Zip Realty, which offers a discount model of rebates and price concessions in 17 markets around the U.S., has reported a net loss of $800,000, or 4 cents a share, for the first quarter, down from a $700,000 profit during the same quarter a year ago.
It costs money to run a quality real estate office, pay for competent support personnel, pay errors & omissions insurance, pay for marketing, newspaper, TV or radio advertising, webpage design and maintenance, hosting & SEO, marketing postcards, real estate flyers, signs, keyboxes, and assorted sundry forms, brochures and business cards.
They are going to have to either raise their prices or lower their overhead if they want to make any money in this game. Luckily, they have $83.5 million of cash with no long-term debt, so they’ll probably be alright for awhile. But I also think there might be some shuffling when some of these business school grads who thought they were going after the low-hanging fruit of real estate sales commissions come to realize that the pickins’ might not be as easy as they seem.
Zip Realty is already having a change in personnel, as Eric Danziger, Chief Executive Officer, announced his decision to resign from the Company on August 1st. No word yet on who will take his place.