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Originally Posted by Falcon Living
Even that rebate company in the North suburbs (I really don't want their name mentioned here-you know who they are Matt) had to back down from those thin profit margins.
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Oh, certainly, but RedFin has what they didn't: big venture capital. Like Amazon, they can stand to be a losing proposition for 3-4 years while acquiring huge chunks of marketshare ($8M can float you pretty far when you're not burning it like crazy, which they aren't). In the end, they'd be a household name and the sheer volume of business would make up for the margins.
I don't think that replicating their approach is necessarily the answer, but the "new market" blend of technology + full-service = low commissions is probably here to stay.
-Matt