What if somebody built a Realty.bot that seemed to make sense from Day 1? What kind of goof-ball strategy is that in the wacky world of Web 2.0?
I don’t know if Roost.com really has a business to bank on. The search.bot horizons are starting to look a little crowded. But unlike past entrants, the company is entering the field with two unprecedented features: They’re working from real MLS listings, via member-brokers’ IDX feeds, and they actually have a strategy for monetizing their efforts.
Yawn! YAMBS again? That’s Yet-Another-Map-Based-Search, a transition in the course of two years from the cool to the commonplace. I haven’t been able to play with Roost.com yet, but my guess would be that they’re behind the curve on cool-factors. The search tools seem to be more than adequate, but Roost is all about search, with none of the social-theater-of-the-mind games the older Realty.bots have been rolling out.
This is nothing but residential real estate search, with 13 major markets being served at today’s roll-out. Since the listings come from IDX feeds, Roost.com needs at least one broker relationship for every MLS system it wants to service.
There’s more. Roost.com plans to make money by delivering prospects back to member brokers on a Cost-Per-Click basis. In one scenario, as in the screen-shot above, the broker can have his own private-label Roost.com IDX system hosted on a third-level-domain — e.g., tarbell.roost.com. Every click originating on that site would go back to Tarbell.
Alternatively, brokers can participate directly on the Roost.com system, with the end-user click-throughs being distributed in a manner similar to Google’s Adwords program: Participating brokers would be selected at random based on their desired spending goals.
I’m eager to play with the system, because what I’ve seen of it so far seems cool. As an example, the image below shows a windolet of photos. You can have more than one of these open at one time, so you can compare photos from multiple properties.
Roost.com is essentially a free IDX system for brokers that they would only have to pay for when they are receiving benefits from it — this in the form of leads to potential home-buyers. The IDX systems available at a monthly cost in many markets are so poor that Roost may prove to be a potent weapon in a broker’s arsenal.
What’s the downside? You’re paying for leads. The cost-per-click system makes the spend manageable, and having real MLS listings — as opposed to the grab-bag of catch-as-catch-can listings on other Realty.bots — is a real bonus. But it remains that brokers are giving away their listings in order to buy them back again.
If there’s a silver lining to all of this, it’s here: The emergence of one new Realty.bot after another is going to drive the cost per lead purchased down to its lowest imaginable commodity level. Companies like Roost.com may still be able to make big money. But more labor-intensive operations, like HouseValues.com, could be in for a rougher ride.
PS: I wrote about Roost.com last August. So far, they’ve delivered more than I expected.
PPS: From Roost.com’s press release:
Roost, an innovative platform for real estate search, launched today in public beta. Roost partners with Multiple Listing Services (MLSs) to help local real estate brokers and agents attract high-quality consumer traffic directly to their Web sites via an intuitive search tool. Roost offers consumers an advanced, highly visual search experience, complete with comprehensive property listings, to help them find the right home fast.
Roost’s platform brings together a network of individual real estate broker Web sites and a comprehensive search engine. This approach ensures that consumers have access to the freshest and most accurate property listings as soon as they are available. Local brokers and REALTORS® can leverage the high quality of the MLS listings to attract additional, self-selected and highly relevant traffic to their core Web sites.
Unlike other online real estate platforms, Roost’s network of broker sites ensures consumers have access to comprehensive MLS listings in major metropolitan areas across the U.S., via close collaborations with MLSs and leading local brokers that can help them find their next home. The Roost platform currently covers the Atlanta; Baltimore; Boise, Idaho; Boston; Chicago; Dallas; Houston; Minneapolis, Minn.; Orange County, Calif.; Philadelphia; Portland, Ore.; Sacramento/Modesto, Calif.; San Diego and Washington D.C. areas and will expand quickly into additional markets nationwide.
“The current real estate climate is a tough one for everyone, so our aim is really two-fold: to empower local brokers in their online marketing and sales efforts, and help consumers find the right home at the right price,” said Alex Chang, CEO of Roost.
For the real estate industry, Roost offers an innovative online marketing vehicle for brokers and REALTORS®. It provides individual “IDX” sites as part of its platform, which use MLS listings in compliance with local policies to attract and qualify self-selected, relevant buyers and sellers to local REALTOR®’s sites.
