Online lead generator HouseValues has been under fire lately. New layoffs, disgruntled customers and employees, and the exit of its COO and mortgage lead business.

In case you missed what's going on here are a couple of links:

1. Shake up at HouseValues by Joel at Future of Real Estate Marketing
2. Layoffs at HouseValues by John Cook at SeattlePI.com (interesting comments left by ex-employees)
3. Interview with Ian Morris, the CEO of HouseValues

So what is the problem with HouseValues? Let's leave management, support and client relations aside and just look at their business model. It has two main problems:

1. No quality incentive

The more leads you generate and sell the more you make.

Other companies that work on a referral fee based on closed listings have a built-in incentive to generate quality leads. HouseValues does not as long as they can replenish their pipeline with new real estate agents.

2. Completely wrong value proposition to approach the end real estate customer

The source of HouseValues leads are primarily from home searchers and home valuation requests. This is the biggest pool of real estate traffic out there. But selling these fairly unqualified inquiries as leads are really stretching it.

People are not filling out a form to be connected to a real estate agent. If they did you would see a whole different type of quality.

You will convert some of these into "ready-willing-able" type of inquiries but not if you don't have a good follow-up system with good frequency, copy and encouraging engagement by the prospect.

One speculation that came out of the Ian Morris interview was that HouseValues would focus on their CRM / follow-up system and become more of a service company. It's an interesting idea.

They're facing a big problem though with a potential CRM strategy. Here is why:

Technology and CRM Systems does not have the same cachet and desirability as leads. The real estate industry is a sales industry. And in sales everybody want leads. Sure. CRM is important. But the average agent does not have or want to spend any large dollar amounts on technology or CRM systems. So when it comes to technology and services HouseValues would have to dramatically increase its client base.

And is their follow-up system good? I can't speak for the technology itself but their frequency and copy is pretty average. And average does not cut it if you want to be in the marketing services business.

HouseValues has about 78 million in the bank and could afford to change direction. Their cash is their
biggest asset at the moment.

But is it enough to turn the company around? It all depends on one thing only. If they take customer
satisfaction and client retention seriously.

We'll see.

All the best.

-Ola

Posted by Ola Edvardsson at 02:20 PM | Permalink | Comments (0) | TrackBacks (0)

If you are reading real estate blogs you probably already know that there is a little social game going on among bloggers right now:

Bloggers ask each other to reveal "5 Things That You Dont Know About Me" and to pass along this
theme to other blogs. This all started by Mary McKnight posting on Active Rain and spread like wildfire.

Maureen Francis of miOaklandcounty.com challenged me today so I guess this is a good opportunity to tell you all a little bit more about myself:

You can read the basic info about me in my professional bio here. But here are five additional things you don't know about me:

1. I grew up in a small town in Sweden and started commuting to the US in the late 90's doing speaking and consulting gigs related to affiliate marketing on the Internet.

2. I am married to an amazing woman named Julia. We met in NYC and relocated to the metro Detroit area in 2004 to be closer to her family. We have an 11 month old son named Stellan who is the joy of our life.

3. I am a huge music fan enjoying all kinds of music. I am currently in a local band in Detroit playing keyboards and sax. Some of our contemporary inspiration sources include Zero 7, Brazilian Girls and LadyTron.

4. I am a total direct marketing geek and collect rare marketing books. If you are looking for a great marketing book look no further than Jay Abraham's "Getting Everything You Can Out of All You've Got"

5. I read a lot. Currently on my night stand is The Birth of Plenty by William Bernstein. My favorite author is Ayn Rand. Her book Atlas Shrugged is amazing.

Now to the hard part. Which bloggers shall I tag to spread this little blog social game even further?

How about these three great blogs that are in my blog reader?

1. real/diaBlog
2. Pittsburgh Homes Daily
3. The X Broker

Guys, care to tell your readers five things they probably don't know about you?

Best,
Ola

Posted by Ola Edvardsson at 01:55 PM | Permalink | Comments (0) | TrackBacks (0)

1. More Online Video Watching - Less Driving

Broadband is mainstream. Today I personally don't know anyone sitting on dial-up anymore. My son will have a hard time believing that daddy used to sit on a 28.8kbs modem when he was young.

Video presentations are going to become much more common in the real estate industry during the next two years.

High-end productions like listing presentations made by companies like Inman stories are probably going to be reserved for upscale listings for now.

With the explosion of YouTube and easy to use sites like One True Media home owners and agents can make their own home grown presentations fairly easily. In the future agents will show up to shoot video in addition to digital pictures.

And "home made" productions can be even more credible and successful in terms of selling than a high end production one.

2. "Press 1 to buy, 2 to sell, 3 to get a mortgage and 0 to speak to an operator"

The use of call centers / contact management centers in the real estate world is increasing.
Good or bad? It's all in the execution.

If you can get a knowledgeable person on the phone right away at 10 PM on a Thu night while you browsed a house it's a good thing right?

