Though I've left behind any professional full-time interests in the Real Estate industry, the space continues to capture my interest I learned a great deal about commercial real estate business working for a web based mapping company targeting various aspects of the business, and I gained a lot of respect for the people that were doing it right. I also learned that there were some people out there doing things the wrong way, and that they tend to be feeding at the low end of things, residential rentals in NYC.
I never spent much time thinking about the apartment markets while I was in Houston, but my recent experience in New York City were so horrifying that I really felt something needed to be done.
Existing solutions seem to come from the mindset that they need to fight the system from within. They aim to undercut broker prices by being more efficient (see applying any technology what so-ever), or they just try targeting a larger market. One of the most recent examples can be found here... XXX has had a series of posts about Redfin, a relatively new low cost residential web-based real estate broker. Though it addresses the home buying market, I hope to see some of their practices carry over to the rental market.
After working with a couple brokers to find rentals in New York City I reallized that they are not evil people. They are working in a market with massive inequalities of information, and fairly low incentives to maintain high customer satisfaction. Especially in NYc with such high demand for housing, the renter is at a disadvantage. People will do anything to find a new place, and many of them coming into the city for the first time know absolutlely nothing about how the system works.... In the end this leads to over-priced apartments, rushed decisions, brokers gaming the system to close more deals, and very unhappy renters.
What I propose is a tool or portal to empower the buyers again. Something that can give them information they need to make smarter decisions and have a bit more power in their court for the negotiating. At the same time I see the same simple tool being applied to the brokers "to keep them honest".
The tools have been built before and the model is being tested by other companies, so its just a matter of piecing it together.
Phase 1: Empowering Buyers
While searching for my apartment in the city I noticed one thing really made my broker nervous. This cardinal sin was talking to other brokers and the other brokers clients (yes, I'm a chatty guy). The more I talked, the more I learned. Combined with some creative filtering of RSS feeds, and some shifty online research I was able to get a much better feel for the market.
In particular I searched craigslist and called a LOT of brokers. I developed a good system of questions to ask each broker, and lost any sense of common decency while on the phone, so i went right for the jugular. The point being, is that each person searching for an apartment is seeing the market from a different perspective and learns different things from that market. Should craigslist simply have had a way to post comments, things would have been much easier.
Enter my previous idea to use social bookmarking sites with comments as a way to "impose" comments on sites that don't have them. An added benefit is that these comments can reach across multipled information sources. You're not restricted to just craigslist or edgio. Any site that generates a static URL for the life of the post can be commented on through a service such as Diggo. If you have a site that was focused on real estate in a certain city, the bookmarks users create, could serve as a way to provide feedback on those posts. End-users searching for apartments could combine their knowledge to help offset the advantage brokers have.
Examples of social bookmarking sites that could be used:
None of them are setup to address this problem, and I would argue that the comments section on these services are very poorly designed. The point is, that with a little bit of code, you could come up with something very similar that would work.
With enough people loading tips and tricks, while posting "the reality" behind many of these online postsings, empowered users will be able to gain a better negotiating position.
Phase 2: Punishing the violators
The other side of this problem is that with the continual influx of renters in NYC coming from all across the world brokers have a fresh supply of new suckers. To be able to provide some continuity between the renter, we need to have a place for them to leave feedback or rate their experiences with different brokers. The biggest issues I see are making sure people are who they say they are, so they can be held accountable for their feedback. This is an area where I have very little experience, but I've found a couple of other sites that are working to solve this problem.
Websites that have buyer/seller rating systems:
- http://www.rapleaf.com/ - a real-estate site may be able to leverage rapleaf rather than re-inventing the wheel
To summarize my very "on the back of a napkin" idea, I see a sight that serves as a portal for the new york city apartment rental market. It is a one of a kind market, so it deserves its own community site. A social bookmarking feature with bookmark comments would provide a way for users to exchange information about apartment listings across all services. At the same time some sort of buyer/seller reputation ranking service would help renters get a better feel for which brokers to work with. Combine with some mildly decent content you could really provide some value in this space. As far as i can tell there aren't many people even providing tips or tricks much less full on tools to help these renters out (i'll eventually be posting some articles about this at www.scoutsider.com).