For those who don't know, Nicolai Kolding is the COO of Better Homes & Gardens Real Estate, and one of the smartest people in real estate. It is actually a treat to be able to read his thoughts on a blog, and Realogy really has to be congratulated for lifting the barriers a little bit. (Now if they would only go ahead and let everyone at One Campus do some blogging....)
His latest post is an interesting read, and one that is bound to generate a ton of conversation, but it hit on so much that is central to what we do here at Onboard Informatics, that I felt compelled to engage in futurism and commentary.
Nicolai describes a conversation he had "at a small, private dinner in Manhattan attended by... global power players (some from China, Russia, and Dubai) that we usually only read about." In said conversation, he apparently learned about a whole new concept in brokerage that will "disrupt every aspect of the real estate transaction as we now know it":
I’m convinced that what I heard was not a theoretical conversation. As I think about it, it all seems entirely plausible; the combination of a woeful economy with decreased consumer wealth and satisfaction has created a perfect storm. And, I have to tell you, I’m now sure these players have the ability and willingness to pounce.
Here’s what I could gather:
- It’s completely virtual - no offices. I can’t even tell if there are to be agents but I assume no.
- Massive content aggregation.
- Massive listings aggregation.
- Everything translatable into many major languages.
- Search: for starters, the consumer can either search by exact property or do a general search by location, house size/style/value, neighborhood type, and some other really funky and creative attributes.
- An almost Priceline-esque reverse auction component that will take the idea of making offers to unchartered waters.
- An “optimal” pricing/valuation algorithm with a variable time component that allows users to calculate a home value today, tomorrow, and over decades based on their predictors. In other words, the consumer would be looking at an analysis of not only what the home should be valued at now (based on whatever data is being fed into this) but what the best price will be and when. Heaven knows what kind of assumptions are going into this.
- A tie-in to a bidding of mortgage rates so that the valuation/rate data is crossed to generate a dollars-per-month optimization.
- There was a lot more to this including some kind of a semantic web 3.0 component that allows the system to recognize users’ preferences and populate their private pages automatically.
I wish I had something more tangible to go with but I’m hoping someone out there does. From everything I could gather, there seems to be a multi-market launch being prepared for the not-too-distant future.
This concept is going under the name (which Nicolai sort of remembered from the convo) that is something like "Foripollas". We don't know what the actual name of the concept/company is, so we'll go with Foripollas for now.
The Grand Vision
From the very start of the popular Internet (dating to somewhere around 1996/1997 after Netscape brought the military-academic complex of the Internet to the masses), one of the grand visions was the idea that direct exchange of information enabled by the Web will eliminate the middleman in virtually every transaction. Additionally, books like the Transparent Market painted a future in which everything bought and sold approached the liquidity and transparency of the stock market as near-zero cost of information distribution and sharing led to near-perfect knowledge of pricing and value.
Ebay.com is probably the poster child for this vision.
But on the other hand, Priceline.com is probably the best known counter-argument. Initially hailed as the model that would change everything as we know it, Priceline became the butt of jokes when the dotcom bubble burst and its stock price went into the pennies. Priceline then had to change its model entirely in order to survive:
More recently, it has moved to a more traditional model where travelers are presented prices and are also told the name of the establishment. Travelers can still choose to name their price but the number of participants in that program has significantly diminished.
In real estate, companies such as CityFeet.com launched with the vision of leveraging the Internet to change Real Estate As We Know It by directly connecting landlords with tenants, but quickly realized that they could not succeed by alienating the real estate professional. Closer to home, FSBO websites have made some inroads, but it seems clear that they haven't exactly bankrupted real estate brokerages.
Technology Has Changed, But Human Beings Not So Much
Ten years later, while there have been massive advances in technology of the web, it's hard to say that human nature has changed all that much.
Sure, we have advanced XML, web services, SOA, SaaS, mashups, interactive mapping, and cloud computing today that we didn't back in 1999-2000, which makes what Foripollas might do intriguing... but I rather think buyers and sellers of real estate haven't changed that much.
We've been conducting interview of consumers on their real estate search experience (and we're in the process of trying to edit some dozen hours of video into something more useful). And one of the really surprising things we've learned is that consumers absolutely want to use a realtor in that process. Sometimes the reason is that even though they have done extensive research about the area, schools, amenities, and looked through dozens of listings, before they go see homes in person, they want someone who is a local expert who knows real estate to give them professional insights. Another reason is that some people, even after having done all the research, just want the service of having someone else do the paperwork for them.
