Source: PPW Podcast Episode 4: The Future of Real Estate Search - YouTube
Participants:
- Edmund Keith, Online Marketplaces Editor
- Simon Baker, Former REA Group CEO
- All real estate marketplaces have a similar search experience because they were initially created as aggregators of listings. This was a great improvement from the traditional newspaper experience.
- However, in 2024, the user experience is still lacking. There is a need for personalization based on the user’s preferences and capacity to buy a property.
- There are two different approaches to address this issue: - The first approach involves asking users questions before showing them any listings. This can be annoying and time-consuming, leading to potential loss of users. Simon suggests adopting a similar approach to Kayak.com, where users can start their search and then filter the results. However, this method may not include important information about the user’s age, stage of life, or preferences (such as living near a park), making it less efficient. - The second approach involves using algorithms to infer user preferences. This method is less intrusive but still lacks certain important information about the user, such as their affordability or whether they need to sell their current house before buying a new one. This data is valuable for qualifying leads.
- The data generated within real estate portals is valuable, but in Europe with GDPR regulations, selling this data may not be possible. However, portals can provide higher quality leads that can be priced higher.
- Users who use mortgage services are worth 40 times more than other users.
- Discovery in real estate search is about finding a place to live that meets specific restrictions, such as being within a 30-minute commute to work or close to parks for families with children.
- Many real estate portals do not have features that allow users to search by commute times or affordability. These features are often hidden or not available at all.
- Simon believes this is because it goes against the premium model of visibility that marketplaces rely on. To change these premium features, advertisers need to be educated instead of simply paying for visibility or top placement. Implementing lead scoring may decrease the volume of leads but increase their quality. Portals typically rely on a high volume of leads.
- The key is to improve the search experience, personalize it, and help users discover options they may not have considered before, while still delivering results to the paying agency.
- As the search experience becomes more personalized, marketplaces may have to charge less for premium listings because they become less effective.
- In developing countries, marketplaces have combined the marketplace and transaction engines together, changing the model from a premium fee to a selling commission. This revolution has not yet occurred in more mature markets, where portals are starting to participate in transactions and share commissions.
- Real estate marketplaces should focus on identifying and tagging features in metadata, which can be improved with AI. First, build the metadata, then improve the search experience.
- More innovation is expected to come from developing countries due to their willingness to experiment with different business models. They are more hungry for innovation compared to mature markets.