Redfin and the seeds of war
Surefield is a new brokerage from Redfin founder David Eraker. The company, which he co-founded with former Redfin broker Rob McGarty launched last week in Seattle. Geekwire has a pretty good write up on the back story.
In a nutshell, the company aims to snag potential home sellers online by offering them a detailed, clickable 3D walkthrough of their home, as well as enhanced staging and cleaning services. It’s one of the first full-scale examples I’ve seen of a startup tackling online real estate’s next dimension.
The premise Surefield sets out is that for many modern sellers the trail of potential buyers (not to mention the lookie-loos) through a home is the least attractive part of selling. Nevermind the scheduling and logistical nightmares that come with it.
So what if you built a technology solution that tries to solve this problem by creating a permanent interactive tour online accessible 24/7? It’s a compelling value proposition. And frankly a pretty novel approach.
And while the tech may seem a bit gimmicky, I bet it gets a few listings.
After all, let’s face it, the dirty little secret behind most real estate marketing, is that very little of any of it actually sells the home. Newspaper advertising, portal syndication, high resolution photography, video tours, and yes, even 3D walkthroughs – all of it is really done to sell the seller.
It’s all done to get the listing.
The seller conundrum
We hear from brokers every day, from all over the country, that getting the listings is the key to success in the market.
Yet it seems that, as an industry, our collective imaginations have stalled at simply servicing buyers on the web. In many of our discussions with brokers about their websites we hear a lot of talk about search, IDX, lead gen and, increasingly, more and more creative ways to snare buyers. Yet, very little is ever mentioned around attracting the seller online.
What an opportunity.
Instead, the brokers’ value proposition to sellers is usually shoved under the mat, buried under a “List with Us” link and filled with boilerplate copy. What a shame.
So while you may not be ready to launch a 3D imaging division in your company like Surefield did, the question remains unanswered… what services are you promoting that truly differentiate the experience you offer sellers?
The very fact that this question has gone largely unanswered has left the door cracked slightly open to a new class of tech-focused competitors.
The next generation broker
Surefield is also an interesting example of another trend that I’m seeing: technology companies that are choosing to monetize their software not through subscription sales or site licenses, but by getting into the real estate business proper.
It’s opportunistic, but unfortunately necessary. Selling technology to agents and brokers is a tough business – the channels are convoluted, fraught with political landmines and the margins are razor thin. Becoming a broker has its own challenges, but getting a piece of the transaction payoff is potentially a much more lucrative outcome.
Eraker’s first company, Redfin, was probably one of the first big tech plays to go down this road. More recently, Keyzio started off as an innovative app that allowed anyone to “like” a home and contact the seller to see if it was for sale. But they’ve recently formed a brokerage behind the scenes to handle all the transactions generated by the app.
It’s a bit like the “paper-broker” trend that Brian identified, though not nearly as parasitic.
What’s clear is that the traditional brokerage model is increasingly under challenge from many sides. It’s not just the discounters and flat fee deals that are picking away the low end anymore. We’re now seeing pure tech plays trying to peel off the high end too.
Smart industry takes and creative inspiration.