Reinventing Real Estate, Part 1: Online and Empowered Consumers Are Taking Charge and Paying Less

For decades, the real estate world turned in a predictable manner. The roles of buyers, sellers and real estate professionals were fairly well defined and transactions followed a predictable path of yard signs, newspaper ads, open houses and miles of paperwork.Recently, online and empowered consumers have changed the game. Real estate professionals now face issues similar to the ones that have transformed the retail, personal finance and travel planning industries. As technology advances and new business models evolve, the real estate industry has begun to transform itself from providing traditional, carefully controlled “agent-centric” transactions to new “consumer-centric” practices. The following is a look at some of the recent industry trends and how buyers, sellers and investors can expect to benefit. The “Five Ds” that are driving change in real estate are:1. Disruption – Over the past 10 years, the Internet has matured into a powerful platform for delivering real estate information, forever changing the interaction between buyers, sellers and real estate professionals.2. Displacement – The popularity and acceptance of self-service and consumer-direct business models is being felt by real estate professionals, who are striving to develop attractive new offerings for Web-savvy consumers.3. Demanding consumers – You now have more real estate knowledge, tools and resources at your fingertips than ever before. More savvy consumers tend to be more independent and demanding.4. Downward pressure – Traditional real estate commissions of 5-6 percent of a property’s sales price are facing downward pressure.5. Developing alternatives – The real estate industry is transforming itself to provide targeted services and exciting new options that add value for consumers.
Disruption”We are going to see our industry go through dramatic transformation via the Internet and consolidation of agents and companies.” – eRealty Times Columnist Dirk ZellerSome industry observers have adopted Harvard Business School professor Clayton Christensen’s term “disruptive technology” to explain recent developments in real estate. Though it’s easy to point to the World Wide Web and advancing technology as the main changes in real estate, that’s only part of what’s shaking things up. Essentially, the real cause of disruption is not just technology, but technology-enabled real estate consumers.Web-enabled consumersAccording to the National Association of Realtors (NAR), more than 72 percent of homebuyers now begin their home search online. The popularity of online real estate ads surpassed newspaper property listings back in 2001, and the gap is widening. Less than one percent of buyers first learned about the home they purchased on the Internet in 1995, while in 2004, that number passed 20 percent.According to a California Association of Realtors (CAR) survey, 97 percent of respondents said the Web helped them understand the buying process better and 100 percent said using the Web helped them understand home values better. Web-enabled homebuyers like you are taking a more active role in researching homes and neighborhoods. You also now spend less time with real estate professionals once you have completed your research. Internet homebuyers also used the Web effectively to filter out properties that did not interest them, visiting 6.1 homes on average versus 15.4 for traditional buyers.Today, you can view photos and detailed information for hundreds of properties in the time it used to take to visit a single one. And the Web provides much more opportunity than simply moving print listings online. The growing availability of residential high-speed Internet connections has boosted the popularity of virtual tours and interactive maps, providing consumers with powerful and flexible visual search tools.In addition to making home searches easier, automated valuation model (AVM) software is making a big impact in how properties are evaluated. AVMs, which generate valuation estimates by analyzing and comparing property information data, are becoming increasingly sophisticated and accurate. While not considered a substitute for human appraisals, AVMs are gaining popularity because they are inexpensive, easy to use and produce valuation estimates in minutes. Now AVMs, used extensively in electronic mortgage approval processing during the recent refinancing boom, are becoming available on real-estate Websites aimed at consumers. This is a significant development for independent sellers, who often find it challenging to price their properties correctly when selling on their own.The MLS goes public”In real estate, MLS data sits at the apex of the change, specifically the MLS information that is pushed to the Internet every minute of the day.” – Bradley Inman, Publisher of Inman NewsOnce an exclusive tool for real estate professionals, the multiple listing service (MLS) has in recent years become a very public platform for real estate listings. The MLS is the nation’s most comprehensive database of properties for sale – four out of five homes sold in the United States are listed on the MLS.
MLS properties are available to agents and brokers worldwide, and are now accessible via consumer Web sites such as Realtor.com, WSJ.com, Excite, Netscape, AOL and MSN. MLS listings also appear on local, regional and national brokerage Websites through Internet Data Exchange (IDX) agreements that allow participating Realtors to share listings and display them to consumers. Even though only licensed realtors can list property on the MLS, the system has begun to figure prominently for the $110 billion independent seller (for-sale-by-owner or FSBO) market. About 13 percent of real estate sales are now FSBO, conducted without a broker’s assistance.Type “flat fee MLS” into any major search engine, and you’ll see dozens of real estate professionals willing to list your property in the MLS for a fee. If you are willing to pay a commission of 2-3 percent, you can attract the attention of thousands of agents who will show your property to prospective buyers. You can then reduce the cost of the sale to about half a traditional 5-6 percent sales commission, plus the cost of the MLS listing. If you find an independent buyer working without an agent, you could make a sale with no commission at all and pay only an MLS listing flat fee.
DisplacementCurrently, about 2.4 million real estate licensees operate nationally, according to the Association of Real Estate License Law officials. The NAR has more than one million members, up from about 760,000 members five years ago. Many real estate professionals and industry observers expect a significant decline in this number because some tasks traditionally performed by agents and brokers can now be done more quickly and easily by Web-enabled consumers.”Historically the fundamental driver of the real estate industry was the control of information. The real estate agent and the real estate office were the only sources of comprehensive information on which properties were for sale and those who might be interested in buying them. With this control revenues were practically guaranteed.Moreover, because this exclusive control was akin to a monopoly by virtue of the multiple listing service (MLS) any firm of any size could serve the customer equally well. As a result, the number of real estate companies grew without regard to market efficiencies.Simply put, the traditional model is too inflexible. Consumers are seriously questioning the value of a real estate agent. They frequently feel that many of the traditional tasks undertaken by the agents are now either no longer required or can be done by the consumer themselves.”- Swanepoel & Tuccillo, Real Estate Confronts ProfitabilityThe quotes above, from a popular report on emerging real estate business models and dwindling profit margins, highlight a number of issues traditional real estate professionals are now facing. And if the real estate industry has grown historically without regard to market efficiencies, the issue has only been compounded since 2001, as new agents signed on in droves, lured by low interest rates and skyrocketing home prices in many areas. It’s likely that the number of traditional real estate agents will decline, while new types of real estate jobs will be created to deliver value to Web-savvy customers.NEXT in Part 2 of 2: – Demanding Consumers, Downward Pressure and Developing Alternatives

