December 1997 Published by the NATIONAL ASSOCIATION OF RealtorsŪ
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Topic: Internet, Techno-File, Technology
Title: Real Estate Flexes Its Technology Muscle
Writer: Warren Berger
Editor: Christina Spira
Article Page #: 36-39
Copyrighted? Yes

The following (or attached) is copyrighted. Reproduction, reprinting, or retransmission in any form is prohibited without permission.


BUSINESS & THE ECONOMY

Technology
Real Estate Flexes Its Technology Muscle

 

After a rough start, the real estate industry has finally grown out of its technological infancy. With the building blocks in place, the industry can and will spread its electronic wings further. Where does that leave you as 1998 approaches? Read on.

By Warren Berger

In some ways, 1997 was the year that tech talk turned to action.

After years of speculation about the ramifications of the Internet, and after experimentation with the first generation of high-tech gadgets such as digital cameras, this was the year that the cutting edge began to gravitate toward the mainstream--as a gr owing number of practitioners started to see technological advances impacting their daily business dealings.

Industry observers say the revolution has only just begun. The mainstreaming of high tech will continue and even accelerate in 1998 as online listing growth reaches near saturation levels, real estate Web sites become the norm, and digital cameras and oth er personal tech gear become standard operating equipment.

Futurists inside and outside the business say that in 1998 technology will become not only more prevalent but also more practical. As the Internet and other technologies move beyond the novelty stage, you can begin to see answers to some of those nagging bottom-line questions: How can the convergence of various technologies--from Web sites to E-mail to digital cameras-help streamline the real estate process for consumers? How can it help me be more effective and efficient?

Internet Comes to Computer Near You
If there's one point the experts are unanimous on, it's that in 1997 the big buzz in the biz was the Internet.

"This has been the year that real estate companies and salespeople truly began to use the Web," says Daniel Burrus of Burrus Research, Milwaukee, a technology consultant who follows the business.

The most obvious use has been online listings. Leading the charge: mega-Web sites such as the NATIONAL ASSOCIATION OF RealtorsŪ' www.RealtorŪ.COM, which added its 1 millionth listing.

"Bringing listings online was our big push in 1997," says Stuart Wolff, the CEO of RealSelect, which operates the site for the RealtorsŪ Information Network, an NAR subsidiary. The site now encompasses more than 80 percent of the country's listin gs, representing 250 MLSs, and Wolff notes, "We should reach 90 percent by early 1998."

"In 1998 the growth of online listings will flatten out as we move closer to the saturation point," says Kevin J. McCarthy of the Real Estate Technology Institute, a Phoenix-based consultancy.

As growth slows, the focus will shift to improving the content and presentation of online listings. Says Wolff: "We need to enhance their functionality so that they provide decision-support tools [such as demographics and school information] a nd strengthen the relationship between the consumer and the RealtorŪ."

"We'll see online listings offer much more detailed information," says Joe Hanauer, a former chairman of Grubb & Ellis and now a real estate technology consultant. He foresees not only community information but also more visual featu res: "The technology will enable you to show floor plans, interior views, and neighborhood views."

Such enhancements will obviously benefit Web-surfing consumers, but how does the growth of online listings impact you?

The answer is, it fundamentally changes your role.

"This year we saw listing information become a commodity that's accessible to everyone," says Burrus. For years, practitioners talked about what would happen if MLS information went public and about the need to find other ways to define their va lue. Now the need is staring you in the face, Burrus says.

But if the online listings boom creates a challenge, it also presents a huge opportunity. Salespeople such as Mollie Wasserman of RE/MAX-Executive Realty, Boston, are finding large chunks of new business--in Wasserman's case, half of her sales in the past year-via the Internet. "It has opened up a whole new world for me," she says.

(Others aren't singing its praises--not yet anyway. A Today's RealtorŪ study, published in July, showed that 76.5 percent of practitioners are getting zero business from their online efforts.)

Taking in the Sites
For those who are successfully riding the Internet wave, online marketing is critical. And the primary online marketing tool is their company or individual Web site.

In the past year there's been a tremendous surge in the number of real estate Web sites, says Becky Swann, Grapevine, Texas, creator of the International Real Estate Digest (www.ired.com). Swann estimates that as many as 300 such site s go online each week. The level of quality, she says, has been decidedly mixed.

