David is CEO of Move, Inc./realtor.com. Realtor.com makes buying, selling, and living in homes easier and more rewarding for everyone.
As the holidays approach, many of us are wondering what we’re going to do differently in the middle of this ongoing pandemic — how will we celebrate? Should we travel? As my family has considered these questions, I’ve spent some time exploring options. As I’ve perused various scenarios and weighed whether or not we should even consider a trip, I began thinking about digital marketplaces. I can’t help myself; that’s the business I’m in.
Sites like Orbitz and Travelocity offer access to a world of possibilities, including flights, cars and hotels, so you can plan your trip from start to finish. Sitting at home, I can choose the right flight for my family from a number of airlines, evaluate and compare features on various hotels and access local experts for guidance.
These digital marketplaces partner with airlines, hotels and car rental companies to give consumers options and help them compare alternatives. We can ultimately choose what’s best because we have access to a diversity of choices. But what if Travelocity only showed us Travelocity-owned hotels? Or Orbitz just gave us access to Orbitz car-rental companies?
I see examples of this in today’s evolving digital real estate marketplace. In the race to create a one-stop shop for homebuyers and sellers, some in the industry are trying to become everything for everyone. This closed-system approach is often framed as a way to create a seamless experience for consumers, but ultimately, I’m not sure who really benefits.
Imagine a homeowner who’s thinking about moving. While searching for homes online, the owner can solicit an instant online offer. They can also apply for a mortgage and find an agent who can help them into their next home. In a closed system, online search is a gateway to a single set of services, in which the marketplace operator owns the mortgage company, is the iBuyer and lists a home it purchased for sale. The consumer may or may not be getting the best offer for their home, or the best mortgage terms for their situation, because in the interest of convenience, the opportunity for comparison shopping is limited.
But I believe the most successful online ecosystem is an open one, one that identifies, collaborates and partners with the most successful people and businesses in the space to deliver the best services and empower consumers with the greatest amount of reliable information and broadest array of quality choices. I brought this belief to realtor.com and to our creation of an open digital marketplace where people can learn about and evaluate their options, and these principles aren’t just relevant for companies or digital marketplace platforms. Industry professionals can integrate these practices into their own business strategies. By focusing on the best ways to serve and engage the people you want to reach, you lay the foundation for your own success.
An open approach requires careful evaluation of the competitive landscape — your own strengths and weaknesses, what differentiates you and your company in the space and what resources you bring to deliver the services, information and insights today’s consumers want and demand. Here are a few key questions to consider in that regard.
What does your audience need that you don’t already provide?
While it’s tempting to start from scratch and develop a new shiny object, recreating the wheel isn’t necessarily the best approach. Sometimes it may make more sense to collaborate with people and companies that already provide products your audience needs and wants, and create a new experience out of that collaboration.
For example, we know that people want to see estimates of home values in an online search. One approach would be to develop a unique algorithm to produce these estimates independently; another one — the one I favor — is to partner with various companies to provide multiple automated valuation models (AVMs). Allowing people to see the range of possible home values can help them understand the complexities of pricing a home for sale, and the experience leans into the expertise of trusted companies with proficiency in valuation.
What unique skills or expertise do you offer, and who might complement your strengths?
The most successful professionals know their territory inside-out, understand their clients’ and customers’ needs and excel at delivering results. And in most cases, they’re not succeeding alone. They’ve cultivated and established business relationships with other agents, brokers, lenders, title companies, inspectors and others.
They understand that innovation can come through strategic partnerships rather than trying to be everything to everyone. Professional staging, for example, is a unique skill. Rather than try to stage their clients’ homes themselves, agents who partner with the best local interior design firms might be able to provide the best service possible in their local market.
How can you build your audience’s confidence in the value you provide?
The homebuying and selling process is changing, from search to financing to closing and beyond. If you don’t adapt to shifting expectations and emerging industry trends, you’re not providing consumer value. For instance, many of today’s homeowners are curious about instant offers. Some brokers have established iBuyer programs to address this growing consumer interest, and in doing so they’re demonstrating their value to this audience. An alternate approach that we took was to create a marketplace where customers could request and compare multiple offers in one place.
Many of the ideas behind open marketplaces are fundamental to how brokers have done business for years. Cooperation between competing brokers is essential for most of today’s successful real estate transactions, and given consumer expectations for a seamless buying and selling experience, we must all evolve collaboration opportunities beyond brokerage to appraisal, lending, closing and other business verticals in the real estate space.