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Real Estate News and Advice |
October 10, 2008 |
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Tough Sell: Realtor.com Increases Rates
by Blanche Evans
Like the great late comedian Rodney Dangerfield, who built a career out of his famous lament that he "don't get no respect," Realtor.com wages an ongoing battle against Realtor apathy, anger, and entitlement. Because of its poorly understood relationship with the National Association of Realtors, Realtor.com and its products and services are sometimes criticized by many Realtors. Many do not realize that Realtor.com is operated for profit by Homestore, who licenses the domain name Realtor.com from the National Association of Realtors. Not one penny of members' dues goes to support Realtor.com or Homestore. In fact, Homestore pays major portals such as MSN and AOL to carry Realtor.com listings to get more exposure for Realtors and their listings. However, thanks to a strict operating agreement, NAR has negotiated that all Realtors listings are advertised for free, and that Homestore/Realtor.com can't charge referral fees to Realtors for leads. It's the listing enhancements and other marketing tools offered by Realtor.com that come with a charge attached. To nip possible criticism in the bud as it announces new pricing, Realtor.com has taken an unusual step - admitting that Realtor.com advertising isn't for everyone. Realtor.com President Allan Dalton has written a personal letter to Realtors suggesting that they not upgrade their Realtor.com marketing systems unless they see value. "The overwhelming majority of Realtors do not pay Realtor.com one penny and neither should you; unless you can look yourself in the mirror and say "I am receiving value from my decision to enhance my listings and image on Realtor.com, the number one real estate Web site," writes Dalton. Dalton goes on to point out that Realtors listings are advertised for free, but enhancements are subsidized by the Realtors and must be supported with results. "Therefore, you should not provide six photos of your properties on Realtor.com just because research indicates (never mind common sense) that both home sellers and buyers prefer and deserve multiple photos of homes for sale, unless you think that by doing so it is worth it to you," he advises. "Otherwise, you are going to be unhappy with Realtor.com. You should not spend one penny with Realtor.com even if you hear other Realtors claiming that they are making tens of thousands of additional dollars because of the upgraded marketing they do on Realtor.com. Because even though other Realtors claim to attract more buyers, secure more listings, and save money on personal promotion on our site, there is no guarantee that you will." Why would he go out of his way to warn customers not to do business with Realtor.com? "An appropriate analogy might be that just as Realtors disclose information regarding property in advance of a buying decision - I wanted to make sure that not one Realtor in America spends one penny on our upgrades without our acknowledging that there is no guarantee that this is the best investment for them," says Dalton. Realtor.com is changing its prices, which is no surprise considering that every consumable except real estate prices have been stagnant since 2000. This year, prices for oil, milk, labor, and advertising have shot upward, along with numerous other items. "Even though we have been absorbing enormous costs due to the purchase of consumer traffic and improvements to Realtor.com, we have not raised prices for 20 months," says Dalton. "We're providing you this information in advance so that you can better prepare your budgets - and hope that this information is helpful to you. Even if you do not elect to spend one penny with Realtor.com, it remains our privilege to advertise every one of your listings with our basic service, for free. We are fully aware and appreciative, that without your listings, which are all generated from hard-working professionals like you, there would not be a Realtor.com." Price changes for The Featured Homes™ Marketing System is based on the amount of traffic in a select market, and will become effective November 1, 2004.
Showcase Listing Enhancements will receive a 10 percent increase effective January 1, 2005. Customers with annual service agreements will be unaffected until the date of their agreement expiration. "It is remarkably reasonable," Dalton told Realty Times. "I think that unlike a lot of sales organizations which have one-size-fits-all, there's not inherent value. We know how to make it valuable, but it is personal - it's not like you put money in a CD and get seven percent, and passbook savings gets five percent. Advertising can't guarantee interest. With our marketing system there is a wide value range, and the reasons for somebody enhancing has everything to do with the value, that they are circumspect. They need to understand that it is a tool and only as good as you use it. Enhanced marketing is for agents who are going to champion the utility of the Internet that they do more than most do in marketing." Over $400 million has been invested to build Realtor.com to date, says Dalton, and the overwhelming number of agents get free advertising and free leads. "There should be statues erected to us," he says. Published: October 7, 2004 Use of this article without permission is a violation of federal copyright laws. Related Articles:
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