Another discount real estate model going down…next up Redfin

[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.

[njtosd]

[quote=sdrealtor]
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%5B/quote%5D

I don’t see anything in the article saying that they are moving away from the discount model. They are planning on reducing the emphasis on discounting as a PR move, but that’s all that I see in the text of the article. Plus, when there is a new business model, only the best start ups succeed. Failure of at least a few is assumed (i.e. Beta Max vs. VCR). I’m not convinced discount brokers are the wave of the future, but I don’t think one business contraction proves a failure of the basic strategy.

[njtosd]

[quote=sdrealtor]
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%5B/quote%5D

I don’t see anything in the article saying that they are moving away from the discount model. They are planning on reducing the emphasis on discounting as a PR move, but that’s all that I see in the text of the article. Plus, when there is a new business model, only the best start ups succeed. Failure of at least a few is assumed (i.e. Beta Max vs. VCR). I’m not convinced discount brokers are the wave of the future, but I don’t think one business contraction proves a failure of the basic strategy.

[njtosd]

[quote=sdrealtor]
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%5B/quote%5D

I don’t see anything in the article saying that they are moving away from the discount model. They are planning on reducing the emphasis on discounting as a PR move, but that’s all that I see in the text of the article. Plus, when there is a new business model, only the best start ups succeed. Failure of at least a few is assumed (i.e. Beta Max vs. VCR). I’m not convinced discount brokers are the wave of the future, but I don’t think one business contraction proves a failure of the basic strategy.

[njtosd]

[quote=sdrealtor]
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%5B/quote%5D

I don’t see anything in the article saying that they are moving away from the discount model. They are planning on reducing the emphasis on discounting as a PR move, but that’s all that I see in the text of the article. Plus, when there is a new business model, only the best start ups succeed. Failure of at least a few is assumed (i.e. Beta Max vs. VCR). I’m not convinced discount brokers are the wave of the future, but I don’t think one business contraction proves a failure of the basic strategy.

[njtosd]

[quote=sdrealtor]
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%5B/quote%5D

I don’t see anything in the article saying that they are moving away from the discount model. They are planning on reducing the emphasis on discounting as a PR move, but that’s all that I see in the text of the article. Plus, when there is a new business model, only the best start ups succeed. Failure of at least a few is assumed (i.e. Beta Max vs. VCR). I’m not convinced discount brokers are the wave of the future, but I don’t think one business contraction proves a failure of the basic strategy.

[sdrealtor]

Huh? Here is the opening paragraph:

“ZipRealty Inc. is closing company owned and operated brokerages in almost a dozen markets, and will begin emphasizing personalized service and the experience of its agents over the commission rebates and discounted listing fees the company was founded on.”

The are moving away from rebates and dsicounted commissions and moving toward personalized service. I dont think it could be any clearer. I’m not saying that you cant find discounted services and commission rebates which you can and always will be able to find from niche players. However anyone expecting a wholesale shift in the industry will be sadly disappointed.

This not one business contraction, its the next in a long line fo similar failures. Remember ipayone.com?

It doesnt work. I’ve seen the financials of large brokerage offices. The financials of perhaps the most successful office in SD and they dont look that good.

[sdrealtor]

Huh? Here is the opening paragraph:

“ZipRealty Inc. is closing company owned and operated brokerages in almost a dozen markets, and will begin emphasizing personalized service and the experience of its agents over the commission rebates and discounted listing fees the company was founded on.”

The are moving away from rebates and dsicounted commissions and moving toward personalized service. I dont think it could be any clearer. I’m not saying that you cant find discounted services and commission rebates which you can and always will be able to find from niche players. However anyone expecting a wholesale shift in the industry will be sadly disappointed.

This not one business contraction, its the next in a long line fo similar failures. Remember ipayone.com?

It doesnt work. I’ve seen the financials of large brokerage offices. The financials of perhaps the most successful office in SD and they dont look that good.

[sdrealtor]

Huh? Here is the opening paragraph:

“ZipRealty Inc. is closing company owned and operated brokerages in almost a dozen markets, and will begin emphasizing personalized service and the experience of its agents over the commission rebates and discounted listing fees the company was founded on.”

