Is Redfin a "slut"?

[photopress:decision_1.gif,thumb,alignright]I just realized that the very BEST line in Glenn Kelman’s post of yesterday, was somehow edited out.  (By Glenn I think, or html error code)

Glenn said, “You say ‘discounter’ the way high-school boys say ‘SLUT’.” (you being the industry, and not ARDELL singlely.)  I would correct Glenn on that, to the way high-school GIRLS say ‘SLUT’.  More specifically, the way THE girlfriend of the boy that just got serviced by the slut, would say it.  (boys on the other hand may say it in gleeful anticipation)

The question of the day is, does Redfin apply adequate checks and balances, as a member of the MLS, to insure that the consumer did not get to Redfin, “on another member’s back”? i.e…abuse of privelege.

“Traditional” MLS members understand this duty, that goes with privelege.  They understand that membership is not just about paying your quarterly dues “for data access”, the same way that some understand that getting a driver’s license comes with duties and responsibilities to other drivers on the road.

Do “online brokerages” understand their obligations to other members in this regard?  Do they understand that the MLS is NOT merely and simply a “data source”?  “Ignorance may be bliss”, but ignorant MEMBERS may, in fact, be “sluts” as in, “I didn’t know he had a girlfriend when I…”.  Did you even ASK first, is the question of the day?  Did you know you were SUPPOSED to ask first?, is the second question of the day.

Are you (Redfin) “a slut”?  It depends on HOW the consumer gets to their decision to buy THIS house online, via Redfin.

Let’s use your example of Amazon.com for a minute.  Say someone goes to Borders and spends three hours in their store looking through books, dirtying Border’s inventory with their sticky fingers while drinking a Mocha and spilling some in the books.  After perusing the inventory available there, live and in person, they write down all the books they want to buy.  Then they go home and order it online from Amazon.com.  Some would say “so what”?!  I say that’s different than my wanting anything written on Frank Sinatra, going to Amazon.com and searching on that site and buying on that site.  Using the site to decide what to purchase, and then purchasing FROM that SAME site, is online shopping.  Going into a competitor’s store to decide what to buy before ordering on line, is ethically and morally an abuse of the competitor’s resources.  Applied to real estate, this is called “procuring cause – the chain of events that led the consumer to the decision to purchase THIS house today.”

There is an ethical issue regarding “Being IN the MLS”.  “IN the MLS” comes with a list of responsibilities and duties that come with the privelege of being a member.  One is that you do not use and abuse other members.  This key point is one that I think ONLINE services most abuse, are ignorant of, and ignore entirely to the dismay of “we old school members”.

If someone calls me and says they want to buy X house, I do not pull out contracts to fill out, as we (perhaps erroneously) believe Redfin would do.  The definition of their business model, suggests they would in fact “be a slut” in this regard.  I hope that is not the case.

Here is what the industry expects of Redfin, and what other members would do, and understand they should do, if someone simply wants a member to “write up” a house they have not themselves shown.  I would need to know HOW they KNOW they want to buy THAT house?  It is an unwritten rule in this business (and to some extent, a written rule) to not “climb into bed” with a buyer who was led to their purchase decision, by another agent member of the MLS.  Any agent worth their weight in INTEGRITY POINTS, would NEVER write an offer on a property that THEY had never seen and the buyer HAD SEEN, without first getting the full and complete story.

How did you see it?  Did the agent showing it to you understand that you would not be buying it through them, at the time they showed it to you?  Did the agent show it to you more than once?  Did you call the agent or email the agent with many questions leading you to your decision to purchase this house?

In other words, I would be expected to ask if they “have a girlfriend” before “servicing their immediate needs”.

What was that agent’s name?  You don’t ask the consumer if that agent was THE listing agent, as they might not understand the subtle difference between A  listing agent and “THE” listing agent.  The agent writing needs to check that by name of agent.  Does Redfin DO that?  Do they even know they need to DO that?  We think not.  We do not think this is part of Redfin’s Agent Training for each and every new agent hired.  Maybe we are wrong.  Maybe Redfin is not ” a slut”.  But their business model suggests to us that they will service other agent’s clients, without regard to the “rules of play”.

