A guest post from Tim Fagan, CEO of HomeFinder.com

A while back I was in the audience at an industry conference when a woman on stage asked this question: “At the end of the day, do any of these online real estate companies really help anyone buy or sell a home?”

My initial reaction – as someone running one of “these” companies – was to dismiss the question as gratuitous, and dead wrong.

She’s just trying to provoke the audience. We provide all kinds of information on our site – of course we’re helping. And that’s what a REALTOR is there for anyway. So what’s the problem?

But the question kept creeping back into my head in the following weeks, prodding me to dig deeper into our value proposition and think about what it would take to answer “yes,” unequivocally.

How could we at HomeFinder.com – and, for that matter, my colleagues and competitors elsewhere in online real estate – provide a more essential service? And while our REALTOR partners would always be the ones who would get properties bought and sold, what could we do to help them get to that goal more efficiently?

Doing this, of course, would not be easy. The online real estate category is a crowded place. Consumers can view listings on myriad sites, all of which offer functionality that is strikingly similar. A set of standards and best practices has emerged as a result – which is good – but with that comes a pressure to stick to proven formulas, familiar features and accept assumptions as to what an online real estate site should and should not do. And that can be quite limiting.

So how do we move forward? I don’t have clear answers yet, but here are some things I believe to be true:

We need to take more risks

This sounds trite, but it’s true. When is the last time an online real estate company did something that made you think, “Wow, that’s gutsy?” Putting real estate listings online in 1994 was gutsy; Zillow took a big risk offering home values online ten years later. But who’s sticking their neck out now? It’s been awhile.

At the beginning of 2009, we expanded from being a technology provider to major newspapers across the country, previously known as Homescape, to rebranding as HomeFinder.com and growing our business to become a world-class home search and information site. While this is a goal we continue to strive toward, the HomeFinder.com name change was both a catalyst and reminder of not only what our site and our competitor sites offer, but also what consumers truly want — to find a home.

Granted, this isn’t Page Six material. But we’re relatively new to the game and that also puts us in a position to more easily escape our own history than others. That’s an opportunity I plan to capitalize on.

Online real estate needs more big moves.

It’s not just about a house, it’s about living a life

Having all the listings – including FSBO’s – is something we at HomeFinder pride ourselves on. But we need to understand that for most people, the house is just part of what goes into a decision to live somewhere.

To make that important decision more effectively, consumers need to get a sense for what lies beyond the four walls of the home they see on the screen. Sure, most sites offer school ratings, basic demographic information and some high-level housing market data.

But today we can go beyond that. The emergence of the “Real-time Web” allows us to capture what’s happening now in any given place, to hear the ambient noise of a neighborhood. The number of new APIs (Application Programming Interfaces) makes exciting mashups of place-based images, video and data possible in ways we could online imagine just a year or two ago.

It’s time to innovate in these areas.

A more effective model: better connect home finders with home sellers

Recently, a small storm erupted over a pornographic advertisement appearing on Realtor.com. While this was entirely inadvertent (apparently the result of an error in their ad serving system) it did underscore a point: The largely ad-based online real estate category often delivers a less-than-optimal user experience.

Ads, featured listings and the like can be quite effective for our agent and broker partners. But for consumers, they often just get in the way.

How can we deliver a better experience that gets consumers where they want to go more efficiently, while also placing our broker and agent customers in the right place, at the right time, on the right platform?

We’re working on some of the answers at HomeFinder.com as I write.

Call to action

In the end, the conference panelist’s question was not an annoyance – it was a call to action. To deliver even more value to consumers and practitioners. To rethink the online real estate formula. To challenge ourselves to question those things we take for granted.

I do not have many answers at this point, just directional notions like those I list above. But I’ll get there.

If you’d like to have your writing featured on FOREM blog, please email us at futureofrealestate@gmail.com

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The guys at 1000Watt have redrawn the Real Estate Web 2.0 mindmap. Make sure you go and check it out.

What’s impressive is that despite the gruesome economic news and horrific market conditions many in the industry are facing there is still so much innovation happening on the technology side.

I think this is going to be the big story of the latter half of 2008. It’s make it or break it time for many of the players on the list and those who haven’t raised a few rounds for a decent war chest to wait it out (see Trulia Gets Beaucoup Bucks) are going to struggle and probably fail.

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There have been numerous rumblings over the last week that suggest that Yahoo is planning to lay off hundreds of employees in an attempt to shed some weight and boost its profitability. Now the New York Times is reporting it, suggesting the announcement could come at the end of the month.