Removing the Veil
Having said that, Foripollas represents a major step forward in real estate web. We at Onboard have been privileged to have been working with the founders for the past five months, and since Nicolai let the cat out of the bag, we may as well talk a little bit about the project.
First, the name isn't Foripollas, but Foropillas -- which is Greek for "central pillars". (The founder is originally from Greece, and the main investor is a major VC from Athens.) The technology that the Foropillas team has developed, with help from Onboard, is something they feel can be the central pillar around which online real estate can be constructed.
Second, Foropillas will launch will a full panoply of community, schools, and business locations data, all drawn from Onboard's unparalleled database. If it's something that's been put into a database, we have it, and have provided it to Foropillas. In some cases -- such as detailed service data on a house -- the consumer or homeowner will need to provide permission to make that information public, but at launch, everything from median income to walkability to education levels and type of employment will be easily accessible on page, and on map.
We've also worked with Foropillas to integrate our 50,000+ local neighborhood boundaries into their search and display interface.
Critically, Foropillas hasn't simply leveraged all the data for the corporate website. They have integrated all of the data, and the analytics it enables, into full suite of agent report tools. Any Foropillas agent can quickly pull a report on an area, with in-depth school information, area trends, demographics, psychographics, and market values (along with trending) in a few minutes' time.
Third, Foropillas represents the first major launch of the Lifestyle Listings Engine. Nicolai wasn't far off with his description; if anything, he wasn't told about the real change our LLE makes possible for Foropillas. In addition to the traditional zip/bed/bath/price search, Foropillas has map-based search (with full neighborhood and data layers right on top of the map), as well as Lifestyle Search and The Obilizer(TM).
Lifestyle Search works precisely as it sounds: you search by your lifestyle preferences using a mix of natural language and filter options. "Show me homes in $300K range, with medical facilities within 5 minutes, walking distance to a cafe, and 15 minute commute to work" is a typical search.
The Obilizer is basically e-Harmony for real estate. A consumer enters personal demographic and psychographic information, such as favorite magazines, how often they eat out, age, education level, and so on. The Obilizer engine then breaks every neighborhood in the U.S. down by psychographic profile leveraging our deep database of consumer behavior and psycho-demographics, and finds matching properties. Those listings are mailed out or sent over RSS, SMS, Twitter direct message, or FriendFeed to the consumer.
The property valuations come from Onboard's AVM system, which we believe is not only the most accurate available on the market today, but also the most transparent, as we make our assumptions and our models pretty clear. That is what allows Foropillas to change variables to look at predictive analysis of what the home should be worth three years out.
Finally, the entire system operates on a common CMS (content management system) built on the Drupal platform. Each agent and office and staff employee of Foropillas is issued an account, which lets them create blogs and hyperlocal content on the platform. Data, mapping, and anything else that could drive conversation is widgetized -- very similar to the Wordpress.com widgets -- so that each agent can easily create a sophisticated, templated blog with a profusion of information tools.
This is the mass content aggregation: dynamic content plus data content plus listings, all with a human-centric focus.
Where Nicolai got it wrong was that Foropillas won't have any agents. It most assuredly will, because they recognize that the game isn't to disintermediate realtors, but to empower them. Also, translations will be available only in Spanish, French, and of course, Greek.
While our client was somewhat caught off-guard about Nicolai's blowing the whistle on their anticipated launch, we welcome the opportunity to talk about what the website and web tools of the future ought to be:
- Human-centric search
- In-depth data content
- Dynamic realtor-generated content
That is what Onboard makes possible.
For those who have read to this point, or have figured out the anagram already, I want to say thank you. And I also want to point out that everything written in here about Onboard and our capabilities is absolutely, 100% true. No April Foolery there.
Which means that Foripollas or Foropillas might be a ruse -- but that ruse belongs solely to Mr. Nicolai Kolding, the highly-respected COO of a major national real estate brand :) -- but the technology being described is not. That tech, that level of content depth and breadth, the innovation of lifestyle search -- these things are all absolutely real. Well, except for The Obilizer... we're waiting on a partner to build that one out.