Redfin CEO Glenn Kelman has a simple, if surprising, answer to the question of why technology hasn’t made real estate better: It mostly hasn’t tried.
While real estate portals such as Zillow and Trulia now have valuations in the billions, their business models depend on the continuing flow of advertising dollars from their customers — traditional real estate agents, not consumers. This means that the portals tend to support the status quo rather than try to lower prices or improve service, according to Kelman.
Kelman’s counterpoint to this is, predictably, his own tech-focused brokerage, Redfin, which attracts consumers through comprehensive search tools and has rebated more than $100 million in fees. Other startups such as Suitey, Findwell and Urban Compass have followed suit.
“The trend is part of a movement across industries, in which software engineers contribute to real-world businesses rather than pure digital marketplaces, so consumers can get better service. Why after all make software for traditional real estate agents when you can just try to be a better real estate agent?” Kelman wrote.
It takes more time and money to have real estate software work hand in hand with real estate agents and expand one neighborhood at time, Kelman added, “but it is the salvation of technology’s proper role in society, to do the big thing, to help regular people, to make things better, to make a difference in the real world. It is the future of real estate, and of many other industries, too.”