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The Corcoran Group: An Early Internet Adopter Pushes Ahead

The Corcoran Group believes in the power of technology to improve their business, and it can prove it. A 23-year-old residential real estate company [they are not a member of NAR] with six offices in Manhattan, N.Y., three in Brooklyn, and 380 agents, Corcoran has been tracking sales generated by its Web site for the last two and a half years, comparing them with non-Web sales. The results are startling. Customers who come in via traditional advertising typically work with an agent for three to four months and look at 23 properties before buying. Those who contact agents through the Web work with agents for about one month, and look at only 7-8 properties before buying. Why the disparity in the Web's favor? "Our Web site puts control and information in the hands of the consumer," says Alfred Renna, Vice President of Internet Marketing. "With the Web we've made enormous amounts of information available to consumers without them needing to talk to anyone." This includes 650 exclusive listings-New York City has no MLS-with full home descriptions, color images, floor plans, information about the neighborhood, and more. Customers can even find agents by language spoken, a real benefit in cosmopolitan New York. Renna jokingly compares this rich offering to the typical newspaper ad: "West 70's, low $400s, call today!" This immediately sets the agent up to be defensive and the buyer not as trusting.

The Web's communication capabilities are a strong incentive for many customers. Renna says the average buyer is a 36-year-old guy who works on Wall Street. He hits the Web site during the day and communicates via e-mail because that's how he does business. "He values us when we respond to him that way since there's not a lot of time wasted on phone calls." Still, it's early in the Internet game. In 1997, only three to four percent of Corcoran's gross sales originated on the Net, but since 1995 they've tripled every year. "People are thinking about buying things in general from the Web and they're communicating via e-mail," Renna says. "We have positioned ourselves right in the middle of this cultural change."

To keep the momentum going, it's imperative that agents become more comfortable with the technology. Many Corcoran agents are already Internet savvy, but with over 300 agents in age from their mid-20s to 70, it's inevitable that some would resist change. That's why Corcoran is so aggressive with technology dissemination and training. "Our training program is completely interwoven with technology and correct marketing of properties via the Web," says Shelby Goerlitz, Corcoran's Director of Information Systems. His department has installed Intel-based PC's on every agent's desk-nearly 400-200 and 233 MHz Pentium processors with MMX "! technology. And 12 Intel Pentium II processor-based servers run the company's network with Windows NT and Microsoft BackOffice. Corcoran has also installed fast T1 phone service to the Internet and between the five branch offices. Fast office-to- office service is essential because more and more agents are using e-mail for basic business communication. "It lets people chatter back and forth," Goerlitz says, "like a big virtual office."

Corcoran is steadily converting all proprietary company applications to be Web-based. To help everyone learn the technology, the company offers 15 training classes a week attended by 150 people. These cover everything about computers, including how to use e-mail and the Internet. The information systems department also runs a computer help desk to answer questions about using the company's software and the Internet. This helps upgrade the agents' computer and Web literacy. "If certain people come to the help desk frequently, we push to get them into classes," Goerlitz says. "We have to get everyone up to speed because that's the direction the industry is going." He's also rewriting the company's real estate software to work from a Web browser. Corcoran is one of very few companies in the real estate industry that are aggressively moving toward the Internet, but it's still behind corporate America in general. "We're an early adopter in real estate," Renna says, "but we're just main-stream in business outside of real estate. We had to go outside our industry to find models for doing business on the Web."

Coming Next Week:
Case Study:Pacific Union

Contributing Author
Michael J. Russer
Michael J. Russer, President of RUSSER Communications, is an internationally recognized speaker, writer, and strategic consultant for the real estate industry about the Internet. His 22 years experience in the real estate field include the development of marketing and software systems as CEO for a high-tech mortgage consulting firm he co-founded. Also an authority on Internet risk management, he recently authored the industry's first comprehensive Internet policies and procedures manual for those companies that have agents active on the Net. He can be reached at (805) 882-1170 or mrusser@russer.com.