Startups · Fundraising

Would you create a digital startup in the real estate sector? What would stop you? Too tough?

Gord Collins Digital Marketing Specialist/Strategist Toronto SEO Social Media Content Marketing

March 4th, 2016

I've noticed some in the real estate market are pessimistic about succeeding in real estate and hence they don't spend on marketing or digital innovations. Old school all the way. Is it because they don't understand modern marketing and who can help them, or is digital marketing failing? I want to know how you feel.

Vadim Axelrod

March 4th, 2016

When we started Rentals.com in the late '90s, the ideas (property tracking / marketing automation / tenant portals / rent pay by cc / etc.) made sense from all angles other than momentum.  Momentum is HUGE in real estate.  It's a relationship business.

So tools to augment it have been a success.  Replacing the current system has been very slow.

RedFin and Zillow have revolutionized the way we look for properties, but by far most transactions are still agent driven.

David Austin

March 4th, 2016

It's an old school thing, if you ask me.  I stopped listing my house with an agent (was listed for a year), listed it myself FSBO and did serious digital marketing for it and had it sold within weeks.

You might have more success working directly with the owners instead of the agents.  Ideally you'd get the agents on board, but if you could at least prove the value of what you do, maybe by working directly with owners, then they'd get on board.

Orion Parrott Founder and CEO, Lendsnap YC S16. We're hiring!

March 8th, 2016

Gord, see also inzopa.com and Placester.com. Placester seems to do what you are talking about (digital marketing for realtors/brokers), if I understood it correctly. Placester is doing very well out of Boston. 

Kristin Boekhoff Real Estate Investment Advisor and Developer

March 4th, 2016

Gord,
I have been working in the commercial real estate field for over 12 years. As others have pointed out, there has been a lot of innovation in the residential real estate space (RedFin, Zillow, Trulia, Auction.com, etc.) There are some new players in the commercial real estate space as well (like Loopnet); and there is obviously the relatively recent innovation of crowdfunding for real estate, but I think that many companies are still doing it the "old school" way because many of our clients are older and are not as well versed in modern technology. (I have several clients that don't even have computers or email! We do everything by phone!) This will obviously change over time...

Also, for most companies, the old school way still works, so there is not as much of an impetus for digital innovation. I am currently working in commercial brokerage (though have spent many years on both the investor and developer side of the business); I see several agent teams starting to create websites and get more involved with digital marketing (Constant Contact, VerticalResponse, etc.), but most of our marketing and prospecting is still done by phone because it is much more effective than emails, online ads, LinkedIn, etc.

 

David Austin

March 4th, 2016

>The old school way still works
The old school does not work as well as it used to and even less so as R.E. competitors leverage new tools while home buyers come to depend on them.

Scott Sosso

March 5th, 2016

Gord,

I would tell that you that while a large majority of them are resistant to technology, the ones that do embrace it can make big strides in gaining market share.  The challenge that you will find with agents is that they are asked to b an expert in 4,5,or even 6 different areas when like most people in the world we are really good at 1 or 2.  So when it comes to these "digital marketing and automation solutions" you are going to have to automated much of it and measure it.  Outside of that they will not utilize it. Oh I forgot to tell you a large majority of them have limited capital, so be careful with the costs and your own bottom line b/c you will spin your wheels. It is not an 80/20 rule it is more a 90/10 or even 95/5 rule....Good luck

Scott Sosso

March 5th, 2016

Gord, don't spin your wheels.  I am a realist when it comes to real estate agents and brokers.  I was one of both for 20 years and still do transactions to this day but trust me you could get give them 1,000 of examples and they still will not pay for it. They think transactionally and rightfully so b/c they never know when their next closing will come.  Please do not take it the wrong way, I respect them for having the will and drive to make it work it.  It is there is a small group of people that can really think big and that would get your vision.  Anything you can automate do.... but it will be an uphill battle...  Good luck.

Terrence Masson

March 8th, 2016

We are getting huge interest from real estate developers to use our mobile augmented reality solution ... major commercial players now to show build-out options in context, on site (as opposed to web based or VR); but I see a great benefit to high-end home design (Toll Bros., etc.) to show up-sell options to clients on site in context (add a porch, different siding, multi-car garage, etc.)

Mark Swanson Leader, Entrepreneur, Strategist, Technologist

March 8th, 2016

Ylannis -  I am curious to the concept you are alluding to. There is no lack of startups attacking the cartel - there are over 3800 RE technology businesses on angellist.   I think it will eventually crack, but the question is how?

MS

Marc-Philippe Huget Associate Professor-Universite de Savoie

March 8th, 2016

Dear Gord,

I speak about my limited experience in startup and RE, here in France, we (an agent and I, from the tech viewpoint) tried to create a startup, and it was nearly impossible, not the correct moment and resistance from realtors, the main problem is the corporate thing, most of them belong to networks (Century 21 to name one) and follow networks and syndicates blindly. I still have ideas of startup around RE but it takes the other way via owners/buyers, IMHO that is the only way to have a chance in this domain.