Good change agents have an edge to them, typically a sharp edge. Exceptional change agents have a sharp, well informed and analytical edge to them that will cut ones mind open so that it soaks in the message of transformational change. Jeff is a sharp, well informed, analytical agent of change. He is on the march against predatory lending and other kinds of mortgage lending practices that have contributed to a large degree to the current financial state of the union.

ENTER “RATESPEED“

Jeff wants transparency in all things related to mortgage. When we spoke recently, we briefly discussed our respective efforts within the industry but digressed almost immediately to his “RateSpeed” widget for the mortgage industry.

As is usually the case within our industry, disclosure is at the core of RateSpeed. The RateSpeed widget spews out mortgage pricing analysis and its resultant solutions are the kind of transparency that sets the consumer at ease with a sense of “complete” knowledge about the financial ramifications of a mortgage commitment.

Although the RE industry and its biological twin, the mortgage wing, need a dose of RateSpeed widgetry, what we need more than widgets, good as they are, is a dose of the mentality and leadership behind the widgets. Jeff’s widget stems from a mental image of what the mortgage industry’s business model should look like, what it can deliver to the customers in this, our Third Economic Wave, the Consumer-Centric Era.

To REALonomics, RateSpeed is not a widget…the widget is the expression of a kind of business model…of course, that’s what REALonomics thinks about day and night…MODELS.

Behind Jeff Corbett’s RateSpeed widget is a business blueprint and behind the blueprint is a design that delivers a solution to the industry and the consumer. BRAVO!

ENTER “RATESPEED RESISTANCE“

REALonomics admittedly knows less about the fundamental practices of the mortgage industry than it does those of the real estate brokerage industry. But there is an initial and fundamental response to our mutual calls for transformation and transparency…resistance.

Moving from corporate hierarchy models to cooperative and collaborative platforms that embrace complete disclosure will always be met with initial skeptical cynicism and resistance. Nevertheless, the Jeff Corbett’s of this industry are to be recognized for thrusting their widgets into our faces, forcing us to think about transforming a now very sick industry into a new, vibrant and fully fluid, consumer-centric delivery model that our clients love…yes, “LOVE” is what I said.

REALonomics applauds Jeff and all of the rest of the Jeff-like transformers who are inching us forward in our “Qwest for Model Perfect.”

Try RateSpeed. Visit The XBroker.

Related posts:

1. Our Genie is on the Loose & Fresh out of Wishes
2. Wikinomics
3. REALonomical: an Economic Mentality

We have been inside, outside and throughout the industry for quite some time. Our vantage point has changed, enabling us to see what we heretofore could not. In the world of business development and economic analysis one’s vantage point can bring the kind of insight that frankly, changes one’s faulty fundamental assumptions while confirming sound precept.

REALonomics now realizes, without further equivocation, analysis or debate, that our industry’s real estate genie has been released from its bottle and is fresh out of wishes!

Pushing the Vapor Back into the Leaky Bottle

From here on out, all attempts to capture the vapor, return it to its confines and cork the RE bottle will fail.

The Genie that once belonged to us, obeyed us, served us and made us what we once were is loose and fresh out of wishes.

The bottle is tarnished. Rubbing the bottle produces nothing. Our Genie is loose and now serving multiple masters simultaneously, none of whom, save one, the consumer, has sway over the Genie’s capacity to grant new wishes.

It’s impossible to bottle this kind of vapor; its seepage passes through the tiniest of spaces, spilling into the open atmosphere, moving where it wills to go. Where does the Genie go? It ALWAYS takes the path of least resistance, shunning confines, rejecting control and moving to open expanse where it finds its ultimate economic freedom.

Bottling the vapor no longer creates reliable “RE Economic Tonic” for the industry. The vapor is meant to be breathed, not bottled.

RGB, NGB and NGCs

Retail Generation Brokerage (RGB) used the bottle to control the Genie in vertical markets where the consumer was required to submit to the model in order to invest in real estate. Net Generation Brokerage (NGB) is the post 2000 freedom model where horizontal peer collaboration is replacing hierarchal control models.

The real estate industry is now the most vulnerable mainline industry to peer-to-peer models where the consumer and the Genie meet up for property inventory data exchanges and local community collaboration. The context is different and the conversation is different. Both the Genie (property and community information) and the consumer have reached agreement…FREEDOM Rules, open space ROCKS!

Vertical (retail, local style bricks and mortar) real estate brokerage models are being quickly replaced with a viral model, spread by a Genie on the loose and fresh out of wishes.

Two dangers to the industry and its economic models occur in this environment. First, there is the danger of complacency, of not re-tooling our economic ship so that it can operate fluidly in a viral, horizontal world where profitability is defined by open, collaborative peer models facilitated by the real estate industry.

