Baron Briefs

RealtyBaron made a strategic pivot in 2009 with the launch of not one, not two, but three web service APIs.   That decision paid off for us in 2010 in the form of three new strategic partnerships.   Our first partner implemented a pay-per-lead model using our Auction API to introduce consumers to agents.  Our second partner — a licensed broker — is using the same Auction API to introduce consumers to agents based on a referral fee at closing.  Our third partner is launching a real estate Q&A service using our Answers API.

Of those API uses,  the success of the pay-per-lead model was most surprising in 2010.  To be fair, it was the first and had time to undergo several iterations.  In fact, it was a downright rocky start last January when it first went live.  However, the pay-per-lead model had a strong finish.  Here’s a sampling of what agents said after paying for leads from our first partner in the final quarter:

• “It is nice to work with referral partners that make it a win win for everyone.”
• “It seemed like a serious lead. Yes, I liked the quick bid response and the quility [sic] of the lead seemed good.”
• “I am still new to this but I have been able to meet two excellent sellers in my market area. One resulted in a short sale listing and one meeting is today.”
• “The qualty of the leads are good. Better than any I used in the past. All the info wth the leads was correct.”

I expect an even better 2011 as we continue refine the process.

Happy new year!

Of all the moving parts in our system, AgentRankâ„¢ is the most difficult to communicate. Most people look past the role it plays in pairing homeowners with an agent. Frankly, I’m surprised how often homeowners choose the default value of 1 (out of 10). However, when I designed the system, it was the “eureka” moment. Without it, the system would be fertile ground for bottom-feeding, hungry agents who would inevitably disappoint homeowners.

I’m always trying to think of “real world” examples to use as comparisons. A few weeks ago, credit scores came to mind. Borrowers with better credit scores typically are seen as less risky and, as a result, receive a better interest rate. Today, however, I thought of an even better one while shopping for a printer with my Consumer Reports ratings in hand at Sam’s Club. AgentRankâ„¢ is nothing more than an objective rating assigned to a Realtor representing the quality of service a consumer can expect.

Just as consumers don’t have to test each and every printer when armed with Consumer Reports ratings, consumers don’t have to interview and haggle with each and every Realtor operating within 10 miles of their home. They simple pick a number–1 to 10–and let the bidding begin.

Speaking of AgentRank(TM), I added two more components earlier this week:

1. Market Forecasts
2. Weblogs

Market forecasts will be used to measure an agent’s knowledge of price trends. By comparing the agent’s forecast of median sale price against the metro prices reported by the National Association of REALTORS®, we’ll identify agents who have exceptional insight into the local market.

Weblogs will be used to measure an agent’s authority on matters of real estate. The popularity of an agent’s weblog in the blogosphere will help identify agents who are considered the experts in their local market and beyond.

Zillow launched MyZillow earlier this week allowing anyone to save a list of favorite homes and track their Zestimates after signing up for an account. It didn’t take long for mortgage brokers to figure out how to profit from it:

Every time a broker does a refi, they can use the appraisal to work up the estimate to match the real value. Then you can save that estimate in MyZillow. You get a monthly report on that homes value. Now you know about how much the home has appreciated, and how much of the mortgage is likely paid off. With this data, you have a pretty good idea of your existing client base’s equity, and can market to them accordingly.

Based on this information, you could send out reminders that they may have reached 80% LTV, and should look into getting their MI dropped. Or, you could send out offers on HELOC’s, or Cash Outs.

Not only do I fail to see how Zillow can possibly prevent this, but it’s also an end run around Zillow’s core business model–advertising. How long before we see a website using Zillow’s API to help manage marketing campaigns on behalf of mortgage brokers?

FYI, I’m not Zillow-bashing here. I’m hoping someone–Zillow or otherwise–can debunk this because the last thing I or anyone wants are more mortgage offers in the mail.

CORRECTION: False alarm. Somehow I skimmed over the fact the broker was referring to a previous client…not a prospective client as first thought. Not so sinister after all.