But if you get put on hold for 15 min and get to an underpaid, tired customer service rep who is reading a script to you it's quite annoying.

With the real estate industry going online, call centers with rapid response and extended hours are part of the future.

3. You will find more salaried agents to help you than today

Commissioned real estate agents want the deal to happen. Sooner rather than later.
When you buy or sell they get paid.

Most agents are hard-working and very ethical. But with a system where it's in the agents financial interest to make the client close as quickly as possible you could encounter someone not so ethical if you are unlucky.

Salaried agents are part of the future. And companies that adapt that model have a distinct and clear reason why clients should trust them with their business.

4. Your transaction costs will be lower and more transparent

Yes, all those articles you read in the newspaper about discount brokerages and increased competition are true. The long-term trend is clear.

Transaction costs will go down when clients are doing more browsing and the agent does less driving. Consumers (and regulators) will become more educated and request better disclosures.

If the government required full disclosure of commissions in the title industry, consumers would not have to pay 80-90% of their title policy premium in commissions. And there is no good reason why anyone should pay more than $2,500 in commissions to a lender or mortgage broker.

Paying a percentage of the sales price to a real estate agent is a flawed model for sure, though I don't see that going away anytime soon.

5. You will probably live in a megapolitan area

In a very interesting article last year Business 2.0 reported that the biggest wave of development since World War II will turn America's major metro areas into giant megapolitans in the next 25 years.

What does this mean? Large cities will grow together and go from being metropolitan to megapolitan. In Arizona, Phoenix and Tucson will be united. Portland and Seattle are predicted to merge in 2030. Hope you like strip malls and chain restaurants, because there are going to be more of them for sure.

Posted by Ola Edvardsson at 12:36 PM | Permalink | Comments (9) | TrackBacks (0)

Real estate agents used to upload their listings to the local MLS and that was it. Today you want to make sure that your listings are being seen and have good placement at sites like Google, CraigsList, Trulia and now... online lead generator giant HomeGain.

HomeGain is turning an increased focus to its home search feature. Since Nov 22 any real estate agent that registers for a free AgentEvaluator trial membership as well as all current AgentEvaluator members has been able to upload their property listings for free at HomeGain through a new beta initiative.

HomeGain says it is currently working on upgrading and enhancing the service for a larger launch in the near future when it's out of beta. This is the 2nd beta launch from HomeGain this fall. Last month they announced a free AVM tool called HomeValueCMA.com.

So... Is this new property listing exposure a good deal for real estate agents?

I think so.

In a buyers market, exposure of your listings to buyers is crucial. And there are 5 million unique visitors a month at HomeGain that can be accessed at no cost. (In real estate traffic 5 million unique visitors is huge).

Traffic from HomeGain's new property listings will not be subject to their normal referral fee at closing.

So there we have it when we begin to wrap up 2006 in terms of online real estate:

Everybody is getting into the online listing business. "Upload your listings to us and we will send you traffic!" is the message .

Almost all players seem to agree that if you don't have the listings you won't make it to the big leagues.

One can only wonder who will be next into the listing business. RealEstate.com? Zillow? Active Rain (who just turned 6 months and broke 10k registered users -big congrats!)? All are prime candidates.

We might not have seen the future of real estate marketing yet. And it might not be a more transparent real estate experience either. But it sure gives a lot of room for all the top real estate bloggers to speculate about the future.

When the industry meet at the Marriot Marquis at the Time Square in January for Brad Inman's Real Estate Connect NYC 2007 I bet the discussions will be around an old topic but with a renewed and re-energized focus:

Who got the listings? And what are they doing with them?

-Ola Edvardsson

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Posted by Ola Edvardsson at 06:13 PM | Permalink | Comments (4) | TrackBacks (0)

It wasn't long ago where every where you looked you saw a headline about the end of the national real estate boom and the upcoming crash. Today prices are coming down and the real estate market is clearly softening.

Aren't we all waiting for headlines saying "The worst is over"?

I thought I would give you one today.

Today Toll Brothers, a luxury home builder from Pennsylvania announced 4th quarter and full year earnings results for 2006. Their earnings dropped 44 percent because of write downs of owned and optioned land and a high number of cancellations, 585 total.

Their forecast for the next year is not pretty. Earnings are expected to drop 62% in the next year.

The most interesting thing in their earnings release was a statement from the CEO and chairman Bob Toll. He is calling the bottom in some markets on the east coast:

"Fifteen months into the current slowdown, we may be seeing a floor in some markets where deposits and traffic, although erratic from week to week, seem to be dancing on the bottom or slightly above."

"The metro D.C. suburbs of northern Virginia, which was the first market in which we saw activity slow, seems to have stabilized, although at levels much lower than those we have enjoyed over the past few years. In metro DC's Maryland market, a more lot-constrained region where builders built fewer spec homes and there were fewer speculative buyers, the market also appears to be stabilizing", Toll continued.

Posted by Ola Edvardsson at 10:19 AM | Permalink | Comments (2) | TrackBacks (0)