Redfin Isn't Going Away, They Are Shaping The Business of Tomorrows Real Estate Brokerage
Posted on March 27, 2008
Redfin published their 2nd annual business findings on March 24th, The Redfin Advantage: Year Two A Comprehensive Analysis of Redfin’s Second Year of Real Estate E-Commerce. From 50,000 feet, the fact that a real estate brokerage puts out these statistics for all to see is unheard of. Diving in for a closer look reveals how this much maligned industry player is laying the ground work for tomorrows real estate broker and brokerage business model and motivations.
Redfin uses technology to address the inefficiencies of the traditional real estate model and works the industry like a business, using proven business strategies, better than any other major brokerage I know of. Maybe there are brokerages out there who focus on (and reward) customer satisfaction while implementing technology to improve efficiency, but none get as naked as Redfin. As far as I can see everyone else is playing catch up, attending the swelling sea of industry conferences and seminars trying to wrap their heads around (or sell) what players like Redfin are doing. Say it ain’t so, but it is.Real estate professionals on all levels ought to pay attention to what is a well funded experimentation in Web 2.0 real estate business strategy. Granted, they’re VC funded so they can afford to experiment with their ‘ideas’. Redfin -The Business Plan must have been pretty compelling or people smarter than you or me wouldn’t have thrown Other Peoples Millions behind it
Regardless, they are blazing a path to redefine the brokerage level business and commission model the way Zillow and Trulia have blazed the mucho-million dollar path toward ‘open-listing distribution’. There will be many people who try to dismiss and mitigate the numbers and statistics into irrelevance but the writing is on the wall, two years running now. A computer doesn’t beat an agent nearly as much as it augments their abilities to the point where they can afford to charge a fee more in tune with practical economics.
I’m purposely not getting into the specific statistics in their report, since they will be analyzed and interpreted on many levels and called everything from self-serving to Arringtons tongue in cheek suggestion that a Computer can replace an Agent. However, you cannot ignore what is the most comprehensive work of it’s kind. IMO Redfin obviously uses these reports to self-serve, but they are what they are, I don’t think they’re lying. If the numbers weren’t so good, you may have had to ‘request a copy’ (based on their promise to deliver the annual report).
In todays soft market Redfin posseses what most real estate professionals do not, good positioning. Redfin may be serving a niche market today but I don’t think it’s too much longer before that niche grows out of being called so. Consumers, especially ‘new’ ones, definitively like what Redfin has to offer.
Their model isn’t perfect nor is it meant for everyone (one size does not fit all) but I have to believe that aspects can be gleaned from this body of work and implemented for the betterment of the individual agent as well as the consumer on a broader scale. It’s only a matter of time before the defection from tradition becomes highly sought after. Many agents are already walking down this road using media rich blogs, highly augmented blog-sites (Incredible Agent, Realivent and Blueroof360) and a host of other social networking strategies. Will you have the tools to satisfy the ever discerning, enlightened consumer? How long is it before your business looks more and more like Redfins? How long is it before retaining a client requires you to do so?