| Interesting. Real estate is definitely technologically underserved relative to its market size. I think this is a play at incentivizing residential buyers/sellers to let you refer them to the local Realtor the first referral and taking the referral to let the user buy things with "points"? If so, I love it. for giggles:
existing home sales 5mm/yr * 200k/house. Assuming a full commision of 3% on one side and if you get 25% as a referral: A typical transaction could be worth: $200k * 3% * 25% == $1500 (less redemption value in points, so basically a redeemable user point has to be less than .03.25 purchase price) If you owned one side of every single existing home sale, that is worth:
5mm * 1500 == $7.5B/yr How do you intend to reach users? I guess with a value of $1500 per conversion, you can afford to spend liberally on adwords to catch users as they are searching, but I suspect the words in that space are competitive and expensive. Even if you get the a 25% referral on the full commission, someone else is able to pay up to 100% of the referral on the commission in user acquisition costs, so you'll never be able to outspend the actual broker in paid search. Basically you'll have to be creative with how you pay for traffic. Which isn't to say its not doable... This sort of reminds me of deal aggregators like Yipit -- they get a commission of the transaction from someone like Groupon, so that means groupon can always outspend them, so you ahve to find some other way to get your leads. What is your plan? |
Your are 100% correct that this space is competitive and expensive to catch users, and being creative is key, which is why we are going after strategic partners to help with the acquisition costs.