I, for one, think they don’t “get” this part of being a Member of the MLS.  I would love to either be corrected in that regard, or be someone who promotes a Redfin change in policy in that regard.  Either way…all are better served as a a result. 

If you don’t want to be called a slut, then don’t be one, AND make it clear on your website that you REFUSE to BE one.  Make it clear that you will not be turning a blind eye to whom the buyer may have used to reach their decision to purchase.

How much you charge is irrelevant to the “slut” issue, everyone knows that a prostitute is about money…a slut isn’t.

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About ARDELL

ARDELL is a Managing Broker with Better Properties METRO King County. ARDELL was named one of the Most Influential Real Estate Bloggers in the U.S. by Inman News and has 33+ years experience in Real Estate up and down both Coasts, representing both buyers and sellers of homes in Seattle and on The Eastside. email: ardelld@gmail.com cell: 206-910-1000

42 thoughts on “Is Redfin a "slut"?

  1. Matt,

    hmmm is the emphasis on “pushing”? If someone wants to buy a house, and goes to an agent for assistance in buying it…is that “pushing”? Just checking to see if you are saying ALL agents are sluts, or just those “pushing” at people to buy.

  2. I can’t believe you suggested reading a book at Borders for 3 hours then buying it on Amazon. Any self-respecting cheapskate knows you read the *whole* book at Borders so that you don’t have to buy it.

    However, in the event you may want to re-read the book at a later date, the suggestion of spilling some mocha on the book is a good one, as it does help ensure the volume will remain unsold.

    just kidding, of course… 😛

  3. You are on a roll. Your blog swap article was great. I thought Glens was out of bounds. It seemed to me he jumped into the swap for one purpose, sounding his companies mission statement. He was lucky you posted his article, and lucky to be on a high volume site. Lar

  4. It would be quite simple for Redfin to polish up its “slut” image with the traditional real estate community by:

    1) Removing the following phrase from the “Three Ways to See A Property” page:

    “If you are unavailable to show the property, my broker is happy to call the seller to arrange a tour. If you have any concerns, please call Redfin at 877-973-3346.”

    2) Replacing that phrase with something like, “Though it may not make sense when looking at the industry from the outside, the tradition in this business is for the buyer’s agent to show properties. Be aware that if the listing agent makes herself available to show you the property, she is going the extra mile for you, and be sure to thank her for that.”

    Problem solved.

  5. Kevin…NOT. Running to a meeting so being mercilessly blunt and brief here. I know you can take it.

    Slut is ONLY if the agent is NOT the listing agent. You are wrong on that one, not Redfin. The buyer cannot be forced into dual agency in ANY state, per my post on Redfin.

    That’s the part you need to rethink, along with the rest of the industry. The listing agent CAN’T be the buyer’s agent too UNLESS the buyer is OK with that, and the buyer can change their mind about that any time during the process, even the day before escrow closes.

  6. How about billing the Redfin buyer when I show him/her my listing? Redfin’s rate seems to be $85 an hour so $20 a showing seems reasonable. No I’m not serious. I only get irked when prospects working with Redfin aren’t upfront about their intentions. Double siding deals in residential is quite infrequent and often not worth it. Sure I’ll show a Redfin buyer. Just don’t be disingenous about agency and don’t get miffed when I don’t drop everything to to meet you at the house as you idle in front of it.

  7. Doug,

    Same to you as for Kevin. The listing agent really cannot EVER push Procuring Cause for reasons that have changed since PC was “invented”. Only a Buyer Agent showing the property is at issue, not the agent for the seller/listing agent.

    Any buyer who sees a property with a listing agent can “swtich out” under agency law. The industry needs to “get” this part, long overdue for everyone to understand the difference and the buyers rights in this regard.

