Social Networking Reaches Real Estate

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Online communities give voice to their members

The infamous “80-20” rule of real estate – the notion that 20 percent of Realtors do 80 percent of the business – works similarly in the case of online com- munities, said Matt Heaton, CEO for Active Rain, a community of real estate bloggers.

“The same thing happens in all of these online communities: 20 percent are really active in doing all the postings,” and these real estate professionals are generally getting results for their activity, Heaton said. “Consumers are reading the content and are connecting with agents.”

Online communities, social networking and user-generated content are grabbing hold in the real estate industry, though “a lot of people do feel overwhelmed with all of these tools out there,” he acknowledged. The goal, he said, is to consolidate and simplify the tools. Heaton participated in a “How Social Networking is Lifting Real Estate” panel at the Real Estate Connect NYC conference recently.

The Active Rain community has grown to about 13,000 members since its launch seven months ago, and Heaton is in the process of launching a separate site, called Localism, that will offer focused content on neighbor- hood and city areas.

“Up until now, real estate portals have really built off of two things: listings (auto- mated valuation models) and the demographics. The personal view has been really missing up until now,” he said. “Marketing is changing very rapidly, and it’s about establishing this trust with the consumer. You have to have a way to reach out and establish that trust and start that conversation.”

Craig Newmark, the soft-spoken pioneer in social networking who founded the popular craigslist.org online posting sites and who also spoke on the panel, grew his simple creation from a one-city online bulletin board to an international sensation that now features com- munity postings in 450 cities and 50 countries. As a collective, craigslist.org sites gather more than 5 billion page views each month.

The site has spread in popularity largely by word-of-mouth and with minimal marketing, Newmark said. Jokingly referring to a charac- ter in the “Seinfeld” television show, he added, “Part of it can be attributed to my George Costanza-like magnetism.”

While consumers and businesses have embraced sites such as craigslist, which offer cheaper and more instant alternatives to print ads, the law has been slower in interpreting this new era of online marketing. Newmark
described litigation that has sought to define standards for managing user-supplied content if that content violates the law, for example.
And craigslist was the target of a discrimi- nation lawsuit that was later dropped. The lawsuit charged that the site violated discrim- ination laws because of language used in housing ads posted by some site users.

“Federal law clearly protects us; we’re pretty much like the wall on which you might write something,” Newmark said, or like a phone company that allows people to make calls but is not responsible for the content of those calls.

Craigslist, as do some other sites that allow user-generated content, allows users to help police the site and enforce content rules and, in some cases, takes steps to eliminate posts. “We trust our community overall,” he said. “If people don’t agree with you, then the ad is removed automatically. People in the commu- nity dictate what’s OK and not OK. We don’t want anything up there that’s illegal.”

Elizabeth Spiers, founder and publisher of Dead Horse Media who was a founding editor of www.gawker.com, said that the rules may be changing in the online world as formerly noncommercial sites, such as blogs, have become commercial sites. Spiers is responsible for a site called www.dealbreaker.com that carries focused news for Wall Street pro- fessionals, and she said many story tips are generated by the site’s audience.

“Certain aspects of the story get over- looked by the national media,” she said, and the DealBreaker site focuses on a niche dedicated to those overlooked or discarded news nuggets. “We are serving a need.” The low cost of operating the site is empowering, because the news service couldn’t afford to function as a print oper- ation, she added.

User-generated content is at the center of a year-old site called Homethinking, which allows reviews of real estate profes- sionals from consumers who used the services of an agent in a real estate transac- tion. Niki Scevak, CEO for Homethinking, said that most of the thousands of reviews of real estate professionals at the site are positive, though there are also negative comments.

“If they…think you’re a bozo that’s fine with us,” Scevak said, as long as the user follows the rules of the site and verifies a previous transaction with that real estate professional. “The opinion you hold, as long as that’s credible, that’s fine.” He noted that there is opportunity at the site for real estate professionals to offer rebut- tals to reviews.

The site’s user-generated content is combined with other property data that suggests which agents are most active in a given neighborhood, and the site also offers interactive mapping. “We monitor millions of real estate transactions to try to figure out which Realtor is performing the best in a particular market,” he said.

Panelists said that the convergence of technologies is a trend to watch: Newmark and Spiers noted the increasing conver- gence of television and the Internet, while Heaton said that robust online mapping capabilities are evolving, and Scevak said he expects “anything that reduces noise” and simplifies the Internet experience to have promise.

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