Secondly, and perhaps more importantly, there are now signs of the emergence of what REALonomics calls “self brokering” whereby and wherein the consumer creates their own economic reality, ignores real estate professionals, only calling on them if they must and when they so desire for services they define for themselves.

The next generation of “consumer-buyers-sellers-clients” that will fuel the recovery and beyond will be Next Generation Consumer (NGCs) whose informational points of reference are alltogether dissimilar to old line retail brokerages.

Great News and More Great News!

Great news! The Genie, once our beckoned servant, existing only to accomplishing our economic wishes, rather than rejecting us, invites us to follow into new the new economic space of opportunity…to collaborate, to join the viral horizontal world of the consumer with new approaches to property information management and peer-to-peer community information services.

More great news! Never before has the industry and its adherents been afforded the opportunity to engage in a kind of real estate information alchemy, where our old lead bottle can be turned to a golden horizontal field of freedom for both us and our partner, the consumer.

Related posts:

1. RateSpeed: Inching Us Toward Mortgage Transparency
2. Mug Shot: A New Front Face & Profile
3. Wikinomics

Participation has, according to a Wikinomics, reached a tipping point where new forms of mass collaboration are changing how goods and services and invented, produced, marketed, and distributed on a global basis. Now the perfect storm of technology, demographics and global economics is an unrelenting force for change and innovation.

They pinpoint 2006 has been the year when the programmable Web eclipse the static Web, on every level. For example:

• Flickr beat out webshots
• Wikipedia beat out Britannica
• Blogger beat out CNN
• Epinions beat out Consumer Reports
• Google Maps beat out MapQuest
• MySpace beat out Friendster
• Craigslist beat out Monster

The losers were websites. The winners were communities.

Wikinomics believes that profound changes in the world of technology are giving rise to power new tools based on community and collaboration. We are a new economy – a vast global network of connected people that swap and exchanging ideas, information and an endless list of other services.

And from where I stand I can see it happening to our industry as well. The real estate industry is changing and the thousands of blogs, social networks and the wikis are already laying the foundation for the new world. New business models are already being born, new paths already being charted and new leaders already being groomed.

Real estate over the next decade will change forever and Wikinomics may shed some light as to the path.

Below are a couple of examples of social networking in action:

Related posts:

1. Our Genie is on the Loose & Fresh out of Wishes
2. RateSpeed: Inching Us Toward Mortgage Transparency
3. REALonomics on CityBlogUSA

My ownership experiences created the foundation for REALonomics, new real estate model math. I’m no longer a believer in the traditional brokerage business model. It cannot sustain owners and provide them with the return on the investment they need to justify their risk and certainly in most cases provide them with an exit strategy. More importantly, the model is increasingly being rejected by the consumer, who favors less control and much, much more transparency.

The fickle markets, all-wise consumer, transaction complexities, capital and legal risks and the arcane nature of the industry itself have rendered the notion of a broker-centric business model nearly obsolete. Want the unvarnished truth? Of the dozens of broker/owners I speak to each month, almost none of them believe in their model, not with the passion necessary to an ongoing and profitable business endeavor. My broker/owner friends are just stuck knee deep in the cement of a dead model.

Power brokering is becoming highly irrelevant. My broker/owner colleagues, nearly to the person, shake their heads and mumble, “…not worth it…I’m keeping the doors open so my agents can make money…and even they aren’t making money any more…”

Our Quickening March toward Obsolescence

Has the pace of change created an every quickening march toward functional and more importantly, economic obsolescence? Yes, it has! To a large degree the idea of opening a brokerage, complete with agent office space, desks, computers, copiers, coffee room and the assortment of industry trinkets that have little or nothing to do with providing consumers access to property information and homes, seems frightening and very risky.

Ours is an industry where owners just won’t let go of themselves, even after staring into the mirror of obsolescence, where we see ourselves, tired, lonely, frustrated, isolated and economically challenged.

The Broker-Centric era (the first economic wave) and Agent-Centric era (the second economic wave) business models are in a final march toward obsolescence. In effect, neither owners nor agents can afford to push the model much further into a future where liquid property information will abound, consumers will bask in the democratization of real estate and we will service transactions from wholly new vantage points.

This “march toward obsolescence” is a not an industry death knell. More accurately, it could be described as the introduction of a new “script” that charts the direction for highly innovative blueprints that finally redefine how we interface as an industry with people in the Consumer-Centric Era (the third wave of our economic development).

