I have a feeling the real estate industry is about to be transformed by the power of the Internet. The upside to property owners and property buyers is simply too great to ignore. For fun, as well as for practical reasons, I’ve decided to test this theory.
Around here, we use the web for everything. So, why not for selling our homes?
For years, the tried-and-true approach to selling a home has been: fix up the place, hire an agent, list your home via the national Multiple Listing Service (MLS), hold an open house, find a buyer.
It’s a formula so familiar that most home/property owners don’t think twice about it.
The problem is, selling with MLS is like fishing in the ocean. Sure, you’re going to catch fish, but are they really the best fish for you? If you’re selling a property in Menlo Park, for example, are you really interested in attracting prospects in far-flung markets like Florida or Wisconsin?
MLS has its benefits, but the system -- which is the primary tool used by realtors when selling your home -- simply can’t compete with the Internet in terms of targeted marketing. Yes, you want to cast a wide net when selling your home. But for precison, you can do better than MLS.
Social networks are fundamentally changing the way consumers go to market. Whatever we’re selling, we use Facebook, Twitter, LinkedIn and similar web tools to alert our friends and connections. The reasons are simple: focus and trust.
Say, for example, I’m selling my car. Because I know my friends, including their likes and dislikes, I can quickly determine who is shopping for a car, who may want an older, used car (like my 1989 Toyota Land Cruiser), who lives close enough to test it out, etc. Then, better than even an ad on Craigslist, I can send a picture and description directly to the best candidates.
Similarly, let’s say I want to alert technology companies in the Valley to the services offered by my marketing services firm. I can place an ad in the local paper -- or I can tweet about my firm on Twitter, so the entrepreneurs in my network are certain to get the info. That’s focus.
Back to the point of this column, maybe I’m trying to sell my home -- which, it so happens, I am. One option is to post the home on MLS, which alerts agents everywhere. Or, I can message my connections on LinkedIn, many of whom are employed, fiscally capable, and live locally -- a great combination for a prospective home buyer.
It doesn’t hurt that some of my LinkedIn contacts work at fast-growing, venture-backed companies. Is there a better prospect for me than the Facebook employee who has been living with his family in San Carlos, has heard that Facebook is likely to go public next year, wants to move closer to the office, and may finally have the financial resources to make it happen?
I’d say that’s the perfect storm.
MLS: "The Kiss of Death"
Thus far it’s rare for consumers to sell their homes online, but the approach makes perfect sense. For one thing, it’s free and relatively easy to connect directly with potential buyers. Also, sellers can leverage the trust and confidence that comes from personal connections.
Most importantly, however, it enables homeowners to avoid MLS. Once a home is listed on MLS, it remains in the system until the status of the property is changed, whether to “sold” or some other distinction, such as the house being removed from the market.
Every day a home is listed on MLS, its value drops in the eyes of shoppers. House hunters know that a home on the market for more than a few weeks has been seen and passed up by many prospective buyers and agents for buyers. The seller gets more and more desperate with each passing day, which signals the astute buyer to make an offer that is below the asking price.
That’s when a listing on MLS can be the kiss of death. The last thing a homeowner needs is a running, daily notification that the value of his or her home is dropping.
Which is why, in my opinion, it’s best to avoid MLS for as long as possible.
This isn’t to suggest that traditional homeowner/agent marketing tactics aren’t incredibly valuable. On the contrary, I believe the best approach is a hybrid model, which leverages online as well as offline tools. My wife and I have just begun the process of selling our home. We’ve hired an agent who we both think is fantastic. He and his team have a stellar reputation, and I’m very confident that they’re going to find a buyer.
But, for now at least, we’re staying off MLS. And, we’re going to augment our agent’s efforts with some of our own. Already we’ve posted a note to our Facebook friends that the home is for sale, and soon we'll have a home-specific fan page. I’ve tweeted about our house on Twitter, and I’ve posted info on LinkedIn.
I even joined a pair of local real estate groups on LinkedIn, and shared our details with its members.
As we collect new content about the house, including photos and prospect feedback, we’ll share it via social media sites as well. And, just for fun, we’re having faux Twitter post t-shirts made up bearing the familiar #1715SantaCruzAvenue lingo.
Integrating social media into your "home for sale" plan is a no-brainer. It’s easily the best way to ensure that a highly targeted group of people will know about your listing. Time will tell if the hybrid model is effective for us. But until further notice, we’re avoiding the scarlet letters: MLS.
Wells Comes Through
Brief aside: I recently wrote about the re-finance of our home. We had a horrible re-finance experience with Wells Fargo last year, and I was hesitant to try again with Wells this year. But unlike last year, the sales rep -- who looked young enough to have graduated college during the Obama administration -- did an absolutely outstanding job. Max Bottaro, I salute you!