Author Archives: Dustin Luther

About Dustin Luther

Founder and original blogger on Rain City Guide, Dustin has since started #InterestedIn Marketing where his team provides content and social media services that helps industry experts earn recognition as thought leaders. You can find me on Twitter (@tyr) and LinkedIn (/DustinLuther)

Feeling "at home" on the web

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There have been some interesting conversation around the web on Zillow’s business model…

But I’d argue that it is way too early to know their business model. In an interesting interview with Inman News (The link is dead) Rich Barton stated that the purpose of building a home estimation service up front was to get people comfortable using the web to find the value of their home.

Rich also mentioned that when he started Expedia he was frequently advised that he needed to “lock-in” potential ticket buyers before giving them flight information because many people (myself included) would to go the site to find good deals, but go to their travel agent to actually purchase tickets. (Marlow, doesn’t that remind you of something that is going on in real estate right now?). However, Rich stuck to his guns in giving the information up free because he recognized how important it was to get people comfortable with finding travel information on the web. In due time, people became comfortable enough with finding travel information on the web that they did away with the travel agent altogether.

I don’t think Rich’s intentions are the same with real estate agents, but I think he’s looking down the road a few years and seeing that agents are going to be more and more marginalized as home-buying and -selling consumers do the bulk of their purchasing research using web technologies. (I’d also bet that Zillow’s business plan is closer to a sketch than a detailed drawing as he likely recognizes the importance of making things up as he goes along.)

Giving away (for free!) great tools like Zillow’s Zestimator is simply a means to getting people comfortable using the internet to set a value on a home. Nothing more, nothing less. And recognizing that Zillow is a long-term project, I don’t think it is a stretch to say that Rich is developing a bunch more tools that will be a more obvious threat to the status quo of the real estate agent commission structure.

Without a doubt, it is a much softer play than with Expedia where he went head-to-head with travel agents. But then again, the stakes are even higher in the real estate industry.

RCG may have completed the real estate blogging trifecta, but which horse is going to win?

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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:

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.

The Importance of Making Stuff Up as You Go Along…

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Jon Strum of the LA Real Estate blog put together a very interesting article manifesto that outlines what it will take for real estate agents can be successful in the future. It is a fascinating article and was picked up by both the NYT real estate blog and Redfin’s blog.

While he was picked apart in the comments section of the NYT’s blog, I think a lot of what he has to say is extremely relevant and that the successful real estate agents of the future will be the ones that learn how to re-invent what they do!

Jon’s point that “real estate professional is in the unique position of adding massive value on behalf of their client to the final outcome of the sale or purchase of a home” is extremely important. Many people are simply not equipped to buy and sell their own home on their own and are going to benefit from the assistance of a professional. While programs like Redfin Direct that allow people to buy and sell homes via the internet may some day capture 10 to 20 percent of the market that still leaves 80 to 90 percent of the market requiring more assistance. (This comment is not meant to invalidate Redfin’s business model as 10 to 20 percent of the real estate market is a HUGE chunk of change!).

broken water wheelThe crazy part is that anyone would disagree with Jon’s general premise that real estate consumers are becoming better equipped (information-wise) and they are going to continue to demand more “value-added” services from their agents. The vast amount of money that is currently spent on “branding” techniques by agents (ads on postcards, billboards, magnets, super-market dividers ???, etc) will inevitable need to give way as the commission structure on many deals change and successful agents learn how to operate on a much leaner budget. People are going to turn to the internet to find out about not only the value of their home (Zillow?), but context around how that value might change (blogging?). People moving to a new area are not only going to want neighborhood information (homepages), but context around those neighborhoods (blogging?). The agents who figure out how to use the efficiencies of scale that the internet can provide are the agents who will be successful into the future!

So what are the internet tools that agents should be using? I had a great email today from a Seattle real estate agent who has a very prominent position in the local search engines (he or she shall remain anonymous). They mentioned that they had been following Rain City Guide for a while, but it took them a while to figure out what I was doing… That brought a big smile to my face because I’m not sure that I’ve figured out what I’m doing! I’ve seen a huge growth in Rain City Guide traffic as we’ve added some wonderful contributors, but I’m convinced that there are still hundreds of ideas and opportunities that I’m yet to take advantage of. Will Rain City Guide learn about those opportunities? You can bet on it!

My advice? Agents who do not want to get lost in the internet shuffle that is sure to take place in the near future should get involved in internet. But don’t waste your time posting your marketing materials on-line because people rarely read that stuff when you spend good money to send it to their homes! It seems like a no-brainer to me that agents should start blogging… But do more than that… Put interesting and challenging ideas on your blog. Blogging may not be the panacea for the future of real estate agents, (there is a lot more to being a good real estate agent than being an engaging writer), but by blogging to learn more about the internet, you will learn about the trends that are shaping the industry!

Romancing Ballard

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Before being interrupted, the contributors of Rain City Guide were having a nice little series on Romacing Our Homes. Seeing how tomorrow is Valentine’s Day, I thought I’d sum up things and add one more article on my neighborhood! So what type of romance did rain city guide contributor’s share?

