Category Archives: Geek Estate Blog

Posts by Sam DeBord on the Geek Estate Blog

Homesnap + Broker Public Portal: The Unofficial Why and How (and the case for more PR)

homesnap and broker public portalI’ve been seeing a lot of questions about the direction and makeup of the Broker Public Portal and its relationship with Homesnap. I have no direct influence or investment in either group, but plenty of interest.

Let’s clear the table first—some of these questions come from a great post/discussion earlier here on GeekEstate, others I’ve heard out in the field.

Unofficial answers about the Broker Public Portal and Homesnap (caveat emptor):

Why?
Brokers want a national search experience for consumers in which the brokers control the display rules. Partnering with their MLSs, they hope to create a clean, easy-to-use search and display that delivers leads back to the listing brokerage and is free of other commercial shenanigans. It doesn’t need to be the biggest, it just needs to return more traffic to brokers.

Does NAR run BPP?
The National Association of Realtors does not run or own the Broker Public Portal. Brokers developed the organization, and they run it in partnership with Homesnap. The MLS partners, in some cases, are owned by local Realtor associations, but NAR isn’t directly involved in BPP directly.

Who pays for Broker Public Portal?
MLSs who sign up with BPP pay $1 per member per month.

Why would agents want their dues dollars to pay for another portal?
The agent benefit is getting access to Homesnap Pro tools. By joining BPP, the MLS’s members get one of the best MLS apps available. Its integration of agent-only information, mapping, rapid CMAs, and direct client interaction will make most agents who see it open up their pocketbooks happily—for a buck.

As for dues: if your MLS passes the cost on to the agent, these would be MLS dues dollars (not NAR). Depending on your MLS, those dues may go to your association, a separate for-profit company, or a broker-owned conglomerate. So the BPP portal is the primary broker benefit, and Homesnap Pro is the primary agent benefit.

Is BPP a “for profit” initiative?
*Update: Via Victor Lund, it is a “for profit” corporation, but all profits are rolled back into the corporation.* I think the more appropriate label is a “for profitability” initiative. The BPP members and Homesnap could directly profit from 1.5 million $1 monthly fees from the entire nation of Realtors. But snaring a greater percentage of internet traffic and leads on a cost-controlled platform is the real goal for brokers. This is about greater leverage in online real estate. Commissions dwarf subscriptions. Brokers, and agents, want more closings with lower acquisition costs.

What if Homesnap wants to break away after BPP becomes popular?
We’re told that the operating agreement has fail-safes, or a pre-nuptial, built in. It’s a private venture. Everyone on this board knows about the NAR/realtor.com/Move deal 20 years ago–they don’t need another reminder.

Why would a consumer use BPP/Homesnap (vs Zillow et al)?
Consumer-driven traffic is just one part of the equation. Agent-driven traffic is a very different animal with a much higher correlation to closings. Don’t ignore the potential of MLS-wide adoption of an agent-to-consumer mobile search tool.

In 2012 I thought Realtor.com might nail this strategy with its app, but the adoption just didn’t take. It made even more sense to me in 2014 when Homesnap came on the scene. (Maybe that just means I’m repetitively wrong.)

Won’t this, effectively, be a “consumer facing MLS website” on a national scale?
If it gets national adoption, it would be in a way. Importantly, though, brokers initiated this project, not the MLS itself. The likelihood of all 700+ MLSs signing on anytime soon is low. But let’s be honest, there are already a handful of consumer facing MLS websites on a national scale. They’re just run by “media companies.” Almost all MLSs, brands, franchisors, and brokerages are feeding them MLS listings somehow.

If my MLS joins, does this mean my MLS will be competing with my local website for traffic?
There’s some nuance in this answer. A local MLS with a public facing website creates a clear competitor to a broker in local search. A national portal also competes, but on a bit of a different playing field. Brokers/agents with quality websites can still compete for local traffic because of their unique local status.

Truth be told, though, everyone’s competing with everyone. Once in a while a large portion of the brokerage sphere is in agreement, and it’s worthwhile to seize that momentum if that’s the “big picture” side you’re on.

So how does Broker Public Portal + Homesnap succeed?
Gradually: MLSs join, brokers push adoption of the tools for their utility and cost savings, and agents start using the app as their primary interaction with their MLSs. In turn, they share listings and the search experience with their clients. 1.5 million real estate professionals become the boots on the ground “selling” the product to actual real estate consumers.

Ideally, more consumers stay inside this sphere. Agents and brokers take home the same commission splits, with lower acquisition costs because advertising fees are lower/cut out.

Think of it this way: Homesnap getting into an MLS is like a software company becoming the only music app provider in Apple’s app store. Other companies can buy all of the Android and Microsoft user traffic they’d like, but everyone on Homesnap’s platform is protected in the walled MLS garden.

What’s next?
There’s no guarantee that any of this comes to fruition. But this is a very pragmatic approach at leveraging brokers’ greatest strengths—the MLS and their agents—and focusing them on building media exposure that they couldn’t otherwise achieve by simply trying to buy it.

Brokers don’t have to build their own mobile search–Homesnap has already done it. There’s already a significant base of traffic using their systems, so there’s no starting from scratch.

Finally, a respectful suggestion: The folks at Homesnap have always done a great job of getting media exposure as a lean startup. Now it’s time for brokers to give the joint venture some more financial horsepower to proactively answer these kinds of questions on a broader scale.

