Inman News, a highly regarded real estate news source, recently interviewed Sam Sebastian, director of classified advertising at Google. Sebastian spoke of the continued migration of off-line real estate advertising (print, radio, television, billboards, etc.) to online, whether it be Google, Yahoo or Craig’s List, national marketing sites whether independent or associated with brand name brokers, and niched, city-centric sites. Sebastian predicted that in the year ahead, until the real estate market stabilizes, major brokerages will take money off the advertising table, put some of it in their pockets, but quickly reinvest when sales trends turn positive.
While the flow of online ad and marketing dollars has increased each of the last seven years, an overall market turnaround could mean an even larger jump than usual to online advertising. Despite any real estate market pause, Google, Yahoo and other non-brokerage sites are attracting an ever broader base of users—as the user experience grows more comfortable and trustworthy—so a greater interest in mining real estate data online seems inevitable. In response, brand name brokers may well channel some of their marketing dollars into these sites (at the sacrifice of their offline budgets) and look for stronger links back to their own sites. The ultimate question is whether these alliances will turn competitive if Google, Yahoo and others offer more than a marketing or advertising platform—that is, will they ultimately try their hands at sales, even if only on a referral basis.
In any case, the face of real estate may change dramatically as buyers pull more and more information off their preferred online real estate site, and rely less upon their own agent. An agent who works for buyers can still offer invaluable services, particularly to first time buyers or someone involved in a complex transaction, such as a 1031 Exchange—exposing them to suitable properties, strategizing how to write an effective purchase agreement, and helping find the most favorable financing. But increasingly, less specialized buyers are approaching a seller’s agent directly, doing their own negotiating and finding their own financing, then offering a purchase price reflecting a commission that is cut in half. The buyer then incurs the cost of a real estate attorney to write a contract, and for hiring inspectors, or other specialists if the transaction is particularly challenging.
Increasingly, real estate agents understand that their real value in a transaction is serving the seller more than the buyer. Listings remain king. Showing their client’s property to prospects, building a case for rational pricing, and marketing the property in creative and impactful ways deserve a full selling commission. The end game for most sellers is to attract a buyer as quickly as possible, for as close to the asking price as possible. The end game for the agent is meeting those parameters not just by putting the listing in MLS or running a print ad, but by delivering rich, visual property information and demographic data online. This can mean intuitive map-based search tools and virtual tours, or a deeper data base that includes more than objective facts about the property. That is, buyers want to know not just about property taxes, bedrooms and views, but a city’s crime, education, health care and employment statistics, the history of a subdivision or development, the political scene, hot-button issues, lifestyle, culture, and the hidden pluses and minuses of living in a particular city. Increasingly, all of this is being delivered online, and that trend is only going to grow more predominant as the consumer/buyer asserts his power to extract cost savings from the transaction process.