  8. Is this buyer real estate agent commision (generally 3%) lower for new constructions? Is the 6% agent commision folded into the price of a house in the case of a new construction? Is it folded into the price when there is a pre-sale oppurtunity as well? My main question here is if there is any difference between a pre-sale and an otherwised priced home on the market. Again question from a newbie to real estate 🙂

  9. We have a way of handling this in Georgia.

    Many listing agents are now using language similar to this in the listing:

    The co-op commission on this listing is 1/2% if we show your buyer this home.

    There’s more than one way to skin a cat… so to speak.

  10. I’ve got the feeling this has been covered elsewhere but I’ll throw it out there anyway. If I show the house to someone, beginning the chain of procuring cause, I’m under no obligation to pay a co-broke to a buyers’ agent.

    Have I paid the co-op? Absolutely. I had one of these two months ago and paid because I wanted the house sold for my sellers. Did I have to? Nope. Other agent knew it, too. I told him I’d pay him anyway, and he ended up taking .5% less.

    My agreement is with the sellers. If Redfin signs the buyers to a buyer broker agreement, then the commission in a case like this is their issue, not mine.

  11. Sandy,

    I get emails every day from builders offering higher than 3% commissions. Usually that means they are having a hard time selling those last 2 homes on a crappy lot. So if you see a MEGA inflated “SOC”/Selling Office Commission, be wary of buying that house even if you get to keep the commission. Giving the agent more than 3%, usually means the house is overpriced or inadequate in some way.

    Likewise if the builder is paying LESS that 3% to the buyer agent and still selling his homes well, that is likely a better than average price or home.

    Your question regarding 6% rolled into the price is not true, or at least not verifiable, on any house. No one posts the seller’s agent’s fee until close of escrow. On new construction it often doesn’t show ever. The seller’s agent usually doesn’t get 3% even if the buyer’s agent does get 3%, particularly on new construction. There would be a volume discount. If the seller’s agent sells 30 homes for that builder in that project, he would never get 3% on all 30. But he is guaranteed all 30 sales, so he still makes a ton of dough at less than 3%.

    From a buyer’s standpoint, you work out with your buyer agent what you want from them and at how much, and then you get the difference. If you just want them to “write it up” for 1%, and the commission is 2.5%, you get 1.5%. If the commission offered the agent community by the builder is 5%, then you get 4% IF you agreed with your agent that the fee to write it up for you is 1%.

    Hope that makes sense. Every seller and builder offers whatever they feel is necessary to get their product sold. There is no one standard rate, though 3% to buyers agent might be “the norm”. Anything more than 3% is considered a “bonus rate” and anything less than 3% is considered a “discounted rate”.

  12. Ardell, I’m not sure where we’re in disagreement here. I wasn’t making a “procuring cause” argument, but rather noting that the harsh, often unwarranted, view of Redfin by the traditional business as a “slut” could be changed at least partly by a simple modification of part of their web site. Instead of implying a listing agent’s obligation to show the property, and a penalty if he/she doesn’t, simply note that, even though it doesn’t make sense to many outside the industry, it’s not traditionally the listing agent’s job to show the property, and if the listing agent does show the property, a simple acknowledgment of that fact will go a long way.

  13. Kevin,

    I was beating my head against a brick wall with an offer for almost 72 hours…but looks like someone will “have a house for Christmas” as a result. At hour 70 EVERYONE in the WORLD was freakin’ WRONG. LOL I’m sure you’ve had days like that.

    I have not yet met ANYONE who is NOT an agent who remotely understands why someone hired to sell a home has a problem with showing said home. I think we in the industry have to Cry Uncle on this one. It can’t ALL go our way when the consumer agrees with Redfin. Do they really have to do everything “the traditional” way? No room for change?

    It is not uncommon on very expensive homes for the listing agent to have to be present at every showing. There’s no reason a seller can’t expect the listing agent to be present at showings. It isn’t common practice, but it isn’t unheard of either.

  14. Ardell

    I think you’re right about the industry having to cry uncle on this one. A seller should have the right to expect to have their listing agent present at every showing.

