How the Web is changing real estate: Home buyers are researching online first

A conversation with Brad Inman, CEO of HomeGain.com and Inman News.

Real estate home sales are still in a boom time, thanks to low rates. That explosion is also felt on the Internet as 70 percent of home buyers and sellers use the Web weekly to help them turn their real estate dreams into reality.

That statistic makes Brad Inman, founder and CEO of HomeGain.com, very happy. Inman is a major force of influence online when it comes to real estate. His Inman News site (inman.com) is considered to be the top real estate news source and his HomeGain.com site has almost 3 million registered users. The HomeGain Website has over 54,000 registered real estate agents across the country and submits 5,000 online agent proposals to home buyers and sellers every 24 hours.

We asked Brad to give us his unique perspective on the current state of the real estate industry online and his take on some of the trends and changes the Web is causing to the way we all buy and sell real estate.

Q: Tell me about homeGain.com.

Inman: HomeGain.com started in 1999. It’s a complete online real estate service for home buyers and sellers who are looking to make their real estate transaction easier and more cost-effective. We have some important tools. We have a comparative shopping or agent matching service where consumers can compare and contrast different agents backgrounds, resumes and commission rates to pick the best agent.

A really important consumer feature is that home buyers and sellers can stay anonymous as agents bid for their business. This is all done online in a password protected private area. We have over 50,000 agents across the country. The average buyer and seller get about seven bids and that’s what we call our “Agent Evaluator,” a very powerful tool.

People will spend an hour comparing different socks, but when they hand off their No. 1 asset to a realtor, they’ll just take a simple referral from a neighbor. We strongly recommend that people take more time and effort to compare realtors before they select one. Ours is really a Darwinian platform where the best and brightest emerge based on consumer’s choice.

Q: Is there a rating system in place?

Inman: We do have consumer testimonials about the agents. We also rate them based on HomeGain sales which shows how many other consumers have used this agent, how much and how often. We also have all their data, their background and history of how many homes they’ve sold at what price.

Q: You can’t easily find that out walking at your local realtor/broker.

Inman: Yes that’s really the danger here. We make an intuitive impulse decision about this person who we often paid tens of thousands of dollars, but more importantly we’re taking this coveted asset and handing it off to them.

Q: What is the process that a real estate agent must go through to be a part of your database?

Inman: The first they may have to do is register and fill a whole bunch of forms on their background, their history and a real estate license. Then they have to check what we call their “Control Center” every day to see which buyers and sellers have accessed their profiles. They then must submit a customized proposal to the consumer. It’s a commitment of time and energy every day and most successful agents get on daily. If you don’t work it, you won’t be successful.

Q: What are some other tools you offer consumers?

Inman: We give buyers access to the MLS (Multiple Listing Service) so you can actually see the updated MLS listings every day. Buyers are looking to find the right home and the MLS changes every day. New homes come on or go off the market in your local area. You can look at virtual walk-throughs and pictures and details of the home.

Another feature is people want to know the value and price of their home – how much it is worth. We provide data and access to the best agents to do a comparative market analysis. We also give access to mortgage rates. We have lots of calculators like preparing your home for sale and what improvements you should make before you sell so you don’t overspend or understand what gets the home looking right before you sell it. We have mortgage calculators, lots of content and articles. It’s really a complete solution for someone who wants to use the Internet to get more information before they sell or buy a house.

Q: What are you doing to take the whole online experience of buying and selling a home to a whole new level in the future?

Inman: We have cracked a couple of the important elements here. One is giving the consumer access to the MLS. It was almost 100 years before the average consumer could see the MLS. They had to go through a realtor and look at the listings one at a time.

We’ve also made available property record data, which used to be really, really hard to get. You had to go down to the basement of the court house and dig for microfiche and didn’t really know what you’re looking at. We’ve cracked that. We’ve opened up all public records. Hey, doesn’t it make sense to give the public public records?

The other thing we’ve done is use the power of the Internet for things like comparative shopping. It used to be Aunt Millie recommended a realtor to you because the realtor made cookies for her. I’m not sure that’s a good reason to pick an agent. These are the things that the Internet is good at. It’s a breakthrough in the real estate industry in terms of pushing the private information that realtors commanded out to the public.

Another new level is trying to automate some of this. We just heard a story this week about a woman from Korea who bought a home sight unseen using the Internet. Wouldn’t it be great if some of this gnarly paperwork could be consolidated into an electronic digitized document so you wouldn’t have to sit in a closing office facing a 120-page document, having to sign things 49 times with no clue what the heck you’re signing.

Q: Are home shoppers comfortable using the Internet?

Inman: The average consumer starts looking for homes on the Internet now. They are not starting by looking in the newspaper. So consequently, any realtor that relied on the phone or newspaper to get leads is out of step with the average consumer.

Q: Are realtors resigned to the fact that they can’t hold the MLS book and now consumers can look at it?

Inman: Yes, but I think the first thing they did was freak out. They actually tried to stop the tide so there was a lot of resentment and a lot of politicking and a very difficult horrible process to open up the MLS to the consumer.
But the beauty of the MLS data, let’s say, versus the music industry – there you have people who are really stealing the copyright. Here the realtor still holds on to the listing. No one has separated that listing from the listing agent. All we are saying is we’re going to market it better. Once the realtors sort of woke up, and progressive realtors saw this a long time ago, many saw they were getting free marketing for their listing. What’s wrong with that? Then they finally began to see this wasn’t the Napster of real estate.

Q: For someone who has built a successful business on the Internet, what advice would you give to would-be entrepreneurs who want to start something online?

Inman: People are always looking for the magical product and they assume it will sell because their product is so outstanding. I suggest people not try to invent something from nothing. Take a business and add value in a way that everyone else hasn’t done.

The other thing is to be really conscious of customers. I always liked Ted Turner’s answer when Barbara Walters asked him what his philosophy of life was: “Early to bed, early to rise. Work all day, and advertise.” You really have to have a smart plan for acquiring customers. The beauty of the Internet is it is a very efficient way of getting customers. But it does require a great deal of sophistication. We have Google and Overture search engines which give people instant access to local and national advertising, but if you don’t understand how to work Google, then taking the time to learn and pull together a team – whether your husband or wife or son who just got out of college or hiring your first salesperson – just think through having the right team.

At the end of the day, any entrepreneur knows it’s about giving up your weekends in Tahoe and working hard. The only formula I’ve ever used in my 20 years building a lot of businesses is hard work is what differentiates you from a lot of people.

To look at homes for sale, find out your home’s value or explore mortgage rates and calculators, visit homegain.com. To browse articles and column on real estate, visit inman.com.

WebTalk Radio is a Seattle-based talk show featuring technology news and interviews. It is broadcast on WebTalkGuys Radio and syndicated nationally on twelve radio stations. WebTalkGuys is also available through the Mobile Broadcast Network, WindowsMedia.com News & Talk, WindowsMedia.com Radio Tuner, WM Mobile Portal, MS-Sync & Go, RealGuide Radio Tuner and RealOne Mobile Phone Media Portal. We are also on WorldTalkRadio every Thursday from 1-2pm PST and IM Tuner Network with SonicBox (Channel V-25). Past shows and interviews are also Webcast via the Internet at www.webtalkguys.com. PC World magazine named WebTalkGuys “Best of Today’s Web Hidden Gems” in their August 2002 issue.

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Related Stories