Disintermediation for Real Estate: The process by which Websites like Google and Zillow will provide Real Estate Agents with all the services provided by Brokers, local MLSs, the NAR and Realtor.com; and for FREE.
The Internet is often described as "The Great Disintermediator". The Internet has the greatest potential to "get rid of the middle man". Or at least digitalize him, put him in your home or office, right there on your computer. Transaction costs become negligible and profits, on even small repeated transactions, can be huge.
Ebay is a great example of how efficiently the Internet can connect buyers and sellers. Amazon.com is another example of disruptive technology that almost put the bricks and mooter book stores out of business. Until those stores developed their own Internet Sales Marketing Plan. And Google, the most successful of them all, developed a business plan, merging "Intent with Content" by using keyword relevant search and sold ads all around their free results.
What Old "Woolly" Woolworth did with the neighborhood "Five and Ten" store, the Google Guys did with "Pay-Per-Click" ads on the World Wide Web.
The prime business example given of Internet disintermediation is the travel industry; where, seemingly overnight, travel agents were out of jobs (because of the work of Richard Barton and the other guys at Expedia, Priceline, Travelocity, etc.).
Ever since Zillow was hinted at, there have been fears and paranoia (Zillonoia) that Zillow would disintermediate Realtors. Since Realtors make a lot of money buying and selling houses, everyone must be out to sell houses, right? Even the media companies: News Print, TV, Google, Zillow, etc.; right? They wouldn't just settle for advertising income, would they? Right?
When Google and Web 2.0 didn't take on the Real Estate industry, like Google took on the Search Industry, that left a big opening for Real Estate Search in Real Estate 2.0. While the NAR, Move Inc (aka HomeStore) and Realtor.com were still fighting the DOJ, the FTC, and various and sundry other Government Agencies, Search Engines and business models; Enter Zillow.
The Microsoft Playbook said: Let the up-start/start-up tech companies cut themselves up on the bleeding edge; then we'll buy them when they make it to the leading edge. Microsoft regrets waiting too long with Google (which they could have bought). Will Google regret waiting too long with Zillow?
The NAR and Realtor.com were in negotiations to build "The Mother of All Real Estate Search Engines". But Google's Stated Vision: to make all the world's data open and useful; conflicted directly with the NAR and Realtor.com's stated vision to make all the world's Real Estate data hidden on Real Estate Websites, concealed on the Invisible Web, preaching the credo: "If we hide it, they will have to come."
The Zillow sponsored Carnival of Real Estate is even disintermediating Zillow posts, with an arbitrary limit of the number of Carnival posts about Zillow. I wonder if "The Carnival of Search" would ever put arbitrary limits on the posts about Google? Lets have the 10 best posts, whether they're about Zillow or not. But maybe the rest of the Real Estate Blogesphere needs Affirmative Action for their posts.
But Realtors have the least to fear, at least if they embrace Real Estate 2.0 and the lessons of the Google Playbook, the Zillow Playbook and all the other Real Estate 2.0 Playbooks. Zillow will offer many of the same kinds of "can't resist services" that Google offers. This means Zillow will be the best thing since sliced bread, not only for home buyers and sellers, but for Realtors too.
Google, Zillow and the other Search Engines are media companies that know how to make money by selling Internet ads, not houses. Newsprint, TV, radio, and other media haven't taken over Real Estate; how will Internet media?
Certainly the new Internet media will empower some homeowners to sell FSBO's, but this will only be a small number. You can do your taxes yourself. Do You? You can defend yourself in court. Do You? You can sell your home yourself. Will You?
But this does not mean Zillow will be the best thing since unsliced commissions for Brokers, Local Realtor Associations, Local MLSs, the NAR and Realtor.com. Zillow's platform is a single platform. Zillow offers a level playing field for all home sellers, agents or not.
Free is better than cheap. Even in Real Estate.
- Why will Real Estate Agents join big brokers with big fees and small splits, when they can get the same services for Free?
- Why will Real Estate Agents join local, state and national Realtor Associations when they can get bigger and better services for Free?
- Why will Real Estate Agents join the local and National MLSs, when the can get a bigger and better National MLS, which pushes their data out to all the other Search Engines, for Free?
Why pay the fees and splits to get Brokers and Associations on your team, when you can have Google, Zillow and all the other Search Engines on your own Real Estate Team; for FREE?
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