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"Environmental Scan of Real Estate Cyberspace"

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Bud Smith Photo
4/18/97 Interview with Bud Smith

National Association of REALTORS®
430 N. Michigan Avenue
Chicago, IL 60611

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Environmental Scan of Real Estate Cyberspace

  1. Creation and transition exist simultaneously; practitioners are starting to recognize the potential benefits of the technological revolution.
  2. Realtors® can give consumers "pre-information" that prepares them for the buying/selling process - the time-savings translate into money; Realtors are also finding the Internet an efficient advertising system.
  3. Potential buyers are using the Internet to become generally informed before actively going out, so they start from a more comfortable level; as the trend for the consumer to gather pre-information grows, practitioners will be under increasing pressure to join the technological revolution.
Response to Change

  1. Key turning points for industries in the past have never been so swift and dramatic, but there have always been those who don't make an adequate transition to the new ways.
  2. A disincentive to change is the fact that the old ways will continue to work successfully for a long time; however, the reluctant will eventually be left behind.
  3. The age group that is most comfortable on the Internet will be the bulk of first-time buyers within a few years; the fact that they will be expecting to communicate and to obtain rapid information via the Net should be viewed as an opportunity, not a threat.
  4. The shrewd professional will be exploring all the various technological options as they develop in order to be prepared to take full advantage of whichever catch on.
  5. Realtors have the capability of creating a personal relationship of trust with every one of their customers through the new technology, empowering the Realtor to focus on true professional value - creating knowledge on which the consumer can base a good buying/selling decision.
Impact on the Industry

  1. The number of real estate practitioners was expected to decline as a result of technology, but a decline in membership of the National Association of Realtors (NAR) has not happened as quickly as expected; what has happened is an explosion in productivity of the most successful Realtors.
  2. The number of new people coming into the industry has remained constant; having some background in technology, these newcomers see unlimited potential for success by applying their way of thinking to the process.
The NAR Internet Site

  1. Experience gained from Realtors Information Network (RIN) led to the improved Internet service - forged through the partnership of NAR and Real Select; such alliances are the answer to the challenges of technological development.
  2., the Internet real estate advertising site for the public, is intended to solidify the industry by giving Realtors national and international access and exposure.
  3. Real Select contributed an ability to tap into financial markets that NAR didn't have plus the critical mentality that the Internet is open information and open communication.
  4. NAR insisted on protecting information, so Realtors who provide it make the decision about how it is used and remain at the center of transactions; is intended to create a super-location where people can find all real estate to be transacted and the Realtors who are handling it.
  5. After four months, the site has been generating 42 million hits per month; every month, more than 15.3 million houses are actually viewed and 1 million consumers come to the site; houses listed should reach 700,000 in April; the average house is viewed 25 times per month.
  6. Total listings over a year should exceed 1.8 million - potentially one of every two sales; nationally, 4 million homes are resold per year.
The Future of Super Search Engines

  1. Realtors are finding value in exposing real estate ads not only on their own sites but also through broader sites such as
  2. In the real estate realm now, most search engines search only for real estate sites, but the public will be demanding ways to sort through Internet real estate information more effectively.
  3. Combining search criteria and having lists automatically updated are tasks already possible in other areas; applying such search engine capability to real estate information on rapidly growing is a natural partnering situation.
NAR Leadership in Technology

  1. Last summer after the RIN debacle, the Board of Directors of the NAR resisted the temptation to abandon the Internet and courageously applied the lessons learned to recreate RIN into - something different but focused on the same objective to benefit Realtors.
  2. Besides keeping the Realtor at the center of transactions, the NAR aims to keep the industry together in a strong position with negotiating power as technology moves out.
The View Three Years Out

  1. The Internet will become increasingly important, but as one of five or six important technologies - including cable TV and wireless communication; chances are there will be no single technological winner, so the Real Estate industry will have to be fluid in moving into all of them.
  2. Because the total number of real estate transactions will not be growing much, expect increasing pressure on the back end of the transaction; technology giants recognize the potential for coordinating the various steps now handled separately by titling and insurance companies, financial institutions, etc. into a seamless process.
  3. There is still a lion lurking over the hill; the Real Estate industry and existing providers must meet the challenge to handle this progression themselves or others will move in from outside.
Contact Information for Bud Smith:

(v) 312-329-8200
(f) 312-329-8576

Real Estate Sites & Tools in this Briefing:

NAR Web site
One Realtor Place (members only)