Just a few more words but first a disclaimer. I have nothing against Redfin and love their technology. Them being more successful does not hurt me nor does them be less so help me. As an individual agent doing anywhere from 8 to 20 transactions a year I stay out of the politics in this business.
With that said the money in real estate is made by the 20% of agents that do a decent amount of business year in and year out while watching costs and running a profitable business. Thats what I do and what I suspect Jim does as well.
The brokerages we work under are not very profitable. They can only make money on volume, by skimming a larger share from agents that do the actual work or ancillary services (title, escrow, lending).
The same financial arrangements offered by Redfin are offered by many far more skilled and experienced agents. We can do so more profitably as we are more nimble, have more control over costs and less overhead.
While they can get listing market share by discounting their side their survival depends upon representing buyers and getting the 2.5% on the buyers side that full service agents support.The brokerage business is very low margin. If they ever truly took over they would have to change their financial model or the business would collapse because it could not be profitable.
Its a delicate balance between old and new and both are needed to support the whole shooting match. The old rules are NOT eroded by technology but rather technology is being used to skim a segment of the business off by venture backed and publicly traded companies with the sales pitch they will change the business. Their real goal is to build a company that can be sold to a greater fool. Having worked in prior careers in the world of VC Ive seen these VC guys at work from the inside. They are best sales people in the world and could sell an eskimo ice. Selling the promises of riches and changing the industry to a bunch of realtors could be easier than selling that ice to someone on a deserted tropical island.
I have no fear of the redfins, zillows or ventured backed tech brokerages. They are all built to be sold not to succeed.
