I don't if others saw the news today, but ZipRealty announed the end of buyer rebates. I wonder if Redfin will follow suit. It has been an incredibly hard real estate market. As both companies strive to increase revenue and reduce costs, it seems like the employee agent and the homebuyer rebate are becoming things of the past.
Zip Realty and Redfin: Did Zip Realty Fail? Why Did We All Worry About "Rebate Companies"?
Zip Realty recently announced that they are going through significant restructuring. They are no longer using the Employee-Agent sales model and are going to a traditional Independent Contractor format. Although the company has not admitted failure, they have stated that they intend to put emphasis on the quality of their agents and their experience.
In the coming months, Zip Realty is closing offices in 11 markets nationwide from 35 to 24. That's almost a third of their current presence.
Recently we've seen discussions here on Active Rain and elsewhere about the threat Redfin might present to traditional Real Estate Agents and Brokerages...but hasn't Zip Realty just proved that discount real estate services don't work?
Simply by admitting that they need to emphasize the quality of their agents, Zip Realty is all but stating the discount/rebate real estate companies are seen as employing agents who are less qualified than the traditional agent. I'm not saying this is true.....but this is the impression they have given.
I have not found Redfin and Zip Realty to be a threat. They serve a market.....and maybe not a very large one.....which is not MY market. I don't want to service the discount client! I provide full-service, quality service, professional service and I charge for my expertise. My clients appreciate that and that's why they work with me. But Redfin, Zip and Help-U-Sell and a variety of others have tried the discount/rebate sales model, it would appear that this might not be a long term strategy....maybe once the novelty wears off?
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