ZipRealty! Everyone knows ZipRealty, right? Everyone talks about ZipRealty, right? You know, the company that works for you as a buyer’s agent, then rebates part of their commission, back to you.
Whoa. Here’s something I didn’t know.
It’s smaller than you might think. A lot smaller.
ZipRealty Inc. (Nasdaq: ZIPR) today announced third-quarter net income of $600,000, down from net income of $2.9 million in third-quarter 2005. For the first nine months of the year, ZipRealty reported a net loss of $386,000 compared with net income of $2.57 million for the first nine months of 2005.
The company employed 1,747 ZipAgents as of Sept. 30, compared with 1,383 at the end of third-quarter 2005 and 1,669 at the close of second-quarter 2006.
ZipRealty also announced that the total value of real estate transactions closed decreased about 11.8 percent in the third quarter to $1.2 billion, compared with $1.36 billion in third-quarter 2005, while the number of transactions closed fell 6 percent to 3,467 compared to the same period last year.
Huh? This is an example of a company that gets a lot more press than it should, at least based on size.
As the Bloodhound Realty Blog puts it:
In my area (greater Phoenix area) there are privately owned real estate companies that have better numbers than Zip.
But because Zip Realty is supposed to â€œhelp the consumerâ€? and there are endless articles in the press about their â€œdynamic growthâ€?. Every time they open an office they manage to get national attention.
Compare the amount of national press the press gives to â€“ just for example â€“ Keller Williams Realty. KW opens more offices, recruits more agents, is growing at a significantly faster rate (both in rate of growth and in absolute numbers). In fact, in virtually every meaningful way, KW is way ahead of Zip Realty. This includes the average commission rates that KW agents charge the consumer.
Read that last line again. The average consumer is getting a better deal from the average KW agent than from Zip. But that isnâ€™t â€œnewsâ€?. KW isnâ€™t positioning themselves as a â€œdiscounterâ€?.
No, writing about a â€œtraditional brokerâ€? â€“ hell, that just isnâ€™t â€œnewsâ€?. It isnâ€™t â€œexcitingâ€?.
ZipRealty is a company built on marketing. That’s just about it.
It’s similar to Zillow, which is given a lot of press because of what it represents, and its potential. But, not in actual influence.
Whether either can last, is the real question.
Source: Zip Realty and a Press Release – By Russell Shaw, Bloodhound Realty Blog