After favorable mentions in Silicon Beat, and the New York Times, the new real estate startup, Zillow, hit the wall today:
.
The buzz is being generated because Zillow suggests a possible destabilzation of the archaic financial system that the real estate agents really don't want to see changed. The Zillow system will provide estimates of property value, which is one of the chokeholds that real estate agents use to control the market.
Damon Darlin of the NYTimes profiled Zillow, and another start-up today, saying:
Redfin, though less well financed than Zillow, is perhaps even more ambitious in its aim to take on the work of agents. The site, which maps listings with other sources of real estate data for Seattle, added a feature last week that allows a visitor to buy a property online.A real estate agent is not cut out of the process; in fact, Redfin is itself a real estate brokerage company. But the site automates the paperwork of making a bid and then rebates to the buyer two-thirds of the buyer's agent's commission, which is usually 3 percent. Redfin, as the buyer's agent, takes only a 1 percent commission.
Redfin shows the potential savings on every listing
This sounds hot. Anythiing that is going to save someone, say 2% of a $1M sales commission = $20K, is going to get a lot of interest.
I can certainly see where real estate agents wouldn't be happy about this.
As an aside, a company that uses a haiku poem as their "sorry, our site is down" *has* to be cool, heh.
Posted by: Josh | February 08, 2006 at 09:51 AM
It's very cool, and both companies are using Flash to make the experience better. When you're taking on a group as powerful as real estate agents, you have to be on the ball. Looking at the Flash interface Redfin put together shows that they are. It's fun to zoom around and look at houses on their site.
Posted by: Ryan Stewart | February 08, 2006 at 12:02 PM
Wrote a bit about Zillow myself - I don't think it's disruptive at all. There's enough error in the estimates - by their own admission 7% overall down to 5% in the Bay Area - to make getting a professional appraisal necessary before any actual sale. Which is why they'll be an advertising *machine* - they'll get tons of advertising from real estate brokers, mortgage brokers, and lead generation companies who'll be there to take advantage of people suddenly put in a ready-to-act frame of mind by the discovery of unexpected riches in their houses.
I'm disappointed by this - you and I agree on the medieval nature of the broker's guild, and early rumors pegged Zillow as something a bit more game-changing.
Redfin I hadn't heard of. Now *that* sounds like a disruptive business.
Posted by: Greg Yardley | February 08, 2006 at 12:59 PM
i am not sure i would call Zillow.com nor http://www.HomePricemaps.com DATA PORN, i mean aren’t we helping the consumer make better informed decisions, thus not relying upon the realtor as much, or at least giving the consumer the ability to know when his realtor is screwing him over?
since when is that porn?
Posted by: HomePriceMaps | February 26, 2006 at 09:25 AM
What can be said about Zillow!
Posted by: Gung Ho | June 10, 2006 at 05:12 PM