Online Education: Advantages And Disadvantages Of Online Studies

Years ago, education wasn’t accessible for everyone except for the elite. In modern society, turning into a student can be as natural as breathing, even if you experience the lack of money or time. Everybody knows that education is vital and influences career expectations a lot, and this fact forces them to go back to school again. But that’s not as simple as it seems to be at first sight. Some folks have to work to make their living; others have families and kids to take care of. Luckily, there is a way out. That’s all about online education.Currently, online education has become very popular. Check any college’s list of options and you’ll definitely find tons of online courses. It can help people to get what they want without refusing to go to work or socialize. Bad news: online education has some negative aspects. Let’s dwell upon pros and cons.Pluses.The best thing about being an online student is the fact that you are not glued to the campus and can manage your classes the way you want. Are you a young parent with debts and full-time work in some tiny Mid West town? This is no longer a problem for you as long as you can choose online courses.It’s a common-known truth that career expectations are directly proportional to one’s education level: but there are very few individuals who would take a trouble and apply for college again. It means that basically, education guarantees success at work. Flourishing career is impossible without considering further education.The last but not the least important advantage is the fact that online courses are less expensive than regular studies. There are innumerous online opportunities that are affordable in terms of time and price. Besides, it is possible to apply for scholarships or simply grab some student loan with low interest rate.Minuses.There are not so many disadvantages of online courses except for maybe the quality. On-campus life and learning is the best way to get the best of your classes, and you can’t get it if stay at home. The good news is, there are tons of great computer programs that make it possible to get quality education. For instance, online courses provide soft aimed on sharing the tasks, recording students’ scientific researches, let alone video connection and discussion opportunities.Hundreds of students graduate online courses every year, and this fact proves that it’s worth considering. Yes, you will lose the unforgettable student days’ experience, but get the freedom of scheduling your own studies at the same time. Courage, patience, and diligence will help you to cope with your online studies.

Serious Social Networking Advantages

Even if the term “Social Networking” has become a household word to most people, not everyone fully comprehends its true meaning. The truth is that many people cannot even give an exact and accurate definition of “Social Networking” even if they are already part of one and so without understanding exactly what it is many social networking advantages are completely lost to most of us. People are easily able to use these systems but are not aware of the true advantages!First off let’s define what social networking is and let’s have a quick look at some of the more common social networking characteristics. Generally speaking, social networks are flocking schemes wherein different individuals are grouped into both specific and broad categories. Of course, such networks are possible not just through the Internet but also personally, in schools as well as in one’s office or workplace. And since the Internet has a wider coverage and is obviously full of people who want to meet others, social networking is much more popular online.One of the more obvious social networking advantages is that these online communities often have a common bond like religion, politics or other shared interests. Once you gain access to one of these communities you can instantly start socializing with other members at once sharing similar interests and experiences. You will also be able to see other members’ profiles, too and learn about all kinds of other web 2.0 advantages that are brought to light through the social network. Being able to make lots of friends online is just one of the advantages of using social networking websites.Also, with access to sites like these lets you have the capability to make friends with other people even if they live outside your country. This is certainly one way to learn about other people’s culture and way of life! Who knows, you might just be able to travel to other places without worrying about getting lost since you already have a friend who will help you out once you get there!Many social networking sites have specific groupings, but there are also many that do not. This means that these websites tender free membership to anyone who wants to join. These are actually the more standard social networking websites wherein anybody can take part even if thy have different beliefs, views or hobbies. And when you are inside their community, you can equally begin to create your own circle of influence based on your own standards and then simply exclude those that do not meet the qualifications needed for or atmosphere of your group. Social networking advantages abound when you can create your own mini social networks.Everyone is encouraged to take part in any social networking websites. It is simple to use, you could have lots of new friends and you could learn a lot, too! On the other hand you should also be aware that there are some risks involved, too.Some dangers would be online predators who are actually posing as somebody that they are not. The truth is, all kinds of dangers lurk around on both the real world and online. Either way, all internet users are always advised to proceed with care most especially if they are just new on this type of socializing. But this does not mean that those people who have already been using these sites for quite some time are not susceptible to any online dangers.As in everything else, everyone is asked to be very cautious all the time. But even if there are some dangers present, you can still be guaranteed a lot of fun with social networking websites! You could instantly go ahead and search for communities that you want to take part of! Just do a simple search online and will get thousands of results and options like MySpace, FriendFinder, Classmates, Facebook, Yahoo! 360, Orkut and FriendWise!