It Ain't All Big Hair and Cadillacs

Sorry - I like the song - and after reading the recent comments by Richard F. Gaylord, 2008 NAR President regarding the recent proposed settlement in the case of the United States of America v. National Association of REALTORS, it somehow has new meaning for me.

The lawsuit addressed the rules for sharing data on the internet via a VOW or virtual office website. NAR established rules that gave brokers who operate VOW's control over whether their listings could appear on the websites of other MLS participants.

Richard's comments struck me as odd. The settlement was a win for both REALTORS and consumers. Is it really a win for consumers? His arguement states that the settlement affirms the rights of consumers. The settlement allows consumers to opt out of having their detailed listing information displayed online. "If sellers choose to be online, they can ask that blogging, automated valuations, and false information about their property on an MLS participant's VOW be removed."

How is it a win for consumers to have their information withheld from potential buyers?

Ok - so I've decided that I want to take my blog in a new direction. While I currently work at a full-service brokerage, I have been intrigued with the possibility of building a new business model - one that is consumer-centric not agent-centric - hence, my new name - real estate Ain't All Big Hair and Cadillacs, best spoken in a slow Texas drawl.

I know the name is silly - maybe stupid, but my intent is entirely serious. I read alot about the real estate industry and I am really trying to be vigilant about learning more about the new and exciting tools, applications and companies that are out to change the way real estate is bought and sold.

I recently read one article quoting an industry veteran's response to the question, "What do you see happening in the real estate market in 2008?" One of his responses was, "Technology will speed change and facilitate more consumer-driven solutions and alternatives for buying and selling homes."
Considering I used to develop marketing strategies for service companies, I thought - hmmm - why can't I develop consumer-driven solutions and alternatives for buying and selling homes? Ok - so I've decided that I am going to develop consumer-driven solutions and alternatives for buying and selling homes but I need consumers' input.

Kevin Seney's interview was perhaps a light bulb moment, but so were my discussions with Redfin, the recent Department of Justice's settlement with the National Association of Realtors regarding internet-based real estate brokerages
, NAR's proposed project of building a national MLS database etc, etc. Needless to say, consumers want to be in control regarding the process and feel that the current business model - I call it agent-centric business model - does not promote transparency.

I believe the traditional "agent-centric" business model of how real estate is bought and sold is evolving exponentially - ie the rise of companies such as Zillow, Redfin, Trulia etc. Consumers have more access to data that allows them to locate their ideal property and better tools to determine the value of properties. Neither Redfin and Zillow have complete solutions - Redfin's technology model is based on the reduction of the cost of the traditional real estate transaction by providing rebates to consumers. They view themselves as a technology company in the real estate business. Zillow's sophisticated Zestimates help provide a technology solution to what most would consider an agent's key role, but often times it still requires the knowledge of an experience agent to completely interpret the data. Trulia is social networking with some valuation and property search capability.

While there are other solutions gaining traction, the three I mentioned have take the information traditionally locked up in local MLS' and provide real data solutions to consumers and consumers are eating it up and demanding more - but what is the more?

While consumers have more data, they may not necessarily have the experience to best assimilate the information. In the current environment, almost 80% of consumers who are searching for a new home are using the internet to search for their ideal property. However, not all consumers have the knowledge of local customs and experience to negotiate the best price and terms to purchase their property.

Many need education not only about the buying and selling process, but the financing part, the legal part, the actual market conditions part, the title insurance and title data part, the escrow management part, the property tax part, the transfer fees part etc. Surely there are enormous opportunities in and around any of the issues I've stated - or perhaps a total solution that encompasses all of those "parts", a collaborative real estate environment - sounds sort of consulting-ish.

What kind of solutions and alternatives do consumers want to in order facilitate the process of buying and selling a home? What is critical to making the process work for you? Buehler?