Elsewhere: TechCrunch, Joel, Dustin, Jay, C|Net, Ron Ares.
Me at TechCrunch, answering what seems to be the question of the day, how can Roost.com get enough traffic:
As with Trulia’s push into private-label real estate search on major media web sites, Roost’s strategy of offering branded IDX search to brokerages is a way around the problem of attracting traffic. The Roost.com site may not score all that well on national hit-counters, but if they can draw people in one small private-label site at a time, they can get the traffic they need to make money. At the least, it’s refreshing to see a business plan that isn’t based on advertising.
Why would this work? Joel answers that question:
How it works is, in each market, the search results are sponsored by an individual broker (e.g. “Portland listings brought to you by…”). As a consumer, if you want more information on any particular listing, including contact information, all the traffic drives through to that sponsoring broker’s site.
Every market however, can have an unlimited number of sponsors and the sponsors rotate in based on the amount of traffic they have bought. This is perfect for some of the smaller brokerages that may not have many listings to market themselves (and therefore can’t participate in Z or T’s listings feeds) but are still looking to court buyers online.
Roost also offers those brokers a co-branded/private labeled search interface they can embed into their site too.
Technorati Tags: disintermediation, real estate, real estate marketing, technology
Arlington VA Condos — Jay says:
My big question is how is Roost going to get people to use their site? Are they going to spend a fortune being at the top of the AdWord battlefield for “real estate” and “real estate listings” and geographic variations thereof?
I’m sanguine that when I search almost any city+st+real+estate I’m not going to find them anywhere regardless how good the tools/interface may be.
If you don’t rank…you shank! Hey I just thought of that one. That could take off in the web 2.0 community or something–if you don’t rank…you shank.
January 23, 2008 — 6:13 am
Doug Quance says:
“But it remains that brokers are giving away their listings in order to buy them back again.”
And therein lies the rub.
January 23, 2008 — 7:59 am
Greg Cremia says:
I just tried it. Maybe I am one of the few who likes to use the back button to navigate but I found myself clicking on 4 different listings and backing up 4 times.
I stopped when I realized I just cost that company 4 click through charges to see 4 listings. If I were a consumer looking at all of the listings it could get pricey.
January 23, 2008 — 9:09 am
Michael Price says:
It’s been a while since I have been involved with the nuances of IDX. Maybe you can help me understand how the rules play out. In the case of Houston, one broker has republished the entire IDX data feed in Roost.Com. All of the leads go back to that broker.
Is the future of listing distribution based on the size and ability of the broker to create these kind of relationships? It was my understanding that a single broker could republish the IDX feeds on their own site only, however, as is the case with Yahoo Real Estate and now Roost.Com that is unclear.
I posted the comment above over at Dustin’s Blog as well because I am extremely curios about this kind of business model. Greg, lets assume that Roost.com will be a success and figure out a way to garner consumer traction. Would you have the ability and or desire as a broker to pay for the exclusivity that is required for Roost to get listings? What is to keep Roost from going into each major market and creating a dutch auction with brokers that all have the keys to the IDX system? Am i missing something?
January 23, 2008 — 9:28 am
Michael Price says:
Guess I should have read down to Joel’s comments but it still begs the question as to the ability from one broker to the next to control where the leads go. It’s Interesting business model that will certainly keep fueling innovation for agents and brokers to find creative ways to get listings exposed without being forced into a position of paying an auction price to get leads back from their own data.
January 23, 2008 — 9:35 am
Bob in San Diego says:
The crux of IDX is that it resides on a broker site. Roost violates that.
January 23, 2008 — 10:46 am
Derek says:
Pull lead from broker’s IDX +get broker involved in your site, then turn around and charge the broker back for the lead you pulled right off his site for a profit!
Sounds like a genius idea!
January 23, 2008 — 10:54 am
Greg Swann says:
Mike, I think you’re talking about a VOW feed — each designated broker has one pipe available to the full feed, which he can then republish on his own site. This is what Zip Realty does. IDX vendors are free-market businesses with a contract to republish the more-limited IDX feed to their broker and/or Realtor clients. The latter is what Roost is doing, in two flavors: Branded on a TLD with leads going only to the sponsporing broker or Pay Per Click on the unbranded site, with the leads distributed at random according to pre-set spend limits, like Adwords.