In the absence of immediate answers, wild conspiracies spring up. I can’t overstate how difficult PR and industry relations are in real estate for a new initiative. Just ask the folks at Upstream. Let’s get the story straight for our industry, and then let the chips fall where they may.

Comments? Fire away.

Sam DeBord is a former management consultant and web developer who writes for for Inman News and REALTOR® Magazine. He is Managing Broker for Seattle Homes Group with Coldwell Banker Danforth, and 2016 President-Elect of Seattle King County REALTORS®. His team sells Seattle homes, condos, and Bellevue homes.

Upstream & The National Broker Public Portal: Unearthing, Creating Super-MLS Data Layers

This article was originally published on Geek Estate Blog:

Upstream, Broker Portal, and MLS DataProject Upstream aims to become the defender and gatekeeper of brokers’ real estate listings nationwide.  The National Broker Public Portal intends to provide a nationwide display of data that puts brokers at the controls.  The former is not intended to exclusively fuel the latter (though it seems like a match made in heaven–more on that later).

Upstream is not an MLS and will not replace the MLS’s co-broker, commission, and professional standards roles.  Its creators do not intend for it to be public-facing on its own.  It’s intended to feed many portals with standardized data.

Upstream and the National Broker Public Portal are projects about advertising online to the real estate consumer. Accurate data and fair display guidelines are important to brokers.  Based on consumer traffic numbers to certain portal sites, consumers don’t seem to care as much about the same issues.

Brokers need to achieve their goals by creating their own vision of perfected data display, while simultaneously building an attractive platform that consumers will not only approve of, but proactively search out.

Differentiation on a level that consumers can easily and quickly understand will be key to gaining a significant market share at a price that’s attainable.

To differentiate in the consumer space broker projects need unique data layers that are only available to brokers.  They can create them by:

1) Reworking the proprietary data they already have, or

2) Generating entirely new layers of data that accompany any new listing that enters the marketplace through their gateway.

Unearthing another layer of current listing data

When we say the portals have “access to MLS listings”, we’re really talking about just a small subset of listing data.  Portal advertisers show the basic listing data, and surround it with other data from publicly available sources.

An Upstream-type gateway could require its members to give broader access to their listing data fields in return for being a part of this new unique consortium of data providers.  By allowing more data fields into this sole repository to become publicly displayed, a preferred portal that is allowed to display this data can claim a truly unique identity.

Just one example of data that might be leveraged for unique consumer content:  keybox history.  The preferred portal might be able to display:

  • The number of showings for a property
  • The rate of showings
  • The days in which the property gets the most activity
  • Aggregated showing data across neighborhoods and cities
  • Heat maps on Sunday traffic for house hunting
  • Which neighborhoods are trending upward
  • Which ones are lagging and have better potential for discounts on prices

That’s just one facet of listing data that’s currently behind a shroud.  We could think of another half dozen in an hour.  An initiative to expose this kind of data on a single website would have immediate consumer impact.

Creating a New Layer of Super-MLS Data

If an Upstream-style project really gained ground as the starting point for listing input, why not give the option, or potentially the requirement, that new listings on this data source add new fields that might not have existed at the MLS level before?

Imagine requiring every single listing entered on Upstream to include a legal description, a floorplan, a permit history, or a 3D-model of the home.  Think of the value of a Super-MLS layer of data that added the kind of consumer-viewable documents and features that can’t be found anywhere else online and can’t be reproduced through public data sources.

Of course these things would have legal and financial ramifications, but the point is not that the examples given are the specific answers.  The answer itself might not be apparent today, but the ability to provide a listing with a totally unique display layer, one that isn’t available to any other advertiser, is riveting.

Why would it work?  The company inputting the data has 1 million data entry staff members.  

Agents are the data creators.  Even a well-funded portal’s engineering army is a fraction of the size of the agent masses creating unique content on a property-by-property basis.

When the data gatekeeper becomes the de facto starting point for the industry, whatever new layers of proprietary data have been added to the listing input fields will become the standard of operation.  The listings could still be fed to MLSs for B2B/IDX/co-brokerage functionality, while a single consumer portal which is allowed to be the sole national display vehicle for these new layers would be able to hammer its opponents over their heads with this Super-MLS listing data.

Get To The Point Or Go Back To Work

The conversations we’ve had about portals selling our data back to us have been long on what brokers want.  They’ve always been short on how to realistically get those things in a consumer advertising market, which is far more important.

If brokers want to create better data, and display it in a superior way, they should focus first on who will pay attention.  Ask what new things can be done with the proprietary data they already have.  Add on a layers of new proprietary fields and make them a feature or a bonus for the agents who input them–an opportunity for their listings to stand out, not just to do more work.  Create a reason for consumers to fund the project(s) through traffic going forward.

By unearthing hidden listing data and creating new Super-MLS layers, you might just have the kind of data that consumers can’t get enough of and that a portal could benefit financially from in a big way–and that’s where the data creators start taking their leverage back.

Sam DeBord is a former management consultant and web developer who writes for for Inman News and REALTOR® Magazine. He is Managing Broker for Seattle Homes Group with Coldwell Banker Danforth, and a Director for WA REALTORS® and Seattle King County REALTORS®. You can find his team at SeattleHome.com and SeattleCondo.com.

