How to (Zil)Blow your Launch

After favorable mentions in Silicon Beat, and the New York Times, the new real estate startup, Zillow, hit the wall today:

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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.