As a follow up to Dave Platters excellent, well articulated post on why anyone “is dreaming” that they can beat real estate.com.au, it made me revisit an idea I had a few years back. I think for the most part Dave is correct, however there is something that needs to be done about property content origination.
To me it has always been about control, if you go back to the early days on business2.com.au I wrote passionately about how agents will pay a price for putting all of their eggs in one basket and relying on one company for their web, marketing and portal needs, and it has pretty much played out in that manner. REA are top dog in many regions of Australia and can rightfully state their number one position. Agencies online property marketing budgets today are pretty much controlled by realestate.com.au and domain.com.au, annual fee increases continue at a clip and the limitations of each agents plans are pretty silly to say the least!
Realestate.com.au is all powerful because they have the listings and consumers will of course go to where the listings are. Consumers also know how to play with realestate.com.au and for the most part it is their favourite tool for browsing for real estate, domain certainly have the numbers on mobile devices but the browser is still king and this will not change in the short to mid term.
REA can pretty much do what they like with pricing, they are the market leader in an industry that is one of the most popular search pastimes in Australia, if you are an agent and you do not list on REA you will pretty much lose listings to other agents that are and REA had a brilliant strategy for agents early on, almost blackmailing agents into going for bigger packages. I lay much of the blame for this with real estate institutes who accepted ‘donations’ from REA in the early days to endorse their portal and put them in front of an eager audience – you!
The REA XML has also become somewhat of a de-facto standard for listings and pretty much all portals accept an REA XML feed to list with them.
If agents and competing portals want to to take that control away and place it back to agents they must do all of these things listed below pretty much in their entirety. Will they do this? Almost definitely not, but it is worth revisiting.
Open Source Listings System
Domain.com.au and all other portals, franchise groups, private agencies and private listing portals (yes they MUST be included) should band together and finance an open source system for managing property data. This must be fully inclusive, and that means REA can also use this system.
It must be built on open source infrastructure, be W3C compliant and define every single element useful to todays real estate agent. The system must have no stakeholders and be open to anyone. The system must be simple to sign up, simple to use and built on an open framework that can have multiple contributors. This would be controlled by a board of developers that have a wall of separation between them and any interested parties.
Agencies simply register with the system and are given a few tabs to work with (My Agency, My Portals, My Developers, My Apps). They manage all of their staff and can import their current listings into the system and the system takes care of the rest. They select what portals they want to be involved with, can give access to their web developers and can login and manage this information from their desktop, tablet or phone device.
Portals simply join the system and offer their portals with their standard terms and conditions clearly set out in the system. This will allow any agency to simply check a tick box to allow their data to be shared by that portal. If the portal is free then it simply starts the data transfer and updates instantaneously once changes are made to the data. If it is paid for then a simple code would need to be added to the system.
Web Developers are given tools to develop websites using this data and be given everything needed to do this effectively, including plugins, sample codes. Agencies can assign web developers to manage their web development by simply ticking a box next to that developer and that developer will have interface access to all they need to develop websites and applications for that agency.
Any product or service can offer their applications to agencies, be it, mobile phone apps, tablet apps, CRM software services etc. These apps can be free, paid or subscription based. Think of it like the Apple App store.
Cost + Revenue
Yes, to build this and maintain this service would be expensive, but nowhere near what agencies currently pay for the same services. The Real Open Source Community (ROSC) would be funded by annual verification. Initially it would need to be funded by portals and franchise groups with no strings attached (tall order) for two years from launch, but once launched each agency, portal, web developer, app would be encouraged to become verified, this verification would be a community trust system.
The annual report and all expenditure would be open and annual verification fees determined by the previous years revenues. This would ensure that the system was always in the black. The system would also have a constitution drawn up that can only be amended if 75% of all verified users voted up for that amendment – in other words each verified member has an equal vote.
Part of the constitution would be that the data is owned by the listing agent and the text, photos, videos etc would be the copyright of the original author. Any breaches to this constitution would have impacts for any of the members. The terms and conditions that each portal, web developer and app developer disclose would be standardized, so agencies know the pricing, annual increases, sold data information etc from the beginning and as it is standardized there is nowhere to hide little clauses
Private Listing Portals
These would be treated just like anyone else. Yes, I hear you say this is a bad thing, complete nonsense! Over the next decade more and more people will list privately, it will take decades for this to become a powerful movement, and by this time agencies would have adapted their business models to suit It is important because they are an important part of the potential market for all agencies.
The reason for this system would not be too knock off any of the leaders, it would simply be to open the originator of the content and give control back to the agency, the people who create the content. REA and Domain would have access to the system just like anyone else and it is highly likely they would still be the dominant players in the market for the foreseeable future.
So, do you think that portals would get involved, do you think franchise groups would get behind this, even though not one of them will own one snippet of the system?