Exorcising the Resident Demons and Myths

Like Emily Rose, we are possessed by many demons. In order to build a neo design we will need to cast out the old counter-productive forces that have taken up residency within our business models and whose negative influence permeates the industry. We are possessed of many…most must go…some will be allowed to remain, temporarily, due to necessity…others can be tamed and trained, perhaps.

The long held notions, superstitions and fairy tales about real estate brokerage will need to be addressed, as these have long held sway over our creative capacity to reinvent, paralyzing us and placing us in an economic stupor.

We must cast-out the idea of property information control and open a transparent portal for the consumer to enter into new conversations with us about real estate investment, where we are truly qualified, trusted and knowledgeable about their investment strategies.

We must expunge the idea that bricks-and-mortar retail models in fixed and defined metro market service areas can continue to produce adequate ROI. We must drag the demon of overhead, kicking and screaming out into the open market where it can be exposed for what it truly is, the enemy of owners and franchisors.

Our demons are legion…they do not come out easily and when they finally do they leave a mark, a dent, a scar that says, “We once lived here.” Our resident guests impact our economies of scale, our market agility and most importantly, our long term survival.

Etch-a-Sketch®: a Neo Design

In 2008, REALonomics will etch concepts for the creation of a neo design. We will put it on paper (well, in the blog) and make the model ideas accessible to you. We will interview brokers, agents, industry leaders and of course, real people who buy and sell real estate. Novel, eh?

Changing our industry’s design is daunting. We need to take a look at our sprawling geographic markets, such as California, Florida, Phoenix, Las Vegas, Chicago, Atlanta and the rest and ask “what can work here, now and tomorrow?” Our industry should deliberately engage in designing the optimal consumer-centric, consumer-partnered, brokerage services model, replete with features necessary to the era in which we live.

Baseline business modeling begins with unfettered access to property information…sketch it in!

Baseline business modeling includes a renewed commitment to standards of practice that please the consumer and create a new, more comfortable reality…sketch it in!

Baseline business modeling marries cultural realities to the real estate transaction prototype…sketch it in!

Baseline business modeling has something to do with expunging the ego-centric expressions and components from the industry that continually project a self-serving, money-grabbing image…sketch it in!

Baseline business modeling is predicated upon a model for all participants, one with the highest possible qualifications for entry…sketch it in!

Baseline business modelling requires rigorous adherence to qualification standards for owner/operators, agents and core service providers…sketch it in!

Finally, baseline business modeling demands adequate ROI when measured against the risk of capital, creative and intellectual investments of the players and principals…sketch it in!

Our impending obsolescence is merely temporal. Our model is being replaced, part-by-part. Can we, those of us within the industry, shake the demons that possess us and sketch a new, highly productive model that will propel us into the future? REALonomics thinks so…sketch it in!

Related posts:

1. Demons & True Marketing
2. RateSpeed: Inching Us Toward Mortgage Transparency

REALonomics is expanding the scope of its analysis in 2008, applying the idea of “new real estate model math” to brokerage, agents, mortgage and title services. The tip of our pencil will need to be sharper and the use of the eraser more vigorous. The fact is, each participating entity related to the real estate industry is going to do a lot of writing and a lot of erasing throughout 2008.

New economic principles are coming into play that redefines the model math equations for profitability. There are less predictable variants in the market place that we have never fully recognized as part of the new model math for profitability.

CAUTION: Don’t use ink! If you do, you will need a 50-gallon drum of white-out.

ERASE THIS: A market is clearly defined. It’s a city, zip code or delineated geographic area defined by brokerage firms, mortgage providers, title companies and franchisors as “effective market area,” “effective service area” or “market service area.”

WRITE THIS: Markets are macro, cyber and fluid environments where consumers seek information, conversations and property information about multiple locales. Markets are needs not lines. They function by personality not by perimeters. Lines are largely irrelevant.

ERASE THIS: Technology and the Internet provide real estate industry service and product providers with websites where static information about offerings is posted and where consumers are asked to provide personal information in order to proceed to the status of “lead” and become valuable as a potential customer.

WRITE THIS: Technology and the Internet create business environments for information exchange services relevant to the consumer’s core set of needs. From these environments relationships are developed by allowing interaction, posting, questioning, suggesting and empowering individuals with information they can use in their quest for solutions to real estate dilemmas.

ERASE THIS: Operating models are in-house labor pools maintained by real estate service providers in order to create a closing apparatus, execute adequate paper trails and meet legal and regulatory requirements associated with unit transactions.

WRITE THIS: Operating models are service enhanced value propositions, driven by high speed Internet technology tools, accessible by all parties (principal and beneficiary) that create constant interaction between principals and chosen service providers before, during and after the real estate investment decision has been made. The relationship transaction data is forever accessible by the consumer from any Internet access point with all property related value assessments available to everyone.

