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The Shift in Real Estate Technology (Part 3)

June 30 2011

This is the second installment of a six-part series from the WAV Group whitepaper.

Inefficiency has a very high cost attached to it. Multiple products, glued together, means multiple training, multiple interfaces, multiple connections, multiple contracts and multiple headaches. Enterprise systems give a company control over their entire operation.

If you examine the graphic below you begin to understand how many areas companies need to manage as well as the data associated with each. This example shows a company that spans 3 MLSs. Recognize that even for one MLS, the brokerage still has the same internal and external system needs. Systems of the future need to unify and connect these business processes.

shift RETech part3It's All About Data
For many years, as long as agents had access to their MLS system they were on an even playing field with everyone else and were ready to go. MLS technology acted like command centers, hidden behind walls. Walls provide safety but they also isolate you. The future can't and won't be like that. There is a need for connections and broader data access in the real estate world.

Sales are getting more complex. Short sales, REO's, changing lending requirements are all pieces of this more complex real estate world. The future of technology in our industry and probably all industries will be about building pipes filled with data that flows continuously and seamlessly.

The message is, "Don't tell us where to go for data and how to connect to it with technology just make it happen! Do it for us, and make the whole experience easy!" Real estate companies need to be the hub for this information and they need to make the entire experience seamless and easy for agents.

Look at the impact that sites like Zillow and Trulia have had on our industry. They have unbelievable market share in terms of visitors when you think they have only been around for a few years. Why have they grown so fast? For one they have nice designs, but also because they provide a data rich experience to people that visit their sites. They don't just show property data. They have lot of other data embedded right into their product experience. We can argue whether their data is accurate, of course, but compared to real estate company sites or MLS consumer sites these 3rd party sites provide an environment that combines an easy to use interface (always a critical factor) with data on listings, solds, neighborhoods, schools, restaurants, etc. Data is key!

Look for a similar trend in professional real estate products where vendors will be offering more than just features and functionality; they will be serving up "new data" right in their products. You won't have to build connectors; the bridges and data will be part of the package.

As an example, CoreLogic, the company with the largest set of data in our industry is creating integration points within their product sets, including AgentAchieve that let agents access data from other CoreLogic products seamlessly. When looking at a contact or a prospect, agents can use data to understand their prospects against a number of factors such as their mortgage, years in a house, equity, etc., to see if they are considered a "hot" or "cool" prospect with a single click on a product they offer called ProspectCheck.We expect other data like marketing lists and foreclosure information, previously available only as stand-alone products are also going to be integrated in CoreLogic's broker products. Integration and easy access will be a key in successful products moving forward.

Follow the Money
When you follow the money you see where real innovation is likely to occur. It's not MLS anymore. The MLS business has become a dog-eat-dog world where vendors have been pushed by consultants to lower their fees and they have hurt themselves over the years, as well, by low bidding each other to win deals.

There are examples all over the country of vendors that have basically given their systems away until $10 seems like a high per member fee to many MLSs.

According to the NATIONAL ASSOCIATION OF REALTORS® Member Profile 2010 however, the median technology spend for the average agent is $640 per year. That is over $50 per month. The median broker technology spend according to the same report, is $850 per year, or over $70 per month. Money is being spent in the broker, agent technology sector and money funds innovation. Just follow the money!