Unbeknown to most real estate principals when they contract a web development company to build them a new website, they are not actually purchasing a website but rather locking themselves into a lease agreement for a site. Almost in all cases, the IP for the site (technology, code and even web design) belongs to the real estate software company and not the real estate agency.
All websites are based around a content management system (CMS) which is the platform that your real estate website is structured/built-on and which allows you to update website content. In real estate, basically all products offered by real estate web development companies are built from the software company’s own in-house CMS. A CMS they have spent years building and one they will not easily change and never hand the IP over to their clients.
From my experience the average real estate website costs around $6,000 to produce and then requires a monthly hosting and support charge of around $150 per month. If you decide you’d like to end your relationship with this company then your $6,000 is a sunk cost. Lets assume you stay 2 years with that software company then the actual cost of your solution is $400 per month. So you’re leasing (at a ridiculous price) a website from the software company indefinitely and at the end of the lease you receive nothing.
It does not stop there, as the web development company will find other ways to bleed money from you. If you require any type of change to the site then the company will quote what ever fee they feel fit (and some of the fees i’ve heard have been outrageous). As a site owner you either pay this fee or go without the site enhancement. As you can imagine this type of arrangement is very counter-productive for your online solution, as you can’t tweak SEO (or have specialist 3rd companies complete this), you can’t install 3rd party software on your site, and your likely to avoid enhancements because of the excessive cost involved.
So what are the alternatives? Unfortunately because of the technology involved in powering a real estate website and also maintaining the data exports means there are not too many solutions. However, there are a few companies in Australia who offer alternatives to an in-house CMS.
One alternative is to have the software development company build your own CMS. This way you own the IP of the CMS and have the ability to move your site if the relationship ever ends. In most cases your site will be build from a popular frameworks (eg .NET, PHP, ColdFusion) so finding another developer will not be an issue. The only downside to this solution is that it will be costly to build your own CMS system, in the proximity of $20,000 to $70,000.
There is one solution which is cost effective and will provide you with freedom and choice. That is to use an open source CMS which is free to use on a General Public License. These open source CMS are usually owned by a not for profit organization of web developers and designers, who’s goal is to share code amongst a worldwide community of developers in an effort to provide a free and powerful CMS for websites. PHP is an open source language and a few CMS build upon PHP include Joomla, WordPress, Drupal, CakePHP and Codeigniter.
Pro’s from using an Open Source CMS over an in-house CMS:
- It’s FREE – Open source CMS are free so you never have to pay for the core software which your website is built on. You then never need to pay for an upgrade to the open source CMS.
- You own your site – Because open source CMS are free means your website will work on any server located anywhere. This means once your site is build and you decide to end your relationship with your development company you can easily copy your website and install it on another server.
- Far Superior – Open source CMS systems have 100’s of developers and designers Worldwide who contribute code and ideas to the system. On a monthly basis the organisation running the CMS will decide on what pieces of code are to be added in the next update. In-house CMS usually have 1 to 2 developers who work full time on improving the software.
- Open source CMS are upgraded every 2 to 3 months – The best ideas from the 100’s of developers who have contributed code will be added to the CMS core, tested by the organisation and deployed in the next update. This means you can continually update your CMS with a stronger more powerful and feature rich CMS.
- Less bugs – All of the 100’s developers who have contributed by adding code to the core CMS will then thoroughly test the updated Beta version of the CMS and quickly find any bugs it includes. Once again an in-house CMS might have 1 – 2 people testing it before it goes to market.
- Endless Supply of Functionality – The way an open-source CMS works is that the CMS provides the core structure for the website. You then install plugins, add-ons and widgets which provide additional functionality which the core CMS does not include.
- Endless supply of developers and designers – If you end your relationship with your web developer then you can easily find 1000’s of developers and designers who can take over managing your website.
- Freedom to Update – You or 3rd parties can have access to update the files for your site, meaning you can source cheap enhancements to your site through your existing developer or other developers.
- Choices for pre designed Themes – If you have a budget and require a website for less than $100 (with no ongoing fees) then this is possible through an open source CMS. Check out Woo Themes a CMS theme selling site.
My advice for next time you’re looking around for a new real estate website is to make sure you’re first question is…….Do you use an in-house CMS? If they answer yes then hangup, if they answer no ask…..Do I own the IP for our site and if we end our relationship am I free to take our website at no cost?
If they answer yes to the last question then you’re onto a winner and you are truly undertaking an investment when you purchase a new website.