ERASE THIS: Execution is defined by “closed” loops where finishing is a line designating transaction consummation.

WRITE THIS: Execution is the ability to protract the line that defines the relationship between provider and consumer as a fluid forward moving economic flow, where the consumer may select multiple services for the duration of the relationship and thus create protracted ROI for the provider.

ERASE THIS: Profit is based upon the industrial transaction model known as the “closing” or “recordation” of a particular single real estate service component such as real property, mortgage lending or title services. The end is the justification of the means.

WRITE THIS: Profit is illusory and ever evolving, being created from multiple and truly valuable service and product models beneficial to the consumer. Changing the profit model is never shaded but fully transparent to the consumer. Information is always extended with precise accuracy and without perceived or actual duplicity. The profit model is protracted and filled with constant change, flux and adaptation. The provider is the servant of the consumer, bringing expansive propositions to the table which meet immediate, intermediate and long terms needs.

ERASE THIS: Leadership sets standards internally and business components execute the performance standards measured by factors related to financial objectives (the traditional CEO model). Leadership operates an organization that moves in lock-step to the flow charted demands of accounting and dividend reports.

WRITE THIS: Leadership is primarily the art and science of understanding consumer needs in a rapidly evolving information-based models and leading transparent environments in the production of packaged services and products in these environments. Performance is measured largely by ideas that create and sustain relationships and therefore produce profit opportunities and actual revenue while retaining and extending the consumer conversations to the next profit cycle. Accounting is empirical, as it should be, but CEO leadership is measured by the true value of extending consumer loyalty, therefore, redefining the role.

Can the real estate industry thrive in a business climate where the name of the game is sustained transparency in an open market model with the consumer front-and-center?

This will be the New Real Estate Model Math for 2008 and beyond.

Related posts:

1. Hyper ROI: a New Model Math
2. REALonomics: RE Model Math
3. Home Real Estate – Model Perfect

Related posts:

1. Dear Owners, the Border Patrol is out in Force

The new economic rules and realities form the New Model Math for an industry that is morphing from its broker-centric and agent-centric roots to a decidedly consumer-centric model. Whoever writes the new rules and effectively addresses the new realities will, to a large degree, control the game and much of its economic outcome.

Mugging for the Camera

A new mug shot is emerging and we are finally able to sketch the features of the front face and profile of an industry whose economic and operating models are undergoing massive revision. What emerges will become the new real estate professional and business operating profile for the coming decade.

Images of the old mug of total brand separation, rugged individualism and attempts to have it all will become economically unfeasible. The consumer demand for services has raised the price of admission in an arena where there will not be many front seats. We will simply have to do more for the all powerful consumer than we can afford to do, this will be a huge economic reality that will lead to new operating rules.

Defining the New Broker/Owner Realities

New Reality 1: We’re moving at light speed and managing change will become a fundamental and deliberate action for business success. Broker/Owners will no longer need to throw themselves under the bus; the bus will simply run us down! Business will largely become the management of change in red hot crucible.

Our new Model Math reality must include what REALonomics calls “change management.” Manage change or watch your business erode. The changes will include brand new, never before seen models, that trim fat and speed up efficiencies…more specificity on this later in this post.

New Reality 2: Broker/Owners will see further challenges to profitability unless they adopt consumer-centric, transparent real estate business models that truly partner with the consumer. Things like true conversations in the market place that allow the consumer , peer-to-peer (seller to buyer and relocation transferee with resident) opportunities and a blogosphere the likes of which we can’t even begin to fathom.

It’s time for the industry to embrace the inevitable democratization of all things RE. And we will need to start with unfettered access to property information on at lease a statewide and perhaps eventually a national basis. This is our new reality. Grab it and go with it or see your business die.

New Reality 3: Coalition real estate. I can hear some of you asking, “what the…?” Coalition real estate is a REALonomics term representing a new type of merger/acquisition model that involves the creation of hybrid relationship between the strangest of bedfellows. The old M&A model will become scant, with new technology-driven relationship becoming a “norm” without anyone necessarily owning it “ALL.” We can’t afford to own it all, can we?

Coalition Real Estate is an economic “Club-Med” that enables us to have all things without having all things…arghh, this one is tough! In the New Real Estate Economy, coalitions will be a fact necessary to the management of change and the demands of the consumer. It will involve new agent sharing models, technology pyramids that collate the tools for groups of Broker/Owners to utilize with optimal price points. Transaction complexity within the lending and brokerage industries together with consumer demands will force us toward coalition strategies as a normal part of business.

