Creating the Ultimate Real Estate Disintermediator
When I originally started at eppraisal a couple years ago I discussed the idea of creating a service that would allow someone to sell and buy a house online. It would be an end-to-end transaction with all of the documents and tie-ins to vendors that might be needed to make that work. I quickly realized what a challenge that might be.
The Real Estate Journal is reporting on a new real estate web product called RealUmbrella that positions itself as the one-stop-shop for FSBO transactions. My first inclination was to think, “is this a Redfin clone?” It isn’t, it’s much more like that idea I was chomping on back in 2005.
Their basic offering is this: for $349 - $949 you can utilize their services, which will give you a bunch of tools to market your property and will give you all the legal documents to transact a real estate sale online with a buyer in real time - no agent necessary.
Most real estate agents will think this is ludicrous, and many home buyers and sellers will tend to steer clear of this type of a service. That doesn’t matter though. As long as there is a significant enough percentage of people willing to use RealUmbrella, they will do well. It’s a large industry and there is room enough for multiple business types.
Will this disintermediation of real estate agents matter? No more than the general FSBO market already does. The other 98% of the real estate industry can continue doing their own thing, and will continue to do well/not well depending up on their own actions.
Of course their claims use all the normal anti-establishment rhetoric used to garner attention. Understandable and expected. What I want to see is if they can pull it off and if they truly can create a paradigm shift in buyer/seller behavior.
I’m interested in hearing from someone who uses their service, so let me know if you have plans on being a guinea pig for the rest of us!
If you enjoyed this post, make sure you subscribe to my RSS feed!
7 Comment(s)
5 Trackback(s)
- From Real Estate » Creating the Ultimate Real Estate Disintermediator | Sep 24, 2007
- From Raleigh, Durham, Chapel Hill News September 2007 | Triangle Report | Sep 25, 2007
- From The Odysseus Medal competition — The long list | BloodhoundBlog: Real estate marketing and technology blog | Realtors and real estate, mortgages, lending, investments | Sep 30, 2007
- From Der Makler | Sep 30, 2007
- From Real Estate Investing | Oct 1, 2007
Dave Marron | Sep 24, 2007 | Reply
Every now and then you see this type of model pop up. When I started at zip in 1999 we thought that we could direct most of the transaction online. Eventually, we morphed into more and more of a traditional shop. I’ve heard Glenn Kelman say the same thing at Redfin.
RealUmbrella may survive, but it will ultimately be an insignificant player in terms of the overall competitive landscape and market share. I see their model as a discount broker with some transaction management software. Companies have been offering those services for years. RealUmbrella is just offering the same services without the benefit of the MLS.
I like new business models. Unfortunately, I don’t see anything new here.
Eric Dawson | Sep 25, 2007 | Reply
Why can’t a company simply take the transaction online? To be integrated with free listings services, private sales, or a tool for brokerages and agents use?
Make the transaction - online - end to end - bringing all the different stakeholders into a digital medium as professionals. And from there make the process more efficient.
Jim Lee | Sep 25, 2007 | Reply
As a 25+ year real estate veteran you know where my heart lies.
FSBOs (for sale by owners) and FSBO helpers have been around for all the years I’ve been in real estate.
Unfortunately for them their numbers continue to shrink. According to the Naitonal Association of Realtor’s latest stats, the numbers of FSBO sellers that were ultimately successful have shrunk to just over 12% of the market from a high of, I believe around 20% a few years ago.
Real estate transactions become more and more complex and with the financing crunch, difficulty in attracting large numbers of qualified buyers, and the attendant liability & safety issues, I see more and more sellers opting to use a real estate professional to guide them in their real estate transaction instead of going the “do it yourself” route.
Emil E. Salisbury Jr. | Sep 25, 2007 | Reply
As a Real Estate Instructor and Associate Broker and Professional Witness. These companies have come and gone before. There is nothing new here. The liability of non disclosure is huge. The forms vary from state to stste. State statute’s vary regarding improvements done by the owner and if a building permit was obtained and if the work done even if it meets the code what needs to be in the sales contract. The City ordinances regarding building permits vary from City to City. Attorney’s will Nuke everyone and let the jury figure it out. As long as everyone is making money no one cares. Its when they lose money that they care. If you have to defend yourself in a lawsuit you’ve already lost. Anyone who thinks they can contract to violate the law better rethink there position. That addendum has not been written yet. Both parties need competent professionals who can guide them through the process. Anyone who wants to take on this challenge needs all the help they can get. One lawsuit will wipe them out. I wish them the best of luck in their endeavor!
Marc Davison | Sep 25, 2007 | Reply
Yes, another entrant to the DIY real estate business adding yet another voice to the chatter about ridding the middleman from the transaction.
I wonder when will the middlemen start creating a more potent chatter of their own. From national advertisements selling “ethics” - something most Americans simply don’t believe that anyone has anymore - to agents promising to go the extra mile on websites thats are arguably 10 years old and full of forms.
I’d love to see a progressive move on the part of the entire industry to reclaim the hearts and minds of the consumer through a stream of powerful messages of its own that have meaning.
Forget ethics and top production - these are not strong branding components. Real estate is a service oriented industry. Find the diamonds in that rough and start having a meaningful conversation with the consumer.
Hojin | Sep 25, 2007 | Reply
I believe RealUmbrella has a good idea but I do not like the fact that you have to pay up front. Why can’t they get paid when they sell the home if its such a great tool.
Then again as a real estate agent, I’ve spent thousands of dollars on one home to advertise in fancy publications. They don’t guarantee a sale either. There’s just so many free choices out there such as vflyer, point2agents, postlets, etc. that I don’t see a reason to pay.
It will be interesting to see how they do in this market environment.
derherold | Sep 27, 2007 | Reply
#7 Marc, very good comment !
I think there are many brokers/agents who forget, that “service quality” is decisive for the consumers. Instead of arguing against the “life cycle” of Umbrella&Co. we should concentrate on the *race of value*.
I come from germany. We have a fsbo-market-share of almost 50% - and there is no *industrial leader* who finds a strategy to fulfill the demands of these clients.
Redfin, Umbrella are not important. But the future will bring: more service, more quality, more value - on less commission.