Michael Arrington of Techcrunch reports that the Seattle-based real estate website Redfin is expanding into California, beginning with San Francisco but expanding soon into Los Angeles, San Diego and eventually nationwide. Arrington writes:
They have an intruiging and aggressive business model. Instead of providing useful real estate information to consumers and then pointing them to real estate professionals like competitors Trulia and Zillow, Redfin is doing their best to completely remove real estate agents and brokers from at least half of a home sale.
Redfin combines MLS listing information (homes for sale) with historical sales data (homes already sold) into a single map. If you find a home you like and want to place an offer, Redfin will represent you in the buying process (they have a call center with licensed real estate professioinals to guide you). Hereâ€™s the good part: They reimburse you 2/3 of the buy-side real estate fee directly on closing. The average amount reimbursed to the buyer is $11,402 (and that is based on relatively low Seattle home prices).
I agree with Arrington’s assessment of the real estate business. The real estate market is a model of inefficiency. This represents a huge opportunity, but with an even bigger challenge. Things that should be fairly simple, like MLS databases, vary from state to state.
Maybe we should just start over and build a whole new market in Second Life.