"We're seeing more good Web sites but also more bad ones," says Swann, who notes that a typical problem is failure to keep the site up to date.

From a content standpoint, many of the first-generation sites were little more than online brochures--often just a quick sales pitch and a biography of a company or salesperson.

But, McCarthy says, in the past year, "there has been a growing understanding of the difference between a Web presence and a Web site. A presence is just a photo and bio, but a site offers real value and a reason to come back."

Michael Russer, a real estate technology trainer who heads up Russer Communications, Santa Barbara, Calif., agrees: "Brokers and salespeople are just now starting to go beyond the 'me-me-me' brochure approach to providing real value and service for c onsumers."

The better sites forge a personal connection between practitioners and consumers. Wasserman's site features a "Not Ready for Prime Time Buyers Club"--for people who aren't quite prepared to buy--as well as an interactive "What's My Home Wor th?" feature, enabling visitors to determine their home's value without sitting through a listing presentation.

Experts say that improved technology will enable Web sites to go multimedia with audio and video--and savvy surfers will demand that.

"As we head into 1998, the challenge for sites is to create a more robust experience," says Jim Sherry of Interrealty Corp., a Vienna, Va.--based MLS service provider. Web sites need "a little bit of 'infotainment value'--better grap hics, animation, music--to make the experience more enjoyable."

Burrus believes the best sites in 1998 and beyond will combine high-tech capabilities with a personal touch. "That may mean posting special pages on the site designed for individual consumers, saying 'This is what I want to show you' and providing vi rtual walk-throughs of the property." RealSelect plans to be similarly responsive to consumer needs in the near future.

Is Anyone Seeing My Site?
Even as sites improve, one challenge will be to overcome Web clutter. With an estimated 40,000 real estate sites out there, it's becoming increasingly difficult to stand out.

"In 1997 the big push was getting a Web site out there," says McCarthy, "but in 1998 the issue is, how do I make sure my site gets seen by anyone?"

High-quality content is no guarantee of success, Swann notes: "The company name on your site may have more to do with the traffic than the quality of the site has." To stand out, it'll be critical to actively call attention to your site, experts say. Basic steps are to promote the site in all your marketing literature and link to search engines and community sites.

Debbie Ferrari, an associate broker with San Clemente Real Estate Co., San Clemente, Calif., says she has kept traffic high by creating nine different Web sites, each with its own URL, that are tailored to the sites they're linked to. For instance, she has one site that's a link at HomeSeeker (www.homeseeker.com), with listings in Reno and Sparks, Nev., and one at Choice Mall (www.choicemall.com), an online shopping network covering everything from entertainment to real estate. They'r e all linked to her main site and all registered at the search engines, thereby increasing her odds of being found.

Sherry believes that the clutter problem may lead to more consolidation of Web sites in 1998: "We may see individual salesperson sites combined into broker sites." But Wasserman disagrees: "I think the trend will be toward individual sites. There's a place for company sites as a form of advertising, but people do business with individuals."

Real Estate Catches E-Mail Wave
If Web sites are going mainstream, E-mail is already there. "Suddenly, salespeople everywhere have discovered it," says Swann.

For users it's a way to link to clients and fellow salespeople, and it can be an effective tool for both the front end of a transaction, establishing contact and rapport, and the back end, relaying documents and closing information.

Russer believes that in 1998 E-mail will continue to be the primary online tool for doing business. "It has the distinct advantage of being direct," he says.

But the coming year will also see the merging of Web and E-mail to provide the multidimensional aspects of the Web with the directness of E-mail. Russer notes that HTML mail will enable practitioners to put interactive documents or even a full-blown Web s ite into an E-mail message--provided the receivers have up-to-date versions of Netscape or Microsoft Explorer to view the messages.

The E-mail explosion has been part of a continuing trend toward greater interconnectivity in 1997. New software now allows voice and fax messages to be attached to E-mail, providing access to faxes from virtually anywhere (see "Send Calls, Faxes t o Your E-Mail," October 1997, page 40).

Burrus believes that the next hot communication product will be all-in-one communication packages, known as a personal communications service, which combine pager, phone, and E-mail in a phonelike unit with a display screen for $200-$300, plus a monthly s ervice charge. Second-generation models due out next year will offer Internet access and a bigger display screen.

