looking for answers, and agents today (because they’re adopting new online skill sets) are helping provide those answers.
I believe what set out to disrupt and disintermediate you from the transaction failed. Agents did not die like the dinosaurs, and we’re still not a ‘point and click’ home buying society, nor did we go the way of the independent book store. In fact, it’s only made those that make up the profession stronger, and helped to dispel the myth of the “sacrosanct six percent commission.” It has separated those that can from those that won’t in more ways than one and continues to do so (maybe there is hope for independent travel agencies and independent book stores, after all). Is it perfect? Hell no, but it looks nothing like 2007.
Their revolution is dead, ours is just beginning.
