Another discount real estate model going down…next up Redfin

[sdrealtor]

Though we havent gone around this one in a while I just wanted to point out yet another Internet based discount RE brokerage is admitting the model doesnt work. All the cries about RE brokers charging too much do not understand how expensive the business is and how thin margins are. While individuals RE brokers can be opportunistic and do a good business the industry cannot survive without the large brokerage model.

Read here the sad tale of ZIPRealty which is exiting markets and moving away from the discount model.

http://www.inman.com/news/2011/01/10/ziprealty-shutter-offices-in-11-markets

[ljinvestor]

The industry could use a breakpoint system though.

I would say that most realtors don’t work any harder to sell $500k property vs $1MM.

[ljinvestor]

The industry could use a breakpoint system though.

I would say that most realtors don’t work any harder to sell $500k property vs $1MM.

[ljinvestor]

The industry could use a breakpoint system though.

I would say that most realtors don’t work any harder to sell $500k property vs $1MM.

[ljinvestor]

The industry could use a breakpoint system though.

I would say that most realtors don’t work any harder to sell $500k property vs $1MM.

[ljinvestor]

The industry could use a breakpoint system though.

I would say that most realtors don’t work any harder to sell $500k property vs $1MM.

[scaredyclassic]

How does redfin go under? Once they have the computer system up and running won’t they always be able to find an agent who will pay 30 perc got the referral? A referrals worth something, the advertising etc. I guess at sone point they could run out of agents willing to pay that but seems unlikely

[scaredyclassic]

How does redfin go under? Once they have the computer system up and running won’t they always be able to find an agent who will pay 30 perc got the referral? A referrals worth something, the advertising etc. I guess at sone point they could run out of agents willing to pay that but seems unlikely

[scaredyclassic]

How does redfin go under? Once they have the computer system up and running won’t they always be able to find an agent who will pay 30 perc got the referral? A referrals worth something, the advertising etc. I guess at sone point they could run out of agents willing to pay that but seems unlikely

[scaredyclassic]

How does redfin go under? Once they have the computer system up and running won’t they always be able to find an agent who will pay 30 perc got the referral? A referrals worth something, the advertising etc. I guess at sone point they could run out of agents willing to pay that but seems unlikely

[scaredyclassic]

How does redfin go under? Once they have the computer system up and running won’t they always be able to find an agent who will pay 30 perc got the referral? A referrals worth something, the advertising etc. I guess at sone point they could run out of agents willing to pay that but seems unlikely

[sdrealtor]

scaredy
The system is more expensive to maintain than you think. If they were simply handing out referrals and drawing 30% they would make a mint but there is much more to support than that. Mark my words, in a few years Redfin will be toast too and will be changing their model. Frankly I dont beleive any of these companies really intend to change anything anyway. All these companies are started by tech entreprenuers. I have some experience in tech start-ups and these guys come from a mentality that they need an exit strategy and that usually means building something they can sell to an industry leader.

[sdrealtor]

scaredy
The system is more expensive to maintain than you think. If they were simply handing out referrals and drawing 30% they would make a mint but there is much more to support than that. Mark my words, in a few years Redfin will be toast too and will be changing their model. Frankly I dont beleive any of these companies really intend to change anything anyway. All these companies are started by tech entreprenuers. I have some experience in tech start-ups and these guys come from a mentality that they need an exit strategy and that usually means building something they can sell to an industry leader.

[sdrealtor]

scaredy
The system is more expensive to maintain than you think. If they were simply handing out referrals and drawing 30% they would make a mint but there is much more to support than that. Mark my words, in a few years Redfin will be toast too and will be changing their model. Frankly I dont beleive any of these companies really intend to change anything anyway. All these companies are started by tech entreprenuers. I have some experience in tech start-ups and these guys come from a mentality that they need an exit strategy and that usually means building something they can sell to an industry leader.

[sdrealtor]

scaredy
The system is more expensive to maintain than you think. If they were simply handing out referrals and drawing 30% they would make a mint but there is much more to support than that. Mark my words, in a few years Redfin will be toast too and will be changing their model. Frankly I dont beleive any of these companies really intend to change anything anyway. All these companies are started by tech entreprenuers. I have some experience in tech start-ups and these guys come from a mentality that they need an exit strategy and that usually means building something they can sell to an industry leader.

[Author]

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