REAL ESTATE IN A 3D WORLD

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The following article from the San Francisco Chronicle is rather long but very relevant, therefore we are posting the entire article devoid of any comments.

REAL ESTATE IN AN UNREAL WORLD
Tom Geller, Special to The Chronicle

Sunday, September 2, 2007

The weather is perfect for an open house. The listing agent greets you at the door and you enter the clean, rambling home, its lofty rooms done tastefully in muted cream with brown accents. Touring upstairs, you remark to a winged white tigress that the bathroom would look better with colored lighting; she touches a panel on the wall to make the change, considers, then agrees.

This isn't Narnia; it's Second Life, a virtual world where more than 1.5 million "residents" use computers to control graphic representations of themselves and interact with others as they wander through realistic landscapes that other residents have created.

The game's large audience has attracted real-world businesses, such as Circuit City, Toyota and Sears, that attempt to attract customers to their Web sites by "building" stores in Second Life.

Now, Second Life is a venue for selling another big-ticket item: homes.

The appearance of real-world home models in online worlds such as Second Life acknowledges that Americans are spending more time in virtual spaces that go beyond the Web. Sites such as Realtor.com already provide home buyers with basic property details, photos, and occasional movies of prospective properties. But immersive, 3-D online experiences such as Second Life, Google Earth and Google SketchUp go further by allowing visitors to fly over the city, stroll around the neighborhood, and even walk in the front door - without leaving the computer keyboard.

Last month, a Seattle-area Coldwell Banker office created a virtual model of a real-world 5,700-square-foot new home on Mercer Island, listed for a little more than $3 million. While several real estate companies have used Second Life to advertise their services, this is believed to be the first time a real home has been available for touring in this environment. Listing agent Suzanne Lane ("Suzanne Ibanez" in Second Life) said she's been happy with the response.

"We've had tremendous interest. About 3,700 people have come in and walked around, including quite a few who are capable of buying this level of home," she said. "It's a property that does command a worldwide market, so we're really excited about this new avenue because it's more worldwide."

She's still not sure whether Second Life will ultimately help her sell the house. However, she's optimistic about the project as a general marketing tool. "I've fielded quite a few questions from people who say they're potential buyers," she said. "The actual home is sort of a launch pad for more information."

The real-world house was left unstaged, its empty rooms devoid of furniture, art, and the cliche breakfast tray in the master bedroom. The home's Second Life version could have been filled with such homey touches at a tiny fraction of the cost of a real-world staging, but Charlie Young, Coldwell Banker's senior vice president of marketing explained why it isn't.

"We made a decision to represent it exactly as it exists in the real world," said Young, who is known as Spuds Carter in the virtual world. "Even the handles on the kitchen cabinets are the same. If you look out the back window, it's the real view. Just because you're not actually in the listing doesn't mean you can't experience what it's like."

The Mercer Island home is part of a larger strategy for Coldwell Banker, which opened its Second Life office in March and revealed that it had secretly been buying virtual property for development and resale.

Such online property is commonly purchased and developed by players who subdivide, assemble, and build virtual homes, just as in the real world. The game's currency (Linden dollars) is convertible to U.S. dollars on an in-game exchange known as LindeX, so such practices have resulted in real payoffs for savvy land developers, including at least one self-reported millionaire. (Coldwell Banker's virtual homes in the game's Ranchero section sell for the equivalent of $20 to $50.)

But from the beginning, the company has treated its forays into Second Life as an extension of its real-world business, creating another way to connect potential buyers with its Web site.

Indeed, the Second Life project was led by Coldwell Banker's ad agency, Kinesis Advertising, which in turn hired Florida's Code4Software to do the actual development. Coldwell Banker says the cost of building a presence in Second Life, including its land and offices, was less than $50,000. The Mercer Island building required a fraction of that sum. However, Young said, he believes the high cost of 3-D modeling will keep home listings from being commonplace in Second Life for a while.

Code4Software President Jared Freedman (Ancient Shriner in Second Life) pointed out that every object in such shadow-world buildings has to be created online, "even a rock by the road, or a weed." But he said the real-life modeling projects are worthwhile, even if they are limited or imperfect.

"Virtual showings have a very bright future, Freedman said. "Fuel costs and traffic congestion are increasing. If you can have a mechanism to help a prospective buyer narrow down their choices for which homes they want to actually visit, you're saving the buyers gas and time, saving the agent gas and time, and saving the homeowner an intrusion. You can make a decision if you want to actually visit the location in person. There's no other way you can convey this amount of information."