|
|
|
REAL ESTATE Death of the Salesman
To survive, Realtors will need to become full-service relocation consultants
William Raveis is president of William Raveis Home Services Inc.
He also sits on the National Association of Realtors' strategic planning group.
|
11/15/1999
By: Michael C. Bingham
|
Mid- and long-term, is technology the industry's friend or its enemy?
As you know, before entering the real estate business I was a systems analyst, so technology is something that I've been looking at, as we have in our company. What's happened is that the Internet has really whacked our business model. Before the Internet, the business used to be Realtor-centric - meaning that anybody who wanted to buy a house would have to go to a Realtor to get all their housing information because [the Realtor] had exclusive use of the MLS [Multiple Listing Service], and they had all the neighborhood information, all the school information, and that was how you got into a door to see a house. With the Internet, all the housing information - HomeStore.com, or Realtor.com - 1.4 million houses in the U.S. are on that site to be viewed by anybody at any time. The Internet also has school information, neighborhood information, you can even do an appraisal on your home, all with just with a click.
Who needs a middleman any more?
What becomes the role of the real-estate broker? Because [the prospective home buyer] has all this information available online, certainly [he] doesn't want to pay six percent [commission] for somebody just to open up the house and suggest what to offer. The customer will determine what to offer because he'll have all the comparable [home sales] information on the Internet.
So what's the new model?
The Internet now gives the real estate industry the opportunity to extend our business model: Not only do we list the house and sell the house; under the new model we will take care of the entire move experience. We will move you into your home through van-line services; we will help you connect and disconnect utilities; and we will offer other products and services around the house to the homeowner through our marketing partners. There is added value now in the new business model, which has a sales associate listing and selling houses, and what we call a 'personal move coordinator' doing all the other services a homeowner needs, giving them a choice or products and the convenience of having everything taken care of by an employee of the [real estate] company.
In telecommunications they call it 'bundling.'
It's bundling of services, but there's more. Right now, with Northeast Utilities and United Illuminating we have our personal move coordinator connecting and disconnecting utilities for our customers, and we're offering van-line services at discounts to our buyers. We're offering new services to our buyers and sellers, that weren't there before, by an employee of the company. Also, we get revenues from those sources. The utility companies and the phone company and the van lines are all paying us marketing fees; it's more economical for them to let us [market to Raveis clients] than for them to do it.
It drives down their cost of sales.
Here's an example: Our utility-company friends told us it cost them $7 for every phone call that they pick up. With us, we handle 10,000 customers a year through one channel, and we handle them in a more productive way than the utility companies. So they end up being more productive and more efficient - and we add efficiency to the consumer. So it all works. So the industry is moving toward taking care of the entire housing event.
But what happens in couple of years when home buyers have click access to not only utility installation, but even plumbers and electricians?
You have that with us right now. But what you also have our personal move coordinator coordinating the times [of service]. There's follow-up work. There's full customer service. What we're providing is 'click and brick.'
So there will always be a convenience incentive to dealing with one person, rather than trying to chase down a half-dozen.
And by the way the service is free, because our marketing partners pay us a servicing fee.
Is every real-estate company in Connecticut following this model, or aret you out in front?
We're out in front. The software product we have that does all this is called 'HomeLink.' You can't just do it with a personal move coordinator; you need software. With our system the personal move coordinator can handle 350 customers at any one time.
Won't the marketplace at some point demand that the MLS be available free online?
Yes, that will happen. Most of the MLS's in the state of Connecticut are trying to resist hat. But Realtor.com and the other national sites will eventually offer a free listing opportunity, because content is what everybody needs in order to drive eyeballs. For us to pay for content doesn't make any sense in this new e-commerce [economy].
At what point do the real-estate companies go to, for example, the New Haven Register and say, 'Look, the paradigm has shifted, and we're no longer going to pay you for classified ad space for our homes for sale. In fact, now you're going to pay us for our home listings, because you need the content to sell papers.'
We've got that already with the Connecticut Post. They're on our site. And we're offering the Connecticut Post to new homeowners as they move in as part of our service. We eventually won't need the distribution of a newspaper. If you look at our site, we have 6,000 home listings, and we're hyper-linked into Realtor.com, which has got the rest of the nation. We have 500,000 people who view our site every month. That's more than every paper in Connecticut [combined]. So there will be a point where I won't need to go to the newspapers - other than to say, 'Visit WilliamRaveis.com and see every listing in the state.'
Will there ever be a point where people simply sell their homes themselves over the Internet?
Here's the problem with that - government regulation. Whether it be lead-paint disclosures, oil-tanks, environmental stuff - there are more rules and regulations now than there have ever been. We have ten or 15 pieces of paper that have to get signed [at closing]; the paperwork is horrendous. If they ever clean the paperwork up, and if the federal government gets out of our business, then maybe there will be an opportunity on the Internet to just click and sell your house.
|
Go FirstGo PreviousGo
NextGo LastGo
to Index
|
|
