There was a time in the not so distant past that it was easy to strategize predictable streams of income from a real estate website. All one would have to do is choose a niche, or a theme, and then publish a site to the web and wait for the profits to roll in, but times have changed.

Success and profitability are planned events. If we know what we are competing against, we have a chance to survive and be profitable. Success and profit streams aren't achieved by luck. You cannot obtain success by purchasing new software, or a glitzy website. Luck is usually a one-time random event, while success and profits are culminations of planned strategies. When there are dips in profit streams or disruptions to our anticipated revenue in our own business, it is time to analyze the realities of business, and adapt accordingly.

Last year at the National Association of Realtors Convention 2004 in Orlando I was fortunate enough to be selected as a featured speaker and spoke on two Internet topics. My first session was on "How to Make Money with Your Website" and my second session was a panel perspective on the evolution of real estate business on the web entitled, "Technology Driven Business Models."

In retrospect, these sessions have forced me to rethink profit strategies, and how profitability can be attained. In the course of this last year I've become convinced it is now more difficult to exact the same amount of profits from the web that was so easy just a short while ago! Why? The fundamentals of online real estate changed. The new realities of doing business on the Internet, and stiff competition for Internet profits will remain a challenge in foreseeable future.

If you look at dwindling profit, that only deals with the situation at hand today. You may react, but still not have a plan. Strategy forces you to look at a bigger picture, and allows you to re-adjust your goals to regain profit margins! Remember strategy is what will ensure survivability!

To start, we need to take a look at the factors, and current conditions that have contributed to the current situation. We must determine what are we up against, develop a plan or strategy, and implement it if we are to be successful and regaining profitability on the web! Before we implement changes in attacking the issues at hand, we must first look to the root causes of change.

Over the past few years, the numbers of Realtors and real estate practitioners has grown incredibly fast. Realtors have moved from a little over 750,000 agents in 2001 to over 1.1 million. More agents are pursuing a fixed number of leads. We must acknowledge that the same growth that occurred nationally has also impacted us on the local level. In some hot markets we have dwindling inventory, and more agents. In other markets that are softening -- we have more agents and fewer sales. Either situation is not very good if you are planning to earn a decent living. While the growth may be hard to comprehend, we must make an effort to understand how this has impacted our businesses, lives, marketing expenses, and profit margins.

In the Atlanta market where I practice real estate, Realtor ranks in the main MLS system has grown from about 12,500 agents a few years ago to well over 34,000 agents. The term "competition" is now on steroids, and shifting into even a higher gear on the web.

What does all this mean? Well, the stark reality is that not everyone in real estate will be successful; not everyone will make money from their endeavors on the web! An analogy is the profitable piece of pie representing profit on the web that was originally cut into 8 pieces is now divided into 64 pieces! Marketing competition from other agents, brokerages, and third-party referral companies for client leads on the web is fierce to capture more closed business. If we assume things will return to normal -- that could be a recipe for our own disaster.

So what can we do to change this or how do we adapt to the change?

We can keep doing what we always do, which will lead us to fall even further behind. To gain a profitable momentum, we must move beyond complacency and denial into analysis and develop a strategy worthy of implementation! If our ranks have swelled this much in a short period of time, many of the persons calling the shots in our real estate industry have not worked in it for long.

There is an old saying on Wall Street, "Everyone is an expert in a rising market," however when times get tough, the tough may get going! There are many that have only weathered our industry on the upswing, and never worked to sell a home when the markets cool.

It is my opinion we've become sloppy on how we handle leads and generate sales. With shared information and IDX we've become slow to react to change, and sloppy about the information we've provided to the public. So what is the result?

We've gone from boom to bust in a very short time, because we've not paid attention to the consequences of our actions! We only have ourselves to blame for displaying too much information! On our individual and company sites we've placed MLS #'s, maps to properties, prices, and yes, even addresses.

Now, tell me again why the public needs a Realtor? We have made our own self-fulfilling prophesy that the public will not need our services, and lamented it when it came true. We have divulged too much free information online, and have not bothered to measure the return or loss, nor accepted the implications of our actions.

A quick overview of changing real estate web competition as I see it:

• Numbers of real estate agents has increased dramatically nationally and locally.

• More agents equal more websites, which equals higher costs to be found!

• Third-party referral companies have placed themselves between consumers in hopes of capturing client leads and selling them back to real estate agents for profit in the form of referral fees or flat fees for so called "exclusive rights or territories."

• We allow marketing errors of placing too much free information on the web. Internet data exchange (IDX) has diluted individual and company earnings. (In print ads do you give the addresses, MLS #'s, maps to the home, and prices freely? So ask yourself why are you doing do on the web?)

• We've totally neglected lead conversion and have become a free online information real estate resource that generates no profit.

• Anonymous consumers take advantage of free information (MLS #'s, addresses, etc) until your services are no longer needed!

• Too much free information has diminished real estate agents/brokers importance.

• Commissions and income decline as a direct result of too much free information.

• Watch spending! It is a normal but a deadly reaction to spend more marketing dollars to re-attain previous profit levels, with fewer resources. Since less income is being generated to sustain a successful marketing effort, this can be a fatal career mistake.

For the next few years, web profits will become much more difficult to attain, but not impossible. Until this market we are in levels out, we have our work cut out for us.

Newbies in real estate may enjoy the challenge in obtaining success on the web because it's an uphill climb. However, seasoned agents who are reinventing web success may be swallowing a bittersweet pill. Most will find it hard readjusting our sites and goals. We were spoiled by earning a large stream of income that has now dwindled to a trickle. Yes, times have been good, but we forgot that only change is predictable.

Published: August 24, 2005

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Jim Crawford, ABR, e-PRO 500 is currently licensed as a Broker Associate with RE/MAX Paramount Properties in Atlanta Georgia, and as a Broker Associate with Prudential PenFed Realty Fairfax Virginia. Jim and his wife Ellen work as a husband and wife team in the northern Atlanta suburbs, and have recently expanded their web business to Northern Virginia and Maryland. As the team's rainmaker, Jim is a self-taught webmaster and designer, and he relies exclusively on the Internet for marketing. He is considered an expert on marketing, nationwide relocation, cutting edge technology, Search Engine Optimization (SEO) for real estate, and Internet marketing. Jim's seminars, online contributions, and technology ideas assist real estate agents to maximize their business results, and raise the industry's professional service level skills. His common sense marketing ideas have been published and quoted regularly in trade publications. He has also consulted and advised NAR offices regarding Internet issues, and Internet ethics for Realtors. In between sales, Jim is a popular speaker at national and regional real estate seminars, REBAR Camps, Blogging seminars and retreats. Jim is a major proponent and advocate of online ethics and the development of social media policies. He is also an online real estate coach, with a self-tutorial coaching site for real estate professionals for webs and Blogging. Jim was a featured speaker at the November 2004 National Association of REALTORS® convention in Orlando, and has spoken at the several REALTORS® conventions both in the United States and Canada. Visit his website at RealEstateTechCoach.com, or e-mail him at .