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Estately announces profitability, raises interesting questions

Galen Ward, co-founder and CEO of Estately, just emailed me to say his company had a profitable third quarter. We’ll see where this heads, but it’s clear the company is doing enough business to run a great Website and support a small staff. I am glad they’re making a go of it.

Galen offers details in a Kelman-esque post on the Estately Blog.

Indeed, I have long thought of Estately as something akin to “Redfin Lite” – a killer search interface and tons of information, but minus the burden of an agent payroll. Of course, Redfin would likely argue that they deliver a better, more consistent customer experience. But then they also went the network/referall partner route earlier this year. And Estately claims to have great agents and high customer satisfaction.

Go figure.

I am also really interested in businesses like Estately (I would place Sawbuck Realty and Movoto in this category as well, among others) because they are potentially quite disruptive. They are licensed brokerages but generally hand off the leads, and the work, to local partners. You see who’s missing: The “traditional” brokerage the agent partner likely still works for. It’s as if a shiny, Web-savvier coating has been placed on the real estate value chain – one that obscures the broker with the office full of cubes.

Lastly, I think Estately and its counterparts offer a peek at the future of online real estate. They are not delivering impressions or traffic or even straight Web leads like most in the category right now. Rather, they connect a specific consumer that has taken a specific action on a specific property with an agent with whom they have an ongoing relationship. Whether this scales has yet to be seen, but we’re going to see more in this vein. Most brokers need more traffic like America needs more Lindsay Lohan.

Anyway, congrats to Estately!

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11 Responses to “Estately announces profitability, raises interesting questions”

  1. Kevin Lisota says:

    Estately and similar companies are a huge “black-eye” for traditional brokerages. To hang your license with traditional brokerages, you pay a fat desk fee, commission splits and transaction fees. In return, you get a brand-name and lackluster websites that deliver no meaninful customer leads. Agents at these companies turn to websites like Estately to obtain meaninful leads and are willing to pay for that privelege.

    See the problem here? Large brokerages are asleep at the wheel. By failing to deliver compelling real estate search websites and the leads they generate, they risk losing the very thing that keeps them in business – their agents and the fees they generate for the brokerage.

  2. Guy Wolcott says:

    Congratulations to Galen and Estately. They’ve built a nice site and I’m glad to hear it is paying off for them.

    Brian, thanks for including us in your overview of the market (though one demerit for the broken link :). Just as you say, we offer good agents what most of their brokers do not–a stream of quality “Internet” customers without keeping so much of the commission that it is financially unattractive for the agent.

    Most brokers want to keep as much of the commission on these customers as possible–they found them, right? As a result, they can’t get their good/experienced agents to work with these “leads”. They get handed to newer/worser agents willing to make a much smaller cut.

    Sawbuck (and I assume Estately) enables Internet buyers to connect with good, vetted agents; and offers those agents a steady stream of good, vetted buyers. Win-win. Most “traditional” brokers just aren’t doing this.

  3. Tyler Wood says:

    Congrats to them.

    I signed up to be a referral agent thru Estately about a year or so ago, zero buyers or sellers in my area so far. Our office website is much more productive at this point

  4. Glenn Kelman says:

    Redfin controls the quality of its own agents and our partners in much the same way, by interviewing every agent in person, surveying all their clients, publishing those survey results to the agent’s public profile on the web. I haven’t visited Estately’s site recently and don’t know their business but I believe they take a different approach.

    Congrats to Estately on its profits all the same, even if we are a little different.

  5. Kevin Lisota says:

    Estately and similar companies are a huge “black-eye” for traditional brokerages. To hang your license with traditional brokerages, you pay a fat desk fee, commission splits and transaction fees. In return, you get a brand-name and lackluster websites that deliver no meaninful customer leads. Agents at these companies turn to websites like Estately to obtain meaninful leads and are willing to pay for that privelege.

    See the problem here? Large brokerages are asleep at the wheel. By failing to deliver compelling real estate search websites and the leads they generate, they risk losing the very thing that keeps them in business – their agents and the fees they generate for the brokerage.

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