The National Broker Public Portal: Simplicity, Differentiation Are the Paths To Success

This article was originally published on Geek Estate Blog:

Simplicity - Broker Public Portal
Image via Heinz Marketing

There has been a lot written about the possibility of a national Broker Public Portal for real estate–probably too much, for a project that’s nowhere near being off the ground yet.  Still, the idea rallies the spirits of many brokers, so it has legs.

The hurdles in front of the project are massive, and they shouldn’t be ignored.  They should become the focus of the project.  Its success will not be driven by trying to overcome them, but finding a way around them.

A member-led organization funded by part-time participants will always be severely hamstrung when competing against investor-fueled public technology companies.

Drew highlighted many of the obstacles to BPP’s success, some of which would call into question whether the project is even worth beginning.  Some of the best (synopsized):

  1. Once the 7.6-12.5 million is invested (initial website build), what is going to be invested going forward and where is the money going to come from?

  2. Is there a defensible moat that would make this an interesting business?  Up to date listings is not enough by itself.

  3. Technology providers in the real estate industry can build technology – but that doesn’t correlate to a great consumer product.

1. Let’s start with the money.  BPP would be best to accept that it will not outfund the Zillow Group.  It won’t outfund News Corp/Move, either.  It has to do something nimble, simple, and creative that doesn’t require building the massive, complex technical project that the big 3 (or 10) already have created.

2 . Up to date listings are a key differentiator, but they are clearly not enough to stand on their own.  They should be a big component of the value proposition, but building the next attractive bauble that draws consumers to the site will be necessary.

3. Real estate industry insiders are not consumer software developers, by and large.  They shouldn’t attempt to become better at building a complex nationwide product than the portals.  They could hire a team to compete but, that again would be oppressively costly if it were done at a competitive level to a Move/Zillow team.

So, don’t start building what has already been built.  Create the next zestimate.  Find that little shiny object that makes a consumer say “I want this.  I’m going to show it to my friends.  They’re going to want it, and we can’t get it anywhere else.”

What do brokers, and real estate insiders, have access to that public portals do not currently?  How can that be molded into an attention-piquing, conversation-starting, unique proprietary product that draws massive consumer-initiated traffic organically over time?

Think Drudge Report.  Think iPhones opening keyboxes.  Think On-Star in your vehicle.  Start out with a wide open mind to what your industry has its tentacles attached to, and then find niches that no one else has yet exploited.  Stick to simplicity, and draw traffic based on the unique assets you create.  Don’t try to build every restaurant in Manhattan at the same time.  Just build the delivery service that gets food to the consumers more quickly.

There must be dozens of great, simple, scalable product ideas that could be derived from a big group of industry trailblazers, based almost wholly on the technology they already own.  I’d be lying if I said I didn’t already have my own.  Having access to broad, clean data will be ultimately important.  Continuing to build the structure of the BPP organization will be necessary, but developing a product that’s unique enough to be worthy of such a grand support structure should come very early in the process.

The process of building a national broker public portal will be slow.  For it to get anywhere, the participants need to be motivated by more than fear.  They need a visible, unique, attractive product to unite behind.  They need a project that seems financially viable.

Consumers don’t adopt portals.  They use tools.  Whether those tools provide entertainment, news, education, or efficiency, the brands that provide the tools consumers value get their loyalty.  By developing that simple, nimble idea for a tool or product that differentiates BPP’s brand value first, it just might have the vision that gets brokers and consumers jumping on board in quick order.

Sam DeBord is a former management consultant and web developer who writes for for Inman News and REALTOR® Magazine. He is Managing Broker for Seattle Homes Group with Coldwell Banker Danforth, and a Director for WA REALTORS® and Seattle King County REALTORS®. You can find his team at SeattleHome.com and SeattleCondo.com.

Walkscore and Redfin: Is Real Estate Tech Too Profitable For Distractions and Discounts?

This post was originally published on Geek Estate Blog:

Seattle’s technology brokerage, Redfin, recently acquired our local community metrics company, Walkscore. The guys who run WalkScore have grown their business into household name nationwide, and have remained the same gracious, humble, community-conscious entrepreneurs in the meantime.

You can’t help but feel happy that Josh and Matt are putting a little bit of money in the bank now. Walkscore’s products have always looked like a goliath in terms of long-term potential eyeball attraction that hadn’t received their appropriate financial payoff.  That chapter has now been closed.  (Let’s hope that WalkScore widgets on real estate agents’ sites don’t start harboring trojan horse links back to Redfin a la Zillow widgets, but I digress.)

Walkscore is now a part of arguably the most tech-savvy brokerage, top-to-bottom, in the country.  Franchisors have some outstanding technologies available, but the ability for Redfin to drive technology down through its silo business model makes for uniform adoption throughout its entire company.

The WalkScore acquisition shows that the company is willing to spend significantly to increase its lead in online technology over competitors.  If you talk to folks who use Redfin’s services, they’ll always first point to the unmatched listing display, discussion forums, and mobile app features that set the user’s experience apart.

Surprisingly few talk about the discounts/rebates.  Many agents from other brokerages’ clients use Redfin’s tools, but not their agents.  There’s no doubt that the discount is attractive to some, but its continual shrinkage in the business model points to something that might just be the future of the business:

Redfin is too successful generating investments with technology to be toying around with discounts.  The desire to change the pricing model of the industry (and the division of labor at the same time) may actually be a distraction from the path to the greatest profits.

