Coldwell Banker goes virtual with property sales

Company sets up shop in Second Life online world

Tuesday, March 27, 2007

By Glenn Roberts Jr.
Inman News

Coldwell Banker has put up a shingle in the Second Life digital frontier, and is among the first real-world real estate companies to sell virtual homes in cyberspace.

Second Life is a three-dimensional virtual world with its own currency, Linden dollars, that can be purchased for real money.

There are about 5 million registered Second Life users, or "residents," and about 1.7 million of them are more active users who have participated in the virtual world -- or "metaverse" -- within the past 60 days. Residents are represented by customized characters called avatars. (See Inman News report.)

"It's the real wild, wild West," said Charlie Young, senior vice president of marketing for Coldwell Banker Real Estate Corp., which has about 3,800 affiliated real estate offices and 124,000 sales associates in 31 countries.

Second Life is dominated by a small group of land barons who dominate the real estate market, Young said, and the company saw an opportunity to participate in the online world while marketing its real-world services in a new venue. "Second Life consumers were being taken advantage of in some regard, in terms of price-gouging," Young said.

Similarly, Young noted, Coldwell Banker got its start 101 years ago when its original founder, Colbert Coldwell, set up shop in post-earthquake San Francisco in an effort to professionalize the real estate industry in a time of rampant corruption.

So Coldwell Banker three months ago began to buy up some virtual land in Second Life and paid a third-party virtual architect for some home designs. And voila -- the company launched its virtual realty business Friday.

David Marine, Coldwell Banker's senior manager of eMarketing, said it's not uncommon for homes to sell in Second Life for about $60 in U.S. dollars, and for landowners to sell parcels in groups rather than individually. "The average resident who wants to buy one piece of land is kind of at a loss," Marine said. Coldwell Banker is pricing its properties for about $20 in U.S. dollars, he added.

Perhaps, said Young, the company will develop a working "code of ethics" for the virtual world.

The company staffs a sales office in Second Life with live agent avatars who can schedule appointments for users to view properties and can answer questions and offer information about the company's real-world services. The office is open for business from 9 a.m. to 8 p.m. Monday through Friday.

Young said these in-world agents are essentially customer-service professionals, not licensed real estate agents. And they don't receive commissions for virtual sales -- they are paid a regular salary, he said.

"We're not in this to make money off virtual real estate transactions," he said. Instead, the company is hoping to build brand recognition with an ultra-tech-savvy audience. "The brand has been looking for avenues to start connecting to the younger consumer, the new consumer," he said.

"Our first and primary objective is all about making a connection from a brand perspective," Young said, and the company has worked to integrate its virtual presence with its real service offerings.

The company's virtual presence in Second Life allows users to jump to real-world tools to search for the company's for-sale properties and agents and find estimated home values, for example. A virtual golden retriever -- the mascot for the Coldwell Banker system -- sits at the entryway to the company's Second Life office and can lead visitors to sample the company's services.

In the digital world, the company has an inventory of about 500 homes that it will sell or rent, and also has plans to sell vacant land for users to build custom homes. The common areas in these developments feature corporate branding, as do the yard signs in front of the available homes. Coldwell Banker also advertises its brand and properties elsewhere within the Second Life space.

Just as advertisers gradually crawled, walked and then flocked to the Web, Second Life is evolving as a destination for corporations and corporate advertising -- though that has stirred a backlash from some users. "We expect there are going to be two camps," Young said.

"We expect the average Second Life everyday citizen is going to be very accepting. We're not just advertising -- we're participating in their experience. We know that land barons who are pretty influential members of the community are going to be not so happy with us. We are going to be there as long as members of Second Life wants us to be," he said.

Other companies have set up shop at Second Life, too. Cisco Systems announced in December the launch of its Second Life presence to showcase products, display the design for a company-branded future baseball stadium, and to host events. Microsoft Corp. has its own island in Second Life.

It's not yet clear, Young said, whether Coldwell Banker will enter the commercial virtual real estate business within Second Life and whether the company will participate in brokering resale properties. Also, he said, it's possible that real-world Coldwell Banker sales associates may want to try their hand at virtually representing Second Life clients.

"This is an experimental lab for us. We don't know where it's going to take us," Young said. "We will learn things about how the Internet works. Things about Second Life could drive the Internet experience in the future outside of Second Life."

Buyers of Coldwell Banker virtual homes have assurances that their neighbors won't be able to super-size their homes to block out virtual views -- homeowners can decorate inside but won't be able to change the outside of their homes. Also, there are restrictions against commercial developments in Coldwell Banker's subdivisions -- so no next-door rock concerts or disco clubs.

The company is attempting to bring some order to a sometimes chaotic land. "There is certainly no urban planning," Young said. Meanwhile, Coldwell Banker offers "well laid-out, well-planned communities. They all have houses built on them -- they all have roads and infrastructure within those communities." As a bonus, the company is throwing in free virtual furniture for home buyers.

Just as in the real world, Coldwell Banker wants to know more about its clients and prospective customers in Second Life. "We have an extremely detailed reporting mechanism," Young said, so there is a record of any avatar who steps into the office. The company plans to keep track of its virtual transactions, too.

On Monday the company recorded its first virtual-home sale, and Young said the company expects that its initial inventory may be sold or rented within six weeks "if all goes well."

Young said the company's virtual presence could be used as a forum for company agents and officials to hold meetings and interact, and the company's Second Life office includes an amphitheater with seating for about 50 avatars. "We are looking at the virtual aspect of communication that Second Life could bring," Young said.