A wide range of property-search Web sites is available to consumers — including those set up by multiple listing services, brokers and third-party aggregators — and there are a lot of unknowns in selecting the best online strategy to market properties, according to a paper prepared by industry consultants.
"Right now, it looks as if the industry has set off on a sea voyage without maps, compass or GPS, and the officers are bickering with each other and with the crew over the course and the destination," according to the "Tales of an Industry Lost at Sea" report, prepared by the principals of the Larson/Sobotka law firm and consulting group and Focus Forward Consulting.
"Everyone knows the waters are dangerous, but there is no agreement whether the officers should fear pirates, sharks, storms, reefs, or all of them."
Brian Larson, a co-author of the report and president of Larson/Sobotka Business Advisors LLC, said in a statement that the industry lacks strategic goals relating to consumer searches for real estate information on the Web. "Couple that with the lack of useful data about consumer desires, expectations and behavior, and you have an industry adrift. MLSs, associations and brokers, who should be natural strategic partners, are bickering about tactics," he said.
While there has been much debate about the value of public real estate search sites set up by MLSs, for example, "The true impact of public MLS sites remains unmeasured," the report states.
Also, "No one has demonstrated the impact of national aggregator sites or broker site traffic, whether good or bad," and "little reliable data is available to demonstrate a consumer preference for listing information available on a public MLS site vs. broker (data exchange) sites or national aggregator sites."
The consultants propose to conduct an industry-supported consumer study of 15 to 18 markets in North America to gauge consumer desires in real estate searches. The group also proposes a study of traffic to broker and MLS Web sites and an analysis of Web metrics from companies including Hitwise and comScore Media Metrics.
A lack of strategy to deal with current challenges in the marketplace "does not bode well for the industry as it faces the challenge of new information channels like RSS feeds, widgets, blogs and user-generated content," according to the report, which calls for industry groups including brokers, MLSs and associations to unite toward a common strategic vision.
The report defines several general types of national aggregator sites. Realtor.com represents a Web site that is powered by MLS-supplied real estate information, while RE/MAX’s remax.com is a national brand site that directs consumers to local and regional franchise affiliates. Zillow and Google Base represent another kind of site that couples aggregated property listing information with other features, such as property valuation or general classified search.
The report also lumps real estate search sites into two broad categories: "pass-through" and "destination" sites.
Destination sites seek to provide a range of tools to keep an audience at the site for an extended period, while pass-through sites are designed to quickly move consumers on to a broker’s Web site.
Realtor.com and Zillow.com are examples of destination sites, while Google Base represents a pass-through site, according to the report.
"In theory, brokers might prefer to partner with pass-through sites rather than destination sites: pass-through sites hold the consumer’s attention for a shorter time and encourage the consumer to ‘form a relationship’ with a broker’s site. But in fact, there is little data to support the preference," the report states.
In closing, the paper presents a possible united strategic vision by industry groups in the year 2010.
The paper suggests that MLS public sites, where appropriate, will be built to maximize the amount of traffic sent to broker Web sites, that "MLSs and associations have developed information and educational programs to help brokers understand what works with consumers on the Web," and that NAR has launched a real estate information portal as "either a tool strictly for brokers" or "to enhance consumer contact with brokers and not detract from it."
Also, "When MLSs are asked to assist in transmitting brokers’ data to national aggregators, the MLSs prioritize their efforts to get listing data to aggregators that are proven to deliver the most and the best traffic to broker sites," the paper offers, and MLSs and associations will have deployed tools "to make broker Web sites the places where consumers expect to find the best real estate information and to assist brokers in making the best use of new communication channels."
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