Imagine for a moment that you are not a professional in this industry.
You’re a regular ‘ole person who has just decided to buy a house.
To you, this moment feels like standing in a dark room. You can feel around the space a little, but are very far from confident. You hear things, but can’t see. You are thinking, yet unable to get your mind around the situation.
But then somebody enters the room and hangs a lantern in one corner. You are drawn to it, naturally.
This lantern may be an app for searching homes that are for sale. Or a website where you can evaluate real estate agents based on their transaction history. Maybe it is an ad on Google that says you can get connected to a top local agent. It could just be a link that takes you to homes for sale in your city.
There are lots of ways for companies to light up the real estate room and draw people forward.
Zillow did it with home value estimates, then listings. HomeLight does it with agent performance rankings. Several companies play the Adwords game. And Movoto does it with a zillion of those links, usually four or five spots down a search engine results page, that lead people to “homes for sale in _______.”
Lots of people click those links just because they are there, a lantern in the room. I don’t really know who these folks are. I mean, among the casual, non-industry chatter about real estate that plays in the background of our lives, have you ever heard someone say “I saw it on Movoto”?
Neither have I.
But people click links. Maybe even on Bing. Then they fill out forms on the pages to which those links take them and in so doing are transformed into a fungible asset called a “lead.” In this form, they are “qualified” or “scrubbed,” then passed along to a real estate agent who, should he or she be successful in re-constituting the lead back into corporeal form, pays a large referral fee to the company with all the links.
Strange business, eh?
Anyway, this is how I think about Ojo’s acquisition of Movoto, a highly-ranked, MLS-powered home search website with broker licenses in 50 states.
Ojo is hanging up a lantern.
Ojo emerged on the scene about five years ago as buzz was beginning to build about AI, machine learning and chatbots. They focused mostly, but not exclusively, on real estate. Others entered the fray, but they are mostly gone. Ojo remains because they evolved into more than just a bot and now offer brokers and agents a solution that pairs the ML-powered chat product with human-powered lead response/ISA service.
This is the same general direction Zillow headed with their Flex program. It’s why Realtor.com bought Opcity, a company that qualifies leads before they are sent to agents.
But selling this sort of service to brokers and agents is tough without having a lantern. It’s a BYOL (bring your own leads) kind of proposition. In 2018, Ojo bought Wolfnet, a company that pioneered the productization of IDX and had a set of national MLS feeds, but that didn’t bring consumers into the picture. Movoto does. Ojo can now flow its own leads into its machine learning/ISA solution and grow its own referral network.
It makes sense. They have smart people on the team, like Chris Heller, former CEO of Keller Williams, who knows how to do this sort of thing. (Indeed, it seems the company is already dabbling in it.) They also have lots of money. Maybe the next move is to set up adjacent title and mortgage operations, like HomeLight did.
Or, quite possibly, I am wrong. Maybe they just refer the leads Movoto throws off to existing partners.
Either way, this underscores the fact that the real estate lead machine is evolving into an array of referral networks. Over time this means more business flowing to fewer agents and teams.
Not an entirely bad thing in my book.
Enjoy the weekend.