Realtors stake territory online

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by Cathleen Moore

(IDG) -- Clicking your way into a new home may sound like a breeze, but moving the emotionally charged and highly complex process of real estate purchasing online is creating stiff challenges for this industry. As it joins the e-business stampede, the residential real estate business is trying to strike a fragile balance between adopting technology and e-business practices while upholding industry guidelines and customer confidence.

Even in a nascent state, these budding Internet activities have had an impact on real estate processes. One of the most visible effects is an empowered consumer, who now uses the Internet to gather information about homes, neighborhoods, and agents before stepping foot into a real estate office. Access to online information has really streamlined the buying and selling process, according to John H. Vogel, an industry observer who teaches real estate courses and is a permanent adjunct associate professor at the Tuck School of Business at Dartmouth College, in Hanover, N.H.

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A better-informed consumer leads to a more productive agent, which can save both time and money for the real estate company. Instead of an agent showing 50 properties to one customer, for example, a customer's research may narrow the pool to five before showing begins.

"Realtors can [now] spend more time on the transaction and negotiation end," says Deborah Meeks, senior vice president of marketing at ERA Franchise Systems, in Parsippany, N.J.

The next step: Streamlining transactions

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When the buyer and agent do get to the transaction stage, the Internet seems like an ideal channel to automate the purchase transaction. Using a common online platform that functions as a repository for documents and information is a vital first step toward simplifying this complex but critical transaction for real estate businesses.

But according to Steve Carpenter, executive vice president at Prudential California Real Estate, in Sacramento, Calif., upward of 100 people currently touch every real estate transaction. Tacked on to this complexity is the fact that each county uses its own documents for the formal deed, presenting a huge obstacle to standardizing the process online.

Another roadblock in taking transactions online is that many companies are saddled with legacy systems and applications, which limits their ability to transact online. Upgrading to more modern equipment and systems poses cost hurdles to smaller franchises.

Aside from obvious logistical challenges, real estate companies also have to overcome fears among their own ranks.

"There was a point when real estate agents were concerned that technology would leave them out," says Robert Moles, president and CEO of Century 21, based in Parsippany, N.J.

But Vogel adds that the technology and e-business opportunities are reshaping the role of the agent or broker, not eliminating it.

"The broker used to sell information, but with Internet [channels] you'll need a broker less and less for that function [and] more and more for judgment," Vogel says.

Other barriers just come with the territory.

"Real estate is a complicated, large, and emotional purchase. For all those reasons, it has been hard to adapt to e-business," Prudential's Carpenter says.

Making headway

With plenty of issues to work through and little help in the way of standardized technology for real estate, many realtors have taken it upon themselves to mold new tools. For example, two real estate-focused technology companies, eWebdesk and Realty Plus Online, are led by current or former real estate agents.

Carpenter also works as president of software company eWebdesk, in Honolulu. One of eWebdesk's products enables agents to shop for homes and access listing-service data wirelessly through Web-based phones, pagers, or palm devices.

Because a real estate company's home page is now the starting gate for many shoppers, companies also are looking to improve the online experience. Re/Max, ERA, and Century 21 are working with iPix, in San Jose, Calif., which provides 360-degree interactive photos of properties to create a virtual showroom on the realtor's site.

Many companies also are ramping up internal systems for agents, including online training, videoconferencing, tip sharing, and listing information. Cendant real estate brands, including Century 21 and ERA, use an internal back-end platform called CREST, which automates data transmission from listing to close. As part of its e-business toolkit for agents, Re/Max offers a contact management tool that interfaces with Palm devices, either via a daily download or wireless transmission, says Kristi Graning, vice president of Web services and IT marketing at Re/Max, in Greenwood Village, Colo.

New breed of competition

But as the incumbent real estate brands struggle to position themselves for e-business success, Internet-based ventures have emerged with technology that's ready to facilitate online transactions. Start-up eHome, in Campbell, Calif., offers online home selling and buying services, including the option of live chat with agents. Orem, Utah-based iLumin is using its Digital Handshake technology to conduct a home purchase entirely online.

Realty Plus Online recently released CloseYourDeal.com, a Web site that allows agents, lenders, appraisers, and others to collaborate and manage the transaction process from start to finish in an attempt to bridge the gap between old-world and new-world methods, explains Kelly Pantis, president of the Sacramento, Calif.-based company.

Many of these nimble online players are giving the established brick-and-mortar companies a run at customers and territory. But established companies lay claim to recognized brand names and established markets, which pose a challenge to newcomers. Although many look toward the new digital signature law to push real estate transactions entirely online very soon, others say online home purchases will not be commonplace for some time. The future likely will combine the strengths of Internet speed with the personal touch afforded by a physical office.

"The real key ... is getting the right balance between the bricks and the clicks, between what you can do on the Internet and what you need a person for," Dartmouth's Vogel says.

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