New Operating Rules for the New Realities

The new realities push new rules into the market place and these new rules are the dots Broker/Owners begin to connect for optimal business model strategies. However, let’s not think that we have no control over the rule-making and design of the real estate industry for the next decade. Although many Broker/Owner have abdicated some critical authorities in the industry, it’s not too late to exercise strong influence on content of the new rule book.

Although REALonomics will not have time or space to qualify each of these new operating rules, the economic primer for them includes, but is certainly not limited to, the following ten industry considerations:

1. Deliberate reduction, as a matter of policy, in the number of real estate agents allowed to practice and thus a reduction in mediocrity.
2. Business entities that are set up to study, manage and influence industry change on behalf of Broker/Owners and the industry itself.
3. Refined definitions of the models and economic blueprints for core services utilized by Broker/Owners.
4. Partnerships and consolidation of services between competing franchisors – ouch! Indeed, franchisors face the same famine of profitability we all face.
5. Implementation of Paperless Tools for front and back end transaction management favorable to agents, owners and consumers.
6. Removal of the structural impediments inherent in the old MLS property models so that transparency and utility can become the norm.
7. Demolition of the local Association of Realtors model in favor of at least regionalization and ultimately, nationalization in favor of the consumer.
8. A new mandate for NAR that redirects and allocates our resources in favor of models and programs benefiting Broker/Owner profitability.
9. Adoption of high-speed, data-rich property evaluation tools, including rapid price evaluation technologies at affordable costs.
10. Replacement of old Internet lead generation models with transparent partnerships with the consumer.

These new business rules will evolve from the realities we now face as an industry. Together, these rules, with others yet to be articulated, will form our new Front Face and Profile.

It’s going to be a very cool decade ahead of us. Enjoy the ride, embrace the pace…enjoy the thrill. After all, you’re already on the roller coaster. Buckle up…grease the bearings…here we go!

Related posts:

1. REALONOPOLY – Does Anyone Still Wanna Play this Old Game?
2. Three Stooges: ’09 Acid Test #2
3. Our Genie is on the Loose & Fresh out of Wishes

Meet Larry – Part 2

We’re moving through an unprecedented era in the real estate industry consisting of serious lending problems, increasing inventory, foreclosures, new competition, profitability issues and of course, an industry whose operating models are being brought into question. We are going to have to ride out the storm. Is there another choice? We are going to have to hang tough and endure the pelting. REALonomics has taken a position that “market stability” is not likely to emerge until the fourth quarter of 2008 and the first quarter of 2009.

In the meantime, we have a huge opportunity to accelerate our business model re-development so that our organizations are prepared for the future…really prepared. We are going to have to deal with the Stooges of the past model that have harmed owners and their sustained profitability. Part 1, Stooge 1, has been addressed; our tank-like, high-cost operating models that inhibit mobility and agility. This is the first and most critical acid test in route to ’09 and the new market realities that will greet us when we arrive.

Before we can re-design and re-invent we need a confession that our buildings and processing models are heavy, expensive and ineffectual in the consumer-centric era; they are antiquated as a competitive business model. They are no longer suitable for the next generation profitability standards we need to adopt. This is our new operating reality that must be faced by owners who desire to reinvent.

We have a second Stooge to deal with…the markets…meet Larry, the second acid test.

Welcome to our New Market Reality (circa 2009)

In Part One, REALonomics discussed our “Market Models” and their inadequacy for the economic wave in the real estate industry. On top of the market model transition underway in the industry we are faced with a new emerging “NEW” market reality, one that will reshape the landscape, its boundaries and create new operating rules for broker/owners.

Fast forward, please, to 2008 and beyond. What once constituted an owner’s “Effective Service Area” or “Market Service Area” is going to be completely redefined by the industry and will have a whole new set of rules governing market management.

A set of emerging economic and operating factors will converge into a market expression sometime during the next upturn, which we slate for 2009. Among these converging factors are:

• Acceleration of Non-Broker entities vying for consumer loyalty
• Consolidation of property data at key levels in the industry
• Emergence of streamlined franchises who have jettisoned old models

REALonomics contends that the biggest threat to current traditional owners and their models is their inability to redefine their core asset as the market, not agents, listings or even pending transactions.

We are going to be forced into a confrontational stand-off with our current limited definition of what constitutes a “market” where our businesses operate. The three factors above represent the pressure points that will afford owners the opportunity to fact the current market stooge in favor of a new, dynamic and fluid operating landscape.

Acceleration of the Non-Brokers

By 2009, entities outside the mainstream of the industry will have themselves positioned in the fluid markets where the consumer resides. We can also be there, but it will take acknowledgement, attention and discipline for owners to realize that vertical, limited, rigidly defined local markets can no longer produce the ROI necessary when measured against the risk inherent in ownership. We will require a new definition of “market.”

