We’ve been hearing from several clients recently about challenges communicating with members. Most are using e-mail but the problems with spam, filters, spam filters, and the delete key are making e-mail less and less effective. Inside many MLS systems, there is a dashboard that allows the MLS to display messages, but that’s not reliable either — most just blow right by the message board. So, I’m writing this post to the agents out there — what would be the best way for the MLS to communicate with you?
FBS recently implemented the ability for agents to leave messages for each other listings and we’ll soon be offering notification options, where each member will be able to specify e-mail, Atom/RSS, and hopefully SMS for different message types. Could such an internal messaging system work for MLS communications? Another MLS has come up with the idea of having users enter a separate e-mail addres just for MLS communication, which won’t be published anywhere else. Do you think that would work? What other ideas do you have?
Here’s our new baby. Though already weighing in at hundreds of pounds, we’re excited to watch it get even bigger!
Dustin and The Notorious R.O.B. are discussing the pros and cons of on-line comments about specific listings. This is a good extension of my posts from a week or so ago about how consumers choose agents. The basic question I was asking in those posts (how do consumers choose agents today?) is the question I think is most important here: How do consumers discuss listings today?
The question being addressed by Rob Hahn (The Notorious R.O.B.) in MLS, Cluetrain, and Social Web — One Step At A Time, Gingerly is a little different, namely how should an MLS allow public comments about listings. Rob gives good advice when he says “take one step at a time, very gingerly.” This is good advice because I think the question being anwered (Rob didn’t pose the question he’s answering it) is wrong or at least premature. As stated above, I think the better question is, how do conversations about listings occur today?
I suggest this question because I see the first gingerly step as modeling on-line conversations about listings the same way such conversations occur off-line today. The Cluetrain makes the points that “markets are conversations” and the Internet enables new types of conversations, but also critical to the Cluetrain ethos is that the conversations need to be authentic. I take this to mean, cut the sales talk, and tell me the truth! Because many corporations and sales people are really bad at being authentic, much of the Cluetrain talks about how the Internet is allowing people to learn the truth by having conversations around and outside of the standard communication channels. No longer is the slick sales person the only way you’re going to get information about your next purchase. Now you can Google whatever you want and learn more about the product than the sales person likely knows. You can engage with other consumers who’ve purchased that same product and you can hear their experiences, good or bad, and get informed by them directly.
Importantly, however, the value of recommendations from others about generic products is far different than recommendations about a home. First, the most obvious difference is that there are not many people who have experience with any particular home. Often, a home has been owned by only a few families. The most authentic conversations could be those with the owners, perhaps the previous owners, and the neighbors, but, unlike on-line recommendations for generic products, these aren’t conversations likely to happen off-line and so I question whether these conversations would develop on-line either.
The next tier would be conversations with other buyers who visited the home and wanted to share their opinions regarding the home. Importantly, I think “visited the home” is key here, because this, again, is a pretty narrow set. We’re not talking about some unknown person calling himself Bugs Bunny trolling through a web site and looking at pictures of the house and offering their opinion. Again, this is where conversations about homes are different than generic products. The sphere of authentic knowledge or facts necessarily is far more limited.
Importantly, conversations about the neighborhood and general vicinity are far different than conversations about a particular home. More people can have experienced the neighborhood and developed authentic and useful opinions than about a particular home. Again, the Cluetrain is about finding or creating new pathways to the truth and that’s a far different thing than changing the definition of truth to include a bunch of opinions from people who really have no basis for providing an opinion about a particular home.
You may have noticed by now that I’ve been using the term “home” a lot because I think it’s critical to remember that we are talking about someone’s home here. This is very personal. Authentic conversations respect that. I believe this is one of the core values an agent brings to the table for buyers and sellers; they are able to be respectful of the personal attachments each party may have and insulate them from conversations that may be hurtful. This doesn’t mean hiding the truth from them, but simply being understanding of their very deep and personal feelings about their home — treating them as human beings and not a punching bag, which I think is what the Cluetrain is all about.
