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That's a cool idea. Our long term vision is definitely to get transaction costs approaching 0 so that home ownership becomes more accessible. > Did different p
by rgbrgb 9y ago
That's a cool idea. Our long term vision is definitely to get transaction costs approaching 0 so that home ownership becomes more accessible.
> Did different portions of California respond differently to your pricing?
As a young startup the sample size was pretty small, but I didn't see a regional difference. I'd say the mentality split was more experienced vs first time homebuyers. Experienced deal seekers understood commissions and were already looking for hacks around using a full-price agent (e.g. getting their own license, going direct to the seller), but the FTHBs often thought it was an additional fee. However, our product naturally attracted more of the latter group and as a team it's just easier to get excited about helping young families become homeowners than helping millionaires save 100k. That said, we didn't really see a dip in the deal seeker audience when we switched the pricing (it's still very competitive).
- boulos 9y agoThanks again for the informative reply. I agree on the "feels better helping families" angle. I think of high-end items as helping to subsidize the expected value (so drawing more high end homes means more absolute marketing / advertising dollars, allowing you to be even more competitive at the lower end). NVIDIA's Quadros and Teslas effectively pay for the GeForce price point, and both are required to be successful (GeForce drives volume, otherwise Quadro/Tesla would have to be ridiculously expensive). I realize now that my assumption is likely wrong: selling lots of expensive homes at a lower commission doesn't generate nearly enough additional revenue. That is, there are only X000 units per year that trade hands at that price point, so unless you get a drastic change in behavior that doesn't move the needle. Interesting challenge!