With the growing number of Americans on the internet, many industries have established their online presence by provide various services to people to fulfill the basic needs of people. Just like many other industries, the real estate sector has started its online presence to ease out the work of home buyers by doing a lot of research work about the properties to help them get the right property without much effort.
As per the study conducted by researchers and analysts, most people today prefer finding property and other related information on the Internet. But this doesn’t mean that the internet has taken over the occupation of real estate professionals. It is simply that now the real estate business is being done more smartly. Now, real estate listing websites are coming up to ease out the process of buyers, sellers, and real estate professionals. On one hand, these platforms play an important role in the property searching process of buyers, and on the other hand, it also helps the sellers and real estate professionals to get their buyers or customers online without making much physical search. Internet search has just become a new norm today.
According to the definition given by Investopedia, a realtor is a real estate professional who is a member of the National Association of Realtors. People who hold the tile realtor work as residential and commercial real estate brokers, salesperson, counselors, property managers, and various other real estate professionals. With this idea in mind, Realtor.com has been created to sell referral-based solutions, leads, and advertising to agents, brokers, and other real estate industry members. In this article, we’ll be diving deep into the realtor business model to learn “How does realtor work?” and “How does realtor make money?”. We have made a huge amount of study in order to present an in-depth realtor business model for our curious readers. So, keep reading it till the end to get the most out of this article.
Beginning of realtor
In 1995, Realtor.com was launched as the Realtor Information Network (RIN) which served as a closed network of members of the National Association of Realtors. While its launch, it was a closed network of realtors providing proprietary information to the members of this network. Soon after a year, this hosting site became public which allowed all the users with available internet to be a part of this network to search for property listings and expanded more with the addition of Regional Multiple Listing Service listings. RIN network grew from 32,000 property listings in 1995 to 400,000 properties in 1996.
During this expansion in 1996, the company decided to relaunch itself with a new name i.e., “SpotRealtor.com”. When the company received funding from venture capital firms, its name changed to RealSelect. Later RealSelect’s name changed to Homestore and then continued to operate the realtor.com with partner NAR.
The Move is the parent company of Realtor.com. In September 2014, News Corp, an American mass media and publishing operating company, purchased move for $950 million. Year by year, the company improved itself by partnering with companies like Airbnb and Yelp as a marketing strategy.
In 2017, features like augmented reality and image recognition in the listings of Realtor.com were added. Along with this, it started to offer 3D tours from Matterport on its iOS app, website, and Android app.
In 2018, Realtor.com launched its marketing product, Local Expert, a service that provides digital marketing services for targeting ads on both company’s website and Facebook. Then in 2020, it launched one more product, Market Reach. Along with these products, Realtor.com added various features to improve the website features and introduced Sellers Marketplace in July 2020 to help customers with iBuying by providing homeowners with information for comparing selling options.
The present realtor
Since the launch, thousands of home shoppers have chosen realtor.com over all the other options available to find their homes. It offers an extensive list of for-sale properties along with detailed information and tools to allow users to make informed real estate decisions. This website is being operated by its parent company Move Inc.
During the COVID-19 pandemic, the parent company of Realtor.com, Move, purchased software company Avail. According to the latest news of 2021, Realtor.com has become the number one real estate listing website and second most visited one.
Realtor Business Model
Let’s discuss the realtor business model before moving on to answering “How does realtor work?” as it will become easy for you to understand.
So, above we have discussed the basic service that realtor.com is providing which is real estate listings on its website. It is being operated by News Corporation subsidiary Move Inc. and is based in Santa Clara, California. Since its relaunch in 1996 as a public domain website, realtor.com claims to be the largest website in the United States for real estate listings.
The website is owned by the National Association of Realtors (NAR) which makes it one of the most reputable online real estate listing websites. The association (NAR) wants all its members to follow a strict code of ethics regarding how they conduct their business.
If you go through the realtor.com website, you will realize that it has far more local home for sale listings than any other real estate listing website or app. Realtor.com also runs an app that allows home buyers to check estimates on properties in their local neighborhood or any other area. The app is very easy to use and the search features are designed to fulfill the complete needs of buyers. The app lets them find nearby homes, real estate properties, and open house listings from the MLS. There is an additional feature in the app that allows its users to search nearby home prices instantly with augmented reality, image recognition, and 3D home tour tools.
The business model of realtor.com well accomplishes the realtor task of connecting buyers and sellers which helps in saving time for both the parties and bridges the gap between them. Buyers can easily scroll through thousands of listings that the broker/seller lists on the website and select the right property with the right information.
How does Realtor work?
The leads on realtor.com come with one year contract. These leads on the platform come from using free services or can be optimized by subscribing to other paid options.
The leads on realtor.com are priced depending upon the property values in that zip code. The more expensive the areas, the more expensive the leads on the platform.
Realtor.com offers two types of leads to its users: exclusive and non-exclusive.
Non-exclusive leads are sent to all the agents or individual buyers in a zip code and they get services on the concept of “First come, first serve”. Whoever contacts the seller first has a higher chance of getting into touch with the seller. This is one of the cheapest types of lead available on the platform.
Exclusive leads are the more expensive ones. The users paying for exclusive leads become a dominant agent in their zip code. The realtor.com platform sends all the leads in that area only to that person who pays for exclusive leads.
