Yesterday, we published the first of our “Great Debates” series where I took on Russell Shaw. The question was — “Realtor.com: Friend or Foe?” You can decide for yourself who won the argument, but I feel both sides were equally represented

We’re looking for both debaters and ideas for debate topics — if you have suggestions for either one, please let us know with a comment or an e-mail.

Consider this: You’ve just shot a camera full of properties and neighborhoods on your new Canon SD1000. Back in the office, you upload them to your Flickr account for distribution to all your online marketing sites (blogs, social networks, etc) but you’ve left out two critical showcases – what about your office and what about your properties? Let’s look at the latter first.

Consider a listing where the family has already relocated. Gone are all the furnishings along with all the life that once made this house a home. What if staging is not an option? Well, imagine having one of these digital storyboards nicely positioned on the kitchen counter. Could this little time capsule, this 20-minute exercise in creativity give this otherwise bare house some soul?

Include stills of the home taken during holiday time. Include stills of the neighborhood taken during the block party. More and more digital frames are video-compatible, so go ahead and show your neighborhood spotlight video, too! This is a non-intrusive, completely affordable, going the extra mile way to add an even greater sense of warmth to the buyer’s experience.

Your office: Once the ground zero for real estate transactions. If you still have one and if you still have a reception area, place these digital displays front and center. In fact, put the in the window if your space is located on Main Street America.

Create neighborhood slideshows. Run the neighborhood videos. Highlight homes for sale. Give a visual gift that keeps on giving.

Imagine taking these digital displays to listing presentations to not only present slideshows of what you done in the past but if you were thinking ahead, you could actually load in a flash drive of pictures of the house you are standing in that you took a few days prior as an example of you’ve have already done to start the marketing ball rolling.

The possibilities are endless. These make nice closing gifts of pics you took of the process. Here’s a memento built to last. Today, with tight competition and soft market, a little bit of ingenuity can go a long way.

While Blogging can be a powerful tool, we are noticing that without adherence to a set of standards or sticking to a cohesive theme, there is a tendency for bloggers to venture far from their early path of building a strong, locally-driven focus, and delve down the road of interpersonal socializing with other real estate professionals all within the same Blog platform. This is understandable since real estate professionals are social creatures, but the result is an unfocused mix of topics and subject matter. This may satisfy the blogger’s need to engage the community and socialize with industry peers, but it renders the blog ineffective when it comes demonstrating local market expertise and professionalism. To the local customer / reader who has serious real estate needs, the off-topic posts can render the blog frivolous and not usable.

In building our blogging system on Zolve, we took note of this issue and with the help of RSS Pieces we created a customer-facing Blog for our local Colorado Springs market — Colorado Springs New Homes Real Estate to test a theory.

On 10/19/07, we began posting religiously every day using what I now coin “Mary’s magic formula”. After 20 days the results were in; the Blog made the first page of Google for “Colorado Springs new homes real estate.” While this is not the top new home search term in our market we still lapped dozens of top-performing websites that have been gaming for Google search engine placement for Colorado Springs new home terms for up to 9 years! As of the date of this posting, we ranked 5th!

The importance of this, as it relates to Blog content is as follows:

1. When we first started publishing on the Blog, we covered everything from sports to foreclosures, essentially mimicking the wide span of a newspaper. But after researching successful Blogging techniques that included the positive effects of building on a singular theme, we emerged with a concise informational site about Colorado Springs new homes. An on-task Blog with no distractions – that produced our desired business results.
2. By adhering to a stricter editorial policy that included writing standards, and well placed key phrases for the post at least 4 times throughout a Blog post, the results dwarfed all earlier attempts.

I understand the need for agents to socialize with each other. As agents, we ourselves cannot underscore the importance and value of this dialogue — through this or any kind of social network. But I also understand how critical it is to separate your inner industry dialogue from your public facing needs of branding, imaging and overall customer acquisition. As a result of this experience, Zolve members will soon have access to a separate platform to socialize, communicate, and network with each other that is distinct from our public facing blog platform we provide on member profile pages. The goal is to provide our members with a safe & private place to socialize with industry peers and engage in conversation that is better served internally and away from public scrutiny.

