I continue to read about online searching versus personalizing the Internet. About receiving content from trusted sources rather than fishing for it. About Web users relying on their social networks, their RSS readers and customized widgets on their Netvibes pages to harness the Internet and customize their experiences versus using search engines and scouring the Web for destinations.
It’s Google versus Facebook — searching to locate the undiscovered site versus dependency on the recommendation of fellow network members for information.
Will the personalized platform emerge as the premiere definition of how we use the Web in the future? This is the big discussion taking place inside Yahoo. It’s why the company reportedly offered Facebook a billion dollars. It’s why Facebook apparently turned them down; they seem to think the answer is yes and believe they are only witnessing the beginning of this new paradigm.
One thing we are sure of: Web users today rely increasingly on “trusted sources” to make sense of the online world. It’s how people used to make sense of things in the offline world.
Is this discussion taking place inside the corporate halls of traditional real estate? If not, it should be. Traditional real estate destinations, Realtors and brokers — the prototypical trusted sources in their category — continue to be pushed to the sidelines in favor of more transparent, simple online offerings that are gaining more trust with the consumer.
We all know this is happening by virtue of decreased traffic, decreased Web rankings and the onslaught of media coverage and consumer commentary. Rather than addressing this issue head on, many in real estate respond with puffery. Others respond by freaking out, bailing completely, burying their heads in the sand or standing firm and choosing not to change at all.
Shot full of holes
Over the past decade, real estate chose not to adapt to consumer needs fast enough. It focused on limiting information, “capturing” consumers instead of building a willing online community, and not being succinct in what it stood for and what it really delivered. It strayed from being simple and transparent — the cornerstone of building trust.
Compounding the problem are the ham-handed responses to the scrutiny currently directed at commissions, itself largely the bi-product of the industry’s own broken brand promises, army of undertrained real estate practitioners, and near-universal failure to convincingly explain what “full service” really means. Spin-doctors continue to sell the “full service” versus discount or FSBO story, but consumers are no longer buying it.
The basis of the old “full-service” argument — “a Realtor will always get you more for your home” — was shot full of holes last week in the New York Times. (See Inman News story, “FSBOs do better than agent listings in Wisconsin town.”) Whether the findings described by the Times are accurate or meaningful nationally is really irrelevant at this point. The battle for the hearts and minds of consumers is over. The NY Times (or “60 Minutes” in its segment on real estate last month) trumped the National Association of Realtors, the “Voice for Real Estate,” as the trusted source.
What does that tell you? It tells me real estate is out of touch with two things: what its core value proposition really is, and what it’s going to do to get consumers to recognize it.
The smoking gun
The rhetorical bullets our industry is shooting are bouncing off the walls and ricocheting back onto itself. The hooks upon which Realtors hang their “full-service” hat may actually be degrading their value. Is manning an open house really full service? Is negotiating deals really a value add? Is driving a homeowner around for weeks to view homes really “full service” worthy of top-end commissions? Could it be that these services, while appreciated by the consumer, may be viewed as menial and not worthy of a high commission? I submit that the services real estate people currently avoid partaking in may very well be elements consumers would gladly pay full commission for. Therein lies real estate’s smoking gun.
The battle over a Realtor’s value has turned bloody as Web users move further away from random searches and instead toward trusted sources. A good medic sometimes has to expose the wound. The antiseptic often stings. Extracting the bullet is painful. But the end result is healing.
In that spirit, I ask the hard question: How will real estate fare on this battleground and can it return to the place they once held as the ultimate trusted source?
The answer will be your silver bullet for tomorrow.
Marc Davison is a founding partner of 1000watt Consulting. He can be reached at marc@1000wattconsulting.com.