David Howell, executive vice president and chief information officer at McEnearney Associates, writes an occasional column about market conditions in the Washington region.
One of the topics generating a lot of buzz — and a lot of consternation — in the real estate business these days is “control.” Everyone is worried about controlling the search process, or controlling the creation, compilation and dissemination of data, and biggest of, control of the customer.
Some in our industry are wringing their hands over the fact that the overwhelming majority of home buyers identify the house they eventually buy on the Internet, and that some of the most popular online real estate portals have wrestled control of the home search process away from us.
We’re worried that we’ve lost control of the listing data that we work so hard to produce, that others have repurposed or misused our data. And the big one is that we have somehow lost control of the customer — they’ve bled off to these national portals, or to mortgage lenders, or heaven forbid, they go and to the transaction themselves.
Here’s the reality: You can’t lose something you never had. We have never controlled the search process for real estate, we’ve never controlled the data and we certainly have never controlled the customer. And we’re kidding ourselves if we think we did, could or should truly control any of those things.
The process of searching for a house has changed significantly with the advent and pervasiveness of the Internet. In 2001, 13 percent of home buyers identified the house they bought on the Internet — and today it’s approaching 80 percent. In the old days, folks relied on newspaper ads, yard signs, friends, neighbors and co-workers. In 2001, 69 percent of home buyers used an agent or broker — today, it’s 88 percent. That’s because it isn’t about controlling the search process — it is and always has been about providing value to the transaction.
We don’t control the data. We can and should rigorously enforce our copyrights to unique information, but our listing data are just pieces of the overall real estate portfolio — tax records, insurance info, demographic records, home plans and blueprints, mortgage loans and credit report — so we should recognize what we have and what we don’t have.
And what we clearly have is accurate data. On a Friday afternoon in November, using Zip codes where we have offices, we compared the number of all agent-listed, fully available listings in the multiple-listing service with those on our Web site and two popular national sites.
Out of almost 1,000 listings, we were off by one, while one of the national sites showed almost 28 percent too many properties and the other national site showed 30 percent too few. The first national site simply doesn’t update its data on a timely basis, and the other one has the same problem compounded by the fact that lots of sellers don’t want their homes on a site with inaccurate estimates of the market value.
Most importantly, we have never met a consumer who wants to be controlled. And there is not a lack of choices in real estate service providers. In our multiple listing system, there are more than 4,000 real estate companies and 40,000 agents. Sellers can sell by owner and buyers can work directly through a seller. There are discount brokers and full service brokers and everything in between.
None of us are entitled to anything — we have to earn it with every single client, every single transaction. If we’re good enough, if we bring enough knowledge and skill to the table, create a brand and try to build long-lasting relationships then we have a chance to earn the business. And that’s exactly how it should be.
Previously from David Howell: