Redfin Real Estate - Is Redfin really "a better way?"

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Redfin Real Estate - Is Redfin really "a better way?"

"Redfin is the industry's first on-line brokerage for buying and selling homes, half Century 21 and half E-Trade. This means we know when you want to use the web and when you want to talk to a real person. Our goal is to change the real estate game in consumers' favor by offering you more data, better-performing agents, and a significant commission refund"

This is the bold statement on Redfin's website.

This week I received a call from an out-of-town buyer who wants to buy a condo in Los Angeles. He found me through my on-line marketing and was impressed by the testimonials he read. After a 15 minute chat he asked if I would match the "Redfin deal" of refunding $10,000 - $12,000 of my commission back to him. I paused, and asked if I could call him back so that I could take a quick look at the Redfin Website.

Another bold statement from Redfin: "In major metropolitan areas, our own agents deliver fanatical service and a 50% commission refund; elsewhere our carefully screened partner agents offer a 15% commission credit".

I called the out-of-town prospect back and explained that I am not a Redfin Broker or affiliated partner. Again he asked if I would match their offer of a $10,000 - $12,000 refund of my commission. I confirmed I couldn't and wouldn't - But I did ask him why he called me and not a Redfin Agent.

He replied that he had left a message but that he hadn't received a return call.

..... I explained that when I pay my clients $10,000 - $12,000 to do a deal, I also don't return calls!

Posted by Stewart Penn - Los Angeles Real Estate on 06/12/2009 03:30 PM

Comments (110)

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Originally posted at: LA Connection Property Blog: Redfin Real Estate - Is Redfin really "a better way?"

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110 Comments on Redfin Real Estate - Is Redfin really "a better way?"

JUN

2009

I have never heard of the company, but have heard of commission referral houses that do nothing but collect referrals and rebate a portion to ignorant customers. Hopefully most people will have the sense to figure out what is really going on with companies like that.

That's funny, but that's also sad.

Redfin's policy is for their agent to show three properties free of charge, and that after that, they charge a certain fee per hour. That's why the tell their buyers to call the listing agent directly because the listing agent would be obliged to show the property to a prospective buyer. They also tell the buyers to go to open houses at properties they're interested in.

I picked up a new couple who were interested in short sales, but were told that Redfin doesn't or won't handle offers on short sales. Also, the couple wanted to see several properties, but were hampered when they couldn't schedule more than one showing at a time because they had to call different agents for different properties.

Thanks for sharing your post. Customers want a piece of everything in a real estate transaction. The sad thing is he will find an agent to do it because of desparate times. Just say No

Redfin is obviously concentrating in the public's greed rather than the promise of good service. .

Great Response Stewart!! LOL!!!

HAHAHA OMG that is hysterical! "they didn't call back" HAHA - I agree with Fernando above - greed vs. service! Pathetic!

Stewart, good for you. If they want good service and a reliable REALTOR®, they will come back. If they don't, you haven't lost anything.

I usually ask this type of person what there job is, and then ask if I can have a cut of there paycheck. They never agree.

We have a Redfin here in Seattle. I noticed a profile of a Redfin agent on Linkedin once and I wrote her just to inquire about how their company works. She eventually replied to me...long after I wrote with a very condescending tone. Basically she told me that she had previewed my profile and I didn't have the qualifications Redfin was looking for! I had just joined linkedin and had no profile. I replied and explained that was not applying I was inquiring about the company and it's structure. She again replied with an even ruder response of which I just hit "delete".

Now one of my co-workers did a deal with a RF agent and said it went well...so well she became an affiliate. I will have to follow up with her and see how that has gone......

That's interesting to hear about Redfin. I do get clients that say they saw a listing on "redifin" that wasn't on our local MLS now and then.

I'm impressed with Redfin's search capabilities .... but that's as fas as it goes.

Much like ZIP Realty, a good online presence but no follow through by their agents.

That is hillarious!

Does Fanatical service = not returning phone calls???

We at Redfin really pride ourselves on our customer service so I'm quite disappointed to hear that we may not have returned this call. Without the specifics though it's hard for us to dig in and see what went wrong. If the client is reading this please contact me at matt.goyer@redfin.com, 206-618-1600 (cell), and I'll get to the bottom of it.

@Robert W May: We offer direct brokerage services in a number of major metros where we employe our own agents (Seattle, the Bay Area, LA, San Diego, OC, DC, Chicago, Boston, Long Island). Outside of those major metros we do have a referral program that I recently wrote about here.

@Pacita Dimacali: We used to charge for home tours but now Redfin clients can tour homes as much as they need to without paying upfront. It is true that we won't handle short sales though. However, we are looking at changing that given how many folks want to see them.

@Joan Taie: I don't know who you spoke to but I would like to apologize for how they treated you. If you have any questions about Redfin I'd be happy to answer them in a respectful way.

@Stewart: We may have dropped the ball in this situation but that's the exception not the rule. Something you may not have seen on our site is that we survey every client who tours and/or submits an offer with us. We post all those survey responses on our website even if they were successful or not. Check out one of LA agents pages, Joyti, and you can read what all her clients have said about her, both good and bad. Also, we post how we did every month. In May 100% of the people who submitted an offer would refer us to a friend.

My area does not have a Redfin office but we do have Zip Realty, another rebate back office. Most of the agents at Zip that I have spoke to have given up because of they only average 30-35% of the commission earned. On a 3% commission they receive less than 1% (Published).

It has been my experience that an experienced agent who has superior skills would (in many cases) save their buyers a greater amount than the rebate back. Let that be shown in your testimonials and refer back to that to capture your next buyer. Because of your great referrals this will get you the customers you really want.

Hi there,

I actually closed on a house with Redfin recently and was extremely satisfied with their services throughout the whole process. Our agent was very responsive, always available and willing to answer any questions we had and she negotiated a great deal for us. Redfin might not be a better way - it's a different way and it give prospective home buyers a choice when it comes to dealing with real estate desicions. Having multiple options is great, as is competition - it makes everyone improve. It might not be the best option for everyone, but I'm happy I had an opportunity to work with Redfin and would definitely do it again.

Hi Stewart, thanks for the questions!

Redfin agents earn a base salary and a customer satisfaction bonus for each deal (the amount is based on the rating they get on the survey we send after every offer). Our field agents who help out our agents by showing houses are contractors and are paid for every home tour they do (though we don't charge the customer for home tours like we used to).

For our partner agents outside of our main service area when we refer clients to them they pay us a 30-35% referral fee which we then share with the customer. We ensure that all our partner agents meet the same requirements as our agents. That is they've done at 15 deals, we survey all their past clients and post those surveys on the website and we interview them in person. We don't accept just anyone into the program.

As for who owns Redfin... It's owned by employees past and present as well as our venture capitalists. To date we've received $20 million in venture funding. Each office is a part of Redfin, we're not a franchiser.

JUN

2009

I am still on the fence about Red Fin. It seems to be a well known name but I have not seen it around my area in Washington-Dinah Lee

Stewart,

It kind of seems as if Matt has hijacked your blog. I've never had any dealings with Redfin I'm sure there are good and bad agents as with just about every brokerage. It'll be and interesting concept to follow and see if it works.

Discount brokerages did their share of growing in boom times but statistics show they've failed to capture any significant piece of the market. I'm not that familiar with Redfin but it sounds like they're well funded but so are a lot of start up dot coms. Maybe 3 out of 10 with make it.

I don't have a problem with rebates or any alternative system, I do however have a problem when they call themselves "revolutionary" or "dynamic" or whatever the buzzword bingo term of the day is. Because quite frankly they are not, there were many companies that sold many more homes than Redfin that were "innovative" and did so with no VC money and did it way before Redfin. I would love to see Redfins numbers on a transaction or profit vs. $ invested!

Also you are not revolutionary if you milk or cheat an existing system. Where is the model with out agents offering commissions? If they were revolutionary they would not participate in any MLS they would have developed a whole new market. They are "dynamic" at telling their story. Implementation is mediocre at best considering the financial horsepower behind them.

Just my $.02

There was a point in time a few years ago that some in real estate industry that were terrified of the Redfin business model. However as with all uproars they die down and everyone goes about their business. What I would be interested in knowing and please Matt don't hijack Stewart's blog is if buyers every run into an issue with their lenders over the rebate.

thats funny..I like that.. ...really...less pay.....less service.. :)

Alternative forms of our business are interesting. Salaried agents Hmm. I just don't see it for me but don't really understand the business model. communal comissions ?

I co-owned a Brokerage in the Seattle East Side and sold my shares back to my two other partners a year ago so I could move back to Chicago (missed the Cubbies, cold beer and pizza). We ran into Redfin from time to time and in my experience the quality or knowledge level of the Redfin agents was merely average at best. It appeared to me that they were somewhat newbies to the industry and could not support themselves on 100% commission working for John L Scott or Windermere, thus, Redfin was a natural fit. Also, they were lured to Redfin for possible future stock options, which, the jury is still out on that...

Redfin's business model may or may not be sustainable. Certainly the next 24 months will be the most crucial in their history and their long term future. For the most part, 100% commissioned agents/brokers, who make up the overwhelming majority of the industry, have not cooperated well with Redfin (listings and their clients), negatively affecting Redfin's growth and profitablilty. Redfin's senior leadership grossly mistook the amount of leverage and power that the "traditional" agents have when acting in a group-like manner such as they have in particular markets. The Real Estate industry is, and always will be, a RELATIONSHIP business. Sure, some of the business will be driven by the internet and price buyers (bottom feeders, meat grinders) but the agent who holds the relationship with the client is in the drivers seat. Redfin's CEO said in a very public magazine article not long ago that "if he could do it over again he wouldn not". Interesting huh...

I agree with Cindy Jones. What does the lender have to say about the kick back to the buyer? And how is this disclosed to all parties of the transaction. If buyers are getting kick backs the sellers are going to want one also.

Mary Lou Cherry

Hi,

I've never heard of Redfin here in Canada but the way Matt explains it above, it sounds kind of like a referral company. They give you a client and you give them 30 - 35 % of your commission. Is that correct?

Then Redfin gives a cut back to the buyer? What about listings? Do they refer them also? Where do they get all the buyers that they refer? Is it from their online presence as you mentioned above Stewart?

Stewart, I honestly thought you made a typo when you mentioned "agents deliver fanatical service" and you meant fantastic. I had to go to the site and couldn't believe my eyes. I have NEVER heard of fanatical service before.

Fanatical - meaning according to Answer.com dictionary: Possessed with or motivated by excessive irrational zeal.

I think I'd change it to fantastic.

Hello- I could not resist reading this blog...Though I am not an agent, I would love to know how RESPA is dealt with within this process, and also, WHO is paying the taxes on the gross amount earned...or net amount earned...and HOW does the customer receive this money back?? Wouldnt THEY then pay taxes on it, as taxable income??

Honestly guys...this sounds like a scam. These confusing type things are PART, and I say part...of why we are all in the pickle we are in now. What will happen here, is someone in some state, will sue over this....then, all of a sudden...we have new forms, additional signature requirements..etc...etc..etc...etc...

I have seen LENDERS get their REALTORS license, and commit half of their commission to buy the rate down...The lender, then advertises this MUCH LOWER RATE than eveyrone else, in the paper...but again..there sooo many stipulations regardin buying/selling/listing the house with them...it just opens you up to too many potential problems.

Just my two cents on the subject ....again, not a realtor, but this sure sounds just like ALOT of realtors have complained about in the past about Shady lenders!

Congrats on the feature.

Darin

Considering how many Realtors hear on AR have not heard of Redfin, I don't think it will be a hit. It is a time when many new models are trying to emerge.

RE: Commission Rebates. Based on the story and some of the responses there are several issues that can be problematic. First of all it is violation of the CA business and professions code to pay an unlicensed person. Secondly, any rebate or refund of the commission must be disclosed to the seller, if not it would be a violation of the NAR code of ethics. Lastly, if an buyer contacts the listing agent and the LA agent shows the property to the buyer there is a potential procuring cause issue, and the listing agent might have a situation that might be subject to arbitration. The aforementioned is based on over ten years Professional Standards experience for 4 REALTOR(R) associations. The bottom line is you get what you pay for. Quality service speaks for itself. You don't see Lexus ( I have 2 of them) pay their buyers to purchase their product.

Beautiful Blog. . .preach it brother!

Jenny (#26 above) highlighted an interesting aspect of Redfin's service claim:

"Fanatical Service" - Possessed with or motivated by excessive irrational zeal".

Sounds kind of desperate to me .....

Matt (from Redfin) - "As for who owns Redfin ... It's owned by employees past and present as well as our venture capitalists. To date we've received $20 Million in venture funding. Each office is a part of Redfin, we're not a franchiser."

Can we get further clarification on exactly who Redfin is?

I am presently working with a couple of buyers who receive daily updates about the MLS listings, but since we are looking mostly at Short Sales, they do not show those homes, there is a big disclaimer in their web site about not showing those homes, another aspect of their way of working is that they do not show homes below $175,000 here in the San Francisco bay area due to the fact that... they don't make any money! Here is verbatum directly from their web site:

Why doesn't Redfin service properties under $175,000?

Homes with list prices below $175,000 don't generate a gross commission to cover our $5,500 minimum commission. We never want you to pay out-of-pocket costs to cover our agent's commission, so we choose not to tour or service properties below $175,000. Since we can't provide you with a commission refund below this price point, we suggest that you hire an attorney to help you and negotiate with the listing agent directly. To see how Redfin calculates our commission refund, please see the next question.

I just don't understand how they can be profitable, even in this slow market we still have to have a budget for conducting business, if we do not get enough, we might as well pack it up and to sell something else.

Antonio

JUN

2009

Stewart. They are probably too busy working for half the pay. I wouldn't do it. You only get what you pay for.

Although Redfin may work just fine for some it doesn't work for inspectors. My inspector told me the Redfin agents allow for just one hour in the property and when that hour's up the the interior inspection is over and the doors are locked. Unless it's a small condo, I usually spend a minimum of 3 hours at any inspection. This is one part of the process you don't want to be rushed through.

I've also never heard of a Redfin agent presenting an offer in person. This is understandable when you have a model where the agent is paid an hourly wage by the broker, but some of the best deals my buyers have been able to get are a result of my having 20 years to develop my negotiating skill. Presenting an offer in person will always be the very best practice.

Looks like your blog has been hijacked. If some agents what to work for half money , I guess more power to them -- likely a business model like that will not last very long. Our 2 cents.

Redfin has not been able to come to Oregon because we have state laws that prohibit real estate agents from giving incentives to buyers and sellers as it is considered coercion. The thought process is that it gives an agent an unfair advantage in trying to manipulate the emotions of buyers and sellers to do something they might not otherwise decide to do if the incentive wasn't there.

It has proved an effective law for keeping overzealous agents from taking advantage of clients who might be swayed by promises of cash. Given our current real estate slump, I imagine it has been really tough on Redfin agents since their commission per sale is so much lower than a traditional brokerage. When you do the math, there are simply not enough sales within many communities to earn a decent living while working with such thin margins. I agree that the next couple years will determine Redfins fate.

Hi Stewart, No Redfin in Florida for the time being (I did hear rumors that they were in trouble - but I have no hard evidence). We do have Zip Realty, I received an offer from one of their agents on a short sale. We're not sure how the bank will respond to the rebate.

LOL, great post. I was going to say that in my area, they don't hold much market presence. In fact, anyone that has contacted me about a Redfin agent, that person is not a seasoned individual and new to the real estate industry. Newbie's might think that is the way to start out in the business. I have mentioned to a buyer - "do you want someone practicing on you". Most of the time, that's the end of the Redfin discussion.

Like Gabe mentions above, what short sale coordinator is going to give money (indirectly) back to the buyer under this situation? It ain't gonna happen! Different states are going to handle that differently too!

As a Professional Buyer's Agent, I'm happy to match the satisfaction and/or huge savings that I can bring a client vs. any online company. When I show them my portfolio of happy clients it gives them a comfort level with my credibility. When they see the figures that I was able to negotiate for my clients CLOSED deals, not pie in the sky computer dreams of houses that already sold or were great looking on the internet but happened to be in blighted neighborhood type of homes, then they begin to see the value in using a true professional.

Maybe I could offer them $12,000 back if they'll split 50% of the savings I net them off the purchase price... Hmmm, let's see half of a recent $60K savings, a $45K savings another 2 at $40K+. Yeah, I guess I should try that :-)

Every so often, in every industry new concepts come up which make an emotional appeal to consumers who don't want to pay for service.

FOXTONS' came and went in the Northeast in a few years. They were all over the radio, TV and print media. 2% Commission for selling your home" They got a lot of listings, and in the up market they sold a fair amount of homes because, as you'll recall, buyer's were begging to buy homes. They closed shop in the fall of 2007 because, oddly enough, they were making no money. You have to sell a lot of houses to stay afloat when you're only charging 2%.

I don't know anything about Redfin - only heard of them briefly as I think they've moved into Long Island.

I am reminded of two quick stories from my life.

When I was a teenager I worked part time at a company that sold cartons and packaging equipment. We were in Southern Westchester county. Mostly I did odd jobs, but I would sometimes answer the phone if it was busy. I got a call from a man who asked our price on a certain sized carton (he needed just one). I gave him the price and he told me that "there's a guy in Brooklyn who has the same size for half the price". I put him on hold and consulted my boss who said to me "Tell him to buy the thing in Brooklyn". I told the man that the Brooklyn place was his best bet. He replied "Yeah, but they won't sell me just one box and who wants to drive all the way out there anyway to get one box?

The second thing that comes to mind is a sign that my Dad had hanging in his office (he was an auto dealer) It read "If you get something for nothing, it's usually worth what you paid".

If it does work out, it should, in theory change the face of the industry in general. If after years of success in providing fabulous customer service and charging less, why would people want any other type of broker. Right?

If, after all, you as a consumer have a choice of two companies - both of whom will provide the same level of service but one charges much less - it's a no brainer. That was the idea behind Foxtons.

I guess it is because this is a smaller market but Redfin seems to have very little to no impact up here. I know they are working Seattle.

Has anyone had dealings with Help-U-Sell, another brokerage that undercuts Listing Commissions?

An office opened in my area, did a flurry of business in the booming market seen 3-4 years ago, and then closed as quickly as it opened.

In essence, they were around for a quick hit with no long term plan.

i am a fairly new agent. about 15 months in. after three months with a national broker i realized that was for the birds, give them 40 percent of my leads. after seeing a ziprealty model i had the idea of trying it. however working for zip was not an option because who wants to make less than 1percent. basically it is an evolution. things are different 10 years agoagents had to do much more work. i would say half of my purchases brought me a list of homes before i even sent them anything. another half of those put offers in after the first weekend of looking. i rebate my buyers 20 percent of my commission, which is not illegal in texas. i only pay a small transaction fee on each deal so i make way more than i did with my first company. so in short i do answer my phone, i dont charge hourly, and i provide full time services to my clients.

I hear of this company from time to time, but here in Alabama there are laws that prohibit providing cash incentives to buyers. Therefore, the Redfin model can't operate here. I think it is one of the better laws out there, as providing cash back to buyers seems to be a method of coersion, and coersion in a real estate transaction just doesn't seem fair.

On the other hand, we do have limited service brokers in this state, who will list a property on the MLS for a flat fee, but do none of the Agent related seller services: no negotiating, no keeping up with the day to day dilligence requirements, no advice or advocacy. You work directly with the seller as a buyer's agent, and it can be frustrating, at best.

I, too, would like to know about the RESPA requirements and the tax burden. Is this all disclosed and reported? Curious.

I think you mentioned Redfin in one of your earlier posts, but beyond that intil today I didn't know much about it. The way it's been described, it sounds like a semi-legal scam, imho. Service? Not even close. I think I'll park and see what other comments come your way that may shed light on this.

Good for you! I do not know about Redfin in particular, but many of the discounters have a number of homes on the web in a number of places that are not on the local MLS and use them as loss leaders to draw in business.

Wow, lots of questions. Sorry if answering them is considered "hijacking". I'm new to ActiveRain so let me know if I'm not doing something right by responding...

@Home Field Realtors: It's always disappointing when we can't all get along and work together; especially in these troubled real estate times. However, we've succesfully helped thousands of buyers and hundreds of sellers. So while there may be the occasional issue with other agents not wanting to work together, the majority of the time everyone just wants to get the deal done.

@Mary Lou Cherry: We disclose the refund by sending a notice to both the buyer and the lender. The majority of lenders have no issues with the refund. If a buyer opts to use part of their refund to pay for closing costs the refund goes on the HUD.

@Jenny Kotulak: We do referrals where we don't have agents, but for the most part our salaried agents help our clients. For listings we charge a flat fee of $5000-$7000 to list your home. Where do we get all these buyers? Our website is #20 on the Hitwise list of real estate sites and is very popular in the areas we are in. As for using the word fanatical to describe our service... I agree, it's a little crazy and we're going to switch up the language shortly!

@One Source Mortgage: We've facilitated over $2 billion in transactions and haven't had an issue. Check out this Department of Justice site on real estate rebates. As for taxes, here's a ruling we got from the IRS on the issue. Our refunds are not taxable.

@Stewart: Working at Redfin are real estate agents, computer engineers and everyone else it takes to run a company. Between full time employees and field agents we're at about 200 people. The venture funding comes from Madrona (Amazon & Classmates), DFJ (Hotmail, Skype), Vulcan (Paul Allen co-founded Microsoft) and BEV (Classmates).

@Antonio & Alexia: Unfortunately with how our pricing is structured its cheaper for a buyer to use a full commission agent! And while Redfin is not yet profitable, we will be soon.

@Susan Peters: We're there as long as the inspector needs to be whether it is one hour or six. And if it requires multiple inspections we'll be there for all the inspections. Also, we do present offers in person where it is the local custom to do so. In the Bay Area, I know Jim Holt, one of our agents, often willl present offers in person. In other markets it isn't common practice and so we don't do it.

@Tarris Rogers: We'll be expanding to Portland before the year is out...

@Lyn: For just the month of May, our top agents in Chicago, Mark Reitman did 6 deals for ~$2 mil and Greg did 3 deals for ~$1.4 mil. Putting them at the top of the game in Chicago since they're in the top 2.2% of buyers agents who did deals in May. Not too shabby...

@Steven, yeah, while our website shows homes for sale in Bellingham we don't have agents there.

Matt- Nice of you to answer the questons. I would recommend that you update YOUR profile, and blog on this yourself.

As to your question to Stewart about hijacking his blog...what I have always done in a case like yours, is EMAILED the person on the side, and asked them to put in their response that it was COOL for YOu to answer the questions...

Sadly, perception being what it is...it does appear that you are hijacking it, and not giving stewart the opportunity to answer.

Just a suggestion, and I do appreciate the links. I will check them out, because none of this sounds like anything I HAVE heard of in 21 years in the industry. However, as I said to Stewart in my comment...I am not a REaltor..so I dont pay very much attention to pay scales, kick backs ..refunds, from company to company. Again, thanks.
D

6-12- I went back in and read the stuff..VERY interesting.

Ten states currently ban rebates and/or inducements:

Additionally, IOWA only allows Rebates if I am reading it correctly, if only ONE company is involved. In other words, if REMAX was selling their own listing.

**This has been around for YEARS! This is not an original idea...but I give REDFIN credit for making it public. Agents have been able always to do this..but dont is all. What the example on the DOJ website assumes tho, is that on the 300k purchase price, at 9k to each side of the transaction, is that the 1% rebate (kick back) to the customer, is coming off of the TOP before the REALTOR THEMSELVES is paid! If the realtor works for someone like Remax...he/she only see approx 4500 or so depending on their commission split agreement. In Stewarts case, this is a no brainer because HE can make the decision. He is the owner! Many companies will just say..."well, I dont care what you do, but it is coming out of your comission. Then, take that 4500 subtracting 3000, and the agent only sees 1500 bucks on a 300k purchase price...

ONly way I see this working at all is on larger purchase price areas...which in many cases are already taking reduced commissions to make the sale. Just look at the example you put in there for Lyn in Chicago. Your top agents there averaged sale prices of 330k, and 440k respectively. In the end, it all has to do with if they are working for themselves, or if they are working for a company...that the COMPANY agree to take the rebate off the top...before the commission split...Otherwise, there is no way I personally would do this...If I were a Realtor!

Thanks so much...I have enjoyed reading about this! - D

The question was asked, who is Redfin? Redfin was started by David Eraker. It seems David decided to leave Redfin around August of 2006. His reason? "To pursue new opportunities." Hhhmmmm, there are two things that come to mind, first, the timing seems about perfect to get out of the real estate business before the floor fell out, and second, if Redfins projections were truly looking stellar, why would the founder who would no doubt know every financial detail of the company want to leave the company that he fought so hard to establish? Actions speak louder than words.

You can read more about it at http://cli.gs/8YMLAe As of now, David has decided to get into the mental and well being field with the launch of his website www.mindsite.com which helps people diagnose their mental state. His Twitter name is @deraker.

How funny that this topic should come up today. I met a nice couple at an Open House last week who called me and asked if I would be their Realtor. Of course, I was delighted - and began talking about all the houses they had seen and would be interested in. Then the big WHAM! He said, "We wanted to use REDFIN, but the agent doesn't return our calls...(I'm in your backyard Matt.) We have decided that we need someone who is more service oriented. So since Redfin charges only 1.5%, how about we will give you 2%? When I questioned where exactly the discounted commission, that is paid by the seller gets distributed, he didn't know. It even turns out that he was looking at short sales. I'm glad to know where Redfin stands with those and I'm glad I didn't reduce my commission.

It sounds like a good deal -using a discount Real Estate Agent (Are they required to be Realtors?), but what is the end benefit?

Here is the interesting thing. Redfin has THE BEST search site! All my buyers love it but still use me. I had to see what all the hype was about and their site was very good!

Stewart - addressing #43, same thing here. Help u sell was here during the boom and then gone again. The bottom line is that it takes a lot work, knowlege and savvy to sell a home. Right now, it is a total seller's market in So. Cal. for starter homes (you know that). Many times my offers get accepted in a sea of dozens because the lisitng agent knows me or likes my service and KNOWS that my transaction will close...I always make sure it does!

Update on the clients who started out with Redfin, but decided to work with me instead. They even signed the buyer/broker agreement.

They liked how quickly I researched properties and gave them indepth info, and how responsive I am to their requests. We're going to look at properties for the third time tomorrow, and we've already mapped out which ones to see first. We've eliminated a few based on the info I provided to them.

It all boils down to my customer service.

And oh...their budget range is up to $600K.

And...one of my former associates works for Redfin. When I asked him how he liked it....it took a while, and I finally got an answer: "It's okay....." Hardly an enthusiastic response!

Very interesting to read. I also was asked by an investor client just last week if I would match Zip's rebate. I declined after pointing out that my client would not like to tale a pay cut, so why should I? I also asked him if he thought the Zip agent would be around for him in 5 years time when he wants to sell all his investment homes. We are still together!

As they say -- you get what you pay for ..

Here in GA we have a "Duffy Reality" -- guess who I get most of my expried listings from -- yep you do it yourself Duffy ..

I hear about Redfin all the time as they seem pretty popular with Los Angeles area buyers. Honestly, the have the BEST website for searching for real estate hands down. When some of my buyers started sending me listings they had found on Redfin I decided to sign up to receive listings from the site too! It's the only way I am able to keep up with the area inventory in a timely manner. Los Angeles county is huge and we have number of MLS'. They have recently started sharing information but it is still nowhere near as efficient as Redfin's site. It's a shame our local MLS's can't get it together to provide information as quickly and as well as Redfin.

Like most of you, I believe that real estate is alot more about relationships and buyers need more hand holding and guidance than they will get with this model. With real estate being so expensive locally though, I can certainly understand the appeal.

A while back I wrote a post about buyers trying to do it all on their own and included includes a letter from a client who went that route first. (Stewart- sorry if I'm not supposed to link back to my own blog. I'm not sure of the etiquette but thought some might be interested in reading it)

Was a fringe company, is a fringe company, will always be a fringe company.

Fringes come and go. Some stick around a while, but are always fringe.

I've always been fascinated by the discount brokerage concept. Not that I thought it was smart but because I thought it was stupid. If clients are that price sensitive and I'm charging 6% then the price sensitive who's hot button that appeals to would jump all over 5%. Why does someone feel they need to cut the price in half. Seems like overkill and leaving a lot of money on the table. You don't have to be smart or innovative to give your product away nor do you get any atta boys for doing so. Every discount firm that has materialized in my market (and there's been dozens) have all closed. It's difficult enough for those of us charging full fees to make a living. Chop your income in half and see how long you'll survive. About as long as the dozens that came and went in my area and about a year until Mr. Piggie Bank is empty. Zip Realty is losing millions and Redfin is losing their butts and every other "let me give you my pay check" moron will find the same bottom line.

Throw in the human factor and you'll understand a little clearer why these firms never see a black bottom line. As the largest real estate office in Georgia south of downtown Atlanta, none of my 140 agents will show a discount firm's listing, ever. It'd be like your arch enemy coming to town and trumpeting "I'm here to cut your throat from ear to ear. Now, would you mind terribly to help me sharpen the knife?" I don't think so.

I love that the founder of Redfin is now in the "diagnose your own mental health" business. What next? Home dentistry? What is this guy... some snake oil salesman?

Don Bush

Stewart -

You get what you pay for, pal! Then! Now! Forever!

Turning Real Estate Consultants into Best Buy-type clerks is not the solution! Kinda like going into a medical clinic to save money on your medical bills.

Consumers, however, want top-quality service AND the cheap price! Trouble is - there is always another Real Estate Agent out there willing to match the deal. Yes?

You don't want those clients!

In a seller's market - these folks might make hay while the sunshine. Likely, now, they'll be scrapping to make a dime, with below-average caliber, desperate agents!

DEAN & DEAN'S TEAM CHICAGO

The Help-U-Sell Real Estate franchise company entered Chapter 11 bankruptcy proceedings after a group of regional operators filed an involuntary petition for bankruptcy.

August 11, 2008

Stuff like that gives full service on-line brokerages a bad name.

On Long Island, many haven't heard of Redfin. The website is state of the art (opinion). In an internet driven market, as most concede this has become, a numbers game would seem obvious. Their website (I just read on AR) cracked the 20 most visited. IF they provide quality agents and response, it's my feeling that they'll develop a following here- until buyers discover that they don't deal with short sales. It's going to be challenging to usurp the agent that's willing to show them, provided THAT agent returns calls. It'll be interesting to watch. Some agents will capitulate and compete with or offer the rebate, some won't- if Redfin is fringe, there will be few who have to make that decision.

Everyone here is saying the same thing. You get what you pay for!!!

Geez -- I know when people want to be online, and when they want to talk to a "real person."

Thanks for your post.

FORTUNATELY, in Oregon it is against our agency license law to offer referral compensation, or kick-backs to any entity that is not licensed as a broker. WHEW!

Yeah, I get Lenn's point. Fringe.

I have no issues with Redfin. They are not in my area but we have many discounters and rebaters. I've done transactions with all of them Some of their agents were very good and some really sucked. That kind of reminds me of my experiences with "regular" brokerages. I truly believe the consumer should have choices. They are not my competition. Of course since my market's prices are well under $175.000 and mostly short sales I don't guess I'll be seeing Redfin any time in the near future.

Redfin does have an outstanding search site. LA buyers love it (makes most mls searches look like antiques). I know several people who use the search, but return to a full service real estate agent when it is time to buy.

I'm not familiar with Redfin. Seacoast NH

Patricia/portsmouth nh real estate

Okay...I'll be the lone dissenter here. Redfin's model is not for every buyer or seller, nor is the full service model. I personally think it is arrogant to assume that all clients want the same type of service. I think MLS only service providers, and providers like Redfin have a place in the real estate world. Clients who want to look at short sales, or lower priced homes, will move onto another agent because Redfin won't offer the service that they want. Why is that a bad thing? Really...why?