January 23, 2008 — 11:02 am
Jessie B says:
“Are they going to spend a fortune being at the top of the AdWord battlefield for “real estate” and “real estate listings” and geographic variations thereof?” –
This happened in the mortgage space and the cost of leads went up as well as the cost of cpc leaving local brokers unable to make an intelligent spend due to lead sellers battlefield. May happened in real estate now with these players with lots of VC – as before you only had HG and HV.
Additionally, they may have difficulty getting free organic traffic ala trulia due to sub domain structure w/ multiple players in the same area.
January 23, 2008 — 11:52 am
Bob in San Diego says:
In San Diego, IDX can only be on the Broker/agent site, not a 3rd party site. Roost’s use of IDX on a sub-domain violates that rule. Our local MLS is investigating this at this very moment.
January 23, 2008 — 12:16 pm
Alex says:
Alex from Roost here. Thank you for the clear write up Greg S. Couple quick comments on things that have gotten a bit lost in the press coverage and some of the blog comments I’ve seen:
– Bob, Roost is a network of broker IDX sites with a powerful search engine across the top of it (one clue to this is the URL structure). Each of our broker partners receives their own IDX site which accesses the data in compliance with local MLS rules. The difference is essentially that the broker is able to use their IDX site as they see fit, and in addition get traffic to it from the Roost search engine when they want it. We reviewed Roost overall with SANDICOR and more importantly each individual broker’s IDX site on Roost goes through an explicit IDX approval process by them. We are and have been 100% focused on offering the Roost platform in compliance with local MLS rules and in a way that supports their local members
– One of the key components of the Roost platform is that we are open and inclusive of all types of brokers large and small. They get their own IDX site and the option of traffic to it on a flexible basis that meets their budget in any given month
Hope this clears things up a bit.
January 23, 2008 — 1:10 pm
Bob in San Diego says:
Alex, Sandicor was under the impression that Tarbell’s IDX was on their own broker owned site. Clearly that is not the case. The broker doesn’t own the TLD.
The IDX Rule in question:
Your scenario opens the floodgates to the display of IDX beyond broker or agent owned sites. I don’t really care one way or the other, but I do want a level playing field. If Roost as a 3rd party can simply provide a subdomain and display one broker’s listings, then I want to play as well. I turn down large community and regional sites to do just this because of the rule.
If Sandicor gives you the thumbs up on this, cool. More opportunity for me.
January 23, 2008 — 2:12 pm
Jim says:
This is the model…many of the ‘large portals’ want it as their real estate search, only a few existing companies can produce it. Roost is starting from scratch. Some of those “few existing companies” may be already working on the same thing and if so are positioned to successfully deploy it on a true national level much faster than Roost. These are the keys to successfully deploying such a model quickly:
1. Need to aggregate IDX feeds for the majority of the MLS’s around the country. Someone said here that Roost has 13 or so MLS’s so far. There are a few companies that currently aggregate a couple hundred IDX feeds and just one (other than Realtor.com) I know of that aggregates over 500 IDX feeds.
2. Be a website provider/vendor for agents/brokers. This will help navigate some of the IDX rules and will be key to quickly getting agent/broker participation enmass.
3. Drive traffic – Build it so that another website can flexibly co-brand the look and feel of it to match their site so as to allow other sites to add a ‘national mls’ search to their site and share in the search revenues ala Google Adsense model.
The first two are not something a company can snap their fingers and produce quickly. I can think of one organization that already has everything necessary to pull it off…and they’re not reliant on VC…and they wouldn’t even need to directly make money on it.
January 23, 2008 — 2:44 pm
Michael Price says:
Greg, I’m familiar with VOW sites, I think I see now how the issue of providing the listing data to a third party site is dealt with by Roost. You or Alex please correct me if I am wrong. In the Houston example the site is not Roost.Com, it is a GaryGreene IDX site, the domain is GaryGreeneIDX.Com and the domain is the property of GaryGreene. In a technical manner it’s a co-branded IDX site owned by the broker. In my opinion that is something that would be completely oblivious to 99.999% of consumers, I am assuming however that it meets the muster of HARMLS Inc. and NAR IDX policy.
