About a week ago I noted that the Zillow Blog added Rain City Guide to its sidepanel and that I hadn’t found out about both the Redfin Blog or the HouseValues blog because they hadn’t spread any link love. As Rain City Guide hasn’t done much to deserve traffic from either site, I didn’t really expect my comments to make much impact, so I was pleasantly surprised to find that both blogs added Rain City Guide to their sidepanel in less than a few days, thus completing my Seattle-real-estate-search trifecta!
I start with this story because it highlights two timely points I want to make: (1) all real estate is local and (2) business blogs can be shockingly responsive in ways that simply is not possible with a standard business website.
And just as all real estate is local, I’m happy to say that all interesting real estate search technology appears to be local as well. I’ve seen some fun tools come out of New York and California (or should we say CaliYork), but I don’t think it can be argued that the future of real estate is being developed right here in Seattle.
So who is going to win the real estate technology race? Will it be:
- The agent-approved service that continues to pump healthy leads to agents?
- The discount service that focuses on lowering the cost of each transaction?
- The completely disruptive service that obviously still has some “features” up their sleeve?
I don’t pretend to have the answer, but I sure enjoying keeping score. 😉
The second (and only tangentially related) point I want to make is that business blogs are now the norm for tech companies. When done right these blogs are much more than just a place to put press releases and instead give some great insight into the corporate personality behind the company. Go ahead and read the first few blog entries from each of the big three real estate search sites:
(I’m waiting…)
Here’s is what I read… The Zillow people are a zany, tech bunch who really believe that they can crack the real estate nut through increased data crunching and processing power. The Redfin people have figured out a better business model and now only need to expand so that they can demonstrate efficiencies of scale. The HouseValues people have a laser-like focus on present marketing opportunities, so they really don’t spend much time thinking about the future. Had any of these three companies been blogging a year ago, I’m sure their blogs would read the same! And more interestingly, I’m fairly confident that if I read the “latest” three or four entries from those same three blogs one year from now, those will also read the same because the culture that created those blogs is the same culture that created those companies. There is a real honesty in blogging that is hard to mask. Both a company’s strengths and weaknesses show through in their blogs!
However not everyone sees blogging from this vantage point. Recently, Daniel Gross of Slate signaled the beginning of the end of the business blog, by focusing on all the problems with blogging. But by focusing on the financial aspects of blogging (which often don’t make sense), he misses out on the overwhelmingly positive marketing opportunities associated with adding a friendly face to an otherwise impersonal website. I’m so glad that these three big real estate tech companies out of the Seattle area have all begun blogging because it gives some great insight into the soul behind the companies.
If traffic rank is any sign of success, Zillow’s sure got the pack beat:
– Zillow – 2,889
– Redfin – 35,000
– HomePages – 36,833
And Redfin is local, so HomePages is definitely losing the battle, which isn’t at all surprising.
And more thing:
“The agent-approved service that continues to pump healthy leads to agents?” – Healthy’s not quite the word I would use.
Me neither Vincenzo…me neither.
For yous non-Italians out there. Jimmy is the nickname for Vincent…not Vinnie as in “My Cousin Vinnie”. There is no Italian name James.
Vincent or Vincenzo is pronounced Vinjems or Jimmy. Though a man named Vincent may have a son named James, with the father called Vince and the son, Jimmy.
Now I need to go back to that last comment and see if it really is my cousin Jimmy over there.
Okay, I may have given HouseValues too much of the benefit of the doubt on that one… How about if I replace:
“The agent-approved service that continues to pump healthy leads to agents?”
with:
“The agent-approved service that continues to pump a healthy number of leads to agents?”
Because like them or not, they are sending lots of leads to agents (for a *healthy* fee!).
I still like to call them the no-one-approved-them services who sell buyers as hostages to hungry agents 🙂
What I don’t understand about HouseValues is why do buyers or sellers visit them? I like their business model, because it enables them to make a pretty penny from agents w/o doing any real work besides creating a web form that asks a buyer for his/her information so we can turn around and sell it to them. I wish I had come up with the idea it first!
But what value do they bring to consumers? RedFin & Zillow give me something for nothing. With HouseValues I give them my personal information and get next to nothing. Are there people out there so uncomfortable with finding a realtor, they think HouseValues is providing them a valuable service?
How can you “like a business model” that removes the consumer’s ability to negotiate the commission? I thought you were “consumer friendly” or a “consumer advocate”? No?
How can you “like a business model” that sells a buyer to an agent without the buyer’s informed consent? Without disclosure?
Jeez, just when you thought you knew what the consumer wanted….he wants to be sold to the highest bidder. He wants you to take his commission discount and give it to HouseValues instead of to him. Who woulda guessed? Not me, that’s for sure.
