Real Estate the E-Business Way

They're typically characterized by aggressive use of the Web, heavy reliance on e-mail, early adoption of online transaction management systems, and a customer-driven information-based mentality. They also employ "dynamic duos"--that is, field-based, salaried salespeople and bricks-and-mortar-based online salespeople.

The online brokerage gives buyers access to property and neighborhood information, including the full MLS. Buyers also get online property photos and "portfolios" in which they can store the listings and photos they fancy, e-mail alerts about new listings and soon online transaction tracking services.

"The buyers I've worked with just love it," says Sandra Stevenson, a field representative with eRealty.com in Houston, who migrated from a traditional brokerage, Henry S. Miller in Fort Worth. She's a 19-year industry veteran.

Will the e's survive?
Her brokerage is one of four, including eHome, zipRealty.com, and Expercent.com, that has set up shop in Atlanta, California, Houston, and Seattle. Besides the fact that consumers may not be able to keep the players straight, eRealty.com, eHome, and zipRealty.com all intend to expand into 10 to 20 metropolitan areas by the end of this year. And in the volatile world of Web business, that backyard competition could mean mergers.

The jury is out on whether these companies have staying power. Bruce Benham, chief technology officer for RE/MAX International in Denver, predicts their impact will be comparable to that of other discount real estate business models. "Most people are willing to pay for the assistance they get from a real estate professional. These companies are going to get some customers, but we don't think it'll be a significant share of the market," he says.

Nonetheless, traditional salespeople can't ignore the phenomenon because Web-surfing consumers are sure to ask about the commission discounts. "In some cases, [these discounts] could cause the traditional salesperson to negotiate a lower commission," he says. "But the salesperson is more likely to say, 'Let's compare apples to apples. This is what they're going to do for you and this is what I'm going to do for you and [my services are] worth more."

How consumers get cyber service
eRealty, eHome, and zipRealty.com assign clients a field representative, who meets with them, shows property, or holds open houses, and an online salesperson, who answers questions via e-mail and coordinates the transaction. All four of the company's heads say salespeople will also work with consumers by phone, but since the companies' model appeals to Internet-oriented consumers, most of them prefer e-mail. Despite these roles, all company salespeople are expected to pitch in whenever they're needed on any transaction.

"We're not [working] in the traditional way, where you always have to be on guard against someone taking your clients. This is a team effort. It's less stressful because we're working together," says Stevenson.

Rather than using field representatives, Expercent's model centralizes all operations in one Southern California location. In fact, the dot com plans to focus exclusively on California sales.

The brokerages' salary-plus-bonus plans are designed to compensate salespeople at a rate comparable to traditional brokerage. "I make less per transaction, but I do more volume [than I would at a traditional company]." notes Stevenson. "I'm in the field more and someone else handles the paperwork. [The compensation] would come out basically the same."

And she points out that the personal assistant-type quality help she receives doesn't come out of her own pocket.

Russ Capper, president of eRealty.com, is even more optimistic about his salespeople's income potential. "Our projections tell us that our salespeople make more than the average salesperson, and they get medical benefits and expense reimbursements."

But Benham questions whether the salary plus bonus system will attract the industry's top salespeople.

In the long run, these companies' success will depend in part on their ability to create a strong bond with consumers. "If they can [create a] brand name and start to capture the Internet traffic, eventually they'll be recognizable Internet brands," says Saul Klein, a speaker and president of The Internet Crusade in San Diego, California. "[Their staying power] also depends on how much money they can raise. It takes tremendous capital to [create a] brand."