Don't know how many of you saw the 60 Minutes piece on the real estate industry Sunday night, but if you did (like me) you probably had to extricate yourself from the ceiling after it!! I was on vacation in Bellevue, visiting my Mom for Mother's Day when I thought I'd enjoy my regular Sunday night ritual of getting my blood pressure up a few notches by watching 60 Minutes. Little did I realize that my blood pressure would almost double from seeing this piece on RedFin, the Seattle Internet based Realtor that claims to be "the industry's first online brokerage for residential real estate"and is trying to "revolutionize" the Real Estate Industry by eliminating the middle man (the REALTOR) and cutting commissions to the bone!
It started off with a young Seattle area couple stating that they SOLD their house and Bought another through RedFin and saved $26,000 in commissions, enough for them to have a nice wedding reception! It also alluded to the fact that they only had to do about 10 hours of work to save this amount of commission! Glen Kelman, CEO of RedFin, calls the Real Estate Industry, the most "SCREWED up industry in America"! PUHLEASE!!!!!!!!!!!!!!!!!! you want to talk about screwed up industries? How about the OIL INDUSTRY or the INSURANCE industry? Kelman says his "Internet agents" close EIGHT TRANSACTIONS A WEEK since it only takes them a few hours a piece!
Now, 60 minutes did interview a Seattle based "Traditional Realtor" who attempted to defend the industry and what it is we do to justify our commissions but, when Leslie Stahl asked her how she responds to the fact that RedFin rebates the client back with 2% of the "typical" 3% commission charged by the selling agent, she said "I don't know how to answer that!" Of course, 60 Minutes is known for catching the interviewee off guard with questions and I didn't envy this poor woman at all!
60 Minutes did mention that many people see the industry as a "touchee Feelee" industry where clients want to see many properties and reveiw them thoroughly (sound familiar?) before making one of the most (or THE MOST) important decisions of their lives! RedFin may be for those who like to buy everything ON-LINE without actually seeing it for themselves (RedFin wants to be the "Amazon.com" of Real Estate) but I, personally, don't have any clients who are willing to buy, sight unseen, property from an Internet website.
Kelman says he expects to have to fight HAND TO HAND combat in each state they try to do business in (I think they're only in Washington state right now)!
The piece also mentioned that the Justice Department has filed a lawsuit against NAR for UNFAIR business practices and trying to prevent competition. Well I, for one, don't want to see these Internet real estate guys having the same access to all the information we Realtors have to pay many MLS, organizational, and SupraKey fees for without paying!
Now that my blood pressure has returned to normal (almost), I thought I'd post this to see what other's thoughts and observations were on this program.
Oh, by the way, if you go Here http://216.52.172.179/DispNewsletter.cfm?NEWSLETTER_ID=1956 you can see a Media Alert that was posted by the Inland Valley Association of Realtors warning Realtors of the article (I saw it AFTER the fact)!
Duane
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