What Users Want: Web 2.0, the Real Estate Industry, & Survival of the Fittest

The recent rise of Web 2.0 indicates an evolution in the preferences, habits, and expectations of internet users that must be recognized, understood, and addressed by the real estate industry. As more people are searching online for housing information, the growing number of blogs, forums, podcasts, wikis, and social networking sites are transforming the way people search for and gather information online. Because real estate professionals must adapt their services to provide for the changing expectations of internet users, it is necessary to understand these new developments in online search, as internet users demand different types of information, provided by different people, from different sources, in different formats.

Different Information:
     People are no longer willing to accept the information provided by experts, journalists, and officials as definitive and comprehensive sources of information.  Instead, people are seeking a broader array of information that includes both personal observations and individual's insights, recognizing that formal sources of information provided by officials, professionals, journals, and newspapers are not as adept at illustrating the complexities of a topic or industry as individuals' insights, opinions, and theories.

Different Contributers:
     When seeking a broader array of information, internet users are calling upon different groups of people to contribute their knowledge than those that have been primarily used in the past.  They are inviting individuals, industry professionals, bloggers, and all others who can contribute to their understanding of a given topic.  While, in the past, the reporting and presenting of real estate news was dominated by key real estate journalists, organizations, and governments, more and more people are now finding a voice and gaining an audience.

Different Sources:
     As the pool of contributors has greatly expanded to include a larger number of people providing information, traditional sources of information like newspapers and encyclopedias have been supplemented by a growing number of alternative resources.
     Blogs   
Perhaps the most notable of these new repositories of information are blogs.  The recent proliferation of real estate blogs has changed the face of the industry, as more discussions, debates, and insights are shared amongst the thousands of real estate blogs.  This flow of information among real estate professionals, observers, and insiders present dramatically different information about the real estate industry and has greatly expanded the available information for real estate pros and Joes alike.
     Wikis
Wikis are another example of these newly-popularized resources of information, as evidenced by Zillow's Real Estate Wiki and the InmanWiki.  While encyclopedias provide primarily factual information authored by experts, wikis represent a collaborative effort in which individuals provide, edit, and manage the content of the site.  While there are numerous issues that arise with this type of group activity, wikis are better suited to provide insight on topics and industries that deal with speculation, human actions, and individual circumstances.
     Forums/Discussions
Finally, people are choosing to participate in discussion groups and forums to learn about a topic in a more direct interaction and exchange.  These groups are especially useful when seeking personal opinions, experiences, or advance about a particular topic.  Users can find discussion groups on any number of topics and can learn more from the first-hand experiences of others.  For example, internet users can participate in forums that discuss particular neighborhoods or areas, Realtors and property managers, and even individual properties.  The information available from these discussion groups differs drastically from all other sources can illuminate facets of a topic that are often neglected or omitted.

Different Formats
     People are also searching for information that is presented in different formats.  The rise of podcasts and video demonstrations demonstrate that people appreciate visual and audible forms of information to supplement plain text.  Rather than reading instructions, many prefer to watch a video demonstration.  Instead of pouring through newspapers, many prefer to listen to podcasts.  And rather than reading a list of amenities, many would prefer to watch a virtual tour or video guide.

SURVIVAL OF THE FITTEST: Real Estate Edition
     These changes in internet users' preferences signal a new era in the age of information that is centered around the sharing, transparency, and availability of information.  Internet users are no longer content with the traditional types of information provided by experts, organizations, or governments that present factual, "unbiased," and official information.  They are relying less on experts and officials to provide the information they are seeking, aware of the tendency of these authors to use their messages to persuade or convince the public.  People are demanding a larger, more varied amount of information, welcoming a broader pool of contributors, looking on alternative sources, and seeking different information in different formats. Real estate professionals must understand and accept these developments and adapt their services to provide for the changing expectations and demands of the internet user. 

Failing to adapt to the changing environment will result in the loss of customers to competitors who do understand the centrality of the internet to their business plan.  Darwin's "Survival of the Fittest" rings true for the real estate industry: those who adapt survive, those who don't, well... die. If that's too dramatic for you, let me put it in terms of reality television:
You will be the "Weakest Link"...   
You will not be the  "Survivor"...
You will lose the "Amazing Race"...
YOU WILL ACTUALLY BE "The Biggest Loser."*

*(OK, I admit it.  I have no idea what the Biggest Loser is about, but it just fit so nicely)   

Comments

[George]

Ooh, another list! I like lists. Why limit it to reality television?

Endora will cast a death spell on you (and Sam won't care).
Bob Newhart will hang up on you.
Ernestine will disconnect you.
The one-armed man will strike again. You.
You'll have as much money as Cliff Clavin does after Jeopardy!.
Geraldine will become enraged and order Killer to, well....
Ozzie Nelson will actually ground you.
You will be launched to the moon, Alice.
J.R. will live. You won't.
You'll suffer the big one, Elizabeth.
You'll trip over an ottoman and break your neck.
Cliff Huxtable will take away all of your money, one dollar at a time.
You'll be dead, Jim.
A large, colorless balloon will chase you down.
You'll receive a bankruptcy note, signed by Epstein's mother.
You'll lose your #1 dime.
...

[Drew Meyers]

Colleen,
Great article (once again). I particularly like this quote - "Failing to adapt to the changing environment will result in the loss of customers to competitors." I think that quote holds true for every business in pretty much every industry. Businesses that don't adapt to their environment will cease to exist in the long term.

[Douglas Pope]

That is very interesting George.

[Colleen Corgan]

Thanks, Drew, you make a really good point.
Wish I could say the same to you, George, but... way to work a Cliff Huxtable reference in though, that is impressive.

[scott Schmitz]

Real estate has traditionally been about doing deals where there is some asymmetry in the information the buyer and seller have about the transaction. I don't think Web 2.0 is going to eliminate that basic situation. It's not like buying and selling stocks where the buyer and seller may know just as much or little about the stock. I cringe when I hear people talking about how they used e-bay to purchase a property sight unseen.

With that in mind, I think all the talk about a reduction in the role of a real estate agents is overblown. Real estate agents are necessary to smooth out what is a fairly complex transaction. Also, so much information about specific properties on the internet is rather old - for example listings on real estate agent web sites are often out-of-date.

A good example of how web 2.0 can be used to help smooth out a transaction, while at the same time not reducing the role of the real estate agents is: www.realtyjuggler.com it's an online organizational tool for real estate agents. They use it to track their listings, clients, yard signs, closings, promotions, lockboxes and basically everything they need to do starting from the first handshake when they meet their client until the last handshake at closing.

It's good that there's an increasing amount of information available to buyers and sellers on the internet. However, I don't thiink that reduces the role of the agent at all. If anything, in increases pressure on the agent to provide additional services - e-mail updates, a constantly up-to-date web site etc.