I do think there are great opportunities for authentic conversations on-line about particular listings and, as Rob suggests, starting gingerly is best. Some of these conversations are already occurring on-line through showing systems that allow the agents to share comments with each other and their clients from particular showings. Expanding on these systems is an obvious way to extend the conversation. What other ways do you think authentic conversations can be created about specific listings?
Id’ hire Mariana, with or without an on-line recommendation.
In Part I, I discussed how (and if) consumers’ search for listings is related to their selection of an agent. Questions were raised about whether leads from listings are converting to customers, especially from an MLS listing portal like HAR.com or any site that promotes the listing agent, given the challenge of single-agent dual agency and (or any listing agent). What does the consumer want? What is their natural decision-making path to selecting an agent?
According to the NAR 2007 Survey of Home Buyers and Sellers, “Forty-one percent of sellers found their agent as a result of a referral, while 23 percent used the agent in a previous home purchase. Similarly, 43 percent of buyers relied on referrals to find an agent, while 17 percent of repeat buyers used an agent from a previous transaction.” In a year earlier survey, “7 percent [of buyers] found an agent on the Internet.” These stats would need to have changed dramatically to avoid the conclusion that consumers don’t choose agents based from listing searches or from the Internet at all. Rather, as then NAR President Pat Coombs said, “Real estate is very much a face-to-face people business”.
At the same time, the web undoubtedly is providing new ways for people to meet each other and the value of a relationship is often being tested by data. More sites are exposing consumer reviews, pricing, and other data to the consumer to help them make decisions about which agent to choose. There are sites like HomeGain, Homethinking, Agent Scoreboard, Agentopolis, and Incredible Agent that provide a variety of agent search capabilities. Some sites, like HomeGain, provide ways to compare agents on criteria like commission rates, years of experience, and consumer feedback. Others, like Homethinking, focus on productivity statistics, like homes sold and price ranges.
With little question, sites that provide more information to consumers are a good thing. Consumers clearly are looking for short-cuts to decide which agent to choose and, as noted above, the current short-cut is the personal referral, born of trust, whether deserved or not. The efficiency of the personal referral appears hard to beat. With just a few words, backed by personal trust, your friend or relative is able to communicate a wealth of complex information into a decision.
As web 2.0 companies slice and dice the data, however, I wonder if that efficiency can be matched? Is there an algorithm that will truly help consumers find the right agent? The 2006 NAR survey referenced above found “the most important factors in choosing an agent for buyers are honesty and integrity, followed by the agent’s reputation. Other important qualities buyers value in an agent include knowledge of the purchase process and responsiveness. For sellers, the most important factor in choosing an agent is reputation, followed by honesty and trustworthiness.” Given this, one would think sites providing consumer feedback about their experience with an agent would be very valuable, but does the wisdom of crowds math apply when the number of referrals an agent may get on-line in any given time-period is pretty low? Will one or more sites gain enough critical mass that this data can be aggregated in a meaningful way?
Perhaps more importantly, is it possible to synthesize this data into a “score” or “rank” in order to provide the consumer with a recommendation? This is what I’ll refer to as the tyranny of the ordered list. Whatever the method is for the agent search, the output is an ordered list, with someone coming out an top, just like we see with Google search results. The search algorithm is designed to bring the “best” match to the top. Even leaving aside the fact that many of the sites linked above have revenue models that create conflicts of interest to place certain agents near the top of the search results (or at least to the side like Google AdWords), the reality is that matching a specific consumer’s needs to a specific agent’s qualifications remains ridiculously complex.
Are these ranking sites really helping consumers? They are providing more data but is the data useful? The power of a ranked list is daunting, because it provides an easy short-cut. Why look at agent two or three when there is a number one? Yet is that ranking really anything more than arbitrary given the complex factors involved? Does the ordered or ranked list cut off due diligence when it really should just begin?
