Coldwell Banker Puts Real House on Second Life Block

Aug. 2, 2007 — -- Virtual world du jour Second Life has long been a stomping ground for virtual realtors, as avatar upon avatar shells out Linden dollars (named for the lab that created the world) to buy tracts of virtual lands to build virtual homes for their virtual lives.

But today, Coldwell Banker, one of the nation's largest real estate brokerage firms, will bring that 3-D virtual world one step closer to reality, when it puts a real, brick-and-mortar house on the block in Second Life.

Second Life avatars can meet with an agent, tour the house — a more than $3 million new construction near Seattle — make a bid, and even negotiate a deal. Any documents that needed to be signed, however, would have to be done in the real world.

Compare the Second Life to the real life house by clicking here.

"We chose Seattle for a couple of reasons," Charlie Young, a Coldwell Banker senior vice president, said. "One, it was a progressive and innovative market. Two, the [housing] inventory could compete internationally."

The virtual house could provide an opportunity for buyers who are far away to take a look at the home, Young said.

Commerce, for everything from real estate to psychiatric services, is an essential part of virtual worlds, such as World of Warcraft, and Entropia. Second Life, which has become exceedingly popular in the last few years, boasts more than 8 million members; in an average day, more than $1 million changes hands.

For Coldwell Banker, which has been selling and building virtual houses in Second Life for $20 a pop, the idea of marketing a real home in that space was a natural extension, according to Young.

"When you look at how homes are bought and sold today, the process has changed completely," he said.

Stephanie Singer, a spokeswoman for the National Association of Realtors, agreed.

"Realtors all over the country are advancing technology," she said, as more and more buyers and sellers use Web casts and YouTube to market their homes. "That's a big change from what you've seen 10 years ago."

Eighty-one percent of recent home buyers used the Internet to buy their homes, as opposed to 2 percent in 1995, according to the association.

While Coldwell Banker's move to Second Life is a continuation of that trend, Singer said that technology alone will never be able to sell a house; instead, it's about a human connection.

"Really, it's grounded in relationships," she said, "Whether you build them online or in instant messaging with your younger buyers."

But, combining real-life commerce with virtual worlds isn't always the best fit, according to Joe Laszlo, a senior analyst at the research firm Jupiter Research.

"Translating the real world shopping experience to a virtual experience doesn't work," Laszlo said, especially when it's something, such as buying a book, that consumers could easily do online. "The idea that you'd need to walk your avatar [into the store] — It just doesn't make a lot of sense to me."

But Laszlo doesn't discount the idea for homes.

"Where it may work is big-ticket items where you might actually want to see them" in your home before you buy, such as furniture, he said. "Make a room that's sort of roughly the dimensions. Then, you get a much better sense if this is going to fit. ... [But] I doubt someone will close on a property without seeing it in the real world."

If the venture is successful for the firm, Laszlo believes that other real estate companies will hop on the Second Life bandwagon, even if consumers don't.

"If Coldwell Banker is successful, I think that will start to put pressure on realtors to experiment there," Laszlo said.

"The challenge with Second Life is that, unlike the Web, [which] reached a point where suddenly it exploded, it's still kind of a fair distance away, where it becomes a place where people have to be to make money and do business. ... The learning curve factor is going to be the big inhibitor."

For now, Coldwell Banker is calling this mixture of real-life realty and Second Life "an experimental project," said Young, who believes that other realtors will follow his lead.

"You're not going to see it immediately, but in the next three to five years? Absolutely."