Alex,
Let’s say I’m a shop that wants to have a small PPC budget in Roost, how does a buy like that work? For some reason I’m just not real quick on the uptake today, but I learn fast 🙂
January 23, 2008 — 7:01 pm
Bob in San Diego says:
The difference between what Yahoo real estate does with Prudential, and what Roost is doing, comes down to the ownership of the domain. Yahoo complies with the original rules that govern IDX, so the IDX resides on the Pru domain.
ex: http://honolulu.yahoo.idx.prulocations.com/
Roost, as we have seen, uses a subdomain. This goes counter to the rule that IDX is for brokers/agents to be able to display listings on their own sites, but not third party sites.
Late this afternoon I spoke with Todd Goodman at Sandicor, the San Diego Regional MLS. 18 months ago Sandicor said “NO” to the same idea, but today views what Roost is doing as an evolving grey area. They admit it goes against the rule I cited earlier, so the rule will now be amended.
The IDX horse is now out of the barn.
January 23, 2008 — 7:07 pm
Michael Price says:
Alex,
No need to answer my previous comment. I have my mind wrapped completely around the concept of rotation etc. now. Clever indeed.
January 24, 2008 — 12:44 am
Dan says:
“Roost was founded in May 2007, and raised a $5.5 million A round.”
The post money valuation seems to be a strong one.
January 24, 2008 — 9:05 am
Alex says:
Michael –
I’m happy to take you through exactly how all the rotation works in detail, feel free to email sales@roost.com if you’d like me to walk you through it (drop my name or BloodHoundBlog and the email will get to me). The simple answer is that Roost is open to all sizes/types of brokers and you simply set a budget for visitors that works for you. That determines how much exposure your IDX site on Roost gets. We specifically built it this way so that we could offer the service to all sizes/types of brokers large/small/independent/franchise/corporate/etc.
Bob –
FYI, we comply with whatever the requirements are in the local market. If the MLS requires that the broker own the domain, we follow that rule. It is simpler to administrate for all involved if it is a sub-domain, but again we comply with whatever the local rules dictate.
As an aside, we don’t feel that the domain has to be specifically registered & owned for it to belong to the broker. Especially as the world evolves where people have profiles on FaceBook & LinkedIn, Blogs here and elsewhere, etc. The notion of ownership has started to morph a bit.
But regardless, we’ll do whatever the local board feels is in compliance.
January 24, 2008 — 10:08 am
Bob in San Diego says:
>The notion of ownership has started to morph a bit.
Semantics. Ownership is still a legal concept. If your partners stop paying you, can they still use the subdomain? If not, then the subdomain is more of a lease or licensed use.
It doesn’t matter at this point though. Sandicor will be changing the rule so you are in compliance. I brought it up because in the recent past, Sandicor has denied others the right to do exactly what they allowed you to do.
Please don’t assume I’m complaining or bitching. I’m not – just using the situation for clarification. You did me a favor. They would not have changed the rule for me, but getting brokers like Andy in San Diego and JLS up north does the trick and was a very smart move.
January 24, 2008 — 10:57 am
Bob in San Diego says:
Alex, one more question for you.
How are you going to deal with the new additions to the NAR Code of Ethics about MLS terminology?
January 24, 2008 — 5:19 pm
Arlington VA Condos — Jay says:
Bob, have the “new additions” to the NAR code regarding “mls” come into effect yet? IF so what are they? I thought till now it was a particular state/regional MLS that made a rule and began enforcing it contrary to everything commonsensical.
Has NAR fallen to this global MLSing bullcrap too? No doubt it was realtors who caused it all 🙂
J
January 25, 2008 — 6:36 am
Bob Wilson says:
Jay, all I know is that they are in the Code of Ethics, so I assume NAR expects them to be followed. I think they are idiotic. A company like Roost that will need ppc for awhile helps prove the point that NAR doesn’t have a clue. The thing with Roost though is that they advertise that they are partners with the MLS, so in areas of Washington and Minnesota where local boards have already slapped agents for using the term MLS in ways that the board doesn’t like, what will they do? Will they push the envelope? Will they cave?
I’m rooting for them now as they have already cleared roadblocks for me to do the same thing that the MLS denied me two years ago.
January 28, 2008 — 10:15 am