Perhaps the natural path for agent selection on-line is through social networking. From general sites like Facebook, LinkedIn, and MySpace to real estate specific sites like Trulia, Zillow, PropertyQube, ActiveRain and many, many others, the opportunities to meet people on-line is growing at a rapid rate. To this end, however, I think many are seeing panaceas where none exist. Just the other day, Dustin linked to a post from Curbed about a consumer being freaked out by their agent trying to befriend them on Facebook.
In this regard, the social networking tools Trulia and Zillow have provided surrounding listing content seem like a promising way for agents to build trust among consumers, but that brings us right back to the tyranny of the ordered list. Jonathon Dalton and Jay Thompson have been posting for some time about the ranking Trulia provides (or provided?) based on the highest number of answers, which resulted in a bunch of agents providing lots of answers of questionable quality in areas they knew little or nothing about.
In the end, modeling the consumer selection of an agent on-line is tricky business at best, and the personal referral is likely to dominate for some time to come, and, in many ways, I think this is a good thing. I consider, for example, brokers like Jay Thompson who just went independent and is building a great brand on-line through his blog and other sites the cream of the crop as to how an agent can communicate their value proposition to consumers. That value proposition will be very difficult, if not impossible, to measure or rank, but the web makes it possible for consumers to connect anyway.
I was talking on the phone the other day with Alex Chang from Roost and, through a broad-ranging discussion, we touched on the question of how consumers select an agent. I’m very interested in honing in on how listing search is relevant to agent selection. I mentioned that last week when I was at the Clareity MLS Workshop, someone flashed a statistic that said 68% (or something lke that) of agent selections were by referral from someone the consumer knew (parent, sibling, friend, co-worker, etc.).
Upon reflection, that statistic wasn’t too surprising, because that’s how so many decisions are made. When I moved to Fargo from Minneapolis ten years ago, I selected an agent in Fargo from a referral from my brother. Think about this: I was coming to work for an MLS software vendor used by all the agents in Fargo, such that I had available to me all the data I could ever want on the productivity of every agent and yet my decision was made based on a referral from my brother. Why is that? We’re all looking for short-cuts. There is so much information available to us today that we need short-cuts, a way to synthesize the data and tell us what to do. If the 68% statistic is accurate, apparently those we already know and trust are just such a short-cut.
The last few days, I’ve been discussing with Greg Swann, Mike Farmer and others the value of a “seal of approval” as a short-cut for consumers. Greg’s theory is that we need an Underwriter’s Laboratory for real estate agents. Brian Boero from 1000Watt Blog agrees and adds the possibility that agent review sites like Homethinking, Agent Scoreboard or Incredible Agents might help fill the gap, too. The commonality of these endeavors (let’s call them “agent search” or “agent recommendation systems”) is to provide the consumer a short-cut to deciding which agent to choose, as well as providing the agents a path (network) to the consumers.
In many ways, agent recommendation systems are the essence of the web movement, exposing more information to individuals and giving them more control. The questions I want to pose in this post, however, are two: (1) is agent recommendation related to listing search; and (2) is agent recommendation likely to be ineffective or maybe even too effective. I’m going to discuss the first question in this post and the second question in a later post.
Let’s go back to the beginning of the post, where it was posited that a large number agent selections are made by recommendation from people we know. In light of this, listing search would seem to be quite separated from agent search. If a consumer is looking for listings, have they already found an agent or are they wanting to find listings first and then find the agent? Perhaps more important, is there a path from listing search to agent selection? In many ways, the two seem in conflict, because the listing search is going to identify listing agents representing the seller and not the buyer. (VAR Buzz has been conducting a great discussion on single-agent dual agency, showing the inherent conflicts in that practice.)
This raises a significant question about MLS listing portals that I’ve been pondering a lot lately. During the Clareity conference last week, I was once again enamored with Bob Hale’s presentation regarding HAR.com. Chris McKeever from CRT was there, too, and he posted some details regarding the presentation. Clearly, HAR.com is driving a lot of traffic back to listing broker sites. The question I have, however, is what is happening to that traffic? How does a listing agent convert a buyer inquiry on their listing into a client? Presuming most are not practicing single-agent dual agency, the most obvious answer would be that they refer the inquiry off to another member of their firm. Is that what the consumer wants? I’d love to see more data about how leads from MLS portals convert to customers.
