Thanks for the heads-up.  I'll check this out too!

Thanks for this post..excellent information for us realtor'with superior service. They should ask the Internet realtor's if they service their clients like this and then tell me if our full service is more valuable.

Neal,

I agree. Let the consumers decide with their dollars. The power of choice is remarkable when not inhibited by the department of justice!

I have nothing against technology..but I find it hard to believe a buyer would purchase a home especially now without physically seeing it.

Once had an Internet buyer with another Realtor..but when they saw it in person ..they didn't go through with it. To each is own I guess...sellers and buyers will never get the same service I provide as the do it your self Realtor. I consider it laziness not to have the Realtor accompany them to see the house...pure laziness in my opinion.

I went to the website. It is interesting.

I admit, I love the internet, found my wife on match.com , my resume is on monster, car from eBay (as well as art and watches). Homes though?

Well I will say that I would give the service a hard look depending on the circumstances. My past agents were worth every penny, but I had to interview a ton of ones that couldnt have been better the Redfin.

How many of you use a discount stock broker versus full service. Did nt we here the sme thing from the industry when they arrived. The size of the $$ can be similar. The internet has a way of providing information. Would you buy a stock without professional advice?

I would buy a stock without consulting a person, however I do read reports and analysis before buying. I doubt if this process does anything more than take photos of homes and put them on the internet. This seems very expensive to me for little service. The commission in this market is closer to 4% tha the 6% that some markets get. They did not mention that commission rates vary over the country. Does the seller pay any fees upfront? Does the buyers agent receive any fees? We only get 50% of the story. 

The other thing that they mentioned that some states do not allow buyer rebates. The rebate for a buyer can get out of hand quickly, nothing is free. 

We show what we have to offer clients. It is really no pressure.  Just show them all of the marketing and positives and negitives.  99% of the time they decide to go with us.

http://www.redfin.com/stingray/do/buy-faq?direct-section=buy

The whole full-service vs. discount vs. pay-for-service broker debate is a bit of a non-debate, if you ask me.  Every business model has a place in the industry.  In fact, I think that the more models there are to choose from, the better we all are in the long run -- professionals and consumers alike.

Let me explain a bit:

Competition is beneficial for all.  Competition keeps us learning, and improving our skills, so that we can better serve and retain the clients we work for.  This benefits not only the long-term viability of our own careers, but the quality of service available to the consumer.  As Brand X rolls out a service that gives them an edge, Brand Y adapts and improves their available services, to remain competitive.  No longer the only brokerage with that "edge" Brand X streamlines their effectiveness, to climb back to the top, starting an "arms race" of sorts.  Lather, Rinse, Repeat.  The consumer wins.  Both Brand X and Brand Y win, because they now have the benefit of the additional training and services available to them to serve their clients, and to attract new ones.

Some consumers are price-driven, some are service-driven.  Not every brokerage model will be right for every consumer.  The client who bought their home last year with an 80/20 package and is being forced to sell due to a job relocation, may find that there has been no appreciation in price since a year ago, and working with a discount broker will be the only way for them to sell the property and afford to pay a commission after paying off their mortgages.  A full commission could force them into a "short sale" type of situation, and no REALTOR I know would recommend that as being in the best interest of their client.

Sometimes, a full service broker can actually net more for the client than the discount broker can.  It is not always a matter of pricing, either.  The additional fees paid to the full service broker are often justified because they go to a greater expense to market the property to the right pool of potential buyers, which can attract multiple and/or higher offers.

When entering this industry in 2006, I thought long and hard about the type of service that I wanted to provide my clients.  I created a vision for my own practice, and then began interviewing various brokers to determine which model was the best fit.  It soon became clear to me that to provide the type of quality service to my future clients, I would need to align with a full service brokerage.  The structure of commissions never really entered into the picture.  What mattered the most to me was having the ability to deliver the type of service that would have clients "coming back for more" -- that is, repeat business and referrals.  I could not imagine clients regularly saying, "Oh, yeah.  I got great personalized service and attention to my needs when I worked with XYZ Realty.  My agent took care of me every step of the way" when talking about a discount broker.   That's not to say that it can't happen that way, and as I said before, there are valid reasons a client would want or need to work with a discount broker.  The discount model just doesn't fit with my business plan.

One thing that I take issue with the 60 Minutes piece is that is leaves a false impression with the viewers.  They say that the commission is split between the agents on either side of the transaction.  What they failed to explain is that it is more likely split between the brokers on either side, who split their share with the agent.  In some business models, that may mean that the sellers agent gets paid 1.5% of the sale price, not 3%, and certainly not the full 6%.  If that agent's client came to them as a referral from another agent, that commission might be shared even further with the referring agent.  A 30% referral fee would lower that 1.5% to 1.05%.  In that case the $500,000 would represent $5,250 into the pocket of the agent, not the $30,000 or $15,000 that the article implied.  I think that part of their piece was an example of irresponsible journalism, which misleads the viewing audience, and has them reach potentially erroneous conclusions about the value of a REALTOR's services.

60 Minutes is a great program, and they have exposed many scams that have abused consumers.  I think the producers who thought it was appropriate to suggest that full service brokerages are taking advantage of consumers may have some something other than objective journalism in mind.  I can only presume they have some personal or political horse in the race.  It certainly did not seem as objective as some of their other pieces I have seen.  Any time you tell only part of a story, it is easy to appear to be exposing something as being less than upright.  I understand their reluctance to tell the whole story, though.  They need to sell airtime.  If they told the whole story, they might bore viewers, and the sponsors might not like that.  I have probably bored you with my lengthy comment, so I understand if you tuned out, and went on to read the next comment, or even another blog on a more titillating subject...

The posts that are flying around slamming consumer choice is very bad PR for our industry. Take a look at this thread titled "Shame on you Redfin" http://activerain.com/blogsview/97974/Shame-on-you-Redfin

Consumers read this site often and our posts will be out there for Google and other search engines FOREVER. I would like to see our peers handle this very minor challenge with more class.

Just my 2 cents. Watch what you post out there.

PJ

PJ..yes, I believe the Active Rain God's should limit this CBS blogging to posting of the "members only".