Fidelity National Real Estate Solutions (FNRES) is rumored to be up to something big. Though no one's talking at the company, it's being said that the company is finally going to put all the pieces together and launch a major threat to online competitors who drive traffic to Realtors. Judging from the company's strengths as a subsidiary of one of the largest title insurance companies in the world and its position as a major productivity service provider to Realtors and their MLSs, whatever FNRES has planned is sure to be Realtor-friendly.
FNRES is the next evolution of Fidelity Information Systems (FIS.) FIS is a "leading provider of information processing management, outsourcing services, consulting services and application software to the mortgage and financial services industries." FNRES produces the real estate version of FIS' products, services and information, which are designed to help real estate professionals run more efficient and profitable businesses.
Put that mandate together with the selection of Marty Frame, Realtor.com's former chief information officer, as the division's new information chief, and it's obvious where FNRES is probably headed -- into lead generation land.
"One thing I'm preoccupied by is what are we going to do for online consumers after listings?" Frame told Realty Times. "Realtor.com does the best job presenting listings to the largest possible audience, and they have about 10 million unique visitors a month. How many households is this? Among renters, owners, buyers, sellers, in round numbers, I came up with a formula that dedupes (deduplicates) users in the same household and came up with a number that Realtor.com is getting a range of 60-70 million households. There were about 6.8 million transactions last year, and 1.2 new home transactions. So if you have 60 million households looking at Realtor.com, but only 8 million buying, what are the other people doing here? What are 50 million other households doing?"
"I would argue that they are using listings as a surrogate to some other questions they want answers to like: 'What is my home worth? What's my neighbor's worth? What's happening in my neighborhood? What are the Market Conditions ? Should I buy or sell? What should I do with the equity I have? Should I refinance to a fixed rate? Cash-out refi? My guess is they have some equity or some other need and are trying to figure out what to do."
Says Realty Times founder Jody Lane, "That's the kind of science that has made Marty Frame so good at his job. It's not just about the numbers, it's what they mean, and it's knowing what they mean that helps you build a good business."
Certainly others have tried to figure out what consumers are trying to do when they're not actually buying homes. The launch of Zillow.com as the number one site for home evaluations proved that. But Zillow isn't the Godzilla people think it is.
Despite it's impressive traffic-generating debut, mostly buzz surrounding its young, rich and handsome founder Rich Barton, Zillow isn't doing much that's new; home evaluations have been around for over 8 years, previously launched without much fanfare on Microsoft's HomeAdvisor. Second, Zillow suffers from some serious vulnerabilities, such as getting more data without paying significant sums for it, including tax roll data and home listing data. The site appeals to for-sale-by-owner sellers, but that segment has been shrinking according to the National Association of Realtors down to about 13 percent of sellers. Even if a slowing market encourages more FSBOs, historically they don't last for long as marketing expenses, showing risks, and other factors weigh on them.
In fact, it's in this kind of market that commissions to agents (the folks Barton hopes to disintermediate) tend to rise, not fall, as desperate sellers offer bonuses and other incentives to listing agents, selling agents and to buyers. Last, once consumers have played around with their home values -- getting what they want to know for free -- what's left to do on the site?
If it wanted to, Fidelity could make toast out of Zillow in short order. Zillow has 65 million property records. Fidelity has 150 million. In fact, Fidelity is strong in many ways that Zillow will never be, namely its pro-Realtor business model.
Instead of parading around suggesting that commissions should be lower, as Barton has done countless times in the media, Fidelity has established pro-Realtor relationships and offers software solutions to support them:
- Lead management
- Transaction management
- Back office accounting systems
- CRM desktop solutions
In addition, Fidelity MLS systems are in about 45 percent of MLSs across the country, touching 35 percent of all real estate agents. Fidelity aggregates listing information for large customers such as HomeServices, Prudential California Realty, Edina Realty, and others, touching approximately 2 1/2 million listings at any given time. (This ability enables Fidelity to come closer to executing a national MLS-type site than any other player outside of Realtor.com, given brokers' permission, of course.)
So now the question is - what is Fidelity going to do with its new hired gun Frame? If anyone has a vision for consumers, it's Frame. If anyone knows how to put a listings database together, it's Frame. If anyone knows what works and doesn't work online, it's Frame. If anyone knows what Realtors like and don't like, it's Frame.
Fidelity's Chairman Bill Foley has made no secret that he wants the services and software divisions to get better connected. What better way than to interface with consumers and drive them to Realtors on a Realtor-friendly platform?
Imagine a site that promotes the use of Realtors, without going behind their backs to the Department of Justice, consumer groups, or the media? Imagine a site that promotes the use of Realtors without asking them to cut their commisions?
While Fidelity spokespersons declined to discuss Frame's job or changes the FNRES might make as it incorporates Frame's skills, other online behemoths should be a little scared. Their business models could crumble faster than the Japanese army under Godzilla's breath if one thing were to happen -- what if Fidelity promoted listings for free to cooperating brokers and agents who buy their lead management systems? A Realtor.com that's agent-friendly, not just broker friendly...What if Fidelity were to drive consumers to Realtors with a Zillow-like home evaluation that's more comprehensive and more accurate?
Cyberhomes, or whatever Fidelity decides to call its new venture, could become the best Realtor perk ever. Imagine no more referral fees. Imagine your listings generating leads for you instead of your broker or your competitor. Imagine no more need to pay exorbitant search engine pay-per-clicks schemes.
What a concept.
"We are not here to capture consumers and sell them back to agents and brokers," says Scott Hoen, FNRES's CEO. "We're making great progress, and our customers are realizing we are here as a partner for them. The talk about integrating our products so people don't have to use five or six different things that don't work together is no longer talk -- we're doing it. But we realize that even if our customers want one system that works together, we have to be open-minded and integrate with other systems, and that takes time."
Fidelity's competition each does one thing well. Realtor.com is the listings king. Google is capitalizing on its position as top search engine to get people to pay for placement. Zillow is known for its less-than-accurate, but steadily improving home evaluations. And there are dozens of others.
All seek consumer traffic to drive to Realtor advertisers, but Fidelity could fell them all with one swoop by changing the paradigm -- drive consumers to customers who are already partners.
Well, if Marty Frame's job is to put the pieces together, then Google, Zillow, Move.com and others -- you're about to get "framed."