Non-Brokers are those entities who understand the emerging transparency and consumer-centricity of the real estate industry. I have called it “The Democratization of Real Estate” and have blogged about it, extensively.

The acid test for owners in 2009? When we get there, will be have a new definition of our markets or will we still be operating under the notion that locally defined geographic territories can bring us sustained and meaningful ROI. The Non-Brokers don’t believe or build on the local market premise as the central economic engine for the real estate industry.

Consolidation of Property Data

Property data, its consolidation and availability to consumers will radically redefine the term “market.” We are already seeing the merger of MLS data into regional conglomerates as owners confess, “we need more territory” in which to capture consumers. This is the centralization and globalization of data that redefines what constitutes an owners market area.

But it isn’t just MLS data. It’s all data related to property. It isn’t just all data related to property…it’s also, all historical derivatives related to property. During the now defunct Broker-Centric Era of the real estate industry, owners controlled the data; consumers came to us in our buildings to talk to our agents about property. Exorcise that concept from our minds. Erase it from the market model map. Expunge it, it’s gone, we lost control…and now we play under a whole new set of rules.

Question: Who is writing the rules and controlling the property data sets? As consolidation gains momentum owners will face serious questions about the economic relevance of things like broker price opinions (BPOs). The authors of the new rules are mostly outside the industry. Our historical bias toward control of data has become a Department of Justice issue with NAR.

Will the major franchises, independent brands and broker/owners be poised for the consolidation of property data into consumer-friendly model? More importantly, do we have any idea how to reinvent our brokerage models so that property data consulting is a meaningful part of our client relationships? Consumers have rejected our old data control model…and that model is no longer valid in the open markets of the New Real Estate Economy.

Emergence of Streamlined Franchisors

Although under foot currently, we will see a third factor that will redefine “market” as major franchisors are forced to redefine how they relate to an emerging open market model.

During the market run-up that ended in mid 2005, franchisors were still peddling the old notion that if owners sign-up for their local city market, zip code or a piece thereof, they would flourish. Not so fast. Franchisors, most of them, are in the same dilemma as owners, however, they have the luxury of defining open markets to their advantage and sometimes they do so at the owner’s expense.

Those who have the power to define markets have the power to control them and their economic potential, short and long term. Franchisors are being forced to redefine themselves and their own relevance to consumers and company owners. Franchise control models that lock-in and lock-down owners will become counter productive to sustained profitability…in short, owners will rebel forcing a streamlining of the traditional franchise agreement in favor of fluid markets where their exists a high degree of competition for the consumer.

Traditional franchising, with all the hooks and barbs of market definition, has all but reached saturation. New franchise models will emerge that unlock the chains that currently have owners shackled to a limited geographic territory. may the best owners win and may the best franchise model win! Here, here!!

The second acid test on the road to 2009 is going to be how owners define and relate to their most precious asset, the markets around them. Our ability to redefined this asset and how we build and sustain business models in a consumer-centric, no boundary arena is going to not only be challenging but exciting. New opportunities are in front of us but we must reinvent.

Related posts:

1. Three Stooges: ’09 Acid Test #3
2. Three Stooges: ’09 Acid Test #1
3. Mug Shot: A New Front Face & Profile

REALonomics is a late blogging bloomer, having been planted in the potting soil of the blogosphere a scant few months back. We need much more business model dialogue about how the concept of blogging fits into our industry. As of this post, both feet are not down yet. The other shoe needs to drop, so to speak, for blogging to become a useful piece of the real estate industry’s economic model. Without any intention of insult, allow me to say that for now, we are all first generation “Blahgers” with room for growth.

We are BLAHG 1.0 by any standard, present company at the forefront of this categorization. Turning the current Blahg-o-Sphere” into a truly “common place” component within our real estate models is going to be a tall order.

State of the BLAHG

Real estate BLAHGS will not be true economic contributors to our bottom line ROI until a set of fundamental shifts occur. These shifts are academic to change and essential to the open adoption of new models.

The State of the BLAHG within our industry is mostly self-serving. We all write, we all write for each other, at each other and about each other. This is BLAHG 1.0 because the economics won’t develop until the consumer is on board. Getting the consumer to board the train is a tall order because the value proposition that causes them to purchase a ticket is not yet clearly defined. We are still playing at this. This is BLAHG 1.0 because it is about us…only a few of us…and it can’t be about us… or just us and have any chance of truly working for the consumer!

Integration of the BLAHG

Our industry will need to dismantle part of its infrastructure and reassemble it from the ground up. Mostly, we need to examine the manner in which we connect sellers with buyers, consumers with our organization and how we integrate property offerings into multiple consumer-centric conversations.

