Redfin: One more nail in the coffin of the wealthy Bay Area real estate agent
, the online real estate company that wants to let you buy a home and undercut real estate agent fees, has raised $8 million in venture capital -- and, as mentioned before, is expanding to the San Francisco Bay Area.
There are a host of new Web-only real estate sites out there, but these guys are actually putting people on the ground, including four in the Bay Area (not many, but it is understandable for a young company, and especially since most of the activity will be happening online anyway).
Redfin is based in Seattle. John Cook, the leading blogger about venture capital stuff up there, has more details in this post.
Investors include Madrona Venture Group, BEV Capital, The Hillman Co. and Vulcan Capital, the investment arm of Microsoft co-founder Paul Allen.
We at the Mercury News wrote a piece a couple of weeks ago about the threat Redfin poses to traditional real estate agents, by helping you pocket two-thirds of the commission that normally goes to them.
We first mentioned Redfin a year ago, when they were early to combine satellite maps and MLS homes data.
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August 9, 2006 12:06 PM
will redfin automatically perform contract negotiations etc? the agent is going to be around for a while it is not that easy!
I think Redfin is a great idea. one needs to trim the fat = Agent with no ROI value, Contract neg can be automated do not under estimate Technology, if there is will and need it will happen.
When I bought my house a couple of years ago, my realtor's contribution included all of faxing my offer and showing up at the closing. I think agent's contributions have been nil over the last few years. I expect that in a "normal" market the agent's primary contribution would be the pricing. An effective way to automate that would be the end of the realtor as we know it.
This will hit the middle of the market and those agents who aren't serious and/or successful. But the Internet and ZipRealty's similar model haven't killed agents to date and won't. But it's an interesting development and one that will help many buyers.
Eric Heller of Redfin wrote me and said "The growth has literally been explosive, and we now represent nearly 1% of all transactions done in the most populous county in the Northwest."
Another interesting site that's going to put some pressure on agents (on the sell side) is Homethinking.