I’ve been slowly evolving RealtyBaron’s lead trading platform since its launch in 2004. In that time, I’ve learned quite a bit from users (don’t we all). For example, I initially modeled lead auctions after eBay auctions–3, 5, 7, and 10 days in length. However, agents complained consumers didn’t respond to emails after a lead auction completed.

After some good ol’ fashioned research ‘n analysis, I concluded a lead becomes quite “cold” after 24 hours…a fact that’s prolly well known by other lead services on the Web. So, I made some changes recently to counter this effect:

1. Instead of giving a choice of 3, 5, 7, or 10 days, I now give no choice and impose a 24-hour time limit on all lead auctions.
2. I added the concept of a “stop bid” which can be used by consumers to immediately stop the auction if a certain bid amount is received from a Realtor®. Not only does this prevent bidding from reaching absurd lows, but it can significantly shorten a lead auction. I now see some lead auctions end within hours of starting.

The first wave of feedback is just now being received after making these changes:

Not bad, eh?

First, let me say, surveillance is part of business. You must keep an eye on the competition. This includes visiting their website to read copy, searching news clippings for their name, etc. But when you start posing as a customer, it crosses the line and becomes reconnaissance. I don’t mind surveillance, but recon is an abuse of my time and money.

There’s one competitor in particular who has now performed recon on my system twice and was dumb enough to include their website name in the header…twice. I let it slide last summer, but it happened again this week so I’m calling them out. First offense was fishing for info on RealtyBaron’s ranking system last summer by posing as a real estate agent web merchant who is considering our service affiliate program:

Then, after RealtyBaron’s launch of Buyer Rebate Auctions last week, they again posed as a customer–this time a “home buyer” in Jacksonville:

“Hungry” indeed….hungry for inside scoop on RealtyBaron™. Down, boy…down.

Sometimes we receive email from brokers and agents who make it clear they are not fans. This beauty just arrived in my inbox from “Jim”:

Is there a service I can use to pick out a brain surgeon or a great attorney or a day care provider so I can bid and not be conceerned[sic] with their quality or their true experiance[sic] or past bad service.I thought prostitution was illegal.Great concept!!”

“Jim” not only illustrates his difficulty with the English language, but he totally misses the point of AgentRankâ„¢ whose sole purpose is to represent an agent’s “quality”. If an agent can’t prove he or she has a good track record, they will not see a whole lot of action on RealtyBaron.com. Unfortunately, I can’t help but think there are a 1,000 agents for every “Jim” who leave our little corner of the Web with the same misunderstanding.

Since launching RealtyBaron.com, our auction platform has only been introducing homeowners to Realtors®. Today, we start helping the other side of the real estate transaction with Buyer Rebate Auctions.

Basically, anyone who has taken the home search into their own hands using vertical search tools such as Realtor.com, Trulia, or Propsmart can use this new feature to connect with a Realtor® who will represent them in the transaction. Realtor® bids are based on what sales commission (or flat fee) they’d accept as compensation. The rebate is the difference between the co-broke fee listed in the MLS and the Realtor’s final bid. For example, a co-broke fee of 3% minus a final bid of 1% = 2% rebate for buyer.

Like RealtyBaron’s current Listing Auctions, bidding on Buyer Rebate Auctions will be controlled by the gatekeeper algorithm, AgentRankâ„¢. As the name implies, AgentRank(TM) ranks agents and prevents underperforming agents from bidding. By specifying a minimum AgentRankâ„¢, buyers can ensure they meet a Realtor who has a proven track record.

For Realtors®, this feature is an easy way to connect with clients who have already absorbed the most costly part of representing buyers–the prolonged home search.

UPDATE: Inman News writes about our new Buyer Rebate Auctions. Thanks, Glenn!

While polling the masses for a new RealtyBaronâ„¢ feature on our mailing list, the discussion took an ugly detour into familiar waters: are lead services a valuable tool for Realtors® or do they simply get in the way of hard-working Realtors®? I’ve decided to let the debate continue here in the comment section rather than pollute the mailing list. So have at it Realtors®…