I’ve been engaged in several blog discussions in the past couple weeks that have come down to the fundamental question: “Is technology innovation within the scope of a brokerage’s core competency?” It has taken me back to a post I read by Brian Boero of 1000 Watt Consulting Titled, “Redfin: A gift from the venture community to traditional real estate.”

I met Brian through his partner Marc Davison in his former capacity as a VP at Onboard LLC. Marc and I shared some pretty great email discussions while I was still in Baghdad and he got me really thinking about the role of a real estate brokerage as it relates to technology. I think Redfin is a perfect case study for this discussion.

Let me begin by disclosing my “party affiliation” and journalistic slant when it comes to Redfin. I am absolutely neutral on whether they are great for the industry or yet another uppercut to the chin. I am a true free-market capitalist at heart, so I believe that anyone, as long as they follow the rules like everyone else, should be able to introduce a business model, take their risks, and let the market decide. As a business owner in the very competitive real estate industry, I am prepared for the possibility that a competitor will compete with me for a customer and demonstrate more value. If that happens consistently and I do not adapt, then I will no longer have a viable business. It is the law of the jungle and I love it.

With respect to Redfin, I really think that they have missed a prime opportunity to become a national player and disruptive influence to the entrenched leading brokerages. They lost this opportunity by taking the easier road in order to reap short-term modest gains instead of taking the harder road which would have positioned them to do something really significant. The easier path that I am referring to branding themselves as “cheaper than the other guys with a great website.” It’s easy for obvious reasons. It’s the same reason that many untrained, desperate real estate agents immediately use discounting as their marketing plan. It takes work and it takes time to build a brand based on what you will do for your customer rather than what you won’t do to save them money. It is called creating a value proposition and demonstrating value.

No matter what the product or service is, people have natural disinclination to the cheapest. It is often-time unfairly assumed that the cheapest is priced this way out of necessity rather than strategy. People don’t buy the cheapest car on the lot unless they have to. People don’t ask for their menu’s to be sorted by price to make it easier to choose the cheapest dish. Ask Hyundai, who is spending millions on a new branding campaign to change its “cheapest in the market” brand that they erroneously staked their company on. Hyundai is by no means a failure; however, they have finally realized that their cars are probably more than their branding has allowed them to price them.

Another problem with the “cheaper than the next guy” strategy is that there will always be someone who comes along cheaper. You have a company like Iggy’s House that says, “we are going to prove to the world that we could choose the worst name possible and still get business as long as we are the cheapest” and poof, 50% of Redfin’s value proposition disappears in smoke.

Note: I do not have either of these company’s in my Colorado Springs market, but I would be willing to pay to see a video of these two competing for the same listing against each other. I can just imagine a Redfin agent responding to the customer’s objection with, “yes, Mr. Seller, it is true that listing your home with us will cost you thousands more, but do you realize that Iggy’s House is a ‘quarter-service’ brokerage and we are ‘half-service’ brokerage… What is that extra quarter service worth to you?” That would be rich.

I suggest that if Redfin would have instead taken the more challenging path and built a brand about value, then today they would already be a significant disrupter: bigger, more credible, and much more profitable. Redfin is by no means failing but I think they would be a battleship today had they chosen the harder right over the easier wrong.

Comparing them to the leading brokerages, Redfin could have offered a very compelling value proposition. Their value could have been offering industry-leading technology and a different way of doing business which provides the customer with a higher-value level of service. Instead, their pitch is basically, “we’ll pay you to choose us.” …Yuck. If they wanted to charge less, they still could have by marketing higher value than lower cost. The number one agent in my market once told me as a new agent to never advertise on cost but “when you are in their living room, do what it takes to get the listing.” That has always stuck with me.

To be frank, it’s not too late. Redfin could use some of their VC millions to “mature” their brand very quickly. The fact that they have penetrated so few markets by now would actually be an advantage to them in terms of changing their value proposition, message, and brand. In terms of technology innovation, they are already ahead of the leading brokerages so a internal renaissance now would allow them to stay ahead as they gain critical mass across new markets.

