Redfin On Steroids
I've only got about 15 years left of real estate activity before I quit and play poor golf and write blog posts full time (maybe write a book about blackberries). If nothing else, I'll continue my rebuilding and make a decent living off investments (hopefully), but there are new people coming into the business facing a whirlwind of change, and people being born who will one day choose real estate as a career. What will they find?
It seems to me that with something as large, and sometimes complex, as real estate transactions there will be need for human services for a long, long time to come. But, I'm going to go out on a limb and beat the drum that a major change has to be made. I think the need for service will entail sophistication, comprehensiveness, and lower prices for each transaction, and it will be delivered in diverse packages personalized to meet the unique needs of each consumer. The 10% superstar, 90% mediocrity model will be obsolete soon. There will be Super Teams making up Super Companies which are Super Connected and I project it'll be based on salary and bonus. It will be a Redfin-on-steroids model. Redfin has created something potentially great, but it'll take much, much more.
The idea of Super Teams made up of talented, cross-trained individuals working together in co-operation to lower prices for consumers and deliver one-stop, comprehensive RE services appears to be the only viable solution in the new world and Land of The Free. Despite the present economic downturn, the future promises prosperity greater than most can imagine and employment opportunities that'll be spread all over the world. Designer living styles in hip and interesting communities with frequent movement will be the trend. Consumers will demand and get inexpensive services that exactly meet their needs. Service providers will work in teams to deliver sophisticated, comprehensive services tooled by technology based on personalization and context that provides information interpreted to be easily accessed and understood.
One entry point of data online will trigger a service reaction that in minutes provides the consumer with all the necessary information, and with one decision by the consumer the process is activated to seamlessly deliver the service. The physical "place" of the service providers will be almost irrelevant - it could be different points of location, with the consumer merely having to see the properties -- the rest will be invisible. I think the "relationship with the realtor" will become irrelevant, also. The "relationship" will be the trust the consumer has with the provider company. Consumers will be gradually sold on the idea of service and excellence above personality. I think the days of consumers choosing agents who are related are or friends or have a good personality will soon be over, because companies will depend less on "star" agents and more on sytematic service delivery. Will this de-personalize the industry? Yes, but if we are going to get to an answer, it will have to be that way -- the purpose of a real estate transaction is to get it done in the most efficient, inexpensive way possible that protects the consumer's interests and meets the consumer's needs.
Socializing and friendship are less important than good, inexpensive service. Real estate has to get down to business and professionalism and let go of the Super Star Salesperson image. Rather than the Top Producer being the hero, teams will compete for the best service delivery for the best price.
In this scenario the consumer wins, but the best service providers win also, and they take charge of their destiny and they aren't dependent on nonspecific-RE advertisers to lead the way -- the service providers create The Way and capture the consumer's imagination through excellent service, cutting edge information-technology and sensitivity to price.
More later.
Mike Farmer
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The idea of Super Teams made up of talented, cross-trained individuals sounds good, but if they're talented, they're going to want to be paid well for their time and expertise. They're not going to settle for discount wages and the idea of making it up in volume sounds good, but hasn't worked in real estate yet. Foxton's tried to do it and went bankrupt. Redfin is losing money and has yet to make a profit.
Without the carrot of making good money to motivate, the individual team members may not be willing to make the sacrifice that it would take to provide the excellent service needed to put together and hold together the typical real estate transaction.
It would definitely depend on volume. It goes to the philosophy of "build it and they will come". I think Redfin started too tepidly, waiting for the response to what they offered, which is weak on service. An offer with the right balance of price and service offered boldly with a dedication to paying talented employees would most likely produce way more volume. If it's done half-way, it might as well not be done.
A company that mistakes an idea with actual delivery will discover that consumers want the delivery more than the idea. A concept might interest people, but the full deal with excellent service will create volume business.
It all depends on committment and belief in the product/service -- then implementation on a broad scale that doesn't cut service corners.
Plus, Marlow, I think it would be appealing for agents to be a part of something exciting and new with opportunity for advancement. By using the team approach you maximize specific strengths of people who might lack in other areas preventing them from being individually successful, but a successful part of a team.
If set up correctly with great leadership a team can do much more volume than as individuals operating by themselves. If this is correct, the volume ought to create enough money for everyone even at reduced prices.
Plus the company could create revenue in different ways through it's website with a little imagination, especially if it's able to attract the kind of traffic I envision it creating. It would need to be a growth company constantly adding value-offerings to generate diverse streams of revenue.
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