{"id":3326,"date":"2008-11-10T09:28:58","date_gmt":"2008-11-10T17:28:58","guid":{"rendered":"http:\/\/seattlebubble.com\/blog\/?p=3326"},"modified":"2008-11-10T13:57:02","modified_gmt":"2008-11-10T21:57:02","slug":"local-discount-real-estate-service-showdown","status":"publish","type":"post","link":"https:\/\/seattlebubble.com\/blog\/2008\/11\/10\/local-discount-real-estate-service-showdown\/","title":{"rendered":"Local Discount Real Estate Service Showdown"},"content":{"rendered":"

As the housing market has slowed dramatically from the heady boom years of 2005 and 2006, the number of discount real estate brokers has been on the rise. While Redfin<\/a> made a big splash in 2004, and continues to be the discount market leader, as the market tumbles other competitors continue to crop up.<\/p>\n

As recently as September, over a year into the local market decline, discount brokerage Findwell<\/a> opened its doors, offering half-priced services for home buyers and sellers. Even more extreme is 500 Realty<\/a>, which was launched in August 2007 and offers to refund 75% of the buyer’s commission.<\/p>\n

With an ever-shrinking pool of home buyers (and therefore successful sellers)—just over 3,000 SFH and condo sales closed between all<\/em> of King, Snohomish, and Pierce counties last month—the squeeze is on for real estate brokers of all stripes, discount or full service. I find it quite interesting to see how the different companies are dealing with the tight market.<\/p>\n

Redfin is constantly improving their search technology (which is amazing), and recently announced a restructuring of their commission structure and services offered<\/a>. Meanwhile, newcomer Findwell is doing their best to make headlines and get their name out there, and has declared a “customer service challenge” to Redfin<\/a>. And of course regular readers of the comments here are aware of the ever-persistent guerrilla marketing campaign waged by Ray Pepper and the folks at 500 Realty.<\/p>\n

Personally, I think there’s plenty of room in the discount real estate services market for some healthy competition like this. In a way, it makes sense that a slowing market and falling prices would bring out more low-cost competition in this field. Since sellers have already seen their paper equity take a significant hit, they want to save as much money as possible. For buyers, the old days of depending entirely on your real estate agent to find you a home are long gone, so why should they still be paying 3%? (And don’t try to tell me that “the seller pays” so the buyer’s agent is free, because only one person shows up at closing with a check—the buyer.)<\/p>\n

Will companies like Redfin, Findwell, and 500 Realty have long-term staying power? I certainly hope so. Will they have a large enough impact on the overall profession to usher in the closing chapter for fixed 3% buyer’s and seller’s commissions? Time will tell…<\/p>\n

Full Disclosure:<\/b> Both Redfin and Findwell are advertisers on Seattle Bubble.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

As the housing market has slowed dramatically from the heady boom years of 2005 and 2006, the number of discount real estate brokers has been on the rise. While Redfin made a big splash in 2004, and continues to be the discount market leader, as the market tumbles other competitors continue to crop up. 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