“An entire economy is emerging around the exchange of goods and services between individuals instead of from business to consumer.”
In a new report, “The Collaborative Economy,” web analyst Jeremiah Owyang presents a choice for corporations: either be part of this rising collaborative economy trend or risk extinction.
Some large companies have already jumped on for the ride. Owyang points out that both BMW and Toyota are renting cars off their dealership lots in San Francisco to contend with the growing ride-sharing trend.
Think about that: They are proactively embracing that which threatens them.
What does this mean for real estate?
It’s easy to dismiss the notion of consumer-to-consumer transactions as a non-issue. The for-sale-by-owner market has never really taken off and never posed a serious threat to the broker-agent model, even with the help of the Internet. And the notion of sellers and buyers interacting – indeed even laying eyes upon each other – remains a real estate taboo.
But we’d be foolish to assume the conversation ends there, wouldn’t we?
Step back a second and think about how insane it would’ve sounded just five years ago that people go online and rent out rooms in their homes to complete strangers. Yet today, Airbnb, a company that facilitates that, is valued at more than $2 billion.
Ironically, at its core, the real estate industry has fostered collaborative business from day one. Every time a home changes hands two agents who otherwise compete in the same market must collaborate to close the deal.
What’s different about the impending collaborative or sharing business world Owyang describes?
My take is that deeper collaboration within real estate – even adding consumers to the mix – won’t disintermediate the real estate professional. But it could cause a couple of things to happen:
It could eliminate the MLS as we know it today. And it could create new business niches and roles for the traditional agent and brokerage company.
MLS no more?
The MLS is real estate collaboration writ large. Listing agents need a way to market available homes to buyers, and buyers’ agents need a way to find available homes for their clients.
It may seem like collaborative apps that would enable sellers to snap pics and upload their homes into a “marketplace” with an offer of compensation could kill the MLS. Experience tells us this isn’t likely – but again, look at examples in other industries. People use their smart phones to hitchhike with strangers – and pay them money for the ride!
What once seemed unimaginable is happening all around us.
Now consider a new app, Keyzio, that enables buyer-seller collaboration in a way we’ve never seen. Keyzio works both ways. Homeowners who are curious about the market can upload photos and information and “claim” their home on the app. And buyers can reach out to any homeowner in the country – whether or not their home is for sale – and let them know they’re interested in buying it.
Sound crazy? A lot like hitchhiking with strangers? Well, the Kansas City-based startup has been live for just a few months and already has evidence of home sales in which the first contact was made via the platform.
Buyer-seller collaboration as a niche
Like BMW and Toyota, it’s easy to imagine a brokerage company offering a niche business that plays within this sort of collaboration.
Using Keyzio as the example, let’s say Broker XYZ partners with Keyzio to offer a pre-market service for sellers and an add-on service for buyers who have particular wants and needs.
The brokerage could essentially warm up sellers by giving them a chance to test the market before they list and see what kind of interest exists for their particular home (more than just a CMA).
And, the brokerage could say to buyers, here are all the homes that are for sale right now. We can help you buy one of these homes, but we can also help you find a home that may not already be for sale. We’re that good.
Where to next?
Many in the industry still do not really understand that protecting old barriers between consumers is almost certainly a losing battle. It’s tempting to dismiss this as a passing trend that won’t impact real estate. But what’s happening outside the industry cannot be ignored.
The right way to think about this is that rolling with the connections typical of Owyang’s Collaboration Economy doesn’t necessarily mean disintermediation.
It may indeed present new business opportunities.