I am with Robbie… I think it’s funny that they pull it off…
It only shows how pitiful today’s RE Brokers are at SEO… lead generation and capture on the net.
I mean this is pure fair market capitalism…. horrible… but fair
The HouseValues site does say that “Your request will be forwarded to a Licensed Real Estate Agent or Broker for processing.” Granted, it’s not in flashing bold letters, and they don’t tell you that they are selling this information, but they are telling you that the information you give will be sent to an agent. Perhaps it’s not full disclosure, but it’s disclosure never the less.
Let me be clear – Me as the consumer dislikes the “HouseValues” model. I get nothing out of it, except a sales call from a realtor I know nothing about. As you pointed out, it also harms my ability to negotiate a lower commission.
If I was a realtor, I’d probably hate it, because it’s one step up from cold calling (you know the client has some interest in real estate), and two steps back (you paid for the information and you really don’t know if it’s a serious buyer or tire kicker).
However, if I owned HouseValues, I’d like the business model, because I’m getting a healthy fee for not doing much work. I think the question I’m trying to ask is why does this business model appear to work? Obviously hungry agents think they are providing a valuable service. But why are consumers going there in the first place? Is HouseValues marketing that compelling to Joe Real Estate Consumer?
Robbie,
You asked “What I don’t understand about HouseValues is why do buyers or sellers visit them?”
I wondered the same thing and I even asked a real estate agent (who uses HouseValues) the same question last week. His response is that HouseValues hits a huge demographic that do not search for information on the web, but know how to go to specific sites that are advertised to them (mostly via TV).
In no way was I meaning to “endorse” their business model with this post. But since we really have never said much about HouseValues on Rain City Guide, it seems there is some pent up interests in sifting through their business model. Maybe it is time for a “HouseValues” post!
Perhaps, HouseValues is like a bizzaro world Lending Tree? Except agents don’t compete (at least to win the consumers business, I’m sure agent competition for a lead drives us the price for that HouseValues charges for one) and consumers don’t win.
Along the same lines as Dustin said, HouseValues pumps a ton of money into marketing.
I attended one of their gatherings, and I was blown away by how much of their business strategy is focused on marketing – not actual product development.
Robbie: “Perhaps it’s not full disclosure, but it’s disclosure never the less.”
Come on, Robbie. Get real with me. If I point to a roof expecting you to see what I see, without telling you what’s really going on, is that “disclosure”. Well, I told him to look up…?
Until bottom feeder sites say “You are going to lose $5,000 of your negotiating power if you hit his button “Find a Realtor”…there is NO, nada, zip, zillow…disclosure. Hey, I found a new way to use the word Zillow 🙂
Gotta go show houses. Have fun!
How come my hyper linkie thingie doesn’t work and everyone else’s does? I tried my blog url and my website url. If it is my post I have to go back and edit it to make it work. When it is someone else’s post it, just has that big black ARDELL with no hyperactivity.
Makes me look more like Darth Vader than a Jedi. Techie help please?
Ha Ha !! Robie good use of Bizzaro…
I am working hard here in Atlanta to endorse the use of Bizzaro over words like SellLeadsToAgentsBizModel!
HouseValues is an incredible marketing machine. Ironically, I think they focus more of their marketing muscle on agents, but they certainly pump a lot of marketing money towards consumers too. Let’s pretend they offer absolutely no service to consumers (they DO connect you with a persistent agent from the comfort of your home), they still have a huge market of stupid people: There are 295 million people in America. Lets say that 10% of those people are entirely unaware of the real estate world and are in awe that someone will give them the value of their home for free, that means there is a potential market of 29.5 million people.
I suspect that more than 10% of americans are functionally stupid when it comes to real estate, hence the $365 million dollar market cap.
Good post.
But characterizing Redfin as primarily a discount service seems odd to me. No one thinks of E-Trade as a discount stock brokerage (that’s Schwab); E-Trade is an electronic brokerage.
In the same vein, the primary difference between Redfin and other brokerages is that it’s an electronic brokerage. We aren’t even trying to offer the same service as other traditional brokerages but at a lower price; we offer electronic service.
Some people actually *prefer* electronic service, irrespective of price; the point is that electronic service is a different kind of service (not an absence of service), at a completely different price-point. The money we make through transactions is largely invested in making a better Web experience for home-shopping.
ZipRealty, the leader in discount brokerages, strives to offer customers service very similar to what Windermere or John L. Scott provide, with agents on a commission model. Zip invests less than 3% of its revenues into research & development.
Where Zip strives to seem the same to customers, Redfin strives to be different, a difference that is obvious to any of our customers.
This is why the New York Times said Redfin has the potential to be one of the industry’s most disruptive innovators.
Glenn, http://www.redfin.com