The Card Trick that is American Real Estate on the Web
By WellcomeMat on Apr 14, 2008 in WellcomeMat
Joel Burslem’s post today about the Rea Group had me wondering if American real estate web companies have cornered ourselves into a show of card tricks that never ends.
The gist of the post was about the Rea Group, whom makes their money when real estate professionals and property owners pay them to list their properties on their site(s). Simple huh? Pay me to list your properties and I will either a) deliver by sending buyers/renters your way, or b) you will stop using my service.
I know that idealism is the ultimate no no in the real estate space, but wouldn’t listers know within a short period of time whether or not it is worth it to pay to have their properties on Site A as opposed to Site B? Out of all the innovation that has occurred within the U.S. real estate space, I wonder what true value has actually been unleashed. I have a few personal favorites, but the rest seem like boring card tricks.
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On Apr 14, 2008, Simon Baker said:
Thanks for bringing this issue up.
One of the major differences between the US real estate market and those of most of the rest of the world is the commission rates charged on the sales of properties.
In the US, the average commission rate is between 5% and 6% of the sale price and this is split between the buyer and seller agents.
In most of the rest of the world, they charge around 3% commission rates. In the UK, where we operate www.propertyfinder.com, they charge
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On Apr 14, 2008, Dave Platter said:
Dave from the REA Group here.
It sounds like you’re questioning the value of innovation for its own sake (as opposed to for the sake of better serving agents and users). And, in my personal opinion, you’re right.
At the REA Group we’ve seen proof.
Real estate is such a wide-reaching category. So real estate websites have to be easy for everyone to use: from the person who has trouble figuring out Google to the Web2.0 fanatic.
When we try out innovations on our test site, property.com.au, like slider bars that let you dynamically change the listings that appear on a search-results map (by adjusting, say, the price range of properties you want to see) we find that the “advanced user” loves them. But, the more typical user prefers the simple, if clunkier, old way of doing things.
I think that often us insiders get excited by the innovations that technologies make possible today. And we sometimes forget that the user and real estate agent might prefer a slower, steadier rate of change.
The best test for a real estate site of whether it’s simply doing card tricks or if it’s really serving a purpose is the revenue it can generate. Are people willing to pay for this?
A good revenue stream will be more useful to any business than an innovative website that many people find confusing.
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On Apr 14, 2008, WellcomeMat said:
Hey Dave…thanks for dropping by! Actually no…this post is about the fact that, in the U.S., pay-per-list rarely works, even though it is the most straight forward way of determining success/failure for all parties involved.
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On Apr 14, 2008, WellcomeMat said:
Dave,
I forgot to mention that I agree 200% with your last comments:
“The best test for a real estate site of whether it’s simply doing card tricks or if it’s really serving a purpose is the revenue it can generate. Are people willing to pay for this?
A good revenue stream will be more useful to any business than an innovative website that many people find confusing.”
You are absolutely right about that.
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On Apr 16, 2008, Dave Platter said:
Dave from the REA Group again.
Thanks about that.
Take care.
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