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The Impact of User Registration on Generating Real Estate Leads

 By Eric Enge, The ClickZ Network

About 6 weeks ago, I wrote a blog post titled 6$ of Web Sites are Real Estate Related. Since then, I have had a chance to look at some aspects of this market in more detail. In this article, I am going to show how slowly this market is maturing, and provide some data on the impact of lead conversion depending on whether or not a user had to register to get access to home listing information.

Lack of Technical Expertise

One of the things that makes this market so interesting is that there are so many agents and brokers, ranging from independents to small brokerage houses to large national firms – hundreds of thousands of them. They have a business model based on having an exclusive relationship with their customer, many of them work alone out of their house, and the great majority of these smart and entrepreneurial people are not technical experts.

Even those agents who work in small real estate brokerage houses are not set up much better to market their services through the Web. In general, the level of technical savvy is still not high in these firms. The Multiple Listing Service (MLS) system that has been in place for decades has provided real estate agents real time "online" information about available houses for decades.

Multiple Listing Service Advantage

Historically, the MLS system has been a major reason for enticing homebuyers to work with a real estate agent. The agent had lots the information, and you didn't. In addition, it was a powerful strategic advantage for the real estate agent over the "for sale by owner" (FSBO) market. If you were a buyer, you could look at FSBO houses, but the number of choices available to you was comparatively tiny, and there really was no guarantee that you were saving any money if you went this route. Plus, no agent would ever show you an FSBO house.

There are also large traditional real estate firms like RE|MAX, Coldwell Banker, and Century 21. You can quickly see the problem though, when you type in a search for "real estate" at Google. Century 21 shows up at the number 7 slot, and RE|MAX is not even on the first page of results. Realtor.com takes the first two slots. If you try searches on leading terms like "buy a house," "sell a house," "home listings," or "house listings," RE|MAX and Century 21 don't even show up.

Information Availability of the Web

But it should be no surprise that the large, highly fragmented market that evolved around control of information would be slow to adapt to the Web. And who can blame them? The MLS system was amazing for its time, and access to this system was a huge and fundamental advantage for the real estate industry. The idea that all that information should be freely available on the Web had to be a jarring notion, to say the least.

Let's take a closer look at how this is evolving. There is a popular protocol for exchanging listings and getting access to MLS data known as Internet Data Exchange (IDX). The software packages out there that support the IDX protocol allows you to make decisions about whether or not you provide information without requiring a registration by a user, or only after a user has registered with your site.

The advantage of requiring registration is that now you would have the contact information of the person, and you could rapidly get in touch with them and improve your chances of acquiring a customer. But as you might predict, the Web has brought a new era of openness to the real estate business. Basically, you can get all the information you want by searching through the MLS listings on Realtor.com.

Push for Registration

So, the big question becomes whether or not to push for a registration. If you look at the Century 21 site and the RE|MAX site, they clearly handle this a bit differently. To aid in answering this question, I got the assistance of Point2 Technologies, a national marketing and advertising platform exclusively for real estate professionals.

The folks at Point2 provided me with the chart below, showing how there is a shift in the effectiveness of requiring registration as a lead generation strategy. The chart is based on data from 100,000 Point2 Web sites over a 3-1/2 year period. The chart shows the decline of leads generated as a percentage of visitors to registration forms over time.

Over the 3-1/2 year period, the success of the strategy of requiring registration has dropped by 80 percent. That is a huge shift. Of course, it is not at all surprising that fewer people would give up personal information in order to get home listing information. More and more people simply assume that the information they want will be available freely online, and more and more of them have the skill level to find it.

Yet, the changes remain slow in coming. Clearly, it's a hard change, and is still being debated by real estate agents.

Point2Homes Thinks Inside the Box

by Joel Burslem
Future of Real Estate Marketing

John L. Scott’s Neighborhood Wizard was just the latest by a web site to clean up map based real estate search (see The Evolution of Map Based Searches). And while I called it a ‘gimmick’ in my earlier post, it is an important step forward towards making map searches more usable.

Point2 Homes has released a new release of their site recently that adds a similar feature by layering on a search box over a Google Map. This is a pretty significant release for Point2 that really brings their map search functions up to par.

First impressions - the overall design of the site is pretty utilitarian and the house icons were a little too cartoony for my taste. It also doesn’t work in Safari. But these are merely quibbles, functionally the site hits a home run.