Real estate insiders are well aware of how multi-tasking degrades a person’s ability to achieve great success in a single task.  Redfin is keenly aware of it.  They’ve divided up the real estate sales process into a production line of task-achievers that have specific roles.  Your showing agent is a field agent.  There are others back at the office who are better at paperwork and transaction coordination to take you through the next steps.  Redfin certainly wouldn’t have agents building their own websites, as many in the industry do.  More role specialization is designed to make the agent-client transaction more efficient, and make more room for profits (or discounts).

While we can certainly point out why clients prefer a single professional to walk them through the entire process, it’s a great insight into Redfin’s business mindset that they’ve set such specific focus on these tasks.  They understand the efficiency of role specificity so well at the individual employee level, that it’s confusing to see the multi-pronged attack on industry norms that make up the overall business model.

Redfin is trying to reinvent the online user experience in real estate.  They’re trying to break the pricing/commission model of real estate.  They’re trying to restructure the labor roles and divisions within the real estate agent sphere.  They also need to turn a profit for investors, theoretically , to go public (or be acquired).

These are all really attractive goals for a company that simply wants to break everything in sight.  They also take focus and resources away from one another.  They’re a herd of horses running tethered together, when the single, most exceptional one of the group would probably run faster on its own.

Redfin is a technology brokerage.  That’s how they’re know nationwide.  The fact that they’re known as a discounter in Seattle is just necessary collateral damage from the loss-leader strategy that has gotten them a foothold in the news media and the national scene.  They’re now acquiring other technology companies to emphasize their superior and unique technological tools for the real estate consumer.

Their downfall is still the inability to get listings.  Sellers list with people.  They list with friends, trusted advisers, and agents who’ve done a great job selling their homes in the past.  They’d prefer not to list with a production line, and they definitely don’t list with a technology.  Most would rather pay a higher commission to an experienced agent who they have confidence in than take a chance on a discount with an unproven entity.

Buyers, on the other hand, just want to find homes.  The technology that Redfin provides makes for an easy entry in to the showing process, and although the buyer might be less than satisfied with an inexperienced part-time field agent conducting the house hunting portion of the process, some will fight through it because they believe in the superiority of the technological process, or simply for the discount.  Others will just use the technology and call the agent they like when it’s time for a showing.

Why not forgo the sideshows and co-opt the profit model that has worked for every other long-term real estate brokerage?  With a unique and valuable technology platform that consumers clearly love, why not just eschew the discounts, bring on successful full-time real estate agents with existing local relationships, and reap a portion of the “full” commissions that come from experienced agents selling homes?  If consumers love the process/technology, and they love your agents, how could profits not increase?

There is, of course, an easier way to get to this point than hiring agents.  If one of the big boys were to acquire Redfin and provide its technology to all of its brokerages, the superior technology and agents would be matched with a well-known, established brand for the trifecta of consumer trust.  Just as Coldwell Banker is now adapting Zip Realty’s tech into products for its brokerages, imagine Keller Williams acquiring Redfin and applying its technology to all of its offices.  SEO, lead generation, and customer retention from the desktop and mobile tools could lead to huge efficiency and conversion improvements.

If, though, the real goal is to simply change the way real estate is done, Redfin could continue to use online lead generation to create a presence in more cities, getting commission referrals from partner agents as a paper brokerage until that location is ripe for a local discount office.  That might be the vision for some–but it can’t be the most attractive direction for the investors who have poured millions of dollars into the company looking for a return.

Maybe we’ll see a shift in Redfin’s strategy over time to what seems to be a more streamlined, focused, and profitable–if also more traditional–business model.  Maybe it won’t come from within, but from the right company acquiring them and effecting that change.  Or, maybe they’ll continue to trailblaze the road less traveled–by both real estate listing commissions and professionals.  For my friends at WalkScore, who undoubtedly have a newly-found financial interest in Redfin’s profitability, here’s hoping they don’t go down that lonely road.

Future Mortgage Option: Lending Insurance To Avoid Rate Volatility

This article was originally posted on the GeekEstate Blog:

Imagine you’re one of the millions of Americans who have been locking in in record low interest rates on adjustable rate mortgages within the past few years. 4.0 percent on a 30 year mortgage is a good deal, but 2.25% on a 5 yr ARM, or 2.5% on a 7 yr ARM cuts your payment nearly in half. Since most mortgages are refinanced or the property is sold within a seven year time frame, it seems like a good financial bet.

Still, five to seven years from now you’re not sure where rates will be. Your ARM could reset annually and potentially leave you at a 7.5 percent in an 8-10 year period. If market rates are near 7 percent at that time, your options will be slim.

It would make sense to have a product that alleviates that risk. There seems to be a niche market for lenders, and insurance or investment-related service providers, for a “future mortgage option”.

The idea would be fairly simple and probably highly profitable for the service providers. Allow a homeowner to apply, and pay the fees upfront, for a mortgage refinance at a set point in time in the future. A homeowner could secure a refinance of their home today at 5.0% fixed for 30 years, but delay the actual closing and recording of that mortgage until five years from now. The lender would be locked into an agreement to close that financing at the defined future date. If, upon reaching that date, the homeowners decided the refinance wasn’t worthwhile, they could simply decline the refinance, and forfeit the closing costs that they had paid upfront.

