The Future – Or Not – Of The Real Estate Industry

There’s a huge threat facing today’s Realtors, and it isn’t the sluggish housing market. The very nature of the Real Estate industry is changing in a huge way, and it’s possible to predict who will come out on top. The threat is called Web 2.0, and it will surely spell the end for any Realtors who don’t learn to use its new technologies to their advantage.

The Internet has completely changed the way information is distributed. Before Web 2.0 came along, the idea was this: hold onto information as tightly as possible to put your business in an advantageous position. Many people still cling to this outdated thinking. Many businesses have failed or are struggling as a result.

To see some great examples of the changes this information distribution has caused in other industries, one only has to look to Craig’s List. Established newspapers paid no attention to Craig's List until it was too far late, and they were losing millions of dollars in advertising revenues. At that point they tried to jump on the bandwagon but were too far behind to ever have hope of catching up. Another good example is the entertainment industry, which stood idly by while Napster devastated profits for the studios, producers and artists alike.

Will the Real Estate industry fall prey next? All information based industries are threatened. In Real Estate the stranglehold on information has always been the MLS. Buyers had to go to Realtors to find the right house; there was no other way to find what you were looking for. Typically Real Estate professionals gave out as little information as possible to draw in the buyer and increase the chances for a sale.

Today, that tactic spells certain failure. As information becomes more readily available, buyers become better educated about their options, and will simply go to whoever will give out the information. It is a plain fact: whoever provides the buyer with pertinent Real Estate information in an easy to find and understand format, wins.

These days a buyer can practically shop online for a house. Many Web 2.0 sites are becoming efficient packagers of Real Estate information – information that used to be proprietary to the MLS. An early Web 2.0 site to provide buyers and sellers with quick estimates of Real Estate value was Zillow. And while the price wasn't always accurate, the concept was right on target. Fisbos uses Craig’s List and it is quickly becoming a strong Real Estate listing site, while others like Housing Maps are scraping the Craig’s List data and creating mashups to package the information for consumers. Another early contender, Real Estate ABC, took the same concept and enhanced it. Watch Trulia, who’s technology is growing by leaps and bounds. If their offering comes together well, they will become a huge player.

Here’s what might become an even bigger threat to the old status quo: the latest rumors say that Google is working on a Real Estate related project. Who knows what will come from that kind of scenario?

Who will wind up on top when the dust settles? Maybe a small company with lots of people savvy will perfect a system similar to Craig’s List; gathering information from participating Realtors and consumers. Maybe a huge company with the resources to gather the information through deals with information providers, which would take a great deal of negotiating to bring it all together. Maybe a combination of both? But no matter how it happens, when it does, Realtors operating under the old status quo will quickly become a thing of the past. Consumers will skip the middle man and deal with information providers directly. Realtors will have to provide enough services to far exceed the value of the commission paid, if they want to get a commission at all!

It isn’t all doom and gloom, however – there is a huge amount of possibility in the new Web 2.0 world. For the Realtors who can understand the new concept in information sharing, who truly understand that information held tightly is no longer the most valuable, success will come easy. The Real Estate professionals who become information providers, able to leverage Web 2.0 technologies to spread that information, will succeed. The world of Web 2.0 allows experts in a niche market to display that expertise to their credit, building huge followings utilizing web technologies. Many of these niche marketers have readerships which already surpass major national periodicals. And Realtors are completely niche marketers – experts in a geographical area and a specialty. There are as many Real Estate niche markets as there are Real Estate geographical areas.

A Realtor who exploits expertise in Web 2.0 technologies will develop a loyal following, which in the Real Estate market equals money. The amazing thing about all of this is that these technologies are very simple to use. RSS (syndicated) feeds are one of the most powerful features of the world of Web 2.0 and can be completely automated. Personal or professional blogs are simple to set up and easy to maintain. Realtors can grow relationships with buyers and sellers in large numbers, all from the comfort of their own website. Networking in the world of Web 2.0 is effortless and efficient from a computer with the right tools. LinkedIn is a great example of this, as is MySpace and FaceBook. And Flikr. The list goes on and on! The possibilities are virtually endless for a Realtor who knows how to plot a course through the new Web 2.0 landscape.

It’s time to face facts: brochure websites do nothing to entice a buyer or seller to use a Realtor’s services. Now is the time for Realtors who want to be successful in their profession to jump into the world of Web 2.0 with both feet!