*The list of contenders is a long one but the winner, in the final analysis, quickly became obvious. 2005 was the year that the Internet’s role in the real estate transaction finally became clear.
Interestingly enough, it wasn’t the role that was predicted. The Internet did not become that famous “disintermediator” that many pundits predicted. The Internet is not removing agents from competition. On few occasions in the history of the real estate industry has so powerful a force pointed to such a clear course for success. In fact, the path for success is so brightly illuminated that only those who wish to fail could miss the mark and the message.
The statistics and sources that are clearly marking the path of the Internet success in real estate are many. The following bullets can be used to mark your trail or your demise:
• NAR tells us that over 74 percent of consumers start their search for homes and information on the Internet.
• NAR tells us that as of the beginning of the year that more consumers find their property on the Internet than through an agent.
• In its latest profile of the real estate consumer NAR tells us that the gap between how much information the consumer gains from the Internet compared the real estate agent has narrowed to only seven percentage points. Given the age of this data it is completely possible that at the present time the Internet has passed the agent as the primary source of information for the real estate consumer.
• We know that Internet empowered consumers earn more money and buy more expensive properties.
• We know that Internet-empowered consumers require about half as much effort when dealing with a real estate service provider.
• REAL Trends (Gathering of the Eagles) tells us that consumers spend an average of 17 months in their search going through dream, research and action phases.
• We know exactly what information the Internet-empowered consumer is searching for.
• We know that the vast majority of brokerage Web sites continue to be “broker centric” and fail to provide the consumer with the information they are seeking thus requiring them to use other and often non Realtor sources.
• We know that Internet empowered consumers will not engage with a real estate professional until a point about 14.5 months after the beginning of their quest.
• We know that at that point (14.5 months) the consumer will e-mail a request for follow-up from five real estate service providers identified during their search; most will pick an agent within 72 hours and more than half will pick the first agent that contacts them.
• We know that most consumers expect a response to their e-mail within four hours.
• We know that most of the serious real estate service provider Internet players are attempting to respond to consumer e-mails within 15 minutes.
• We know that more than 70 percent of e-mails from consumers to agents go unanswered after three days.
• NAR tells us that almost 50 percent of listings fail to meet the consumer’s expectations for photographs and information.
• We anticipate that when all the numbers are in almost 30 percent of transactions will have come to the real estate service provider over the Internet.
• The lessons of the past year have taught us how to filter, scrub, incubate, assign and follow through on Virtual leads. These lessons are now part of the wisdom of this industry.
• We know that a whole range of new real estate service competitors (HomeGain, RealEstate.com, LendingTree.com, Service Magic, HouseValues and soon Zillow) are gaining power and influence by focusing on the very service area that the traditional real estate service provider is ignoring.
• We know that in the third quarter of 2005 the leading edge of these third party lead aggregators begin charging 45 percent fees for their best lead referrals.
Will the impact of these fifteen bullets be fatal?
Will the apparent failure of the traditional real estate service provider to follow this obvious course of success become a historic turning point?
2006 may be the year that these questions are answered. Whatever happens, one thing is clear. The Internet can never be accused of removing the brokerage and agent from the transaction. That distinction will always belong to those who failed to dodge the bullets.
It is time to target your success and hold your yearend business planning meeting.
