Comments on: Redfin Select: School-Marmish Innovator’s Dilemma? Becoming What They Hate?

By: [Housing On Fire] Blogoshere Hose-Down [Matrix]

[Housing On Fire] Blogoshere Hose-Down [Matrix] — Tue, 22 Apr 2008 12:01:46 +0000

[...] Redfin Select: School-Marmish Innovator’s Dilemma? Becoming What They Hate? [3 Oceans] [...]

By: Kevin Boer, Broker Owner, 3 Oceans Real Estate, Inc. (650.387.2860)

Kevin Boer, Broker Owner, 3 Oceans Real Estate, Inc. (650.387.2860) — Wed, 09 Apr 2008 20:26:07 +0000

Hi Thomas,

That’s a good question, a very very good question.

I doubt that Redfin’s model would work in markets like Houston, so yes, scaling is definitely an issue.

By: Thomas Johnson

Thomas Johnson — Wed, 09 Apr 2008 15:26:31 +0000

they need to become a $100M company as quickly as possible, and doing it at $10000 rather than $5000 per transaction will bring that about more quickly.

Kevin: How can they scale up, when they are operating in the highest priced markets already? In ERAHouston, 4th largest city in the US, average sales price = 150,000. Maximum buy side commission is $4500. I can see the VC conference table jaws hit floor. “You mean we have to sell FIVE times the houses to compete and we can’t make make our ten grand per transaction?”

There is an old real estate adage that might apply here: “Listers last.”