Of course, like anything related to mortgage lending, there would be plenty of risks that need to be addressed.  Here are a just a few:

  • To ensure the financing is still available in the future, the lending institution would need to be insured by a larger organization that could follow through on its obligations in case it goes under.
  • The borrowers would be prohibited from taking on any additional leverage on the home–the balance of the liens against the property at the point of application would have to be the same or lower upon the date when the future mortgage is to be recorded.
  • The 3rd party fees necessary to record the mortgage, collected as part of the closing costs, would have to be held in some kind of reserve account by the lender. It would probably make more sense for the lender to only collect its origination fees or “points” upfront, and then collect the recording-related fees at the future closing date if the homeowners elect to go through with the refinance.
  • The lender would incur the risk of the homeowner’s employment situation changing in the interim.  That’s a risk that every lender takes with long-term mortgages already, though.  Within 30 years, there will inevitably be changes with some borrowers.
  • The lender would incur the risk of market values declining in the interim.  Again, this risk is inherent in any real estate lending.  A company involved in ARM lending is already keenly aware of the profit margins necessary to take on the risk of short-term market depreciation.

This might make the future mortgage option sound like a bit of a niche product. To the homeowner who is making the hedge bet of a low-rate ARM, though, it’s exactly the kind of backup insurance that would be attractive.

We insure everything. Why wouldn’t we pay a few bucks upfront to mitigate the risk that rate volatility creates for our largest monthly expense and our most valuable possession?

Homeowners with today’s ARMs are banking a nearly 40 percent reduction in their mortgage payments.  At the median U.S. home price with a 20 percent down payment, they’re saving almost $20,000 over seven years.  In high cost markets, their savings could easily reach $50,000. Spending a grand or two upfront to ensure that, at year seven, their payments are still reasonably low would be financially responsible.

Lenders would obviously be the primary business beneficiaries of the product, but financial advisers and insurance agents could reasonably offer it as an option to their clients as well. There would certainly be some regulations involved, but there would probably be a way for these service providers to directly partner with lenders in offering the products to customers.

Take it a step further, and consumers could be offered both products at once–an ARM and a future mortgage option. It might require two different lending institutions to be involved, since most lenders love their five percent ARM adjustments and wouldn’t want to gut them with a secondary product. The added income on the future mortgage fees might just be enough to get a single institution to offer both simultaneously, however. Effectively, they’d be creating an ARM with a single fixed adjustment date and rate, and a higher profit margin for closing it.

It’s a somewhat complex product in its implementation, but with our zeal to insure ourselves from any risk in our lives, there are probably a lot of homeowners who would buy into a future mortgage option.

New, Inexpensive Video Opportunities Explode For Small Businesses (Including Hyperlapse)

This article was originally published on Geek Estate Blog:

If you haven’t tried out Instagram’s new Hyperlapse app (and your Facebook feed isn’t already full of your friends’ time lapse videos), stop reading this article, get the app, and try it out right now.

My first reaction to this app was that its ability to shoot a time lapse video from a mobile phone was really interesting, but its ability to stabilize video through its programming that constantly monitors the phone’s gyroscope was the really useful feature.  Steve Pacinelli at Tech Savvy agent beat me to it, but I think that most people will come to see this stabilization as significantly more useful for shooting real-time real estate/home tours than a time lapse.  The ability to use this stabilization in other functions will continue to make mobile video production more and more professional.

In the past few months I’ve seen more new video products created for small businesses and real estate agents than I’ve seen in years before.  Here are a few links that run the gamut from creating your own videos, to hosting them for video SEO purposes, and for displaying them in an attractive fashion on your website:

3rd Party Video Hosting

Video hosting services have been around for a while, but more are creating hosting pricing packages that are in reach of a real estate agent.  SproutVideo is one of those services that we’ve personally used and been impressed with.  The strategy behind using your own video hosting service is to maximize video SEO.  Submitting sitemaps to the search engines tells them your video resides on your own website, and points the traffic there.  There’s a lot of literature on this, but the simple takeaway is that when your YouTube video outranks your website in search results, 99% of the time people will watch your video on Youtube and then leave.  In many cases, “owning” your videos and keeping them on your website will result in better conversion of traffic, even if the total traffic numbers are lower.

Video Hosting and Display Channels

Tagible has created a platform for hosting your videos, but also displaying them as a channel that can be housed on your own website as opposed to on YouTube.  They’ve got a nice interface for uploading and adding content, and one of their biggest strengths is the tie-in to pre-made video libraries.  As an example, they created a channel for me that displays my team’s videos, and also pulls in real estate videos from 3rd party sources as well as branded videos like those from Coldwell Banker.  It’s a real kick-start for someone who doesn’t have a lot of video content yet, and it’s very attractive.

Rebranding of Video Libraries

What a lot of busy folks are looking for is simply a video library that’s ready for their customers to view, with their own contact information added to it.  I bumped into Bill Kerbox at Inman Connect in San Francisco, and his company is working on a product to do just that for agents.  They have a standard set of videos about the usual questions and topics that come up in conversation or prospecting for agents, and agents can have their own marketing/branding, contact info, and calls-to-action added to each video.  They’re displayed right on the agent’s website, so the traffic stays within the agent’s sphere.  This might not appeal to those looking to do unique local videos, but it’s certainly a fast way to start a potential contact-generation video campaign, and could be tied in to listing prospecting fairly easily.  Here’s an example from an agent in Southern California.

Building the All-In-One Mobile Video App:  WrapVideo

WrapVideo logo
I’ve been imagining what the perfect small business mobile video app would be for some time.  I started planning it out a couple of years ago, but as most entrepreneurs with real jobs on the side do, I never got around to finding someone to build it.

