What Would Google Do_ - Jeff Jarvis [99]
At a party at the World Economic Forum at Davos, when I met one of the Google cofounders, I mentioned that I was exploring the idea of what an airline would be like if Google ran it. I said I thought it would be social. He grinned and told me about a technology entrepreneur who had founded just such a social airline, but it had to shut down when employees were caught in a scandal smuggling drugs. Pity.
Google Real Estate: Information is power
I’ve already aired my enmity for real-estate agents and their oligopolistic fee structure. So I start this chapter not by suggesting how they can remake themselves but instead by speculating how others can disrupt, undercut, and destroy their business.
I should explain why I feel this way about agents. I have had some bad eggs. I also know there are nice agents. It’s not personal. It’s financial. I do not believe that agents add 6 percent’s worth of value to a home sale. The only reason they could demand that commission is because they have controlled the multiple-listing service (MLS) that is key to having your house seen by buyers. Agents aren’t the only parties ripping us off in the process. Title insurance is particularly irksome, as is the necessity of having surveys done and redone, as are home-inspection rackets that have never found the flaws I have found after moving in. Let’s not forget lawyers, who make the process unnecessarily complicated so they, too, may soak us. Then there are newspapers that charge too much for inefficient advertising.
The real-estate business is ripe for disruption. Attempts so far have failed because they only try to break open the existing structure, to create discount brokerages that can get homes into that precious multiple-listing service. Even though the U.S. Justice Department in 2008 reached an antitrust settlement opening up the MLS to discount brokers, we are still trapped in their closed system of mutual back-scratching. We need to replace the system. If tomorrow we all listed our homes on craigslist or an equivalent, we would pull the rug out from under the MLS. Some real-estate agents—the smart ones—list homes in these alternative databases today. Shoppers may also list their desires to buy or rent homes or find roommates (as happens on craiglist), and someone—say, Google—could write an algorithm to link seekers and sellers directly, making the internet itself the marketplace. Other services feed the market with information it needs to be efficient. Zillow.com, for example, collects recent home sales so both buyer and seller can judge for themselves what a fair price would be.
As soon as the first real-estate agent (or agent’s husband, as often happens) reads this chapter, I know I’ll get an angry email or blog comment telling me I just don’t understand the value they bring. But if you must explain your value, it’s not as great as you think. With all due respect, that reaction betrays the same defensive, protective thinking torpedoing other industries covered in this book. The wiser reaction to such a challenge would be to see the opportunity in it. I’m not necessarily out to destroy agents. I want to wake them up. If you’re the smartest, most competitive agent around, you should want to leapfrog your cozy competitors, disrupt their businesses, and exploit the new opportunities online brings. Or a newcomer will.
Sellers and buyers still need services. Perhaps the next-generation agent should offer them à la carte. First, sellers want buyers to find their homes. That’s marketing. Agents say that’s what they offer now, but they don’t much. As I said earlier, when agents put an ad in the paper it’s to market themselves as much as the home. I’d start a company that does nothing but help market homes in the open internet, creating listings on craigslist, taking pictures and making videos, making web pages for the homes, making sure those pages show up in searches, even buying ads on Google. Thanks to Google, you can do this on your own with links to as many photos as you want (free on Google Picasa); video