You may wonder why a Real Living brokerage owner in Colorado Springs and the founder of Zolve would care about Redfin’s current direction. Okay a part of me feels a kinship to my fellow entrepreneurs who put it out there and make it happen. My wife and I are single-handedly working to keeping open a local deli that was opened by a retired couple with their life savings due to this odd compulsion. I hate to visualize Glenn Kelman looking in the mirror five years from now with tears in eyes, lamenting, “I coulda been a contender. I could have been a contender!”

However, mostly it is out of frustration and good old-fashioned Generation-X anghst. I want something or somebody to shake our industry’s brokerage leaders into action. I am not talking about accepting and adopting new technologies; all of the leaders have open checkbooks and are on that bandwagon. I am talking about innovation and leadership. I have concluded that the only thing that will cause real change will be market-share loss.

If for some crazy reason, Redfin takes my advice, I only ask in return that they stay out of Colorado Springs. However, if Redfin continues its present course with its current brand & business model, they are welcome to come join us… we have a pretty good Assist-to-Sell that you can give run for their money for that small minority in our city who is willing to trade time for money.

$87 million is spectacular and Zillow must have some pretty amazing plans since some very intelligent investors have partnered with them. However, this news struck a sour note with me for a reason unrelated to Zillow.

For me, this aggressive risk-taking by a smart, fearless industry outsider further highlights the complete lack of gusto, courage, and leadership from within the industry. I am not meaning to be exclusionary with my language but I am defining the industry’s insiders as the billion dollar international brokerages whose agents transact the real estate that makes all this work.

$87 million is just an annual budget line item to the Cendant’s, ReMax’s, and other leading brokerages. Can you imagine what our real estate industry today would look like if these brokerages 5 years ago each budgeted $87 million a year for innovation focused on providing tools for their agents to provide a better customer experience? In my imagination, this scenario would have left no room for a Zillow or Trulia. There wouldn’t have been the necessary need. The fierce competition for technological innovation fueled by this type of investment would have led to phenomenal progress.

Yet, here we are. The captains of our industry decided instead to play it safe and invest the hundreds of millions dollars paid by their agents in royalty fees on cute television ads, $40,000 magazine ads, and other safe, conventional strategies. Today, all of the leading brokerages now have larger technology budgets but they are used to adopt technologies rather than to innovate or take risks and lead. How else could Zillow take the AVM model that was commonplace in the industry, make it better, and raise $87 million based on it?

While attempting to raise venture capital for my upcoming startup Zolve, I met with two well-known venture capitalists from different states. It struck me as odd that they both expressed reluctance to invest in a real estate internet start-up for almost the same reason. It was almost verbatim like they had read the same venture capitalist magazine the month before or something: “the real estate industry is risky because it has several highly-capitalized, well-entrenched players.”

I mention this because I think that both of these very intelligent VC’s did not really understand the internet real estate industry. What they said is true for the real estate industry but it does not apply to the internet real estate industry, which is different. From my perspective, the real estate industry online is wide open which is good for me as the founder of Zolve, but is very aggravating and disappointing to me as a working real estate broker.

If there are any real estate industry leaders reading this, ask yourself, “what would Rich Barton do?” and stop managing and start leading. Your agents will follow you. We are waiting for you… and as soon as you decide to lead, we will start following.

Mr. Wurzer’s post took a look at the Google API and posed the question whether MLS’s should follow step and provide more open access to MLS listings. At Real Estate Connect last month, this was a hot topic at many forums. However, the discussions were not about whether this should happen, but when and how. I have also noticed this assumption in all of the blog posts that I have seen on the subject. The assumption I am referring to: “making MLS listing data more open and accessible is the right the thing to do.”

