Zillow and Redfin Downsizing

Two of the big names in Internet real estate in the past few years, Zillow and Redfin, have recently announced layoffs in an effort to "live to fight another day". These events were recently reported in the LA Times blog by Peter Viles, senior producer for Real Estate at LATimes.com
Probably no big surprise for most people in the real estate business as everyone has seen their fair share of slowdown related right-sizing but unnerving none the less as both of these companies seemed to be on the fast track to internet success not so long ago.

Zillow is a company that provides consumers with free estimates of their homes value. While Zillow has seen their fair share of controversy regarding the values they come up with, consumers don't seemed to care as they simply want an estimate and most Zillow estimates seem close enough. Real estate agents have been frustrated over the years as they try to advise listing clients as to what they should list their home for, only to have these home owners try and correct the agent using a Zillow example as to what the value should be. Zillow is not the only site to provide free house values and one site, www.mlsmaps.com, offers home owners three different ways to determine value with Zillow being one of those three.

Redfin, an Internet based discount realestate company, created it's own discord within the real estate industry as a successful Internet discount broker. Redfins position is that with all the great tools on the internet that consumers can use to find and research homes for sale, why should a home shopper pay full commission. A great argument if you are a consumer, horrifying if you have spent the past 10 years charging your real estate clients 6-7% commissions. Now that consumers can view most of the mls listings online, without having to speak with a Realtor, maybe buyers agents need to revisit their model. I think a good listing agent is worth their weight in Gold as selling a home in a timely manner for the highest price is no easy task.

All this considered, it is still a sad day to see two real estate Internet pioneers getting slapped down by a rotten economy. Hopefully things will recover for the real estate industry and these companies in the near future. Best as I can tell, that probably won't be for at least another 12 months if we are lucky. Hang on!