It would have the ability to blend photos, video clips, music, and audio like Videolicious. A real estate agent or small business would simply have an intro and outro image uploaded to their phone, and it would allow them to add video clips, and produce the video.

What didn’t exist until now, was the stabilization to make the video look somewhat professional.  I experimented with Luma in the past, but now that Hyperlapse has set the standard, the reality is here to integrate that stabilization into a Videolicious-style app.

Finally, the app would need an integrated video hosting service to maximize the video SEO.  With an integrated hosting service, the business person would shoot, edit, add music, voice it over, upload to hosting, and potentially even plunk the video down right on their website from the palm of their hand.  Imagine a sculpture artist, a furniture maker, or a real estate agent creating professional product videos on a regular basis for their website, with little hassle or time necessary.  It’s a content gold mine.

Ideas Are A Dime A Dozen Without Hard Work and Development

While I thought the idea was genius two years ago, I made the mistake a lot of people probably make–thinking that I was the only one with this idea and not talking to enough people to see if it was worthwhile.  Finally, a serial startup guy told me that there are probably a dozen other people with the same idea and no motivation, so I just needed to get the idea out in the open, and see if there was really a need or a market for it (thanks Christopher Fryer).

I built a video pitch a year ago to express the value proposition and the pain point for online video.  Want to steal my idea?  Be my guest.  If you build it and I can use the app, I’ll be happy.  Interested in working on it with me?  I’m all ears–I can sell if you can build.

WrapVideo:

Someone out there is probably working on an app like this as we speak. If not, let’s just hope that it’s on its way soon, because I know a lot of business owners who would adopt video content immediately with this kind of access.

Price Per Square Foot in Real Estate: When Data Makes Us Less Informed

This article was originally published on Geek Estate Blog:

As professionals, we’re often as fascinated by real estate statistics as consumers are. Price per square foot is one of the metrics that is frequently quoted in attempting to value homes for sale, and it has become a ubiquitous stat on real estate websites.

While it’s an interesting piece of data in an online listing, frankly, it’s a waste of time. Price per square foot is a number that boils down dozens of unique factors in a house or condo and attempts to bundle them into one tiny package. Unfortunately, all it really does is instill a false sense of confidence. It takes away all of the unique, broad, and interesting features of the home that allow us to effectively evaluate its worth and instead melts them into a beige, unremarkable mass.

Price per square foot is the equivalent of putting a cheeseburger, fries, and Coke into a blender and trying to charge $5 for the resulting “Happy Meal”. To lean on it as a means for supporting a valuation is lazy. It ignores view, geographic orientation, floor plan, upgrades, nearby amenities, and property condition and gives the impression that it can encompasses them all with a single number.

As real estate agents, we often struggle to explain this to our clients. They feel more informed when websites are crunching data into these easy-to-digest figures and often think we’re being disingenuous when we tell them to ignore statistics like price per square foot when evaluating a home for sale.  It seems illogical that this new information might actually be detrimental to their ability to evaluate a home, but unless they’re buying an entire neighborhood at once, it often is.

Let me give a quick example that might help explain this for the consumers most likely to use the price per square foot measure–condo buyers.  Condos in the same building are theoretically the most similar homes in terms of location and style and should measure up comparably.

I pulled 44 sales in Seattle’s Escala condo building from the first half of 2012, and measured their price per square foot against floor number–just one of the many factors that could illustrate the ineffectiveness of this valuation strategy.

** Yes, this is a very old Microsoft Excel chart ;) **

Seattle Condos Price Per Square Foot

The first conclusion is fairly obvious:  If we used price per square foot to compare one condo to another for value, we might be under $350/sq ft for one condo and over $650/sq ft for another.  Averaging those numbers around $500/sq ft would still make valuations of some condos on lower floors and higher floors off by over 40 percent.

If we took the floor of the condo into account and only compared “nearby” properties to one another, the trend line of the numbers might seem to make more sense in the aggregate.  For the individual home buyer, though, the resulting valuation could be still be remarkably inaccurate.

There are condos on the 2nd floor that sold for higher price per square foot valuations than some on the 10th floor.  A condo on the 20th floor sold at a lower rate than one on the 9th floor.  Condos within one floor of another often have sale prices that deviate up to $100/sq ft from one another, up to a 30 percent margin of error.

While the overall price per square foot trend is upward as the floor number rises, clearly any individual condo cannot be reliably compared to others in the same building using price per square foot.  The floor number is just one way of illustrating the inefficiency of the measure.  We could easily produce similar charts for condos facing East vs West, or those with views of a lake vs. a city.  We could show that the upgrades in the home, the proximity to a desired amenity or a noise nuisance, or even the access to elevators and parking spaces will all affect the home’s value in a way that makes aggregated averages so inaccurate that they’re often not worth even considering.

Establishing the true value of a house or a condo is not a simple task, even if we’d like it to be.  The more we attempt to ease the process by boiling together the unique and interesting qualities of a piece of real estate, the less effective our valuations of that real estate are.  Statistics often only tell a small part of the story, and in this case, price per square foot tells us very little at all about a home’s true value.

Disqus vs. Facebook Comments: Barriers, UX, and Stickiness–Which is Better?

This article was originally published on Geek Estate Blog:

As someone who spends far too much time commenting on others’ writing and discussing business online, I think I have a fairly good feel for user experience when it comes to online commenting systems.  Disqus and Facebook commenting seem to be the major 3rd-party players in the commenting world right now, and they deliver very different products.

