Click, click click. Dub dub dub.

These may be the future sounds of a real estate office hard at work. Not that "Call on Line One!" has entirely disappeared, but if recent network plans at Cendant real estate brokerages are any indication, the sounds of raging property transactions in progress are about to change.

This week in the Redwood City, California Coldwell Banker office, the Cendant network strategy was rolled out to anxious agents. Acquired in the 1997 Cornish & Carey brokerage sweep, the Redwood City office was fully wired and Internet ready. What's unique about the Cendant roll out though is the comprehensive thinking that went into the component formula and the technical tour de force implementation staff putting the plan in place.

These guys know what their doing. The question is, "Can they get the agents to go along with the plan?"

So far the answer to that question is a resounding yes, but it's still early in the game.

The network plan itself is a combined strategy to include both "connected" agents and those technically hesitant. The point being that everyone needs to:
(1) "Access and Deliver Information critical to their business, and,
(2) "Communicate, both internally and externally".

The four components of the program are described as Infrastructure, Software, Internet Services, and, Training and Technical Support.

The plan starts with a "Network Computer Minimum Specifications" sheet for connected agents and, for those desiring to purchase independently. A separate, corporate sponsored, leasing plan is also available. For the unwired, there are shared workstations for accessing the InterNet, MLS and the company Network Data Center.

Infrastructure Details:

The details of the Cendant Network say much about where the company is going and what will be required of Cendant Agents to get there. While that statement in itself signals a new direction for real estate, the plan does demonstrate that perhaps a new era of corporate dependency may be at hand.

The backbone being put in place is a high speed "Frame Relay" WAN, a dedicated wide area network pipe connecting all branch offices to the Network Center. This provides constant, persistent connectivity to the company data Server and MLS at speeds of 384 Kbps, and to the Internet at 1536 Kbps.

Agents can connect to the network from home at speeds of up to 56K, with 128K ISDN coming soon. Although ADSL (368K and up) is available in the area, connectivity plans have yet to be announced. Interestingly though, since the Bay Area Peninsula is the backyard for Ricochet Wireless Modems, Cendant has also arranged to accommodate these highly mobile agents.

And yes, if the Redwood City implementation is any indication of things to come, that does mean Cendant may become a real estate specific Internet Service Provider, an ISP. It also means that Cendant is positioned to become the primary portal for over 40,000 agents and much of the transaction business they service.

The software included in the Network plan is an interesting mix of MLS access, CMA reports, County Records, and Internet basics. The MLS connection provides for instant look up, with dial up not required. To prove the value of their network service, Cendant supplied agents with a side by side comparison of market costs to their proposal. The comparison measured software, connectivity and service /support costs to demonstrate the value of their system. Even the wired agents were surprised to see the accumulating cost of purchasing and maintaining their connectivity.

To get some perspective, we took these issue to John Carman, Office Manager of the nearby Los Gatos Coldwell Banker. John had been in charge of the Redwood City Office when the Cornish & Carey flag flew above it. His office in Los Gatos, the heart of Silicon Valley, is also scheduled to go on line within the next few weeks.

According to John, one of the bigger issues has been that of perfecting the accounting process to manage waves of agents scheduled to go on line. Certain compromises had to be made and this very much accounts for the "one size fits all" approach of the network system pricing.

"From a corporate accounting standpoint, it just became too difficult to price services specifically to each agent. So rather than trying to carve up the accounting nightmare, which would have seriously delayed roll out, it was decided to strike a fair 'one price fits all' billing point, and concentrate our efforts on greatly expanding the connectivity and functionality of the system. The idea is to use a netcentric approach to lift the technology advantage our top agents now enjoy....and lift that advantage far beyond the reach of the competition......"

John did acknowledge that in this process there may be some purging of low end, technophobic agents. But, the decision to focus on enhancing the top tier of productive agents rather than becoming a warehouse of warm bodies will probably have a rippling impact throughout the Bay Area and beyond.

The new eMail system will also have a bulletin board system, complete with event and calendar scheduling. These features are certain to accelerate the communications and message exchange between agents and corporate efforts. From legal updates, to an awareness of community developments, to changes in contract clauses and addendum issues, on down through the normal "post it" routines of birthdays, baby showers, engagements and awards, John sees the new system as a workgroup community breaking the barriers of distance and building relationships of interests.

The Cendant strategy of integrating their local market presence with sweeping global marketing methods is about to go electronic. With 1/3 of the nations listings and near 40,000 agents transitioning to the world's first global "One Stop Shopping" plan, Cendant is indeed setting a rapid pace. NRT, the Cendant subsidiary responsible for real estate acquisitions is expected to go public any day with a Wall Street rattling IPO. Coming on top of this first implementation of the Cendant electronic network, the next round of acquisitions could prove most strategic.

Meanwhile, the scuttlebutt inside Cendant has GMAC, recently having wet their appetite with an entry acquisition of Better Homes & Garden, suspected of setting their sights next on Prudential. And with the Cendant "One Stop" blueprint now out in the open, one has to wonder if GMAC will be content to wait for an NRT IPO? An NRT flush with new acquisition cash would be expected to press any and all global pretenders into action. And, throwing fuel on the fire beginning to burn between Cendant and GMAC, unconfirmed reports insist that the legendary Dick Schlott, widely attributed with having designed the original Coldwell Banker "One Stop Shopping" plan, is going to be in charge of GMAC's real estate division.

Things that make you go hummmm, are often the very same things that make things go boooom.

Editor's Note: Content on this page reflects the opinions of Mr. Gary Edwards only and not necessarily the views of this or any other publication, organization or Website owner.

Published: July 15, 1998

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