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An open letter to startups trying to disrupt the real estate industry

There are always new startups popping up offering lower commissions and buyer rebates hoping that they’re going to be the next big thing in real estate. To date none of these new companies except Redfin have disrupted the industry at all. Personally, I believe it’s because people love working with people and don’t want technology taking that away on the biggest purchase/sale of their life.

If a startup actually wants to disrupt the industry they have a lot to do

Stop taking the same approach the last 20 startups have taken to the “buy and sell homes online”. Most of these are started by very smart people who just have no experience in the real estate industry period. With most ideas, you want to create something inside your realm of knowledge. It’s easier to spot problems and innovate on them when you’ve dealt with them first hand.

Why does everyone want to get rid of agents?

Like previously mentioned, people like working with experts when it’s the biggest financial decision in their life. For at the very least of reasons, it’s nice to hold someone accountable instead of a website with no face.

Knowing this, if any startups want to disrupt the buying / selling of the real estate industry they should focus on figuring out how to utilize agents while building technology to compliment their skill set and make them more efficient.

I’ve yet to seen a startup market the home

This is another problem I see. These startups are taking the approach of having buyers go through their site and pick a home they want to buy. As a seller, I definitely don’t want that. I want to know that someone is doing everything they can to sell my house. Use every connection you’ve made in the past 10-20 years, have flyers dropped off everywhere, hold private brokers opens, open houses and everything else you can think of. People’s lively hoods and reputation depend on selling that home. That’s what you’re competing with.

 So what’s it going to take?

In my opinion it’s going to take working with agents and being able to hold a claim that listing on your website on average sells homes for higher prices with the lowest listing times. Reverse engineer that statement to figure out how to disrupt the industry but, until someone does that then I don’t see it happening anytime soon.

All I see right now is new startups popping up with the same idea that starts with less commission and no agent. That’s not innovation, that’s competing on price.

About Andrew Gale

Founder of FlyerCo focused on innovating real estate flyers.

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