So how is this going to affect Yahoo Real Estate?

It’s certainly still one of the most popular real estate destinations online – just behind Realtor.com and MSN Real Estate (according to ComScore, see Real estate Web traffic increasing).

But the portal is a bit of an anomaly in Real Estate 2.0. Rather than build much itself – it has instead focused its strategy on aggregating the best features from other Yahoo assets and around the ‘Net (listings from Pru, valuation from Zillow and eppraisal.com, foreclosures from RealtyTrac, etc. etc.), then wrap them in display advertising and leverage its cross-property traffic to drive pageviews (see A conversation with Michael Yang, General Manager of Yahoo Real Estate).

Their latest release adds content to a new Guides and Advice section, which layers in one more destination for that traffic to go on the site. (Full Disclosure: The new section incorporates content from Inman News, my employer, and I helped negotiate that relationship).

Unfortunately, adding more to the mix just means more of a schizophrenic experience on the site. With so many places to go – I find it, quite honestly, overwhelming and ultimately disappointing.

The sad thing is, Yahoo Real Estate, despite its impressive traffic numbers, has always felt like kind of an afterthought by the company – especially when placed against some of its more developed sections like Yahoo Finance. Which is why the news of impending layoffs must surely be troubling.

Sramana Mitra, writing over on GigaOm today, implores Yahoo to Please Put Up A Fight. He writes:

Yet another segment that is moving online is real estate classifieds. Borell Associates predicts that by 2012, newspaper real estate ad revenue will hit $3.2 billion, while online real estate ad revenue will surpass that at $3.4 billion. In 2007, total ad spending on real estate dropped 3 percent, but online advertising soared 25.8 percent to $2.6 billion due to a shift to online from print. Yahoo doesn’t have much of a presence in online real estate — ZipRealty is a ripe and cheap acquisition target.

Mitra is right on when she said that Yahoo hasn’t nearly captured what it could in real estate advertising – but misses the boat completely when she suggests that the portal should acquire ZipRealty. I doubt Yahoo has any interest at all in running a brokerage. Besides, that wouldn’t give them any slice of the advertising pie anyway.

If Yahoo is serious about acquiring a stake in online real estate (which, I can’t tell if is) – a better target might be a company like Trulia, who already has a business model in place to secure some of those classifieds dollars.

A move like that would require some serious re-jigging of their model but maybe that’s just what they need to do.

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Here’s Jordan Behan of TellTenFriends on Real Estate 2.0.

[youtube]http://www.youtube.com/watch?v=GJT057EruFE[/youtube]

(h/t Ubertor Real Estate Blog)

I met Jordan in Vancouver during my recent talk there (see Real Estate 2.0 North). He’s a sharp cat and any Realtors north of the border should definitely look him up if they want help tackling the challenge of bringing Web 2.0 into their business.

Me, I’ll be continuing to talk on Web 2.0 and real estate marketing over the next few months. A couple of upcoming engagements:

October 18 – Portland, Oregon
November 8 – Arizona Entrepreneurship Conference, Phoenix, Arizona
November 13 – Las Vegas, Nevada

Mark your calendars – and if you’re going to be around in any of these places, let me know, I’d love to meet up.

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Just in case you hadn’t had enough already, Yahoo! News has re-purposed Redfin’s controversial 60 Minutes segment into a new microsite called Real Estate: Buying And Selling Online.

Unfortunately, the original Lesly Stahl segment has been split into several short clips, losing whatever coherence the original had and making it nearly unwatchable (this was presumably done so they could sell more advertising spots). Also, the video, when played, launches sluggishly into a separate browser window — a web-video practice I thought had disappeared along with RealMedia and WindowsMedia codecs. When you lump this all together, the whole exercise really looks like a way just to repackage old content to sell ads.

That said, the site is cleanly layed out and incorporates some interesting social features; a lively comment section, video ratings (only 2.5 stars so far) and polls (60% would buy or sell a house online). It also features some cheeky copyrighting; the words ‘Old School’ under a thumbnail of a Remax agent loading a sign in a car, for instance.

Ironically, no link to Yahoo! Real Estate to be found on the site, though Yahoo! Finance (with a bad link to boot) and Yahoo! Answers are featured.

But probably my favorite feature (and one that nearly made me spit my tea over my screen) was the Most Popular Viewed Segments section, which perhaps subconsciously reveals the watching habits of the microsite’s visitors?

[h/t Matt Goyer for the head's up]

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