    As the “traditional” 6% commission comes under attack, the reality is that Realtors will be increasingly expected to justify that percentage by consumers. IMO, as we move forward, sellers are either going to demand more service or a lower commission rate.

    With that it mind, offering sellers the option to have representation at showings is a great way to differentiate yourself as a ‘full-service’ Realtor vs. the discounters.

  15. Joel,

    It is not necessarily in the seller’s best interest for the seller to require that the listing agent be present at every showing. Coordinating the buyer and buyer agent’s schedule around the listing agent’s schedule wouldn’t work on any but the very best of houses in the very hottest of markets. It could cause the house to be shown less, which is contrary to the seller’s stated objective. There are, after all, only so many hours in a day and forcing the buyer to accommodate the listing agent’s availablility ALWAYS is generally not a good thing.

    Also, many buyers don’t want the agent for the seller anywhere near them when they are trying to decide whether or not to buy a house.

    Which raises the point, that if the buyer DOES see the house with the listing agent, and is encouraged to do so by their Buyer’s Agent, they should be instructed that anything the listing agent says is said in the best interest of the seller, and not the buyer.

  16. Unaccompanied or unrepresented Buyers are welcome to attend any of our public Open Houses to view a home for sale.

    If that is not possible or inconvenient, we ask that any unaccompanied Buyer who wants to view one of our listings, come to our office first. At that time we will check their ID and make a copy of their drivers license. We also ask for a copy of their pre-approval letter from a lender. If they are not pre-approved, we give them the option of coming back after they have one or with meeting with a lender in our office. We also ask them to sign a limited Buyers Agency Agreement with a Buyers Agent in our office to view the home. If they are unwilling to do that, then we ask them to return and view the home with an agent of their choosing.

    These precautions assure agents that the Buyers ARE who they say they are and are qualified to buy a home. It also assures the Sellers that we’re only opening up their home to qualified Buyers.

    The assumption is for accompanied Buyers that their agent has already ascertained that they are who they say they are and that they are qualified Buyers.

    Having systems like this in place protects all parties and assures every party of each others intentions, and assures the physical safety of agents and the security of the Sellers and their property.

  17. Marlow,

    With all of the “identity theft” issues that exist today, I would not want copies of every agent’s clients driver’s licenses in the hands of every agent. I don’t even understand why agents send me copies of Earnest Money checks of their clients. A deposit receipt is sufficient. I do not need to know your clients confidential checking account info.

    I think some “common practice” issues need to advance beyond the same old, same old 50 year practices.

    I have never in 16 years had a buyer pretend to be someone they were not. I have had a seller bring a woman to closing who wasn’t the woman on title 🙂

  18. Well, I’m not willing to meet strangers, disembodied voices on the phone, at a house or other non-public location. If they want to meet me or have me assist them, we can meet at my office. End of story.

    Obviously, each agent must make the decision about what’s right for them. I’m not going to let myself be bullied or threatened into making an unwise decision. And yes, I DO tell my Sellers that I will not bring unidentified or unqualified strangers into their homes, for security and safety reasons. They are happy about that. Many are hesitant to do Open Houses, for the same reason, and we discuss the benefits, concerns and downside of either decision. I always try to have at least two people in attendance at an Open House, and I do ask that Buyers sign in.

    These precautions just seem prudent to me, but each agent is free to make their own decisions.

  19. Marlow,

    I think I misunderstood your previous comment. I thought you meant every agent at Coldwell Banker Bain got a copy of every consumer’s driver’s license who looked a a house.

  20. No, no. I just get a copy of their license. In case I don’t make it back to the office, you know! I worked with Mike Emert before he was murdered at a showing. It’s still too fresh in my mind.

  21. When you said “our” instead of me and my, I translated that to thousands of copies of driver’s licenses! My brain just goes that way.

    I was thinking though, Marlow, that I only copied someone’s driver’s license one time. Back on the East Coast we were exceptionally conscious of HUD and discrimination issues and trained that what you did for one you HAD to do for all. A warning to not simply get the copy of driver’s license from people who “looked scary to you”. I broke that rule only one time, a guy walked into the office and wanted to see property and the hair on the back of my neck wouldn’t stay down.  There was just something about him that scared me…and I don’t scare very easily. 