I think it is sad that agents feel the need to jump on the bandwagon of saying how awful all of their agents aren't quality folks. I have seen sucky agents with Prudential, Coldwell Banker, ERA, and RE/Max. Yes, folks even the big guys have crappy agents. Redfin, I am sure, is no exception. I am also sure that have really good agents there as well. Google the number of rants on AR about agents that don't return phone calls...I bet if you did a poll there would be distribution across all companies.

All of the big buys have had franchises fold across the country. You all point to the discounters, but let's throw the big guys in the mix too. C'mon folks Realogy was teetering on the edge there. I am constantly stunned at the glee that seems to occur in the real estate industry when a business owner has the gall to try something different and then struggles or fails.

The ONLY person that decides if Redfin is a better way is the consumer. I say give them choices so they have the chance to let us know what they want. Redfin has a place.

I told a client once "Keep your hand out of my pockets and I will keep others' hands out of yours."

That's the deal.

Thanks for the post.

They've opened up shop in Chicagoland, but aren't doing any business. I don't think they can survive in a more difficult market.

Simply nothing better than good old fashioned service and ethics and honesty...humm....

Deb

Good for you, I guess there is a business model for everyone. I have actually heard good things about them but in this case I thik not.

I've had clients tell me they found houses on Redin, but have had no dealings with them other than that. It sounds like a limited service model.

I have never heard of this company.. Is this another DISCOUNT BROKERAGE type company ?

JUN

2009

Have not heard of them here in CT, would sound appealing for some buyers, but most definitely agree that you really do get what you pay for.

Not being an agent but an investor I have to say that I would not think of asking my long time agent to lower her commission. Great consistent service is hard to find and I do not mind paying a fair price for her hard work.

Tell the buyer go to Redfin. Let him experience the great service they provide and they promote. Good luck to him.

Redfin does not seem to operate in Canada at this time, based on searching www.realtor.ca for "Redfin" in the company name. This website includes all real estate brokerages in Canada, except for those that are not members of a real estate board.

We do not have Redfin in my market. I don't think they'd be attracted to Central Ohio because our prices are too low. We do have a bit o'rebating and discount brokerage of course. I always wonder when the market turns if someone will try to copy it. Or if some of the online companies are trying to copy this for local consumers?

Morning Stewert, terrific post ! Seems like the combination of lesser experienced agents and some real questions about " paybacks " will severely limit this business model.

Funny and to the point. I have not had a Redfin call in Oklahoma. As to Inman news recongnizing Redfin, I like those guys but honoring Redfin is no big deal. A few years ago they gave a special award to The Justice Department.

Thanks Stewart,

I learned a lot about Redfin. You obviously grabbed their attention. Nice catch on the "fanatical service". :)

Redfin is definitely niche. To those who asked about rebating persuant to loan guidelines - they (at least USED to) have it on their website that the way it works is that it is fully disclosed on the HUD and that it must conform within lending guidelines. SO for example, I bet they are not dealing with the FHA market that much because I believe that FHA does not allow commission contributions or concessions.

They wouldn't do well out this way these days. You need to write an average of 10-12 contracts per financed buyer before they get a house. We have so few Realtors now (the herd has been thinned) and they screen the snot out of their clients so rebating agencies that cap the amount of homes they could see would definitely be going down the tubes right now. For example if any of my team members work with someone for two days and they aren't writing contracts yet, they are kicked to the curb. We completely put our buyers through the wringer for sense of urgency with buying.

We all have the ability to decide what we will work for. What would happen if these business models started popping up everywhere? That means that we have lowered the amount that we work for which in turn will push average commissions downward. (I said average and not standard, OK?) Rebating and Discounting Brokerages RELY on the full service model to continue to pay them. They also rely on full service agents to be able to negotiate those higher commissions for them to survive & (BIG AND) show properties to their clients after the clients have reached their cap on homes they could see. Our time resource is so thin here that it is really hard to find a pop tart, open house or list agent who can open a door for a buyer who doesn't want to show comittment

There is a common theme here that cheaper = worse but that's not necessairly true. Look at Costco and Amazon, two companies that offer great service at a lower price by using technology and volume to lower costs.

Redfin is able to offer a refund back to the customer because the home buyer does the work of finding the homes they want to see by using our website. Once they find the homes they want to tour Redfin's level of service is comparable to the level of service you all offer. At times, other folks will help out our agents with touring or transaction coordination but that's no different than what many other agents do when they're busy.

Unlike other brokerages we survey every client and post those surveys on our website for you all to see (go check them out and see what our customers say about our agents!). And when an agent of ours is not offering the level of service our customers expect we fire them. If you ever have a negative interaction with a Redfin agent let me know, but I suspect that when you do work with us on a deal you'll find us to be very professional.

I know several of you are baffled that our agents aren't commissioned and that must mean we attract bad agents. I couldn't disagree more. Redfin agents who make our customers happy make a nice living. In addition to their salary and bonus they get health benefits, paid vacation, we pay their MLS dues and reimburse them for mileage.

Our success is by no means guaranteed but even in this down economy we're growing our business. In 2008 we grew revenues about 40% and web traffic 400% and this year we continue to expand to new markets and hire more agents.

And thanks Melina for being the lone dissenter :).

"As the largest real estate office in Georgia south of downtown Atlanta, none of my 140 agents will show a discount firm's listing, ever. It'd be like your arch enemy coming to town and trumpeting "I'm here to cut your throat from ear to ear. Now, would you mind terribly to help me sharpen the knife?" I don't think so."

Sounds like you're putting your profit ahead of your duty to your clients. I wonder what your local realtor association would think of a statement like this.

Dear "Another Realtor"..... I put profit before anything. I'm not running a Salvation Army franchise but a "for profit" firm. If you don't understand that basic concept then I'd suggest you apply to the American Red Cross or some other altruistic organization who can put service above profit. Being profitable in a sea of firms awash in red ink will allow me to be around next year and beyond to service my clients. Conversely, I diligently service my clients to be profitable. Funny how that works, isn't it? Any client (or agent) that doesn't understand that I have to be profitable simply needs to do business with Redfin or perhaps other discount firms who won't be around later. As far as the local realtor organization, why would I care what they think about how I run my firm? They're not my partner or my manager, didn't put up a penny to start this firm and don't take part in helping me battle the marketplace. Are you suggesting that I should seek their council on how I choose to run my firm?

Don Bush

"I diligently service my clients to be profitable. Funny how that works, isn't it? Any client (or agent) that doesn't understand that I have to be profitable simply needs to do business with Redfin or perhaps other discount firms who won't be around later."

