Google Real Estate in Secret Beta; Threat to Cendant, Move.com, HouseValues, ZipRealty (CD, GOOG, HOMS, SOLD, ZIPR)

Shimon Sandler reveals that Google has developed a real estate listings search service, and it's already looking good:

Since Mr Sandlar's discovery (more screenshots here), the beta has been removed from public view. However, the prospect of an impending release of a Google real estate listing search service threatens a number of publicly traded companies.

The US real estate market is remarkably inefficient, and a number of publicly-traded companies benefit handsomely from that. US real estate commissions, at 4-6%, are higher than in most other countries. Improved information flow will reduce inefficiencies in the market and ultimately cut brokers' commissions or eliminate them entirely.

Effective search for real estate listings combined with Google Base would allow home sellers to list properties directly with Google for no fee. The screenshot above suggests that Google has already integrated its real estate search with Google Maps.

The most likely victim of Google Real Estate will likely be:

Cendant Corporation (CD)
Cendant provides real estate and travel services, including traditional real estate brokerage services, car rental, and time shares. Cendant has announced that its business units will separate into four companies. The Real Estate Services Division will become Realogy Corporation upon the completion of its anticipated spin-off from Cendant during the second quarter of 2006. It consists of four primary business units: the Real Estate Franchise Group, representing approximately 15,000 residential and commercial franchised real estate offices and 313,500 sales associates affiliated with the Century 21®, Coldwell Banker®, Coldwell Banker Commercial®, ERA® and Sotheby's International Realty® brand names; Cendant Mobility (which will become Cartus), a premier provider of employee relocation and global mobility services with six global service centers on four continents; NRT Incorporated, the nation's largest residential real estate brokerage company with operations in 35 major metropolitan markets; and Cendant Settlement Services Group (which will become Title Resource Group), a leading national provider of title, escrow and other settlement services. In 2005, the Cendant Real Estate Services Division reported revenues of $7.1 billion and EBITDA of $1.2 billion, with year-over-year growth of 9 percent and 5 percent, respectively. Wonder how that growth will look in a few years time...

Other publicly companies at risk from Google include:

ZipRealty (ZIPR)
ZipRealty provides brokerage services to buyers and sellers through its employee-agents in Arizona, California, Georgia, Illinois, Maryland, Massachusetts, Texas, Virginia, Washington, and Washington, District of Columbia, and provides consumers the opportunity to access Multiple Listing Services (MLS) data through its Website with a lower commission structure than is typical in the industry.

HouseValues, Inc. (SOLD)
HouseValues provides a service for residential real estate agents that combines lead generation from its HouseValues.com and JustListed.com Websites with its Market Leader prospect management system and personalized coaching and training. HouseValues provides these services to agent customers for a monthly fixed fee pursuant to contracts, most of which have an initial term of one year, continuing thereafter on a month-to-month basis until terminated. Wonder how many of those contracts will be renewed in a few years' time...

Move.com, formerly Homestore, Inc. (HOMS)
Move.com provides an online service that enables consumers to find real estate listings and other content related to residential real estate, moving and relocation. The Company's primary consumer Websites include REALTOR.com, the official site of the National Association of Realtors (NAR); HomeBuilder.com, the official new home listing site of the National Association of Homebuilders; RENTNET, an apartment, corporate housing and self-storage resource; SeniorHousingNettm.com, a comprehensive resource for seniors; and Homestore.com, a home information resource site with an emphasis on content related to mortgage financing, moving and storage, and home and garden activities. HOMS stock has been a long-term let-down. Doesn't look as though that's going to improve...

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Comments

[hhffoo:]

I know this is an old thread but I will leave my opinion anyway.
Well, First of all, Google base will hurt not only these sites mentioned above, but all real estate websites. We will see agents crying everywhere for so much time in Seo and online marketing to get the number 1 position in Google for nothing, since Google base own what I call number 0 position. Just search for "New York real estate" or "new York homes for sale" and see who number zero is. Just to remember, once upon a time we all choose Google as our main search engine and thus, Google base will be chosen as the main housing search over the net, no doubt of that.

