Google has vanquished much of the Internet and with it a lot of off-line interests as well. The Google information and advertising model has proven to be enormously efficient and accountable, much to the irritation of Madison Avenue and traditional advertising outlets.
Now Google is entering the real estate arena, a matter which will upset some people and elate others. Competitors will claim surprise and argue that Google is somehow "unfair," but anyone who follows both real estate and the Internet knew or should have known that Google was coming -- and what will result.
Most active brokers and salespeople belong to local MLS services. When a home is listed, the data gathered by the broker is placed in the MLS and then it becomes fully available to paying members and partially available to the public.
With the advent of the Internet there have been several proposals regarding how best to distribute MLS information online:
- With an "Internet data exchange" system (IDX) MLS member brokers can post some data on their sites and consumers can look at all listings without a requirement to register. To find out more, visitors contact an MLS member, hopefully the one who posted the data.
- With a "virtual office website" (VOW) consumers must register to see listing photos and more extensive data. When they register online visitors can also have the "opportunity" to enter into complex contracts that may unknowingly create unwanted agency relationships.
- In 2005, the National Association of Realtors -- in the face of an anti-trust suit by the Justice Department -- introduced the Internet Listing Display (ILD) protocol, something to replace both the IDX and VOW options.
"Buyers," said then-NAR President Al Mansell regarding ILD, "will be able to find all the listings available for public display on the Web site of the broker of their choice and sellers will be able to work with the listing broker of their choice. The policy treats all MLS members equally yet respects the rights of property owners and their listing brokers to market a property as they see fit. This response to the Department of Justice's concerns has resulted in a better policy for all concerned."
The real issue with MLS display policies is money: Can MLS data be used by websites that then charge brokers hefty fees for consumer leads and referrals -- brokers who generated the MLS data in the first place? Since Google does not charge referral fees, and since the pattern of Google to this point has been to present search results with mathematical purity, referral sites must now compete with a new and unbeatable pricing option: zero.
With Google, you just type a location, say Brooklyn real estate .
Toward the top of the listings you'll see "Refine your search for Brooklyn real estate." You'll then be able to select from properties for sale, for rent or both.
Press the button and a series of listings will appear -- plus a box which will let you search by price, bedrooms, baths, distance and newest to oldest -- or vice versa. Also, a map shows where properties are located. You can also add your own listing to the system if you're registered with Google.
The Google real estate option much resembles its Froggle project. Both use thumbnail photos, both use content from other sites and neither charges a referral fee. The real estate system uses maps while Froggle does not. (I would like an option to exclude the map to speed up pages.)
What's attractive about the Google approach is that it costs brokers nothing -- which means it costs consumers nothing. Google makes its money by selling ads as pages come up. There are no referral fees, no online agency agreements, no distinctions regarding how a broker charges or who a broker represents.
Some in real estate will moo and scream because the Google system offers an equal playing field for everyone -- including those selling without a broker. But that is precisely the long-time situation with newspapers and brokers have hardly been driven out-of-business by self-sellers who use the classifieds and yard signs. To suggest that Google must adhere to a different standard than the local paper is illogical.
The catch, though, is that Google's system is not entirely like newspaper classifieds. Listings are free. Newspaper classifieds -- long challenged by auto and job sites, eBay and Craigslist -- now have another competitor that cannot be ignored.
Given refinements, the Google system may well turn into a national MLS, one with a vast audience. For local brokers who simply want to sell homes and help buyers, none of this is a problem. For those who sell newsletters, marketing services and such, Google is also not a problem -- local brokers and salespeople will have even more need for services which allow them to stand out in their marketplace.
What Google does is important because Google is the Internet's search leader. The research service comScore Networks, says that as of January Google was the market champion with 41.4 percent of all searches. Yahoo! was second with 28.7 percent while MSN had 13.7 percent and was third.
The comScore data shows something else: While the number of searches increased 10 percent during the past year, Google's slice of search activity grew by a hefty 6.3 percent. In effect, the importance of search is growing and Google's share of that expanding market is increasing.
There's little doubt that the Google system will evolve and improve over time. For instance, imagine if you could press a button and get a list of local homes that will be open over the weekend. Or imagine if home listings were automatically tied into public property records.
Google has the potential to become a major real estate site as long as search results do not give preference to any broker or non-broker listing source; charge to list; restrict public access; demand online agency agreements or seek referral fees.
In other words, if what Google offers is merely a neutral search platform for universal information distribution and access, one which happens to generate huge advertising revenues, it can't lose.
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