So do your agents disclose to their buyers that they are not actually working in their best interests but in the best interests of their broker? That is, they're not showing all the houses on the market, only the ones that their broker thinks is worth his trouble.

"As far as the local realtor organization, why would I care what they think about how I run my firm?"

Because you and your agents are supposed to be working in the best interests of your buyers, not in your own best interests.

I see Mr. Another Realtor... you're the guru of real estate. I'll tell you what. When you build a firm of 140 agents selling close to 100 million in real estate with thousands of happy clients I'll contact you for advice. Until then let me suggest you take a few advanced business school courses before you start preaching on "how you should do it." This may come as a shock to you but most people in business work for their own self interest. As soon as you shake off that delusion you seem to have fallen spell to maybe you can be a teacher for NAR or start a firm called "Realtors for Humanity."

Don Bush

Like every concept it has it's place in the market. Is it going to take over the way we do business? No probably not but they will always get a slice of the pie. Those of us who are still doing business the usual way, we must give better service going forward or someone else will.

After reading all the comments, all I have to say is in response to #87 - where Matt said, " the home buyer does the work of finding the homes they want to see by using our website. " In my experience, the buyers who get online and find the homes they want to see cause a LOT more work for me, because they want to see everything that has a description written by an articulate agent. I point out that the homes they've chosen don't have the number of bedrooms they said they wanted, or aren't in the area they said they wanted, or whatever, but they still want to see them. Then, when we're standing inside the house, they say, "Doesn't have enough bedrooms." I believe it all works out better for the client and for the agent if the professional does the work. And if they've agreed to do that work for a certain amount of money, they should do it.

BTW - regarding those who've said Matt 'hijacked' the blog - it seems really unfair to criticize a company, ask questions and make accusations in the comments, and not expect a rep of that company to respond.

"The most amazing thing was that of the 163 who responded to our survey's in May, all 163 would recommend Redfin to a friend" - Matt Goyer, Redfin

In Real Estate (and all other businesses involved in the service industry) I don't believe (no matter how hard we may try) that we are able to be "all things to all people all of the time".

So I am amazed that Redfin had a 100% positive response to their May Survey.

Can any other member of ActiveRain honestly claim these kind of statistics?

I think its nice to hear from Matt who is from Redfin instead of all the other companies telling us what redfin is. It's like traditional offices trying to expain 100% offices ....they don't have a clue if they haven't been there. We don't have a redfin in CT but I know for sure that the next few years real estate the way we know it now is changing at a rapid pace and I wouldn't be surprised if someone comes up with a combination of all the best concepts at a good value to the customer and clients.
Maybe a ATM type machine where you make your offer online, sure they still have to view the property with someone but how much is that worth?

The long list of comments is intriguing to me. Some of these perspectives I have never really thought about. Redfin is another business model that the consumer can choose if it suits them. They (Redfin) are not in Ky and I wonder if they ever will be. I have emailed them months ago asking that very question. They have never answered me either. If customer service is bad, a company can not survive.

When I graduated from real estate school and received my sales associate license, I went directly to a company called EXPERT Realty. They eventually went to ZIP. Without writing a blog as an answer, I will write a separate blog explaining how the system worked there at the time. It wasn't very pretty - that is, after one week of great training...the money just wasn't what it was all cracked up to be...JMHO.

My $0.02 on discounters is this: Can they FUNCTION without tons of VC??? Therein lies the rub. It's relatively easy to undersell the competition when you are being propped up by millions in VC that the other's aren't. The bottom line: their margins are way too thin for the high-touch nature of this particular industry for them to survive without all the VC.

Sure, you can compare real estate to booking flights on Expedia and buying books on Amazon all you want - but let's get REAL. Anyone buying a HOUSE is going to take their sweet time! It's an enormous purchase and buyers need tons of hand-holding - which is costly to the agent and the brokerage in terms of time. Time, unfortunately is money.

I have no trouble working with discount agents IF they hold up their side of the transaction. That means they ATTEND inspections - from start to finish - they run papers around when they have the buyer - they deal with issues such as the walk-through and the buyer coming to take measurements for furniture. In this case, the buyer and their needs is the that agent's responsibility. NOT mine. All too often discounters mooch off of the traditional system by sighting our "fiduciary obligtion to sell the home" in order to foist the leg-work on the listing agent. SORRY! You have an obligation to your client as well - the fact that you agreed to do it for next to nothing is not my problem.

JUN

2009

In October 2008 Redfin made the following announcement:

"Redfin laid off roughly 20% of our employees. Unlike other startups, our industry’s recession started a year ago, when home prices first plunged."

Matt (#87 above) - I'm curious to know what happened to those employees that were let go. Do you know if they returned to being commission based agents or did they leave the industry completely?

"I'll tell you what. When you build a firm of 140 agents selling close to 100 million in real estate with thousands of happy clients I'll contact you for advice. Until then let me suggest you take a few advanced business school courses before you start preaching on "how you should do it.""

I'm not trying to tell you how to do it. I'm saying that refusing to show certain properties to your clients violates your fiduciary duty to serve them first and yourself second. Your success at the way you treat your clients has nothing to do with your legal, professional and ethical duty to them.

Eric Reid - Post 56

I will write this here and of course write you personally as well.

I looked up your listings and found none of my expired listings in your stack. Perhaps you thought you took one of my listings and was mistaken?

I also would like to know what part of 70 points of marketing that I do for my clients is "do it yourself"? My clients spend no more time on their listing with me than your clients spend on their listing when listed with you. Don't confuse value with a discount price as if there is some expertise lost. The question is not how or why do I charge so little, the question is why do you charge so much?

We staff our office and contract department 365 days a year with a team of contract negotiators and our buyer and marketing team work 7 days a week with 2 holidays a year not covered. I can hardly say the same for the agents who are picking up their kids, ordering drive-thru food and waiting to get off their full-time job to negotiate an offer.

Maybe you don't have your facts straight? My website is full disclosure - spend some time there and get your facts straight please. The Realtor Ethics Code Article 15 says
REALTORS^® shall not knowingly or recklessly make false or misleading statements about competitors, their businesses, or their business practices. (Amended 1/92)

Rhonda Duffy
Duffy Realty

JUN

2009

This is a most interesting post and the first time I've seen two or three hi-jackings in one post. Actually lots of good info for all.

I run my own full service firm. I have also blogged that gimmick brokerages can't last past the venture capital's life span because they cannot attract good agents, which is the lifeblood of market share and porfit.

