4 ms·

Paypal and Uber have network effects that are harder to replicate. Visiting a website and browsing real estate listings don't.

bdamm 9y ago
Not so. As more agents learn that competing against RedFin agents is more difficult than it should be, they'll join in with RedFin. As more people learn that RedFin-style home buying works for them, they'll make RedFin a key part of their next home buying experience. I know I have, twice already. The down-stream network effects of this are likely more significant and harder to predict, as real estate is way slower than hailing a taxi. Think desegregation.
- PenguinCoder 9y ago
  The current problem is if this were a truly online only method, Redfin would accept and sell listing anywhere. Currently it does not, and is only useful in a few US large population areas. I want to use a service like redfin, but they don't operate in my area. For redfin to really take off (or companies like it) and supplant the real estate broker, it needs to be more available even in rural areas.
  - eh78ssxv2f 9y ago
    IMO, one reason behind that is that the actual agents charge 3% no matter the absolute cost of the house. This does not make much sense since buying a 100k house sometimes involves as much work (if not more) as buying a 3M house. As such, it is better for Redfin to operate in the markets where house prices are higher since the absolute amount of money they can save is also higher in these markets.
philwelch 9y ago
(Disclaimer: I work for a real-estate tech company other than Redfin; my opinions are my own) Brokerages also have network effects; they just end up being nullified by the MLS. If some real estate website somehow cornered the market on listings by dominating the seller side, they could have a significant network effect by either not publishing to the MLS or doing so after a delay.
- StillBored 9y ago
  Which is what broker groups on strong redfin areas are basically doing through collusion. They run "silent markets" by delaying listing new houses on the MLS, and giving traditional brokerages not working with redfin early notification of listings.

bdamm 9y ago

Not so. As more agents learn that competing against RedFin agents is more difficult than it should be, they'll join in with RedFin. As more people learn that RedFin-style home buying works for them, they'll make RedFin a key part of their next home buying experience. I know I have, twice already. The down-stream network effects of this are likely more significant and harder to predict, as real estate is way slower than hailing a taxi. Think desegregation.

PenguinCoder 9y ago
The current problem is if this were a truly online only method, Redfin would accept and sell listing anywhere. Currently it does not, and is only useful in a few US large population areas. I want to use a service like redfin, but they don't operate in my area. For redfin to really take off (or companies like it) and supplant the real estate broker, it needs to be more available even in rural areas.
- eh78ssxv2f 9y ago
  IMO, one reason behind that is that the actual agents charge 3% no matter the absolute cost of the house. This does not make much sense since buying a 100k house sometimes involves as much work (if not more) as buying a 3M house. As such, it is better for Redfin to operate in the markets where house prices are higher since the absolute amount of money they can save is also higher in these markets.

philwelch 9y ago

(Disclaimer: I work for a real-estate tech company other than Redfin; my opinions are my own) Brokerages also have network effects; they just end up being nullified by the MLS. If some real estate website somehow cornered the market on listings by dominating the seller side, they could have a significant network effect by either not publishing to the MLS or doing so after a delay.

StillBored 9y ago
Which is what broker groups on strong redfin areas are basically doing through collusion. They run "silent markets" by delaying listing new houses on the MLS, and giving traditional brokerages not working with redfin early notification of listings.