It’s still about property. Real estate transactions remain unchanged at their nucleus. It’s still about a buyer. It’s still about a seller. It’s still about the money that makes transactions work. The modus, however, by which we bring the transaction components together in transparent environments is the next important step in the integration of the BLAHG into our business models.

Broker/owners need to lead the charge by learning about BLAWGs, by BLAWGing and by plunging themselves over the cliff into the BLAWGing abyss which is a new sea of opportunity.

Consumer Adoption of the BLAHG

An insurance professional made this profound statement to me a few days ago, “I don’t understand blogging, how it works and why it is important but it seems reasonable that we should do it and scary at the same time.” We had a conversation that evolved around how his company and the consumers doing business with it could benefit by BLAHGing with his organization. He remained frightened and unconvinced until I mentioned that BLAHGing could be a means for clients to become partners with him and a kind of sales force in the organization…this got his attention.

Before we can release BLAHG 2.0, the industry will need to first convince ourselves that the consumer is an extension of our enterprise, a true partner. Broker/Owners continue to exhibit a great deal of anxiety over BLAWGing. Let me just say it and get it out of the way; this psychosis is “RESTLESS BLAWG SYNDROME” (RBS). But it is a real mental impairment for the industry. Transparency is the nature of the BLAWG, its heart and soul. Transparency, to date, has not yet become the nature of the real estate industry. We are conflicted over this notion.

Consumer adoption of the BLAWG in our real estate models and in the open arena of commerce and conversation is going to prove a bit illusive for a while. In order to fulfil the BLAWG integration we need to accomplish the following:

• Convert ourselves to belief in BLAWGing; dispensing with fear;
• Discover the path to integration within our current models;
• Build BLAWGs that quadrangulate sellers, buyers, property and money with Brokerage in the wings;
• Integrate powerful consumer-centric blogging platforms into our marketing game plan;
• Provide BLAWGing opportunities at every level of the relocation blueprint;

We are in the midst of BLAWG 1.0, transitioning to BLAWG 2.0. Within a very short period of time we can enter BLOG 3.0, leaving behind the experimental era. Until we reach the BLOG, we must BLAWG.

No related posts.

Part 3 – CityBlogUSA

This post is the third installment of a three-part series with Donald Teel, the Founder of e-Partner, and it addresses blogging in general and the CityBlogUSA Network specifically; its mission, model and functionality. In addition, this post looks at the place of blogging in real estate business model paradigms in a consumer-centric industry.

REALONOMICS: CityBlogUSA is a pretty stout venture, what’s the nutshell on this thing?
CITYBLOGUSA: The e-Partner team took a look at the blogging phenomena during the first few months of 2006 and made some important discoveries about blogs and blogging that we thought might guide us into that universe. We decided there were reasons it was a space we could not ignore.

REALONOMICS: What were the discoveries your team made and what were the compelling reasons to jump into the blogging ocean?
CITYBLOGUSA: “Ocean” is a good word to describe blogging and it was one of the discoveries; the sheer enormity of blogging as a social medium for interaction and idea pooling is profound. We also discovered that a lot of people were writing, only a few were reading and even less are commenting, leading us to conclude that we were still in the infancy stage of blogging as a means to new business models. We discovered that only a very small slice of blogs had what I would call “meat and potatoes” content…real view points, cutting edge thinking…and they ranged from the cute boutique blog to high-powered political blogs.

But far and away the largest discovery was that blogging isn’t really being used as effectively as it can be within the real estate industry to create peer-to-peer relationships and business models that can help owners of real estate companies. Owners don’t know much about blogging and are generally confounded by it. Finally, we discovered that only about 10% of all owners had a grasp of what blogging is; they asked us, point blank, “What is blogging?” While many are saying blogging is peaking, I’m saying, for the industry we have no clue yet what it can mean to us in terms of consumer loyalty.

Our reasons for creating the CityBlogUSA Network, however, were more than fanciful and had to do with our business belief about consumer-centricity within the real estate brokerage business and the fact that real estate companies should utilize blogging as a part of their business development strategies. We work from the premise that anything good for the consumer is good for the broker/owner…literally, everything, and this belief can ultimately create higher profits for owners. Having been one, I can say, owners are generally skeptical people and tend to be a little intimidated by consumer demands. Blogging allows us remove the sense of nervousness about opening up the operation to consumer scrutiny.

