Whispers of a housing recession are beginning. Despite optimistic housing statistics from the NAR, and the NAHB, many agents are reporting increased inventory and falling prices in certain neighborhoods and price levels. Will the market downturn be like others, or will this one be different?

One factor that may alter the effects of a downturn is the role of the Internet. As agents incorporate Internet technology marketing and communication costs into their operating budgets, as they did with cell phones and fax machines, will they be able to improve service delivery to the point that they can offset the ramp-up costs?

One company, The Real Estate Franchise Group of Cendant Corporation, is betting that they will. The Cendant residential brands, CENTURY 21, COLDWELL BANKER and ERA, have taken the unusual step to set up the majority of their agents with Web pages activated at REALTOR.com.

While it can be argued that Cendant is being handsomely reimbursed to be Realtor.com's biggest customer of I-LEAD lead generation packages (Cendant owns 16.9 percent ownership in Realtor.com's operator Homestore.com), the bottom line is that Cendant real estate agents will have a competitive advantage in terms of Internet marketing.

Clearly, Cendant has just given a vote to the Internet as a preferred marketing tool - not just because it can own a piece, but because it can also cut marketing expenditures for brokers and agents, putting them in trimmer condition to compete.

Consider this. According to the NAR 2001 Member Profile, Realtors spend approximately 14 percent of their gross personal income on business-related expenses. Realtors who spend more get better results - the ones with incomes over $100,000 spent $26,300 on business related expenses, over 25 percent. Yet, the typical Realtor spent only $1000 on promotion and marketing expenses related to either her practice or to her listings.

While the median showed that Realtors spend $900 on technology, of those a whopping 36 percent spent between $1,000 and $4,999, with 42 percent of brokers and 33 percent of sales agents spending in that range.

While it's not clear whether the NAR considers Internet marketing to be in the category of technology or promotion and marketing, it's clear that a majority of agents reinvest little in their businesses. So Cendant is doing it for them on the gamble that the Web pages purchased at a discount by Cendant for its agents could result in higher earnings for the company. Now agents can have a professional Web page that they can promote for well under $100, and attach to their Realtor.com listings to use as a lead generation tool. Realtor.com has also sweetened the pot by slashing costs to some services such as IPIX virtual tours from $99 to as low as $40, reports a Coldwell Banker office in North Texas. Internet marketing has never been cheaper or more effective. Realtor.com is also promising lead accountability with their new I-LEAD XL product which puts XL customer profiles in front of consumers (by permission.)

Why bet on the come? The NAR report also showed that Realtors who use the Internet make more money ($8,700) than those who don't. Realtors who use e-mail have a median gross income that is $16,200 higher than those who do not use e-mail. The I-Lead lead generation packages are geared around capturing potential clients through e-mail inquiries through Web pages and other lead generation devices.

In 2000, 82 percent of Realtors were associated with a firm that had a page on the World Wide Web, says the NAR report, yet only two out of five had a Web page for their own business use.

Again, as with e-mail, Realtors who have a Web page have higher incomes than those who do not. Realtors with personal Web pages had a median gross personal income of $68,000, 85 percent higher than for those who do not have a Web page or plan to have one soon.

But leading agents like horses to the trough may not be enough to make them drink. Training agents to use the Internet instead of traditional sources such as newspapers may prove to be a challenge. Half of sales agents report receiving zero leads from online services, but 41 percent report receiving between one and 10 percent of their business online. Seven percent get between 11 and 20 percent of their business online. Clearly, a technology gap exists among agents and Cendant is betting that enabling agents will help them leap over it.

One reason could be that some agents have paid more attention to this number - that 37 percent of 1999 homebuyers used the Internet as an information source, up from two percent in the mid-nineties. While 68 percent of all Realtors place their listings on Realtor.com in hopes of capturing these lookers, only 19 percent place their listings on their franchise's Web site, and 63 percent put their listings on their broker's Web site.

Published: August 17, 2001

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Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. For more articles by Blanche, click here.