Stop, or My Digital Camera Will Shoot!
"Digital cameras became the must-have product in 1997," says Steve Canale of Acclaim Residential Marketing, Ann Arbor, Mich. "And they're primed to be on everyone's desktop in the next year or two."

That growth is being driven by several factors: The explosion of Web marketing brings with it a demand for digital images. And the price has now come down to affordable levels-about $300. Above all, says Canale, "there's the wow factor. This is reall y a way to impress the people you're doing business with."

You don't need a digital camera to store pictures on the Web. PhotoNet, a product of PictureVision Inc., Sterling, Va., enables users to scan standard 35mm pictures and load them on the Web, Russer says. And Kodak is working on a similar product. Right no w, getting a roll of film developed and digitally stored costs about $5, plus nominal online storage fees.

Another photographic innovation that's having an impact is 360-degree photography, capable of shooting virtual home tours for a Web site. In the past year Rubloff Residential Properties in Chicago began offering virtual tours of high-priced houses on the company's Web site (rubloff.com/). Consumers can look around the room using the computer mouse.

The feature "has really drawn people to the Web site," says Laura Anderson, a broker with the company who also manages the site. She can't quantify the amount of business it has brought in but notes that it's expensive--about $300-$500 per listi ng. Despite the cost, Sherry thinks more sites will feature virtual tours in 1998. "It's an experience Web users will flock to," he says.

Technology Changes the MLS Landscape
Beyond what it's done for individuals and companies, technology has the potential to alter the business in ways that aren't completely foreseeable.

MLS consolidation, which has been a trend for several years, is expected to continue in 1998. MLSs are closing ranks, say RealSelect observers, because consolidation makes it easier for multioffice brokers to operate: All their offices can use the same ML S system and procedures. And fewer MLSs cut down on the number of overlapping markets where practitioners must list homes in two MLSs.

In addition, technology has attracted outsiders--tech giants, such as Microsoft, and media companies--that may see money to be made in the transaction process. The Chicago Tribune offers America Online's Digital City, a source of city housing, tour ist, and entertainment information; NBC (www.nbc.com) recently launched an interactive site through 50 local television stations that'll let viewers search for a home and check movie listings, among other things; and USA Today's site (www .usatoday.com) includes a homes page. Digital City, NBC Interactive, and USA Today use www.RealtorŪ.COM as their source for listing information with a direct link.

"In 1998 we'll see what Microsoft plans to do in this business, and we'll also see the media companies, which have a big stake in listings and have the ear of the local consumer, get deeper into real estate," Sherry says.

But the experts don't believe outside forces pose a threat to your business. For one thing, NAR has already signed exclusive partnerships with many of the largest media companies. Besides Digital City, NBC Interactive, and USA Today, NAR has agreem ents with such online directory service sites as NYNEX's BigYellow (www.bigyellow.com) and US West (uswestdex.com). All that brings millions of consumer eyeballs to RealtorŪ listings.

And McCarthy notes that the technology and media companies are focused on providing information, not service: "Perhaps the biggest effect they'll have is to educate the consumer that it's now possible to access listing information yourself, which wil l force real estate people to adapt."


Technology
1998 Outlook
Content-rich online listings: Now that the vast majority of listings have been brought online, "we need to enhance the functionality" of those listings, says Stuart Wolff of RealSelect, which operates www.RealtorŪ.COM for the REALTO RS Information Network, an NAR subsidiary. Look for listings to incorporate more information about the community and to provide visual enhancements as well--floor plans, interior views, and neighborhood views.

State-of-the-art Web sites: Savvy surfers will demand better, more rewarding sites--and technology will make it possible. Vastly improved modem speed in 1998 (new cable modems and phone company ASDL--asymmetic digital subscriber lines--to soup up I nternet access will be hitting the market during the year) means that Web sites can incorporate more video and audio, making it possible to conduct virtual home tours, then post them on a Web page.

HTML E-mail: Combining the multidimensional aspects of a Web site with directness of E-mail, HTML E-mail allows users to put an interactive document or even full-blown Web site (not just a hyperlink) into an E-mail message.

Greater interconnectivity: All-in-one communication packages, known as a personal communications service, which combine pager, phone, Internet access, and E-mail in the same phonelike unit, "will be very big in 1998," says Daniel Burrus o f Burrus Research, Milwaukee.
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