    He wasnt a “protected class”, far from it, but it reminded me that we have to be careful if we have this policy to ALWAYS do it, and not be descriminatory. Of course I didn’t give a rat’s ass at the time. I was scared. And I put the copy of the driver’s license on my broker’s desk and called him too. I’ve only had a couple of times in 16 years when I was scared. Three that I can think of now. I took extra precautions in each situation, but they were all OK. Better safe than sorry, you are correct in that regard.

  22. OK, I’m jumping in a little late on this one, but I don’t see how the Amazon/Borders argument really proves Redfin is a “slut”. It seems that if you compared the two situations the buyer is the one that is “sleeping around”. They’re the ones that are taking advantage of the convenience and price of the said establishments. Would we expect Amazon to make sure that all their customers have not visited any bookstores in the last 30 days? I can see that if a buyer has obviously been working with another agent it would be integral to ask them to finish with them, but in reality we can’t control what the general consumer does.

  23. Deanna,

    There are no MLS rules for consumers. Only MLS rules for MEMBERS of the MLS. Ultimately the purpose of the MLS is for the benefit of sellers and is/was the MLS’ purpose before it became so Agent-Centric and before buyers could SEE the Active listings only.

    The agents duty in the mls is to protect both the seller and other members from someone “using the system” inappropriately. While the buyer may create the issue, it is the MEMBERS duty, and the MEMBERS duty ONLY, to police itself with regard to participating in wrong doing…regardless of whom started that ball rolling down the wrong way.

    I think I’ll tell a story…interested in your opinion. Look for my next article in a few.

  24. Hi Marlow,

    You said, “If that is not possible or inconvenient, we ask that any unaccompanied Buyer who wants to view one of our listings, come to our office first. At that time we will check their ID and make a copy of their drivers license. We also ask for a copy of their pre-approval letter from a lender. If they are not pre-approved, we give them the option of coming back after they have one or with meeting with a lender in our office. We also ask them to sign a limited Buyers Agency Agreement with a Buyers Agent in our office to view the home. If they are unwilling to do that, then we ask them to return and view the home with an agent of their choosing……Having systems like this in place protects all parties and assures every party of each others intentions, and assures the physical safety of agents and the security of the Sellers and their property.”

    I am totally with you about making sure you are safe and I buy all of your procedures up to the Buyer Agency Agreement. I hope that you fully explain to your seller that you require the Buyer to sign a Buyer Agency Agreement and the purpose of that is so that you get the SOC and that some “qualified” buyers may not want to sign such an agreement which would remove them as potential buyers for that seller’s home. If the seller understands this in advance of signing the listing agreement, life is good. Otherwise, the seller is unknowingly buying into a process that could have material impact on the ability to sell their home.

    -Russ

  25. Thank you for having the courage to speak up about Redfin, Ardell. I am offended by the presumptuous approach they take to defining how others will do their work for them.

    Since Redfin came on the scene, my interactions with buyer-callers to my listings has changed. I now have to probe differently regarding how they want to work with me, why they are calling me instead of using an agent, what kind of agency relationship they both assume and seek, and whether or not they are working with Redfin specifically. My impression is that buyers are sensing a general resistance to Redfin, or understand its unfairness at some level, and as such I am increasingly finding people who are not upfront/honest about their intention to use Redfin since they feel they will receive less service and information from the listing agent.

    Redfin particularly concerns me on two fronts. First, their presumptuous attitude that I should do their work for them, and they get to walk away as the “discount hero” while not providing any level of quality service, buyer representation in the selection process, or knowledge about the specific property and other properties that may be better matches for the buyer. They force upstanding listing agents into a situation where we either have to knuckle under and say “yes, we’ll do your work for you only because we want the best for our sellers and not because you are compensating us for doing your work for you”, or else we have to say “your client, you do the work that you should do” but then have to look bad to our sellers since they very understandably don’t care where and how the buyers get there. Redfin in effect discounts the entire industry, not just their side of the deal. They give a cut back to buyers thus reducing the buyer’s agent side commission, and they reduce the per-hour income for the listing agents by unilaterally forcing more work upon them.