The are moving away from rebates and dsicounted commissions and moving toward personalized service. I dont think it could be any clearer. I’m not saying that you cant find discounted services and commission rebates which you can and always will be able to find from niche players. However anyone expecting a wholesale shift in the industry will be sadly disappointed.

This not one business contraction, its the next in a long line fo similar failures. Remember ipayone.com?

It doesnt work. I’ve seen the financials of large brokerage offices. The financials of perhaps the most successful office in SD and they dont look that good.

[sdrealtor]

Huh? Here is the opening paragraph:

“ZipRealty Inc. is closing company owned and operated brokerages in almost a dozen markets, and will begin emphasizing personalized service and the experience of its agents over the commission rebates and discounted listing fees the company was founded on.”

The are moving away from rebates and dsicounted commissions and moving toward personalized service. I dont think it could be any clearer. I’m not saying that you cant find discounted services and commission rebates which you can and always will be able to find from niche players. However anyone expecting a wholesale shift in the industry will be sadly disappointed.

This not one business contraction, its the next in a long line fo similar failures. Remember ipayone.com?

It doesnt work. I’ve seen the financials of large brokerage offices. The financials of perhaps the most successful office in SD and they dont look that good.

[sdrealtor]

Huh? Here is the opening paragraph:

“ZipRealty Inc. is closing company owned and operated brokerages in almost a dozen markets, and will begin emphasizing personalized service and the experience of its agents over the commission rebates and discounted listing fees the company was founded on.”

The are moving away from rebates and dsicounted commissions and moving toward personalized service. I dont think it could be any clearer. I’m not saying that you cant find discounted services and commission rebates which you can and always will be able to find from niche players. However anyone expecting a wholesale shift in the industry will be sadly disappointed.

This not one business contraction, its the next in a long line fo similar failures. Remember ipayone.com?

It doesnt work. I’ve seen the financials of large brokerage offices. The financials of perhaps the most successful office in SD and they dont look that good.

[njtosd]

Read on, my friend. Later in the article you will find the following paragraph:

“The goal is to change the perception of the company — for now, the company has no plans to reduce the commission rebates it offers to buyers. Although ZipRealty advertises itself as willing to offer commission discounts to sellers, those discounts are negotiated on a case-by-case basis.”

Again, as I mentioned in my earlier post – the article indicates that the goal is to change the perception of the company. They have announced no plans to change their actual business model.

I think the more interesting data is that Redfin has not gone public and has not received any financing since 2007. That either means that they (a) aren’t successful enough to attract additional financing, or (b) they don’t need it.

[njtosd]

Read on, my friend. Later in the article you will find the following paragraph:

“The goal is to change the perception of the company — for now, the company has no plans to reduce the commission rebates it offers to buyers. Although ZipRealty advertises itself as willing to offer commission discounts to sellers, those discounts are negotiated on a case-by-case basis.”

Again, as I mentioned in my earlier post – the article indicates that the goal is to change the perception of the company. They have announced no plans to change their actual business model.

I think the more interesting data is that Redfin has not gone public and has not received any financing since 2007. That either means that they (a) aren’t successful enough to attract additional financing, or (b) they don’t need it.

[njtosd]

Read on, my friend. Later in the article you will find the following paragraph:

“The goal is to change the perception of the company — for now, the company has no plans to reduce the commission rebates it offers to buyers. Although ZipRealty advertises itself as willing to offer commission discounts to sellers, those discounts are negotiated on a case-by-case basis.”

Again, as I mentioned in my earlier post – the article indicates that the goal is to change the perception of the company. They have announced no plans to change their actual business model.

I think the more interesting data is that Redfin has not gone public and has not received any financing since 2007. That either means that they (a) aren’t successful enough to attract additional financing, or (b) they don’t need it.

[njtosd]

Read on, my friend. Later in the article you will find the following paragraph:

“The goal is to change the perception of the company — for now, the company has no plans to reduce the commission rebates it offers to buyers. Although ZipRealty advertises itself as willing to offer commission discounts to sellers, those discounts are negotiated on a case-by-case basis.”

Again, as I mentioned in my earlier post – the article indicates that the goal is to change the perception of the company. They have announced no plans to change their actual business model.

I think the more interesting data is that Redfin has not gone public and has not received any financing since 2007. That either means that they (a) aren’t successful enough to attract additional financing, or (b) they don’t need it.

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