February 2009

By Owners, for Owners

REALonomics has spent a great deal of time articulating the historical flow of the real estate industry. In so doing, we have clarified the so-called “flow” of things economic, demonstrating that the business models are in constant flux, evolving to every higher life forms. The Broker-Centric era gave way to an Agent-Centric era, which now is giving way to a Third Economic Wave, the Consumer-Centric Era.

e-Partner is one of the fascinating Consumer Centric Era economic models that empowers owners to create market management models that allow them to penetrate the horizontal markets, recruit office-less agents, engage in multi-market branding and creative business development strategies.

In effect, e-Partner is a total market model that blankets the entire country with State and local Community-Based Website (CBWs) that allow real estate company owners to expand their market influence and presence to literally every city in the State where they do business. The model ignores vertical market definitions, opting instead to allow broker/owners to do what most departments of real estate empower them to do, operate statewide.

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The Anonymous User Paradox

The title industry has long opted to sell directly to intermediate influencers while ignoring end users. The industry incorrectly assumes it’s product to be information. The misconception was spawned by an inexplicable affinity to remain physically and emotionally distant from consumers. The title industry, in fact, sells only credibility and the absence of consumer-centric title models proves that this nuance is not generally perceived.

The arcane concept known as reverse competition has created tiers of imbalances within markets as well as structural inadequacies within the industry itself. The greatest of these issues: The title industry and the consumer know very little about the other. In markets with expectations of honest and continuous business chatter, the self imposed seclusion of the title industry has fueled a public suspicion of skeletons in the closet. The paradox: a retail industry of the store front variety that has never met its customer.

Brick-n-Mortar Mentality

The contemporary model encouraging title company ownership by real estate companies will soon face economic challenges. Income streams produced by internally processed title orders will lose velocity when confronted with heightened scrutiny by consumers and governmental agencies.

The lucrative profits currently used to finance a “brick and mortar mentality” among corporate executives are also needed to lubricate a false sense of security and high percentage commission splits for real estate agents. As the model’s machinations de-accelerate, effective and appropriate business models will elude the title industry’s grasp due to the anonymity of the consumer.

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Rock Solid Melt Down – Tantrum in SD

REALonomics Op-Ed

It looks like some Internet visionaries just don’t fit the mold. Or, perhaps, the mold is now being broken. Or, worse yet, maybe there is only one mold at Prudential Real Estate Affiliates (PREA), into which all brokers must be poured…PREA’s. Is the insecurity inherent in our models finally exhbiting its pathos in ways akin to the melt down of Brittany Spears?

Everyone on the inside of the real estate industry’s news networks is buzzing over the Prudential ouster of Zillow and Trulia from the San Diego Real Estate Conference of Prudential Real Estate Affiliates. Inman News reports brokers in “dismay” over Prudential’s insistence that Zillow and Trulia pack it in and hit the road…20 minutes prior to show time!

REALonomics predicts the damage controllers are going to be out in force.

The Bad Business of Messing with Owners

When the likes of Ed Krafchow, President of Prudential California Realty, calls his franchisor to task for “interfering” with his job, you know you have an issue on your hands.

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Home Real Estate – Model Perfect

Home Real Estate is the premiere recipient of the REALonomics Model Perfect recognition for real estate brokerage business models. More will follow. In fact, nominations have already started arriving as we engage in the Quest for Model Perfect. Although, we speak of “perfect” the true emphasis should no be on an unattainable flawlessness but rather, we should emphasize “quest” as the imperative. The Quest for Model Perfect is about the journey not the destination.

Real World Modeling

Perhaps the most accurate description of Home Real Estate’s model is that it is just flat out “real world.” There is a refreshing absence of the all too common place bravado and hype sometimes seen in a company’s offerings. Home’s real world approach to business modeling is clearly NOT lopsided, being neither “Broker-Centric” nor “Agent-Centric” (our terms).

Home’s ownership team seems to grasp reality…i.e., we are in a third economic wave of the real estate industry, one that is decidedly different in focus, being market-driven and consumer-centric. There is a keen, sharp edge to their recruiting website and if I were an agent shopping around, I’d be spending some time analyzing Home’s agent offering and setting up an appointment.

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GEEKology – Without the Mythology

Technology, no one can doubt, is reshaping the real estate industry. We are in a Renaissance of redevelopment. Fortunately, all of this transformation has allowed me to observe from a distance and close-up the adaptations real estate agents and their owners are making to the industry’s great challenge of all…incorporating technology and the Internet into their business models in sustainable and profitable ways.

It is no longer about “we have a company website with IDX.” Today’s business development challenges must take the development much further, indeed, into the realm of consumer feasibility, consumer centricity, consumer capability…see the theme? It’s all about “them.”

Most of the real estate agents working in and around the market where I reside are out in front of their company owners when it comes to technology and the Internet applications. More importantly, it is not a necessary evil to top producing real estate agents, it is the nucleus of their business and future of their ROI.

GEEKology 101

Fundamental to Internet business development strategies are the answers to these questions:

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