On to Ballard…

ballard rr crossing

Anna and I simply love living in Ballard. We’ve both lived in different parts of the country (and the world!), but we’ve never lived in a place quite like Ballard. It offers a great mix of urban features (walkable neighborhoods with lots of coffeeshops, bakeries, art houses, farmer’s markets, etc.) without feeling too urban. For a relatively young family, it offered us a wonderful opportunity to own a home with a big yard and great neighbors! Thank you Ballard!

In addition to the year-round Farmer’s market in Downtown, Ballard hosts three festivals that are a lot of fun:

If you’re looking for more on Ballard, check out the post I wrote last march on the Ballard Community as well as this post Anna put together on the history of Golden Gardens! (Interesting stuff!)

Climbing into bed with the competition

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I caught an investigative bug tonight, and I feel a strong need to post this speculation…

  • Fact 1 — Rob over at Your Seattle’ Neighborhood Specialist had some great commentary on Zillow in the months leading up to their beta release
  • Fact 2 — Rob has been silent since the release of Zillow
  • Fact 3 — Marlow Harris also noticed this, so I’m not the only one wondering what happened to Rob
  • Fact 4 — A reader pointed out to me that hourlyagents.com service is no longer available.
  • Fact 5 — Rob used to heavily promote the Hourly Agents site and his blog still has a link to it
  • Fact 6 — The hourly agents site now says “This Domain is For Sale — Please contact info@hourlyagents.com for details. — In the meantime, please join me at Redfin”

So when Marlow asks:

Where are you? Where are all your editorials and opinions? You were writing up a storm before, but now that Zillow has revealed itself, you’re silent.

Did you get that job there, after all? Did you sign some sort of oath of silence?

WHAT DO YOU THINK???”

I think the answer is worse than an oath of silence… I don’t think he’s working for Zillow (those people have definitely woken up to the idea of communicating!), but rather, I think he must have climbed into bed with the competition!

UPDATE 1: I just found out that Redfin started blogging one day before Zillow, but… it slipped past me as they haven’t shared any link love (yet!).

Update 2: Redfin added Rain City Guide to their sidepanel! Thanks you guys! Now all I need is for the HouseValues blog to add a link to Rain City Guide and I’ll have completed a Seattle Real Estate Technology Trifecta! 😉

Update 3: The Trifecta is complete!

Zillow's Impact On Day 1

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Despite the fact that the Zillow site spent most of the day gasping and sighing, a ton of digital ink was spilled discussing their service (or lack thereof). Here are the articles I found most interesting from Day 1:

By the way, if you scrol through this Technorati search, you’ll notice that not only was I the first blogger to break the story, but I announced Zillowblog an hour before it went live!)

How well does Zillow Zestimate your home?

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Since everyone’s doing it, I thought it would be fun to have one place where people discuss how good Zillow’s “Zestimator” is working!

The process is simple…

1) Go to Zillow.com
2) Type in your address
3) Record the Zestimate of your home
4) Return here, and let us know in the comments how well their tool stacks up to reality.


Here are the Zestimates I’ve gathered so far:

  • My home: The zestimate is probably $40 to 60K too high. The home next door to mine, (which is almost identical) sold this summer for $80K less than the Zestimate
  • Ardell’s home: $200K less than she just paid for it!
  • Robbie’s current home: He estimates that it is $220K too low!
  • Rich Barton’s home: He may have “overpaid a bit” on his $2.6M Madison Park home.

How well does Zillow Zestimate your home?

Zats really cool…

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Zillow has launched!

I just got an email from Zillow’s Director of Communications and she passed along the fact that not only is their blog live, but a beta version of their site is live as well… Rich and David flipped the switch!

So, what does Zillow do?

In two minutes of of a Skype conversation with my mom, we were able to find the “Zestimated” value of my home in Seattle, my mom’s home in Sacramento, and my grandmother’s home in Las Vegas… Very cool indeed, especially since my home value is zestimated to be worth $140K more than we paid for it two-and-half years ago!

From what I can tell, they’ve found a way to estimate the value of thousands upon thousands of homes (60,000,000+ homes by their count). For my neighborhood, they have lots of background information on each home… Not only does it tell you the size, square feet, lot size, etc. but it also gives information like a list of recently sold comparable homes. Very cool indeed.

zillow_screenshot_1

The site is loaded with tables, graphs, and charts for each home.

Probably the strongest selling point so far is that creating a set of comparables is so easy. I’ve worked a fair amount with Anna to develop comparable market analysis, and I can tell you that agents may have access to slightly better data on each home, but Zillow’s system is SO much easier to use that I imagine many agents will turn to Zillow from now on…

zillow_charts

Interesting, interesting stuff… It is interesting that the site has a complete lack of obtrusive ads and it will be really interesting to see how this plays out in the agent community. I’m not seeing a lot of negatives so far.

Here’s how Rich Barton explains their business model on the Zillow blog:

I’d like to make a comment on our business model, which I’ve found helps divine motives. Zillow.com will make revenues from advertisements on the site. We will always be crystal clear about what is content and what is advertising, just like any respectable content provider, and our advertising will not define our content. However, the beauty of “Web 2.0