    Second, their “solutions” to the complaints lodged against them lack a sense of reality and are definitely more PR fluff than anything. For instance, their new offer for free home tours is of little real value. That offer is limited to a tour of up to three hours. Few buyers actually decide upon their home in one rushed tour of several homes. The majority of buyers take weeks or even months to decide upon a home, and on average (per NAR) they look at 10 homes. In my experience those 10 homes can frequently be spread across different days of 1 or 2 homes per day as new ones come on the market or as buyers learn more and hone in on their priorities by close work with me as their agent. And of course that’s just the average, with many people needing to look at more than 10 homes, and I provide that service for as long as they need. I predict that once the first 3 hour tour gets used up by Redfin buyers, those buyers will then revert to the same behaviors as before instead of letting tangible costs start racking up when Redfin starts directly charging them afterwards. This is a disservice to the buyers either way: if they actually use the Redfin additional cost tours later they will likely feel rushed and not look at as many homes as they should, or else feel rushed in the ones they are looking at. If they use the uncompensated services of others instead, then they are back to the underlying ethical and professional problems of the Redfin model.

    I like the suggestion of Jonathan Dalton above (small portion of buyer’s agent side commission if listing agent shows the property instead of the buyer’s agent). I believe that is a good solution. That approach already has a history of effective usage in the industry and I have seen it work in other situations (usually remote areas where buyer agents send their clients out to look for land or second homes or such, and the listing agent shows it). It forces Redfin to provide some compensation for the work they are forcing upon others, and the listing agents get compensated for the additional work required of them plus makes us more open to showing a listing to any buyer whether they are a personal client or not.

  26. Scott,

    I had a call from an agent wanting me to show my listing to her client the other day. You act like Redfin is the only time you have ever heard from a buyer of another agent wanting to see your listing. I would only warn you to keep a policy and stick to it. If you are not going to show your listing to buyers who aren’t “your buyers”, you want to 1) advise your sellers of your reasoning and 2) not show your listings to the buyers of ANY agents from ANY company or any buyer who doesn’t understand your policy.

    You changed your procedure. If you and your sellers are happy with the changes you’ve made…no problem.

    Personally, I think if anyone offers a lesser commission to an alternative business model, someone should sue the MLS for allowing that practice.

    I have sold many homes over the years for other agents by spending hours at the open house and answering their questions later in the day by phone, while their agent was out of town. And a few times it wasn’t even my listing…I was just doing the Open House. But I represented the seller well, and the buyers bought the house and I got NOTHING. Once on a million dollar sale I shamed the listing agent into giving me a $100 gift certificate to my favorite restaurant 🙂

    What goes round comes round. I represent the seller well when I am doing an Open House, regardless of whose buyer comes in and whether or not I get paid anything.

    Would you be so mad if it was a buyer of an agent in your office and that agent was on vacation? I don’t get why it is such a big deal. You say yes or you say no. As long as your seller is OK with how you handle it…no problem If your seller would want you to show it…then you show it. It’s all about your seller and the seller’s best interests.

  27. “I have sold many homes over the years for other agents by spending hours at the open house and answering their questions later in the day by phone, while their agent was out of town.” – Ardell

    In all truthfulness, I couldn’t count how many times times we hear this (among other choice commments) from traditional agents regarding the other traditional agent in the transaction (whether on vacation or pushing the ‘secret agent button’ once the deal is signed around and sent to escrow). This goes on more than people probably care to discuss–sans Redfin.

  28. Tim,

    I am grateful for some of the comments around the Blogosphere this week saying they “like Glenn and Redfin better now that they’ve seen this discourse online”.

    I really do think the bad attitude toward Redfin and other “newfangled stuff” is more fear based than reality based.

