Web 2.0 Service: Online Realtors

Honestly, online real estate sucks. Though I may be in error, my assumption is that most people using these sites are buying to live opposed to buying to sell. Therefore, it isn't the slightest microeconomic market fluctuations and 40 different types of home categories that the user finds crucially important, but look and feel of the home itself. If their goal is merely to cut down on the time spent driving around to get a list of the houses with signs in front, they do it well; however, online real estate has so much more potential. They can do the most mashups, mushdowns, or masharounds, but they are just going to end up with the same product. Instead of eliminating time, they create more information that is not necessarily helpful - Home buying is a behavioral phenomenon, not an formulaic process. Thus, it should be treated as such. More information is not necessarily good; if it is not helpful, it just makes for clutter and confusion. So what's the point of all this? Online real estate should replace traditional realtors.

So aside from my ranting, what is good? Zillow does a mean Google Maps mashup and creates a great "bigger picture" experience through its zestimate 10 year prediction albeit it needs improvement - it had only 21% of homes within standard deviation for my area and was 60% off for my own home estimate a few months back (they apparently took the zestimate accuracy statistics down). Hotpads has a cool map interest feature - it provides options to display public/private schools, colleges, and public transportation in the area. Redfin is heading towards the right direction - it is its own online real estate brokerage.

So the solution. Create an online brokerage that tours the house online, provide the necessary statistics, and stay in sight of the larger market. House-browsing has become a hobby especially growing in the 15-25 age group a la popular TV shows. The new generation of house buyers within the 25-35 age group, categorized as the MTV generation, have learned to communicate through mixed media. Similarly, the 35+ age group has begun to utilize the internet as an essential tool. Thus, video tours based on floor plans, seamless 360 degree interactive pictures with tagged points of interest, interactive special features for highlights [home theater, pool, minibar] are all crucial, essentially giving the buyer the same experience as a house viewed in person. From a statistics standpoint, long term estimates, house history reports of problems/repairs/burglaries/estimates would prove useful, while keeping the classic house statistics to the necessary minimum. Combining this with a well-designed satellite map, house estimates of the area, and toggleable areas of interest [schools, shopping areas, public transportation, amusement parks, subdivisions, gated communities] add crucial elements in home-buying. This may also lead to advertising opportunities with subdivision developers, gated communities, shopping districts, and any area of interest.

This may be enough to sell a service, but home buying includes the payment and paperwork. Loans, credit, comparison global/local lender rates, and closing prices are aspects that are no considered in the current online real estate market. Ideally, the user could run through the entire process online (besides the recommended house-visit). I don't have the expertise to comment on this, but it definitely would be an amazing experience to buy a house without leaving your desk.

By creating a large market, niche services will also benefit. Foreclosures, co-signing, partnerships, renting, short-notice selling, and other such services would be perfect for online form. Such niche services are conventionally done by private agents in local areas, which leads to little market to drive competitive prices for those foreclosing (people receive very little from foreclosing companies) and also for those buying (who pay in large for commissions to these agents).

Market: Even at low volumes, 6.48 million units for 2006 (National Association of Realtors, 2006) is a ridiculously large market.

Competition: Zillow has taken the online real estate market by storm and now reigns as king, Redfin is the the only online real estate agency, and a large variety of sites with maps and a basic description of sites.

Potential Expansion:
- Partnerships with existing real estate agents
- Advertisements for areas of interest
- Niche markets [foreclosures, co-signing, partnerships, renting, short-notice selling, college housing markets]
- Create notices [RSS, email, instant messenger] for customized searches [features, target market, urban/suburban/rural locale]

Other Thoughts:
- This could potentially change the behaviors of the house purchasing, much like eBay changed auctions.