I recently became a Redfin referral agent because I do believe that Redfin is different. Most gimmick firms hire anyone. I was impressed by what I went through to just get referrals from these guys-talk about screening. They only want good, experienced agents. Moreover, their site is amazing, so if they continue to get good agents who benefit from their site they'll put it together. And guess what? If you are making money with good people, you aren't a gimmick.

Now, perhaps because the rebate is smaller for my arrangement the type of buyer is different, but my experience is not that Redfin buyers are cheapskates; they just seem more technologically savvy. I can't speak for the areas where the rebate is higher.

I am in Seattle and will admit that I really was not too thrilled with Redfin in the beginning. I didn't like how the buyers called and were sneaky about tricking me into doing their buyer agent's work. I hated that the company seemed to be building its business on my back with no apologies. They have changed their biz model and this is not happening for the most part anymore. I actually like Redfin buyers quite a bit now - they are smart and savvy and I love when they visit my open houses. There is obviously a need for this alternative business model and Redfin is stepping up to fill that need in our market. I don't see the issue anymore honestly. I think there is room for many business models in my market. I would love it of course if they all came to me for their buying needs, but you can't win them all:)

JUN

2009

Thanks Melina Tomson, for your intelligent comment.

I was a traditional agent for years and understand the temptation to bash new business models, because they threaten the full price traditional service model and the income they produce for their brokers and agents.

I am now working for Redfin in New York and have to tell you how refreshing it is to work for a company that believes in transparency and puts the customer first. We may not be the right model for every customer and every agent, but we clearly delight those that do find that our incredible search site, customer service, rebate model and agent salaries meets their needs. Yes, we do miss callbacks from time to time...will all of you out there that have never missed a callback please stand up and take a bow?

There's room at this party for all sorts of models. The sooner that the real estate community focuses on their customers best interest instead of their own, the better. Spending time and energy trying to discredit the competition makes us all look bad.

Michael... Redfin's "consumer advocacy, customer first" philosophy at the expense of your own well being and corporate profits is about as much BS as I've heard this week. If you've been fed so much corporate nectar that you are now preaching against every business school course ever taught then you're headed down the wrong road. If you truly go to work everyday to serve your fellow man at the expense of your own company's well being, you and your firm are not long for this world. Discount firms have been around for decades and so far none have gotten a toe hold on any market. Foxtons left town, Redfin and Zip are losing millions only being kept alive by VC, Help-U-Sell has filed bankruptcy and most of the mom and pop discounters last less than a year. It's simply not an economically viable model. But that doesn't prevent every one wanting to recycle that idea from trying again and again. Now we have another genius listing homes for free (Iggy's House) trying to pedal that same old line of "we just care about you." Horse feathers. I really don't think the general public will buy that line in big enough mouthfuls to keep the discount business alive. It hasn't so far.

Secondly, if you expect an entire industry of full service / full fee firms employing millions of commissioned agents to lay down and welcome you into a market while you try to cut us off at the knees, you're smokin' some mighty good stuff. It won't happen because of what is at stake. If the discount model by chance ever becomes a dominate part of this industry then tens of thousands of traditional firms will fold along with the unemployment of almost 3 million commissioned traditional agents. When you understand what is at stake then you begin to understand why you don't have a cheerleading section from your competitor's side of the battlefield. It doesn't take a business genius to give away their earned income. When you guys can step up to the plate on a level playing field and compete honestly and drop the "we're just doing this to shield you from those dastardly full fee firms and to be your advocate for fair play" you'll get some respect in the marketplace. Until then, be prepared for a battle royal. Most agents refuse to show discount firm listings and until one of us wins the war expect more of the same.

Lastly, any commissioned agent that would work for a salary is a failed real estate agent that couldn't cut it by competing in the commissioned world. You'll never find a high producing, high income salesperson willing to work for a salary. Conversely, every low income, low producing salesperson would jump at the chance to have a regular paycheck since they couldn't earn one by their own talents and perseverance.

Don Bush

Don,

I respect your passion and commitment to the model that works for you.

But not cooperating with non-traditional models does not serve the customers and clients best interest, which is our legal and moral responsibility.

And agents who choose to work with Redfin don't because they "couldn't cut it", they choose Redfin because they like our culture and compensation model. Our agents are among the top producing agents in several of the markets we have served for 2 years and more. We don't hire failed agents.

I want to see all agents flourish in the model that fits their style the best; full service, online, flat-fee and FSBO. Not any one model serves all buyers, sellers and agents. In my humble opinion choice is good, monopolies are not, they smother the natural, healthy competition that keeps everyone on their toes, looking for ways to get better at what they do and improving their services.

Change is inevitable. We either effect it or it happens to us.

Just ask the UAW Leadership.

Michael, business morals is a subjective opinion. As far as the legality, I've heard that on AR a hundred times yet no one can give me a link to any such law. The primary reason is there isn't any such law but only a delusional wish by discount brokers. Any broker is free to exclude any listing for any reason from the list of homes they are willing to show. While not showing discount brokers' listing may not serve a buyer's interest or yours, it serves mine which is to prosper and to do what I can to keep bottom feeders and others who's published goal is to destroy traditional brokerages. While you don't plainly say with all your transparency anymore than you say that your real goal is to make profit and to better your own life, it is clearly the goal of discount firms to cut the throat of those of us that are full service / full fee firms. Don't expect us to assist you in sharpening the knife.

Certainly you're correct about change. Exactly when and how is a huge question for all of us. But when 90% of all discount brokers fail and the remaining ones are limping along losing millions, I'll bet on the side that the change will not involve an evolution to discount brokers dominating the market.

Don Bush

JUN

2009

Stewart, great response!

JUL

2009

Stewart,

I didn't know what Redfin was until I read the whole thing. This sounds like borderline criminal scam activity; definately they're playing a numbers game. Can they not be reported and investigated?

OCT

2009

Great story, I am checking out everything about Redfin as I am getting so many clients using the Iphone application. But, it is not accurate information!!!!

NOV

2009

The whole world wants a deal and few realize that they get what they pay for. Hopefully over time, companies like this will die off as people wise up to their antics. Good for you for standing up for yourself and not cutting the commission.

JUN

2010

I have to agree with Lenn here. Pretty much a fringe company. Redfin has built a great website with their $20MM in venture capitol. When that gets used up, and we are almost there from what I've read, they will have to get more venture capitol or they will have to charge what everyone else charges to stay in business.

I've dealt with several of their agents and they, like all agents are either very good, average or very bad. No surprise. The surprise will be to see where last year's Redfin agents are five years from now.

I expect when the money's all spent they will sell their software program to the highest bidder and follow their founder into never never land.

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Stewart Penn - Los Angeles Real Estate

West Hollywood, CA

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