Barriers To Entry

It seems to me that the most successful discussions I’ve seen over the years have been on the Disqus platform.  Facebook comments seem to be picking up steam and replacing Disqus on quite a few sites.  I’d imagine this is because the proprietors believe that everyone is on Facebook, while Disqus requires a separate account registration.

There’s some logic in that, but a few flaws in the assumption as well.  The first is that Disqus does allow anonymous/guest commenting when the administrator enables that setting, so everyone can comment on any given article if desired.  There’s no exclusion of unregistered commenters.

The other flaw is the assumption that Facebook ubiquity is superior.  Many Facebook users don’t want their work discussions carrying over to their personal Facebook profile.  Even though the default in Facebook commenting is to not post to your profile, many users will be resistant to the idea of linking those comments to their account, whether or not their perception is misinformed.  Further, many will likely tone down their comments because they somehow believe they are more closely tied to their personal profile (toning down comments might be good or bad, depending on your goal).  Again, the users’ impressions might be wrong, but we all have concerns about Facebook’s ability to change our privacy settings at their whim.

User Experience

The UX on both of these platforms is…not quite velvet yet.  They both have some nice features, but they’re not particularly intuitive once you get past your initial comments.  Facebook’s system seems to be implemented differently on different sites.  Replying to other users can be clunky, and the ability to name other commenters with an @FacebookName isn’t consistently supported in my experience.

disqus-favorite

Disqus’s reply comments feel much more organized.  Still, the ability to follow a discussion is quirky.  To see what others are commenting after leaving the site, a user needs to “favorite” the discussion by clicking the little star.  Further comments will then come directly to the user’s email.  Without favoriting it, the user only receives direct replies to his or her comments.

That’s a decent, if not intuitive feature, but it also triggers a daily email digest with all comments from the previous day.  Most users want immediate updates, or a daily digest, but not both.  As a regular user, I don’t see a quick way to choose one or the other.

facebook-no-optionsOn the Facebook side, I’m not even aware of a feature that allows you to follow all comments on a thread.  Users receive notifications when others reply to their specific comments, but that’s all (this may be in the custom implementation of the platform).  A user has to come back to the page regularly to see if any new discussions have arisen.  If the Facebook user checks the box to also post the comment to his/her personal profile, then they’ll receive more notifications on the Facebook platform, but most don’t.

This is particularly problematic for the authors of pieces who want to respond quickly to those commenting on their articles.  Disqus’s “favorite” feature, while clunky, at least allows the author to sit back and wait for comments.  Reloading the web page every hour to check for comments is like AOL dial-up.  This has to improve.

Stickiness–will they keep talking?

The whole point of a commenting system is to encourage discussion.  You might get more users in with a lower barrier to commenting, and you might get them to comment quickly with the right visual calls-to-action or simplified UI to remove any extra steps.  At the end of the day, though, the total number of comments you receive, especially those that interact with one another, will be the measure of the success of your system.   The quality of those comments is somewhat important, but discussions create traffic, and sooner or later the wiser minds will join in.

My experience, thus far, is that Facebook commenting has a long way to go.  I wouldn’t be surprised to see it take over the market place within a few years because of Zuck’s ability to buy or build anything he wants, but for now it’s not drawing me back in to discussions.  If Facebook leans further into the commenting platform and draws more of its core users into those discussions (most likely by lessening our privacy choices in our comments), they may very well draw discussions from broader audiences since their user base is so much larger.

In the meantime, the articles I’ve written on the Disqus platform have had more fully-developed discussions than those on Facebook commenting.  If Disqus could add a few more options for notification customization right on the commenting interface (not requiring the user to go into a “Settings” screen), they might be able to hold on to their position as the premier commenting system online.

Real Estate CRMs and Lead Management: Where Is The Integration Automation?

This article was originally published on Geek Estate Blog:

I’ve been reviewing dozens of CRMs over the past year for projects within my own team as well as others’ businesses. The majority of these discussions include a fairly simple question: Will this CRM automatically import/update itself with the leads I get from various sources?

Traditional CRMs are great for managing your “customers”, which is what they were designed for. It’s striking how many haven’t gotten past that point, though. Most real estate agents and teams that I know are generating leads through their own websites, company websites, and marketing portals. These leads aren’t customers yet, and they don’t warrant a salesperson taking the time to input each one individually into a CRM.

It seems that every CRM would have a system to automatically import its users’ leads from outside sources, but surprisingly few do. Exporting a list of contacts from the source and manually importing them to your CRM doesn’t count.

At a minimum, having a custom email address that salespeople can cc when they receive new leads should be available. This can direct new leads to the CRM and add them to the contacts database without user input, but I still find that the majority of CRMs don’t have this functionality.

It’s not just the small companies, either. Some of the largest and most expensive CRMs require a boatload of integration work, upgraded modules and add-ons, and customization to make this relatively simple process work.

Ideally, a CRM should be working proactively with every new lead generation source in the industry that seems to be gaining market share. Find the lead source company, figure out how you can make the process of getting their leads out of their system and into yours easier, and advertise your ability to do so.

If a CRM is looking to the future of serving the real estate agent population, this is a huge area to focus on. Organizing and simplifying the process of lead-contact-followup is something that busy sales people are willing to pay for.