Ron Carpenito, I believe you might be wrong about your argument “of the need of a REALTOR”. (By the way, my wife is a realtor, and I have 10 years experience in marketing and marketing psychology applied to real estate, so I just want to give my opinion based on experience)
Your opinion is biased on the people who are buying houses now, which are the x-generation people (30's and up). However, if you start thinking about the generation Y as the people buying houses today, then you and all real estate agents would be very scared. In marketing Psychology, the generation Y is actually called “Net generation”. And this net generation are the ones buying cars today, and believe or not, car dealers are amazed and surprised on how these kids arrive there, knowing every single button, car dimension, and everything inside the car. Car dealers no longer need to trainer their employees as before because these kids go over there just to negotiate and sign the papers anyway. So believe me, they will do the same thing in real estate. Now, who to blame? Oh boy! I blame all real estate agents and brokers who lack knowledge in online marketing and accept any thing offered by the snake oil ITs and web developers out there. Every single day, these people push you some sort of technology, and very few of them is good for the agents career. Trulia is example, what is going on with agents anyway? How come it’s possible to think that a map search is good for you? You need people to call you and ask you to drive them there, ask you if the house is located in a corner, or perhaps the house is located in a busy street; you just transferred the job a real estate agent is supposed to do to an online service. Is just like the stupidity of place a school information button on your website, area information button, calculator button, virtual shows and every day a new thing. The entire job that once was done by an agent is now done over the internet and that because the REATORS themselves are doing it, damaging their own career. And now you wonder why CNN, NYTimes and many others love to write a head line mentioning that the 5% commission is not worth it for its service. Well there is a bit of true on that, ALL THE SERVICE NOW IS DONE ONLINE anyway. Regardless this generation-Y, they will get all the information out of your site and buy with those online brokerage that give part of their commission to the buyer, such as sidebyside and redfin. So, in a near future, or you become one of these online brokerage firms and give part of your commission to the buyer, “by the way your salary will be as same as a Mcdonald employee” or the real estate agencies will disappear just like the travel agencies.
Sad story.
(didn’t proofread by the way)

2007 May 13 09:09 PM

[hhffoo:]

Hum!! Interesting, just after last post, it came a CBSNews article: "Realtors' Commission Fees Are Under Assault" keyetv.com/business/fi...
By the way, to summarize what I tried to say. The need of a Realtor will always exist since the US laws requires that an agent opens the door at least once before it sells. But my point was that real estate agents are the ones responsible for the proliferation of discount brokerage claiming that is not fair to keep the whole 6% commission, since the buyers found all the information he needs online, thus they should give back part of its commission. Bringing all this to the topic of this thread, the problem rely on by feeding sites such as Trulia, Zip Realty, Google Base, or by giving online information about schools, neighborhood, map of the area, perfect sizes of the rooms, 20+pictures of the house, virtual shows, etc, etc… All the services that once were done by an agent in on-on-one contact, now everything transferred to an online service. Off course, agents can’t send the key of the house to the buyer go and see it, so they will always need a realtor, but this realtor will be the one that gives part of the commission to them.

More article about this: CNN: money.cnn.com/2006/04/...

NYtimes: www.nytimes.com/2006/0...;en=17e433c1e1651e1c&a...
Other: www.nytimes.com/2006/0...;en=5892d422b169a166&a...


And there are dozens more since the media loves to talk about the 6% commission.

2007 May 14 10:55 AM

[filmiki:]

I am still a firm believe in the Rent.com model, which is far more robust for apartment searched, has more inventory than anyone and is obsessively focued on this

2007 May 29 04:18 PM

[Christina:]

As a home owner who is looking for a new home (I am an gen X ) I would say that the internet is the only way to go- we find listings through zip realty, google, trulia, zillow, realtor.com (Zip is the best as it allows the best search options). Then we map it on google earth to see the property over all ~ie will it fit our toyhauler? RV gate dose not mean RV parking ~ the we search the web for any other pictures we can find - drive by it our selves then if we want to see it call our realtor. Saves everyone time. So realtors are needed although 6% seems pretty high to settle terms and sign papers! She does not match us with houses on her own only set up a search on their sight that usually does not narrow down our specifics enough. When we drive by a property we like we take down an address then hit the web We are amazed when we can't find it on the web and we don't persue it any further in this market there are too many hosues out there to be calling a bunch of realtors only to have them bicker about who is representing who is listing who is co-listing etc etc . The realty model is going to have to change becaouse it is driving us out . we are going to list our house ourselves as soon as our realtor contract runs out. Why pay 6% for the realtor when that can amount to over half of your profit? Any way just my perspective.

2008 May 09 02:39 PM

[blueatlasbr...:]

Search Google Real Estate from your iPhone!!!!

Check out "Blue Atlas Broker". Fast, easy to use, uses your GPS to locate property nearby.

Here’s the link on the App Store…
itunes.apple.com/WebOb...

Jul 10 09:02 PM