I was out sick for most of last week so rather than regurgitate a bunch of old news; here’s a quick summary of the reaction to some of the bigger stories.
Redfin’s New (Old) Business Model
Redfin launched a referral-based business model that allows them to expand in to new markets. They also add data-rich review pages on all their agents.
With the real estate market contracting and credit tightening, Redfin has been forced to reconsider its business model. It seems that these partnerships with real estate agents was necessary for Redfin to expand throughout the country without having to hire more agents.
Sure, these guys work for traditional brokers like Century 21, Prudential, and Coldwell Banker, but they’re progressive: as part of the program, they agreed always to put the customer first, to let us publish all sorts of data about their performance — and to refund part of their commission too.
The concept is not new. In fact, Seattle area companies such as Estately and Market Leader (Formerly HouseValues. Note: post has been updated to reflect the company’s current name) also earn money through agent referrals. But the program is a big switch for Redfin, which has always touted the customer service focus of its agents.
this is a business model that they’ve tried in the past… and it failed miserably the first time.
Redfin was the pioneer of a new model, centered around a fantastic website, direct consumer engagement, and a novel refund concept. Their obsession with transparency, truly excellent user experience online, and “freakish depth” was the precursor to what the brokerage of the future might look like.
That chapter, I think, now comes to a close. The new real estate companies have found that they cannot make money directly from consumers.
It sure does look like Redfin is getting back into the lead-gen game. But I think this a smart move for them. It’s a quick and easy way for them to ramp up service in areas they don’t already serve. And heck, why reinvent the wheel?
They already have the best search experience on the web (hands down) and this is the best way for them to leverage that asset.
Will it succeed? Who knows. But the agent reviews rock.
Trulia Takes On HomeFinder
Fresh from it’s recent dust up with Realtor.com (see Take the Trulia Challenge), Trulia seems to be picking a fight with another industry giant. This time it’s Classified Ventures Inc’s HomeFinder (formerly HomeScape) and last week Trulia snagged a crown jewel by snatching the Washington Post away from them.
The Washington Post hopes a new partnership with Trulia will help the newspaper’s Web site become the “definitive source” for real estate information in and around the nation’s capital.
The move from a Classified Ventures, Inc. (CVI) product is somewhat surprising, in part because The Washington Post Co. is a CVI shareholder, along with several other newspaper companies.
It’s yet another sign newspapers haven’t been able to figure out how to manage their once-lucrative classifieds offerings themselves. They’re dependent on startups like Trulia to do the work for them.
Newspapers have, overall, done a pretty crappy job of creating a compelling online experience for consumers to replace their dead tree Sunday real estate sections.
More importantly however, they’ve done even less to attract the real estate advertising dollars that are fleeing print.
Now they’re desperate to claw back even a little bit of that revenue and help with their hemorrhaging budgets and Trulia’s offering stems the bleeding just a tiny bit.
At least it buys them a little time to figure out what they’re going to do. And they can’t beat the price (free).