There are a few companies who are doing this now, but some sort of API or set of standards that allows lead generation companies and CRM companies to design their import/export functions to work with any other vendor would be a huge boon to making the process simpler going forward. The technical knowledge necessary here is far above my pay grade, but an intermediary conduit that brings any lead source into communication with any CRM accepting that kind of data might just blow the lead management industry wide open.

Real Estate Search: Why Agents Don’t Need To “Win”, Just Earn

This article was originally published on Geek Estate Blog:

Drew wrote a great piece earlier on the state of real estate search.  I was at Inman Connect in New York last week as well, and it appears that not only did we share a few drinks, we also shared some of the same speaker “takeaways” in terms of the dynamics of portals and agents in the online arena.

What we didn’t share was the same reaction to the speakers’ positions.  By and large, the message was “Portals have already won search.  Stop trying to compete in that space. Focus on other things.”

I think that a lot of our disagreement may be more in semantics than actual strategy, but for a word-nerd like myself, it matters.  Telling a real estate agent to “cede” the real estate search arena, in whichever platform, is a dangerously overemphasized position, in my opinion.

Even still, we can start from Drew’s points, most of which I agree with in concept:

1. A “decent” web search is the cost of doing business in 2014.

Without a doubt, this is true.  Having a website with search was unique last century.  The cost of most decent-quality websites is minimal compared to most agent/brokers’ other advertising budgets, but most don’t apply the effort or the resources to make it usable and friendly.

Your site is not going to be anywhere near as good as a portal’s in terms of UI and design.  You don’t have an L.A. agency working for you.  But, if it’s clean, easy, and full of unique local content, your users still might prefer it to the big boys.

2. There is room for Agents/Brokers in Web search.

Glad we agree here.  Agents don’t need to “beat” a portal.  They just need to garner a handful of leads every week.  This isn’t particularly expensive, it just requires some marketing strategy and ongoing upkeep.  Being the 4th or 5th website that a buyer visits allows you to differentiate from a national organization and sell to a consumer who is likely closer to purchasing than they were when they visited their first real estate search site (likely a portal).

3. We live in a mobile world.

Increasingly so…

4. Building great mobile products is a lot harder than web.

…and costly.  There are fewer options available at the moment, fewer providers, and fewer folks who really know how to do mobile well.  This translates into a much larger expense for a decent quality product.  Moreover, if it’s a one-off product that doesn’t have built-in updates available (i.e. the provider will create a new version for iOS7 without breaking your bank), it’s going to be sinking from the day it goes live.

5. Building great consumer products is not a broker’s (or agent’s) core competency.

True.  This goes back to the need for some focus and integration of web search into the basic company strategy.  Without intently creating a quality search experience, the efforts will be in vain.  At the same time, it doesn’t have to be Zillow, or Trulia, or Realtor.com.  It just needs to be a user-friendly search that provides unique content from your local market.

6. Zillow, Trulia, Realtor.com (& Redfin) are dominating the market.

It’s true, the portals get over 100 million leads/year.  Only 5 million homes/year are actually sold.  Not all leads are equal.  The consumer is searching lots of sites, and your leads will be more focused.  When a buyer searches on John James Realty and then signs up with John James Realty, he or she is probably more likely to recognize John’s name when he calls back, as opposed to when he was one of four agents on a portal listing page who happened to get the lead.  Are your five local website leads leads worth ten of theirs?  I don’t know.  But, I’d wager that your local site’s leads offer much higher conversion rates.

7. Mobile Distribution is Insanely Hard.

This may be the biggest point of the discussion.  If the scarcity and cost of quality mobile developers wasn’t bad enough, the task of garnering consumer adoption of apps is exponentially more difficult than generating website visitors.  It requires an entirely separate marketing strategy for the mobile product, and it has to continue long-term to keep the product viable.

My slightly different answers to each real estate role:

  •  Agents:  Start with the best IDX you can find.  It doesn’t need to cost $1,000/mo.  It doesn’t need to outpace a national portal.  It just needs to be so easy to use that you’re convincing a handful of consumers, every week, to contact you.  As Drew rightly said, a mobile app should probably be nowhere near the top of your priorities…unless you’re already doing very well at search.  If you already have a large enough following/user list to market an app to early adopter/reviewers, and you have the resources to purchase a product that will continue to be improved over time, it might be worth a shot.  In the meantime, don’t ignore mobile web.  Get your website responsive if you don’t have an app (or even if you do).
  • Brokers:  Go build an app with a smart developer.  It might not make you a lot of money for a while.  But, over time, the democratization of mobile app technology will happen much like it has for other technologies.  It will get cheaper.  Try it out, don’t break the bank, but understand how it works so you’re prepared for the future.  It may not be “found” by tons of consumers, but your agents can get their clients to use it and keep them in the fold.  For a broker, it’s not a huge expense.
  • Franchises:  You’ve got the funds, but you need a better reason to build a great, high-end app.  If you’re going to do it, find a way to make it unique.  Search is great, but if you can tie another information source or local service model into the app, you’ll have something consumers will talk about.  Create a service that ties real estate search to an idea that generates word-of-mouth traffic in your offices’ local markets and faster services from your agents to their clients.

In the end, my drive for agents is in continuing to hold their ground where a sliver of traffic might seem insignificant to others but is enough to make their next year a record year.  Drew’s points are salient for the industry as a whole.  For the individual, there are exceptions to those rules, but only where real dedication and focus on the search process is part of the strategy will there be worthwhile financial returns.