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

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.

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.

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

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:)

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

Stewart, great response! 

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?

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!!!!

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.

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.