6.28.2007

Why Redfin Will Succeed

Kevin Boer at 3 Oceans Realty poses the question, "If You Were Designing The Real Estate Industry From Scratch, Would It Look More Like Coldwell Banker Or Redfin?"

The consensus so far is that if we started from scratch, the industry would still resemble the 1.3 million contractors that make up the NAR. I made a comment that could be interpreted as harsh against the demographic that Redfin is seeking to court, but I meant what I said- we all know (or are) someone who is glued to a computer and would love to never ever leave. I have a family member (no, not my husband) who is literally addicted to the internet and would never leave his chair if he didn't have to go to the bathroom. Seriously.

Redfin would be great for him because he's scared to death of getting out of the house. He wouldn't care how Web 2.0 the Redfin site is, he would love the idea that he doesn't have to interact with a human. The problem is that before he says "I do" and marries his home, he'll want to personally (ideally without a sales person present) hold its hand and commence to a little heavy petting before committing. This is why video open houses are so important for this tiny demographic. BUT, buyers will never purchase a home sight unseen, because humans inherently rely on tangibility and emotions regarding major purchases regardless of whatever "business model" a Realtor uses. Look, I personally don't like big crowds and sales people make me nervous, but I have to see the house/car/skirt in person before I let a salesperson into my personal business. I understand.

Therefore, I maintain that Redfin is courting the hipster/WoW nerds and I believe (as my husband notes below) that they will survive (and succeed) in their niche because they've quietly found a tiny demo that was not publicly being courted, and the only reason they need a website is for PR, not necessarily sales. RealtorGenius says it better than I can in a comment at 3Oceans:





4 comments:

Athol Kay said...

Coldwell Banker is nuttier than Redfin in terms of it's online nerd rep. It opened an office in Second Life a few months back.

As to WoW nerds...

We're officially 0.3% of the global population. Ya I said global.

P.S. LOL you called it "WoW", have you started playing Lani?

AUSTIN REALTOR'S WIFE said...

1. Coldwell has a few nerds on staff but they still haven't shaken the bluehaired rep (at least not here). With any brokerage, there are people who are advanced and those who cling to the traditional get-rich-quickly-in-RE pamphlets.

2. I don't play WoW... like I said, I have a computer-addicted relative! But I am COOL enough to know that it's called WoW!

3. To add to the article, I actually don't believe that a remodeled RE industry would look like Redfin OR Coldwell Banker. I think Single Pointe Realty would really be the likely model! :)

Marty Van Diest said...

Just stopping by to read your post for Carnival of Real Estate.

I don't have an opinion about Redfin since we haven't had to deal with it up here in the Frigid North.

Jeff Brown said...

Lani - I'm not sure what kind of success Redfin has had in San Diego so far, though I remember Kris Berg saying they'd closed one deal in about half a year.

If indeed they're looking at a niche that small, their success is anything but assured. The same fear that keeps those buyers inside their four walls will rise up and choke them when Redfin becomes unavailable after the deal is put into escrow.

All those disclosures, inspections, loans - they'll implode as they sit looking at their screens. :)