Based on the overwhelming consensus on this topic from those that write and speak about it, I imagine that you may be reading this thinking I am out in left field somewhere. I am not discounting that I may be alone on this. However, consider my perspective… I am a Colorado Springs real estate broker. I love my business because I spend my productive days training agents, working through problems, motivating, enforcing standards, recruiting, meeting a payroll, and ultimately helping my agents obtain & maintain an advantage over their competition. My clients are not home buyers and sellers; my clients are real estate agents who are building real estate businesses because they love the work and to support their families and achieve financial independence.

I can understand how making MLS data more malleable and easier to syndicate may benefit national aggregating websites like Zillow, Trulia, Homegain, etc, but I do not understand the value of this to the real estate agents or real estate customers. I look at this question in a very capitalistic way by following the money…after all, this is a business to most of us, not a government service of some type. Here’s how it looks from my Rocky Mountain vantage point…

THE NATIONAL AGGREGATOR PERSPECTIVE

I can see why the companies that fit into this category would definitely want things like a regional or a national MLS, or at least an IDX standard. I have read over and over again that there are over 900 MLS’s in the United States and that acquiring and aggregating all of those feeds is akin to passing a controversial bill through congress — it is a very political, time intensive, and expensive process that is not for the faint-hearted.

This aggregation is so painful that only a few companies have yet done it. Please post a comment if I am missing one, but as far as I know, they are: www.remax.com, www.realtor.com, www.helpusell.com, and www.homegain.com (sort of). Are these really the only four sites in the country where a customer can go to one web address and access all the different MLS’s? If so, then the current rules governing MLS data sharing are accomplishing their intent.

If there was a national MLS or just a few regional MLS’s and this aggregation process became much less cost and time prohibitive, it is very clear what would happen. Any 19 year old who knows .NET could create another national real estate website for about $5,000 and automatically be a competitor with the #1 site in the field — Realtor.com.

I know Realtor.com very well. I pay heavily each year to have “showcase listings,” which basically means that my listings that show up there will not embarrass me when my clients check to see what they look like. I feel qualified to share my opinion that the only two things that Realtor.com has that gives it the leading 8% market share of real estate customer eyeballs online are its MLS aggregation and its brand. If having the MLS’s aggregated becomes ubiquitous, then that brand will quickly not be enough to maintain its lead.

My point is that more accessible MLS data would not only create far more real estate entrants than we see today but that the data would be far less valuable to everyone. How long do you think it would take companies like eBay, Google, Yahoo!, Microsoft, Amazon, etc. to pull in that data alongside their existing content? Again, this would be great for website businesses outside the real estate industry, but how does that benefit the companies within the industry?

THE REAL ESTATE CUSTOMER

I assume the argument for greater accessibility is on the customer’s behalf. However, when I imagine this scenario playing out, I do not see it. Why is more advantageous for a Colorado Springs resident or someone moving to Colorado Springs to be able to go a national site to search the listings posted to the Colorado Springs MLS versus finding that information on one of hundreds of Colorado Springs agent websites with IDX feeds?

Would the advantage be that the customer would not have to register contact information on a national site where they presumably would have to on a local site? This scenario is, of course, assuming that when the MLS data became more accessible that this would include IDX rule changes governing that customers must first register to access MLS listings. However, if the national sites could then open the shop to the customers without having to require registrations, then I can only assume that the real estate brokers who have created the information would have the same option. If this is the case, then this advantage of a national listing aggregation site would be canceled.

So then what would be important customer problem that would be solved by “freeing the data?” I think everyone on all sides of this question would agree that most home buyers and home sellers, no matter how they acquire their information, will still continue to seek the counsel of a real estate professional for an important real estate transaction. If we can assume this, then why add another layer between the customer and the local market professional who is the only link in the chain who can truly add context to the MLS data?

Currently, many customers find MLS listing data by using a search engine to search for “[enter real estate market here] Real Estate” and then screening the search results for the site that offers the best local market information and listing data that they are interested in. I agree that there should be a better way than essentially searching twice: once entering the search time on a search engine and then searching again through the 2 million results that appear for “[enter real estate market here] real estate;” however, I don’t see how a national MLS listing site solves the local context need that most home buyers have. The listing itself is just part of the puzzle… what about the schools, the “brand” of the neighborhood, the equivalent neighborhoods that offer more possibilities at a better price, etc.? I have never had a client buy a property without considering the material factors that surround the property.