Listing search does seem related to agent search on IDX sites, where the site owner is promoting mostly listings that are not their own. Yet, the question remains, is a consumer looking for an agent when they are looking for listings? In other words, are they going to pick an agent from their IDX site? This question is raised most prominently by Roost’s model of a national portal rotating IDX sites. When a consumer goes to Roost, they are directed into an IDX portal of a particular broker and inquiries on specific listings are directed to that sponsoring broker’s web site. So, the question becomes, will the consumer value the tools being provided by that broker enough to select them as their agent? Rephrased again, will the click-throughs convert to leads and the leads to customers? That question likely will be answered in the near-term as Roost and other IDX vendors collect data on these metrics, and I look forward to learning more.
Unfortunately, I have more questions than answers about how or whether listing search relates to agent selection. The path certainly doesn’t seem direct and yet listing content remains the gold everyone seeks. The question is what is the most natural path for the consumer to take from listings to agent selection, or are the two really distinct?
Tomorrow, I’ll turn to the second topic I raised above, namely whether agent search or recommendation sites are a more natural path for consumers to select an agent. One tentative title I have for the post is The Tyranny of Ordered Lists.
Greg thinks I’m benighted (”being in a state of moral or intellectual darkness; unenlightened”) and is no longer participating in the discussion, but I think there is more to understand here, if only for myself. Greg extols the virtues of capitalism over government correctly:
Socialism fails, Fascism fails, Progressivism fails because they are all attempts to supplant the sometimes-imperfect reason of the marketplace — the weighing of incentives and disincentives — with the consistently-perfect irrationality that is brute force.
My point, which Greg calls fear, is that substituting one “seal of approval” for another because the market will eventually correct one but supposedly not the other ignores the very real and long-term impacts the “sometimes-imperfect” decisions of the market can have on people, especially when companies evolve into market-dominating positions. The difference between the power of a government and a market-derived monopoly (which have many shades of market power) is not a bright line, despite that one is subject to a vote and the other the market. Or, at least, the time to correct the sometimes-imperfect decisions of a company with market power can be so long as to make ignoring it (to turn Greg’s artful phrase) “childlike wishful thinking — endearing only in children, and, even then, only for a little while.”
Why wish for companies to be put in the position of judging others? Merely because one believes a “seal of approval” is needed for the otherwise ignorant consumers who supposedly can’t think or ask questions for themselves? A corporate “seal of approval” is needed to create a more perfect capitalism? I disagree. In fact, a “seal of approval”, wrought by humans and only corrected by markets in the longest of terms, is just as likely to create more disinformation as information. Instead, I suggest buyers beware. Think for yourselves, without relying on any imprimaturs for success. In doing so, you’ll be pursuing and creating the truth of capitalism, which abhors king-makers of any kind and for any term.
Joel Burslem over at FoREM comments today on the news that Prudential is partnering with Trulia by saying:
It seems ironic though, with all these brokers now lining up in different camps to feed their listings to the big consumer search destinations on the Internet, that it’s ultimately the consumer that suffers from these alliances being formed.
If I’m trying to search for a house in Portland, I still have to have to go to multiple destinations (Frontdoor has X, Zillow has Y, Trulia has X & Y but no Z) just to get an accurate picture of the complete inventory available on the market.
I’m starting to think the broker feed model espoused by many RE2.0 search sites (despite their early technological lead on the search experience), may ultimately be a losing proposition . . .
Yeah, I agree and have said so several times over the last year.
I just realized that yesterday was the FBS Blog’s birthday. 230 posts; 1,040 comments; 69 categories; and about 400 subscribers by feed and e-mail. Though I’ve only been blogging a year, it seems longer, like I’ve always been doing it, and I’m pretty sure that’s a good thing. I didn’t really have any expectations when I started, but I’m happy with where we’re heading.
