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A slow housing market is not the only concern for modern Realtors; in fact, it doesn't hold a candle to the larger, long term threat looming. Some call it Web 2.0, and it will surely be the downfall to Realtors who don't learn to leverage it to their advantage.
The nature of the Real Estate industry is about to change and it's anyone's guess on who will come out on top.
There are many examples of the effect on the Internet's change in information distribution in other industries. A few biggies? The major newspaper thought nothing of Craig's List until it was too late; after realizing they were losing millions in advertising revenues they tried to jump on the bandwagon but were too far behind to ever hope of catching up. The music and movie industry stood idly by while the likes of Napster devastated their profits.
Will the Real Estate industry fall prey next? Any information based industry is in jeopardy. The signs say the Real Estate industry is likely to be the next victim.
There is a general principle changing here, and grasping its meaning makes the future evident. Pre Web 2.0, the thought was that holding onto information tightly was valuable; possessing proprietary information put a business in a position of power. (In Real Estate, of coarse, this was MLS.) Realtors had the information and buyers had to come to them to find the right house. Anyone in the industry knows that typical practice was to give out as little information as possible to draw in the buyer.
In today's world that tactic spells disaster; as information becomes more and more readily available, buyers won't stand for the old tactics. They will simply go to whoever will give out the information. In light of this, all signs point to this one simple fact: whoever packages the information in the best way will be the victor.
Technologies are nearing a point where a buyer cab simply shop online for a house. A myraid of Web 2.0 websites are working hard at becoming efficient packagers of information. Zillow became one of the first to give buyers and sellers quick estimates of Real Estate value, as well as leveraging Google maps to enable potential buyers to see the lay of the land, so to speak. While accuracy wasn't always right on, the concept most definitely was. Real Estate ABC quickly followed, taking the same concept and enhacing it; while Fisbos uses Craig's List and it is quickly becoming a strong Real Estate listing site. Trulia is one to watch in the near future; they are attempting to scrape the internet for Real Estate listing information and put it all together in one convenient package. Their technology is growing by leaps and bounds and if it comes together as well as it might, they will become an even bigger player then they currently are. Others like Housing Maps are scraping Craig's List data and creating mashups to package the information into a convenient, easy to understand format for consumers.
Possibly of a bigger threat: the latest rumors that Google is working on a Real Estate related project. It's anyones guess what might come from the minds of Google.
There are many possibilities for how this will turn out. Who will wind up on top? A behemoth company with the resources to gather information through deals with information providers, possibly. That sort of play would take a great deal negotiating to bring it all together. Maybe a smaller company with a little more people savvy will perfect a system of gathering information from participating Realtors and consumers; similar too the concept of a Craig's List. One thing is for sure; no matter how it happens, when it happens the old school Realtors will quickly become a thing of the past. Buyers are going to skip the middle man and deal with the information providers directly. What a Realtor provides in services will have to far exceed the value of the commission paid, or someone else will step in and do the job.
Amidst all of this there is a large amount of possibility. For those industry professionals who can understand a new concept in information sharing, who truly understand that information held tight is no longer valuable, success will be easy to obtain. Today, information that is wide spread is valuable. Real Estate professionals who become informations providers, able to leverage Web 2.0 technologies to spread that information, will succeed.
The Web 2.0 world allows experts in a niche market to flaunt that expertise to their credit, building huge followings utilizing web technology. Some of these niche marketers all ready have readerships which surpass that of major national periodicals. Realtors are definitely niche marketers, experts in a geographical area and a Real Estate specialty. There are as many niche Real Estate markets as there are geographical areas.
If a Realtor develops expertise using Web 2.0 technology, she will develop a loyal following. And we all know that in the Real Estate market, loyalty = money. And the best part of all is that these technologies are very simple to use: blogs are easy to set up and run; RSS feeds are one of the most powerful features of the world of Web 2.0, they can be totally automated. Real Estate pros can form relationships with buyers and sellers in large numbers, all on their own website. Networking can be done fairly effortlessly and super efficiently from a computer if you have the right tools. A perfect example is My Space. Or Facebook. Or LinkedIn. The possibilities are endless if a Realtor know how to navigate the landscape.
It's time for Real Estate professionals to take a deep breath and plunge into the world of Web 2.0. Brochure websites do nothing to entice a buyer or seller to use one's services; it's time to get involved with the Web 2.0 world or get left behind by it!
Phil Weaver of www.thesitemechanics.com consults on social marketing and designs Web 2.0 enable websites that engage the audience, providing tools for the offline marketer to successfully utilize the web to enhance their business. He has recently built www.realestateguides.com, a website Realtors can post their listings, have their own Real Estate related blog, and network with other Real Estate professionals.
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