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Real Estate Brokers Edgy About Online Competition

As if discount brokers aren�t causing enough angst among real estate brokers these days...now the former head of Expedia travel web site has offered a �beta� test version of internet tools designed to help people get home valuation estimates, which ultimately will assist consumers in the search for homes. The company (Zillow.com) has raised $32 million from two venture-capital firms, Benchmark Capital and Technology Crossover ventures.

Zillow chairman and CEO Richard N. Barton says the new service will involve information tools that will enable people to �take control of the process� of buying and selling real estate. There�s concern in the real estate industry because of Expedia�s role in slashing the costs to consumers when booking online reservations for hotels, cars and airplanes.

So far, real estate brokers have avoided the kind of price war many people predicted in the early days of the Internet. Even with the higher prices of homes, commissions still average more than 5%.

Barton believes major change in home selling is inevitable over the next five years or so, because �there�s an unsustainable disconnect� between the commissions charged by most agents and the value of their services. He expects that agents will become more productive and less numerous.

Editor�s note: Further change is evidenced by Homestore Inc., operator of property listing service Realtor.com (owned by the National Assn. of Realtors and now the top real estate Internet site), which has announced it�ll change its name to Move.com and revamp its primary web site to include more consumer-friendly features.

Tougher online competition ahead for real estate brokers will also come from companies like Google and Craigslist as they add more information about homes for sale, which will give consumers more �ammo� in negotiating with or even bypassing agents.