Transparency is the New “Black”

I heard second hand a comment attributed to Carey, one of the big brains in our creative department, that “Transparency is the new black”. As usual I think he is right on the money. 

So what is transparency? According to Dictionary.com, one definition of transparency is the full, accurate, and timely disclosure of information. 

Traditionally the real estate industry has been sorely lacking transparency, lacking it in fact, from every angle.  Consumers (buyers and sellers) have experienced agents, brokers, franchises, mortgage brokers, banks, credit agencies, lawyers, title companies, appraisers, insurance companies, and more, that have been less than transparent at times.   This lack of transparency can result in spite of the best intentions of the participants.

In the last decade we have seen great strides made in name of disclosure and access to information including reform such as RESPA and the Fair Housing Act.  That said there is still much to be done.  I would say that the next evolution (or possibly revolution) in transparency is being driven by the Consumer and their access to information that is being realized by Internet connectivity and a new breed of Industry participants.

While I could go on at length with respect to transparency and the real estate industry, I am going to focus on consumers and their desire to access information and how this affects brokers and agents.

Let’s start with a couple of the latest examples in real estate that include http://www.zillow.com/ and http://www.realestateabc.com/ .  These sites are examples of transparency at its finest.  Consumers are simply provided with “full, accurate and timely disclosure of information”.  In fact, in these cases they get all the information there is, as accurately as can be provided, immediately, without restriction and for no cost (not even their personal contact information).  These sites live up to the true definition of transparency.  

Sites like Zillow  have produced apprehension and fear amongst agents and brokers.  Why? Because they are providing information to the consumer that agents and brokers have traditionally provided.  Therefore, the thinking goes, consumers may find they don’t need an agent or that the agent provides less value and should be compensated accordingly (read lower commissions).  To agents that feel this way I have one piece of advice – get over it. Your value is not tied to the access of information.  Transparency is here to stay, it is not a fad, indeed, Transparency is the new black.  

The new consumer is demanding transparency.  They want it and are prepared to do things differently to affect it. Real estate professionals need to embrace this pent up latent consumer need before others, possibly from outside their industry, do it first. Consumers are not getting what they want, I say again: give them what they want before others do.  Rather than just spew forth words like “embrace” and  “change” I am prepared to step out on a limb and articulate some concrete examples of what “embracing transparency” might look like.  

To start with – What do consumers want? They want transparency: the full, accurate, and timely disclosure of information.

  • Rich and complete information
  • Instant response
  • Completely free of obligations

New innovation that might provide this could include:

  • Websites with very rich listings and data, including descriptions and photos provided directly by the sellers. Nobody has more knowledge or interest in providing information and photos then the seller. Imagine a sellers list of “the top ten things they will miss about the home and the neighborhood”.
  • The ability for the consumer to pose questions directly to the listing agent and seller with oversight and moderation by the listing agent.  Many times questions that buyers have can only be answered by seller.
  • A key aspect missing from the Internet is trust.  A social networking models could be created that would provide a transparent rating system that would give consumers insight into key factors about an agent.  How long they have been in business, how many homes they have sold, satisfaction ratings, etc., much like an ebay vendor rating.  It is said that everybody is connected within 6 degrees, perhaps testimonials could be traced back such that a consumer would be able to talk to someone who knows the person giving the testimonial.

The above are just a few of the things that will happen this year.  IMNSHO the time is rapidly passing for agents to simply embrace these changes, they must actively participate, enable and encourage the types of innovation I am speaking of.  At Point2 we are developing solutions to address the above issues (and more 🙂 ).  We are developing these solutions such that they allow our members to provide value to the consumer and in this way lead the field.

12 Responses to Transparency is the New “Black”

  1. Jay Thompson says:

    *Great* post Brendan! I for one am growing weary of hearing agents whine about Zillow and RealEstateABC. I for one WELCOME those sites!

    Think automechanics. I can get on the net and find some site that will tell me why my car makes some weird noise, or pulls to the left, or blows blue smoke. Heck, I can probably find some site that will tell me what widget on my engine needs to be replaced to make it stop blowing blue smoke.

    But I’m no auto mechanic. You think I’m going to be replacing parts on my car because some web site told me to?

    It’s the same with Zillow. There’s a WHOLE LOT MORE to selling a home than knowing what it’s worth. Most people won’t fix their own cars, even if they know WHAT needs to be done (they still don’t know HOW to do it). And most people won’t sell their own home, or attempt to complete their own purchase contract to buy one.

    Information is king. Zillow (and REABC) provide that. More power to ’em.

    (By the way, I got two different valuations on my own home from Zillow and REABC. One was about 20% too low, the other about 10% too high. Both had no clue the home that sold last week that has the exact same floorplan as my house and is located less than 100 feet away would have been a great comp……)

    Jay T.

  2. […] I submit to real estate professionals that if they consider the value of their MLS to simply be consumer facing advertising, then they are correct, Zillow will be the next National MLS.  At this point I would also suggest that these same Realtors get their resumes in order.  Side Note: I always refer interchangeably Realtor and Real Estate Professionals – When I say Realtor I really mean anyone licensed to sell real estate (I hope I don’t get a nasty note for Laurie Janek J ). Seriously, the members of the Realtor community that feel their value add is tied to their control of the public display of listings are living on life support.  That genie escaped the bottle long ago, and consumer oriented web 2.0 companies like Zillow are going to continue to make listing display to freely and easily available.  This is what consumers want – seem my post here. […]

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  4. jdowler says:

    Thanks for stopping by my blog on this topic and for sharing your article. Great content. Now that there are sites where consumers can rate agents, we will see even more proactive behavior on the part of consumers as they continue to push for information . Those with their heads in teh sand will soon become obsolete, except to their most loyal fans.

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