It’s been a busy few weeks here at 3 Oceans.  Some eagle-eyed viewers may have noticed that my byline recently changed from Kevin Boer, Realtor, Alain Pinel Realtors to Kevin Boer, Broker/Owner, 3 Oceans Real Estate, Inc.

I’m pleased to announce that 3 Oceans is now more than a blog — it is, in fact, now a full-fledged boutique real estate brokerage.  I recently got the final paperwork from Sacramento, and today I officially handed in my keys to my old broker, Alain Pinel.

I’ve thoroughly enjoyed my 3.5 years at Alain Pinel, learned a ton, and made great friends.  The time has come, however, for me to move on and further leverage the exposure this blog has given me.  I have many innovative business ideas I’ll be implementing, many of which would have been difficult to do while at a traditional brokerage.

If you still have my kboer@apr.com email address, please be sure to change it to kevin@3oceansrealestate.com

I think this means I now need to double-check and counter-sign my own paperwork?

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Tipped off by another insightful Greg Swann piece (Greg — do you ever sleep?) I just read through Glenn Kelman’s fascinating soul-baring finances-revealing post over on Guy Kawasaki’s blog. As a serial entrepreneur — and quite a successful one at that — Glenn has certainly done more than his fair share of financial modeling, and his post is rich in advice for the prospective entrepreneur.

What is particularly fascinating is how Redfin’s financial modeling is thoroughly and utterly unlike that of a traditional broker. That makes sense, of course, since Redfin is, well, not a traditional broker. In particular, unlike traditional brokers, Redfin makes its money through the act of – wait for it — brokerage — that is, representing buyers and sellers of homes.

Traditional brokerages — Coldwell Banker, Prudential, ReMax, Keller Williams, Alain Pinel — on the other hand, most emphatically do not make money through brokerage activities — they leave that work to their agent work force, usually a collection of independent contractors. Traditional brokerages, you see, make their money through landlording.
They provide agents with office space, training, mentoring, branding, open house opportunities, telephone lines, etc. and then charge these agents twofold: first, a portion of their commissions (starting at 50% or more for new agents, going down to perhaps 5% or 10% for the top agents, averaging perhaps around 25%) and secondly, a rather long laundry list of fees, including tech fees, desk fees, legal fees, and a myriad of others.

Much of what remains in the agent’s pocket after the broker’s share is divvied up among countless vendors, including the local MLS, newspapers, cell phone carriers, web site vendors, and Lexus dealers.

Here’s a picture of the money trail:

…and here’s one of them new-fangled Sketchcasts…

Further commentary from others:

• Ardell summarizes her take on the article: Sounds like the practical people are the ones asking for money, and the impractical ones are the people giving the money.
• Joel wonders if the downturn in the market will do a Foxton’s to Redfin.

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Trulia, the online listing site which aggregates data from brokers and agents around the country, just turned two today.  In that short time, they’ve accomplished some fairly impressive feats:

• They built a home search site, getting listings Realtor-by-Realtor, broker-by-broker, without going through MLS’s.
• They formed partnerships with a number of leading regional and nation-wide brokerages, including Alain Pinel, Coldwell Banker, and Keller Williams.
• They layered on an impressive array of quantitative data on schools, neighborhoods, price trends, and so forth.
• They mixed in qualitative information with their Voices product, which has spawned quite an active consumer-agent forum.
• They became one of the leading sources of online traffic for many of their broker partners.

As founder Pete Flint notes in this blog post, they did all this without resorting to the all-too-common bait-’n-switch tactics in this industry.

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