THE LOCAL REAL ESTATE AGENT

Finally, we must consider the perspective of the local real estate agent like me. Of course I am not speaking for the 1.4 million Realtors® in the country, but I can comfortably account for the 60 agents I know in my brokerage. They don’t care if it is difficult for national websites to aggregate listings. These national websites are one of three things to the average agent like me:

1. A competitor
2. An expense
3. An advertiser who will someday be a competitor when they get my information

As a Colorado Springs agent, it costs me $400 a year to display the Colorado Springs MLS listings on my website or blog. I don’t mind that the visitors who want to search listings have to register because that is the whole point of having a website or blog… to meet real estate customers. Why would I want to invest the money to build a website or blog, invest the time to make it relevant with great local content, and invest a great deal of money to make sure that my website is “found” whether that is through the search engines or through conventional advertising if I am just going to give away the information that is attracting my potential customers to the site? Please consider this question from an agent’s perspective.

Also, as a Colorado Springs agent, why would I want to show listings from multiple markets on my website? Most great agents have a professional standard to only work with clients in markets in which they have competence and knowledge. I understand that they are some markets in California and other places where there are overlapping MLS’s where aggregation obviously makes sense but this is the exception, not the rule.

I can hear a lot of fist-pounding and sighs out there as I write this. I imagine many people are thinking to themselves that this “another small minded realtor® who doesn’t get it.” However, unless you are a working agent who is feeding your family today through brokering real estate transactions, then you may want to reconsider my perspective on this issue.

The bottom line is this — The end game for the real estate agent if MLS listing data becomes more accessible and easier to aggregate is all bad. Now, my local website with its $400 IDX is ineffective and worthless because the listings that me and my peers have negotiated, collected, uploaded, and quality-checked are now ubiquitous. Real estate customers now can find these listings on 1 out of every 10 sites they visit: while they are checking their US Bank account balance, they can easily click on: “Search all homes,” while buying beanie babies on eBay, I can skip over and “search all homes,” while pre-qualifying for a mortgage on Countrywide, the last page of the loan application asks if I want to “search all homes.”

The companies with the established online brands and huge advertising budgets will now be the first point of contact for my customers and they will graciously give me a Housevalues-ish opportunity to “buy them” for only $1,500 per month. Or a company (probably from Seattle) will make a great deal with me. They will send all of the customers that visit their site interested in my market if I agree to their advertised listing fees, rebates, etc. All the sudden, I am not having fun anymore.

I think MLS’s get this. I also think NAR gets this too. However, it seems like both entities would better serve the interests of their customers – the agents – if they became more part of the conversation like the smart people at the FBS Blog. Perhaps NAR cannot due to the ongoing lawsuit with the Department of Justice, but if there are 900 MLS’s out there, why is only one in the colleseum of public opinion making its case? I think it is not an illegitimate position to state, “we do not want to make it easier to aggregate and display MLS listings because it is not good for the people who pay our bills.”

If you do not agree with me, can you at least acknowledge my perspective? The purpose of this blog post is to challenge the assumption that “MLS accessibility is something that needs to happen.” Let us not allow group think to prevent us from thoroughly debating this question at the risk of building policy and opinion on an invalid assumption.

I could write more about the daily tasks and challenges, but it would take me far off-topic. The bottom line is that our work was mostly carried out in the day when the local business people, city council members, and utility workers were available. This left significant time in the evenings which, if left idle, would result in too much thinking and commiserating. Napoleon wrote that “it is a soldier’s right to complain” but complaining only begets more complaining.

Different people occupied their mind with varying distractions: movies, video games, reading, exercising, or the internet. You should know that your soldiers in Iraq are receiving wonderful support. The food is great and most bases have internet access which is very significant. Even though the cost was high and the speed was very slow, I cannot describe how important that this connection to the civilized world was to me.

