Lately we have seen many real estate networks purchasing online estimation tools in order to offer a more comprehensive real estate offer to their visitors!
At first glance, one might say that the estimation tools are a success … I think the contrary, these acquisitions highlight the weaknesses of the model online estimation tools.
I do not know in detail the financial situations of the companies mentioned, but just a simple Google search to find that most online estimation tools have been trying to find new owners for 1 year now.
So, this acquisition raises a lot of questions about the model of online real estate estimation sites.
A model not that good …in my own opinion.
The economic model of real estate websites estimation problem from the beginning. Indeed, these sites have been very successful in generating leads for real estate projects, but do not really have managed to monetize or at least be strong enough to absorb the cash advance that follows.
Let me explain:
The online estimation tools have a hit to identify real estate projects. Those owners who are not yet ready to sell learn about prices through online simulation. Any bet for estimated sites is to get the owner to follow until he will decide to sell his property.
Except that their model is based on the sharing of the commission, which is a problem! Indeed, a lead generated in January 2013, will perhaps decide to sell in October 2013 and the sale will take place in January 2014 … all the while the estimation website has spent money to acquire the lead, raise the lead … except that the return on investment comes only much later, if it happens one day …
Indeed, beyond the cash aspect, the real challenge is in transforming the lead mandate and sale. This is the crucial stage where the agent makes the difference. Except that this milestone, online estimation sites have until now decided to delegate to external partners (agents immo partners).
This is the weak point of all these sites of online real estate estimates and everyone has been aware of it for some time.
A win for real estate professionals
The model estimation websites takes a hit and the big winners are the networks that buy these websites. In addition to a team and a credit to those networks redeem a great tool to generate internal mandate. And we all know that whoever controls the stock control the market …
These acquisitions are ultimately a victory for realtors showing that make real estate is more than just assessing a price using an algorithm and must be behind the men to do the job!
I think Artemis (and these two officers networks) have a bright future ahead of them, because they just pay for a tool that has the ability to generate leads them a package which provide agents which they often lack: of mandates.
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And you, what do you think of this?