REALONOMICS: Tell us about the consumer side of the CityBlogUSA Network.
CITYBLOGUSA: We decided to take a risk and empower the consumer to do what the consumer is already doing or, in fact, wants to do…communicate with others about real estate, thus the marketing tag “Ask the people who live there.” Our first premise, which is the premise of blogging as a social media, was residents know more about living in a city than others do and should be afforded the opportunity to post information about not only real estate but any other topic they want to discuss, from acupuncture to zoology.

We believe the democratization of real estate is evolving at a quickening pace. Peers want to dialogue with peers. Consumers trust other consumers. We need to acknowledge this and create the business models that match this truth, rather than resist the change.

From the business side of the CityBlogUSA Network we asked ourselves a penetrating question, “why aren’t owners providing community-based blogging within the markets for residents who have a story to tell and consumers who want to relocate, need to sell where they live and buy real estate in a different city?

REALONOMICS: What were the reasons owners weren’t providing such a medium for their markets?
CITYBLOGUSA: Lack of knowledge, understanding, initiative, technology enablement and a dash of fear. Like I said, broker/owners, too many of us, didn’t even know what a blog was! Owners didn’t have the time or the technology savvy to create blogs, manage them and make them work.

When we started to tell owners we were going to empower residents in their markets to talk about their “favorite city and home town” via a social networking medium the top immediate question was, “who is going to police what they say?” Which is like saying, “we exist for our clients but we really don’t want total transparency and unfettered communication because we might not like what they say.”

REALONOMICS: Where is the CityBlogUSA Network now in terms of development.
CITYBLOGUSA: Square one…and, it’s a round BETA hole and our sledge hammer is pretty beat up. On a scale of 1 to 10, we are .0023418! Seriously, we took the WordPress Multi-User platform and had to do some pretty strenuous code enhancements to make it work in every State and City in the United States and within the entire e-Partner Community-Based Network. Every developer who does this will attest to the concept of “Protracted BETA” or, the work is never done. Right now the CityBlogUSA Network is up, running, being blogged, agents are joining, owners are joining and we are at about week four. The truly motivated are jumping on board because we are offering some degree of exclusivity to owners who want to be in the middle of this and the agents who want to position themselves. We are just scratching the surface and moving very deliberately toward solutions, avoiding jumping on every bandwagon that hits the Internet weekly.

We have no illusions about resident/consumer blogging. Despite the growth of blogs, the vast majority of consumers are still not fully literate about the blogosphere and how it can empower them…but, they are learning quickly, which is why the real estate industry needs to be at the forefront of the creativity and implementation curve, not behind the eight ball.

REALONOMICS: Where does the real estate industry fit into the CityBlogUSA Network?
CITYBLOGUSA: First and foremost, all that we do at e-Partner involves the industry with a primary focus on broker/owners and the consumer. We start there. However, we are not creating the blogging network so that it can feature real estate practitioners as its centerpiece; that would be counter-productive to the consumer-centric models we believe in and where the industry is going.

The CityBlogUSA Network is consumer and resident focused with broker/owners and agents in more of a supportive role, i.e., we are here, you can find us, blog with us, ask us questions, use our knowledge and invite us into your world if you choose to do so.

In this sense we are not like ActiveRain, which is far-and-away the industry leader for promoting agents and ancillary service providers at the front end of their solution. We don’t have a “come one, come all” element. In fact, we have a “first come, first served” model for agents. We are actually creating limited exclusivity for agents at the community blogging level. If you visit our Myrtle Beach blog, you will see agents from Century 21, independent firms and Coldwell Banker, while the South Carolina Blogging Network is used as a tool of another brokerage firm. I honestly believe the blending of the industry is the wave of the future and it isn’t a new phenomenon. Zillow, Trulia, ActiveRain, CityBlogUSA and others are doing it. In our traditional circles, we have resisted it to a large degree with the exception of Realtor.com, where all firms, brands and agents get to play.

What’s different about the CityBlogUSA Network is the consumer-centricity and resident focus. It will take us a while to get where we need to go, so we are in it for the long haul.

REALONOMICS: How do people get involved in the blogging network?
CITYBLOGUSA: Easy, they go to www.CityBlogUSA.com, pick a State and a City and hop into authoring, commenting and suggesting ideas to their hearts content. They can upload photos of their community through the PhotoBlogUSA component as well. If they are serious about exposure they can spend some money to promote themselves to consumers and residents by engaging in highly target ads.

If a user wants to hop directly into their State, they can simple dial in their browser to such locations as CaliforniaBlogPage.com, AlabamaBlogPage.com, MaineBlogPage.com, etc. Just hammer the state name into the address bar and follow it with BlogPage.com.

Related posts:

1. CityBlogUSA Plugs into e-Partner
2. CityBlogUSA Empowers Residents
3. REALonomics Launches National Political Blog Network