For me, I used this time to lose the 30 pounds that I had earned in 5 years of real estate, write to my family, think, and to keep a long-distance connection to real estate. I missed real estate and I also had persistent anxiety that I would be passed by if I did not stay current. I realized that for the first time since college, I had the opportunity to just sit and think about things that I enjoyed. Since college, I never sat under a tree and just allowed my mind to dart around and get lost in ideas. Reclaiming this was the one thing that I really enjoyed about being in Iraq. I had never read a blog before, but I found one called the Bloodhound Blog through a Google search while researching for a real estate startup (www.zolve.com) that came to me while in one of my thinking times. As is the nature with blogs, that one article linked me to other articles on other blogs and I found myself in a new world that I didn’t know existed. It was really engaging and fun.

The Bloodhound Blog led me to an article by Marc Davidson who was writing for Inman News. I loved his tough messages, always written from unique & interesting angles. I also enjoyed Future of Real Estate Marketing, Real Estate Tomato, The XBroker, Transparent Real Estate, the Rain City Guide, among others. These blogs were enjoyable because they all seemed authentic, smart, and thought provoking.

It was an interesting period to discover real estate blogs because all of the new things that were coming on the scene. Zillow & Trulia had recently launched and, if there is any question of where they are going today, they were even far more mysterious about a year ago. Then, it seemed like on almost a weekly basis that new emergents were coming on the scene. It became evident to me that real estate industry online had significant pent-up energy and Zillow’s launch uncorked the bottle.

The vibrant real estate blog community is special. For me, having my RSS feed list is akin to picking 20 of the smartest people in the world about the subject that I a most interested and having the opportunity to talk with them on my own terms on a daily basis. If you have ever had a brilliant friend who made you better just by being around him/her, then you know exactly what I am talking about.

My college roommate was a Marshal, Truman, and Rhodes Scholar as well as a marathon runner, leader and all-around great guy. When we talked about philosophy, I thought a little longer before I spoke. When we worked out, I pushed myself harder to keep up. You always play your best game when you are playing your best competitor, even if you lose, and that is how I feel the real estate blog community affects me — it ups the ante for professional competence and well-thought conversations for everyone who wants to participate.

The next part will be my perspective about today’s real estate technology landscape after being detached for so long.

• Part 1: How the Industry Changed While I was in Iraq
• Part 3: My perspective on today’s real estate technology landscape after being detached for so long.
• Part 4: My perspective on what is coming in the next year.

It was October 12, 2005 that I noticed that Western Union letter on my dining room table with the rest of the mail. I knew this had to be bad news because who else uses Western Union for letters other than the Army? Either something had happened to my father, who is still an active duty soldier, or the Army was calling on me.

Fortunately and unfortunately, it was the latter. Apparently, as a military academy graduate, the army had the right to call me back to active service anytime within 8 years of my graduation date. I confirmed with a phone call that I really did have to report back to the army in 30 days for an 18 month tour of duty.

The purpose of this 4-part series is to discuss how the real estate industry landscape has changed between the time I checked out of the real estate world and reported for duty on January 15, 2006 and returned home on May 3, 2007. The change has been tremendous both in substance and tone.

From this agent’s perspective, here is the context of the real estate industry prior to departing for Iraq:

1. Only three real estate websites affected my business as a real estate agent:

1. Realtor.com
2. My local MLS
3. My website

2. My website was hugely successful because I had a high-tech MLS IDX capture system that allowed me to trade potential customers access to my MLS in exchange for their contact information.

3. I had never read a blog and thought that they were only used in politics.

4. If someone wanted to find out their home’s value, they could either contact an agent and ask or they could go to HouseValues.com and get tricked into asking an agent.

5. Realtor.com was very one-dimensional, limited, and had a choppy user interface [some things never change].

6. The only companies who implemented a business model where they paid customers to work with them were companies who had to in order stay in business.

The remaining 3 parts of this series will discuss the following:

• Part 2: My experience discovering blogs, podcasts, and the new real estate websites as a mental distraction during evenings in Baghdad.
• Part 3: My perspective on today’s real estate technology landscape after being detached for so long.
• Part 4: My perspective on what is coming in the next year.