Primary marketColdwell Banker Beta-tests Its New e-Brokerage
Coldwell Banker is beta-testing its new e-brokerage site, Blue Edge Realty. Designed to compete with the discount e-brokers who offer lower rates courtesy of the cost efficiencies of the Internet, Blueedge.com aims to fill an unmet need for do-it-your-self sellers who want limited help for reduced fees.
Blue Edge do-it-your-sellers pay 2 % commissions and get services such as professional market analysis, pricing, negotiation and closing assistance, but they are on their own for showings, open houses and advertising, except for a Web site that will get the listings "maximum exposure through the Blue Edge Realty Web site, the Multiple Listing Service (MLS) and REALTOR.com."
At first glance, it"s easy to think that you are looking at a zipRealty clone, especially when you see the logoed SUV, a deliberate attempt to one-up the former"s youthfully modest VWs. But don"t be fooled. There"s a lot more going on than meets the eye. Blue Edge brings an edge to sellers, and manages to do it without discounting the clout and networking strength of the Coldwell Banker brand.
Test markets are up and running in Illinois and Pennsylvania where Coldwell Broker owners have presumably bought Blue Edge franchises. But a visit to the Web site shows that the company is also operational nationwide, even in areas where there isn"t a Blue Edge franchisee, and that is because the company can do something its fledgling e-broker competitors can"t do - tap into the national Coldwell Banker broker network.
In Dallas, for example, where NRT, a Coldwell Banker franchisee, has just purchased Henry S. Miller Realtors and already owns Paula Stringer Realtors, among other brokerage locations, there is no Blue Edge affiliate, but Blue Edge consumers are able to perform home searches and see Dallas listings represented by Coldwell Banker affiliates. Of special note, the listings all contain addresses and mapping so that online shoppers can drive by the homes, saving buyers" agents precious road time.
Navigation on the site is pleasant and clean and easy to use, with only a few small exceptions. The "How We Work" section does not delve into the mission critical commission issue. The site assumes that the seller will read every heading and find commission options under the not-so-obviously titled "Service Package." Also, some links may not be readily apparent. To see maps of the homes, buyers must click on the address, which they may not know to do unless they mouse over the address.
Most of the site"s features are intended for sellers. After setting a listing appointment online, A "Property Marketing Consultant" arrives at the seller"s home with a property marketing kit, a yard sign, and selling tips. Also included in the listing package is Internet transaction management which enables sellers" Web pages to "schedule appointments, update information, track interested buyers and access the real estate forms…."
What is unclear is how the site plans to capture and capitalize on buyers. There is no mention of a discount available for them. And how do they pay their agents? So far the answer is in one of the two service plans under the seller"s Service Package. Paying an agent is the buyer"s problem unless the seller wants to upgrade to the 2 % Plus program which allows a co-op fee to be paid to the buyer"s agent. Buyers are invited to schedule home tours, but a link to such a scheduling feature couldn"t be found. On the side are only links to Blue Edge Mortgage and to Blue Edge customer support. Surely these aren"t the lead capture tools intended to be used by the brokerage.
Buyers who click on Blue Edge Mortgage can be pre-qualified so that only qualified buyers are presented to Blue Edge sellers. How buyers are served and whether discounts are available for them if they find a home through Blue Edge are questions that are unanswered, as a spokesperson for corporate Coldwell Banker confirmed that Blue Edge Realty is in beta test but said the company is not ready to discuss it.
Why Does Coldwell Banker need to address lower fees?
Coldwell Banker could be hedging its bets against a changing brokerage environment in which fee compression, rising technology costs, and higher agent splits are challenging profitability. By experimenting with a new business model that offers revenues from the hard-to-capture FSBO market, said to be on the rise in many seller"s markets, Coldwell Banker has little to lose, particularly when it can bring its existing brokers and agents to the Blue Edge party instead of edging them out. Many brokers are already reducing fees privately, and rarely below those suggested by Blue Edge.
Another possibility is that Blue Ridge is a technology solution in disguise. In other words, instead of paying a third-party technology partner to develop an IT program at great cost to individual franchise brokers, Coldwell Banker has done it as a lead generation tool and sold it as a franchise. The local broker then gets the bricks and the clicks.
For example, a listings search shows that the listing broker is identified only as an affiliate and contact information to the broker or listing agent is unavailable unless the buyer is intrepid or informed enough to copy the MLS number, visit another site like Realtor.com and contact the listing brokerage directly. But how likely is that? Instead the buyer is more likely to mosey over to the "e-mail Blue Edge" with questions or add the listing to their search bookmark.
If the site does design a program for buyers, that means that Blue Edge could be the world"s slickest lead capture and referral tool. Are inquiries sent directly to the listing agent or kept by Blue Edge to capitalize on as a referral? The question remains tantalizingly unanswered until corporate wants to go on record.
A hint that the company may be a listing/referral tool in disguise for local network brokers (who may also happen to own the local Blue Edge franchise) may lie in a response by customer support manager "Grace," to the question, "What happens if sellers end up wanting to list full-service? She says, "If a seller finds they are in over their heads, or they are too busy to show the home, we will refer them to a full-service agent at no additional charge."
That"s a win-win for the seller and Coldwell Banker.
These possibilities indicate that Blue Edge is not so much an answer to the e-broker threat, but is a means to raise franchise growth and profitability.