Here are the three basic features of realtor.com:
- Rent a property
- Sell a property
- Buy a property
How does Realtor work for the buyer?
Being a buyer, you just have to visit the official website at realtor.com and register yourself. Then, select the city/region/country where you want to buy/ rent the property. The search bar appears right in the center of the screen on the website. Now, you can easily choose the property that is suitable for you among the various other listings present. If you have registered yourself on the platform then after choosing the right property listing, an automatic message is sent to the seller to contact you. If the person doesn’t contact you then you may also contact the seller as the contact number is made available to you with the property detail.
How does Realtor work for the seller?
As a seller, you have to register yourself and then list the property on the platform by mentioning its exact location. Now, you will have to fill in the exact detailed information about the property like the number of rooms, floors, property size, etc. After filling in all the details, your property will be listed on the website.
How to be a realtor on realtor.com?
A person having a real estate agent license can become a realtor at realtor.com. If he/she can prove that they have an active MLS membership then only they are allowed to access the professional dashboard of realtor.com.
Who are realtor’s investors?
With valuable information, useful tools, and professional expertise, realtor.com provides people with every information and tool that one needs to confidently decide on starting a new home journey.
In 2014, Move Inc was acquired by News Corporation, and its shares were excluded from NASDAQ.
According to the data of Crunchbase, realtor.com has no investors as such. But, it has made two acquisitions namely, Avail and Remodelista. Avail is the most recent acquisition made by realtor.com on Dec15,2020.
How does Realtor make money?
Above we have discussed the business model and working model of realtor.com in detail. Now let’s move on to discussing its revenue model and learn “How does Realtor make money?”
The platform makes money through the brokers involved. It provides a subscription model to the brokers who are willing to list properties on the portal. It allows brokers to list as many properties as they want under a certain package which also gives an extra advantage to the company as they get a comprehensive list of properties.
Additionally, realtor.com earns its revenue by providing feature listing options to brokers and individual sellers. If a seller wishes to make a quick sale can brand their property on the homepage of the platform. By the branding, brokers and individual buyers will get attracted to featured listings and will hence derive more sales.
Realtor.com takes a subscription fee each month. The cheapest option available here are $200 per month to access its services.
What are the various other alternatives to realtor.com?
Today, many other real estate listing websites have come up that provide the real estate listings of the United States. Here we are going to discuss the various other alternatives to realtor.com:
- Zillow: It is a popular real estate company that was founded in 2006. It is a strong competitor to realtor.com as it lists more than 100 million homes across the United States. Along with the huge amount of listings, it also provides valuable estimates known as “zestimates” along with comparable for each listed property. According to various analysts, it makes its money from its ad placements.
Trulia: It is another real estate listing website that does the same work of connecting buyers, sellers, renters, real estate professionals to each other in the United States. It acquired Zillow Group in 2015.
- Redfin: It is a large online real estate company. The company runs its app on android as well as iOS and claims to update data every 5 minutes. The user interface of the website and app is very user-friendly and allows users to search for properties through a map-based function. Although other functions of the company are very similar to Zillio and realtor yet there are some other additional features included in Redfin. It employees a team of real estate agents who are rated by Redfin users. The compensation received by these brokers is decided by the rating they receive.
- Homesnap: It is again an online real estate listing platform that also includes a map-based search function and an intensive amount of property information. The unique quality of Homesnap is in its mobile app. Using the Homesnap app, sellers can click the real-time picture of the house that is to be kept for sale, and in the app query, all the necessary listing information about the property is available there. This app also works on unlisted properties.
- NeighbourhoodScout: This platform provides users with information regarding neighborhoods in the United States. Users can get neighborhood information using the search function by entering the location. This search option will get detailed information about the average horse values in that area, local school information, demographic data, traffic data, crime rate, and much more.
The real estate sector is experiencing a rapid change in its work processes because of the integration of technology. Today, all investors must remain prepared for the ways that online property listing platforms, mobile apps, machine learning, and virtual reality impact this sector. The increasing popularity of the real estate listing platforms means that buyers and tenants will have a strong idea of what they are looking for when searching for a property. Investors will have to stay ahead to adapt to buyers who can access the various amounts of information about the properties at the touch of a button on their smartphones.
With the growing technology integration such as virtual reality, real estate professionals must aim at improving their business processes rather than being worried about these new resources. They should now think of these upcoming technologies as a way to make their business more reliable and efficient.
If we talk about the future of the real estate sector then it is completely driven by new technologies and buyer-seller relationships. Buying a property today has become much easier with the virtual real estate listings available on the Internet. One can now gather in-depth information about the property from the conform of the home without any assistance from a professional.
Now the freshers entering into this sector will have to learn to thrive amidst these technology changes. These new software and technologies will speed up the closing timelines and the online real estate listings that they provide will result in the emergence of more informed buyers. They (professionals) will have to come up with new solutions or be a part of this virtual presence. Realtor.com is running mostly because of the information and leads provided by the real estate professionals or brokers on the platform otherwise the property updates of only the sellers is not simply enough and it is a fact that not everyone can set up an online presence to look for their property buyer or tenant. There are yet many other options available for real estate professionals to look for. Adaptions, innovation, and creativity are all that is required as qualities in the upcoming professionals to combat the technology challenge.
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