(excerpt from Transparent Real Estate
By Inman News, Monday, January 22, 2007.(excerpt from Transparent Real Estate Cyberhomes learns from Real Estate 2.0 Pioneers)
Last week, I had a conversation with Marty Frame, Fidelity National Real Estate Solutions (FNRES) Chief Information Officer, and builder of its Cyberhomes automated valuation model ("AVM") product. We discussed the state of Real Estate 2.0 and Marty shared some of the strategies FNRES has for Cyberhomes that evolved from watching RE2.0 pioneers like Zillow and Redfin blaze the trails.
Zillow, Redfin and Cyberhomes all share the objective of providing education, compelling data and services to the consumer. Both Zillow and Redfin have been on the path, sometimes intentional, sometimes not, of upsetting the industry's status quo, and in doing so have had to make hard strategic decisions about how they will engage the three main players in the industry - the brokers, their agents and the consumer.
It's tough to be a Real Estate 2.0 leader moving headlong into an entrenched, relatively opaque industry like real estate... I've stated the problems in my earlier first mover's advantage article. I hugely admire Redfin and Zillow because a year or so after their launches, their presence is reorienting the thinking processes and belief systems of real estate practitioners... I see a renewed commitment by agents to real time service through technology (if only just getting that Treo so they can respond quickly to email), Reggie Nicolay at Fidelity Title sees greater broker acceptance of technology solutions that automate the transaction processing (see excerpt within Elvis=Zillow article), and finally the consumer is beginning to demand real estate transparency and they are searching the internet for data and content that grows richer daily thanks to the RE2.0 pioneers.Marty and I both relish corporate strategy, we're both channeling Harvard's Michael Porter, dry as that may sound. The charts below illustrate examples of the challenges Zillow and Redfin have encountered and their positioning strategies, and how Cyberhomes might take advantage by adapting its positioning after the pioneers settle on a strategy...like playing the big blind in poker, betting after everyone has had the chance to bet. (Some of Marty's insights are in italics)
| Zillow | Action | Intent/Unintended effect | Positioning |
| Brokers | Invited Agents to post listings on the new Zillow | Unintended effect: "Further cutting brokers out of the loop by empowering agents" | Broker neutral - but Zillow's relationship with the Brokers is weak... they also haven't attracted the broker advertisers and that is probably a key objective to their "media" strategy.
"Zillow had to give up on the brokers when they stated they are a consumer focused media company"
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| Agents | Promised agents Zillow wouldn’t disintermediate their deals and encouraged them to directly add their listings on Zillow
| Intent: encourage “listings content” to attract and strengthen data relationship with consumer | Zillow aspires to help agents attract a consumer client base and develop organic leads. Stickier site = bigger media play. |
| Consumers | Providing educational real estate resources, such as Real Estate Wiki, in mission to educate the consumer about pricing (AVM) and real estate transaction processing
| Intent: establish credibility with consumer.
Unintended effect: still making Realtors uneasy who think consumer education equates with disintermediation.
| Focusing on the consumer as the audience in their media business model. By emphasizing no intention to monetize from the transaction, Zillow is positioning as a free, impartial, "no agendas" data service for consumer.
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Check out comparable charts for Redfin and Cyberhomes. Continue reading more...
Pat Kitano, Transparent Real Estate
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