Switching between the move icon and the drawing icon is slick. Drawing a search box around the area in which you are interested and then refining it as it zooms in, has always felt to me to be the most natural way to start a search. John L. Scott’s “Etch a Sketch” is perhaps a little more refined, but Point2’s implementation just feels easier to use.

Once you’ve defined the area you’re looking in, the Point2Homes map makes good use of AJAX to dynamically load the listings in the right sidebar, as you click on each. You can switch between the listing description and the search filter quickly and search results are reloaded dynamically as you refine your search. I liked this alot, it works very smoothly.

For each listing, you get a thumbnail image and a basic run down of property features (beds, baths etc.) - though if you want more information on a listing, Point2Homes takes you to off to a separate page. One feature I really like was how it knew the name of which neighborhood you we’re searching in (sometimes I didn’t know the name) and offers to show you more listings as well.

Ultimately, the biggest drawback is simply the lack of listings - Point2Homes pulls its listings from individual agents in its system rather than an MLS
feed or broker feed. For that reason, I can’t see Point2Homes ever being a mainstream real estate search page.

It’s too bad really, their innovations will probably go largely unused. What I’d really love to see is some sort of map search Frankenstein, that culls the best features from Point2 and Trulia, maybe throw Shackprices and Redfin into the mix too.

Watch what you sign with online listings agreements

Is a National MLS the Way to Go?

By Stefan Swanepoel

RISMEDIA, June 1, 2007-Many think that the notion of a national MLS is a good one. According to Jim Sherry, technically there is no reason a national MLS would not work. He says it's more about getting the egos out of the way first.

The consolidation of MLSs into super-regional ones or even one national MLS has already taken its first steps with the consolidation of MLS service providers over the past six years. Today three major players, MarketLinx, a division of First American, Fidelity National Real Estate Solutions and Rapattoni Corporation collectively manage 1,200,000 MLS desktops; approximately 90% of the market. So that is the quickest and easiest way to go, right?

Many say probably not.

Some think the solution will come from one of the industry's aggregators. The logical player is of course Realtor.com, but media favorite Zillow is often mentioned. Point2 says they already are one. Others such as Oodle, Edgeio, Propsmart, BackPage or Live Deal say they could easily be one.

Many say probably not.

Some think one should go directly to the brokers instead, like vertical search engine Trulia. Having already signed contracts with powerhouses Realogy, RE/MAX, HomeServices and numerous other large brokers they could already be well on their way.

Many say probably not.

If vertical searching is the winning strategy then no one will beat the deep base searching power of Google. Who could beat the powerful Google search ability to sort through millions of listings and find the right answer in a split second? Walt Baczkowski, MCAR CEO, says Google may very well replace the MLS as we now know it today.

Many say probably not.

Google is an online marketing avenue, it's not an MLS. There is a huge difference between a search engine, a consumer site and a broker MLS. Realtors don't understand the value of the MLS says Mike Long, CEO of Move.com, the managers of Realtor.com. Giving the listing information away to others will result in a de facto MLS … with no MLS rules.

Many say probably not.

Some like Glenn Kelman, CEO of Redfin feel that MLS rules are like a thousand tiny shackles on Internet business, which limit the free flow of information to the consumer.

And so the debate continues. It is not clear exactly where we are heading. What does appear certain at this stage is that that consolidation into larger MLSs is inevitable. As a matter of fact it is already happening on a regular basis. Larger MLSs will inevitably lead to increased standardization, which in turn will fuel further consolidation and open the door for the creation of one national MLS.

The drive toward one national MLS seems to be born out of frustration by regional brokers but it is being fueled by consumer demand for more real estate information with listing data. MRIS CEO, David Charron says a national MLS is a great idea, but the creation thereof is complex as it will have to take into consideration local licensing laws, nomenclature, customs, governance and compliance management. Whoever decides to carry the torch will quickly discover that this is by no means an easy or straightforward initiative. There are also many other sticky issues that will need to be addressed before a national, quasi-public utility becomes a reality - items such as data ownership, data security, data standardization, data integration, third party participation, and so on.

So while the industry grapples with its parochial issues - both practical and legal - existing MLS systems will have to re-engineer themselves into standardized mega regional systems or a national system. Whichever direction is taken they will have to be relevant and meaningful for brokers, agents and consumers alike, or face the consequences of competition and possible obsolescence.

MLS, Web 2.0 and new business models are discussed in detail by Stefan Swanepoel in his new 159-page 2007 Swanepoel Trends Report.