Last Friday, Redfin announced it was taking a two-week break from accepting new listings. According to Glenn's post on the company blog, this was done in part because many Redfin agents had been working long hours for weeks on end without any time off. In other words, they were working as real estate professionals.
My first reaction was that it seemed odd to cite one of the basics of the real estate profession as a reason not to accept new listings. But as I thought about it a little more, things seemed to become more clear.
First, if a company is experiencing higher-than-normal demand, it would seem logical to staff to meet that demand. If the company doesn't increase staff, that normally would indicate the demand is expected to be only a short-term phenomenon. Or that the demand doesn't exist.
Second, no one takes two weeks off and still expects prospective clients to be waiting when they return. Most people don't have sufficient patience to wait any more than an hour for a return phone call (and they probably shouldn't have to wait that long, to be honest). Expecting them to wait two weeks at the height of the summer to list their homes is more than a little optimistic.
Third, why would a company continue to plan expansion when they can't manage the business they already have?
In the comments below Redfin's posts, Glenn said it wasn't "good news" they had to do this. I only can imagine.
Redfin's ideas clearly have some resonance with the general public, as evidenced by those defending Redfin on my blog and theirs - even if the defense has little to do with the announcement. One reader even went so far as to imply Redfin is doing this so as not to add to the inventory in the areas they serve. Um, sure.
At some point, though, critical questions should be asked ... if not by the VC folks throwing cash Redfin's way then at least by the public. 60 Minutes' fawning advertisement did nothing to answer what is so unique about flat-rate listings and rebates to buyers (the short answer: nothing. One even posted a comment to Redfin's original post.)
Imagine going to the supermarket and seeing a sign telling you no new customers were allowed for two weeks in the interest of providing excellent service to those inside the store. Would you wait outside for two weeks to buy your groceries? Or would you go to one of the dozens of other stores capable of providing excellent customer service at higher capacity?
Seems like a simple choice to me.
What a great Post! Thank you. I bookmarked it becasue I want to really digest your comments and maybe do a follow up. Excellent information.
Sincerely,
William