    I’m sure no one wants to boycott other models or restrain trade in any way. Once you point out that that is what they are doing, they are usually ashamed of themselves and just didn’t see it that way.

    I got an email today from a very nice man saying we have to “get together and DO something about Zillow for the sake of our businesses!” It’s just fear based. Illegal, but fear based 🙂

  29. REDFIN has a one sided view of what is TRANSPARENT.

    A buyer represented by Redfin should say so. If the listing agent doesn’t want to show the property then the buyer can contact the owner. It might do some good to shake up some agents that forget who they represent and what service they can provide to their seller.

    On the other hand if the Redfin “represented” buyers didn’t feel so sheepish about screwing someone they would proudly announce to a listing agent that they are using the discount broker.

    TRANSPARENCY is a two way street.

  30. John,

    If agents were screaming about the real problem with all this, instead of whining about the “extra work”, I’d honor that.

    Truth is the reason a listing agent should not want to meet with the client of another agent, is that they cannot hold the information received during that showing, confidential from the seller.

    Something as simple as how much the people liked the house, or something overheard that the wife said to the husband when the thought the listing agent was listening.

    Representation of a buyer client does not start they day they find a house that they want to buy. So there really is more to all this than just the financial aspects.

    If Redfin doesn’t meet the buyer until after they find the house, how much information may the seller’s agent have gained, to the seller’s advantage, by that time? Doesn’t seem quite fair to the buyer to close him up in a room with the “opposing” side of the equation, especially if that agent is not going to represent them in any way during negotiations.

    It’s like telling the chicken to go get the fox to get into the henhouse…isn’t it?

  31. Completely agree on representing the seller’s best interests, Ardell. I work EXTREMELY hard for all my seller and buyer clients, and I have many glowing testimonials to show for it. It would likely be in the seller’s best interests to work for free, but I don’t think you are proposing that. This is a profession of value and it is the source of income for hard working Realtors paying their bills at home. So, where do we draw lines, roles, and responsibilities?

    My gripe is with Redfin and their presumption of expectations without even asking me if I agree. Somehow you have tried to turn this discussion around to be perceived as an issue between the seller and the listing agent. The issue lies between Redfin and the listing agent.

    It also sets up a strange precedent with undefined boundaries of responsibility of who gets compensated for what. Redfin has conveniently chosen to have someone else do part of their work for them, and they pass their unearned savings on to the buyer since they used the listing agent’s valuable time and good will. Perhaps the next step would be to fill out the offer for the Redfin buyers too? 🙂 They are unilaterally shifting the division of responsibilities to the side that helps them as a company be most profitable by minimizing their time investment and interaction with their clients, at the expense of others. It only comes back on them as a problem if they have a buyer who wants to see a Redfin listed property, which is of course a very small minority of properties out there.

    If this all happens every once in a while, then I completely agree with the “so what” and “just do it”. But any model such as this needs to considered on a larger macro scale and determine if it is sustainable. Under that criteria, it either falls apart or the compensation division between buyer’s agent and listing agent should change from the traditional 50/50 to more for the listing agent and less for the buyer’s agent. The extreme progression of the Redfin model is for listing agents to become all-the-time “semi-dual-agents” whose client base is limited by their listings, buyer’s agents fade away, and Redfin becomes a paperwork-processing plant. That’s exaggerated for effect, but it helps illuminate the idea.

    I have many times also done “pro bono” work for other agents as you have, but I bet they do the same for you when you are on vacation. Different scenario entirely than the Redfin situation, and I don’t find it to be analogous.

    And I’m not sure I follow the reasoning or agree that Jonathan’s suggestion should result in suing the MLS, if that is what you meant. The practice of compensating a listing agent for handling a buyer agent’s client is already frequently used, and is an offshoot variation of referral fees. It doesn’t penalize an alternative business model; instead it sets out expectations and describes what the buyer agent and the listing agent will be compensated for depending upon the buyer agent’s completion of certain duties, and the buyer’s agent can choose how s/he wants to complete those duties and get compensated accordingly. I even saw that Redfin posted something acknowledging potential value in this idea, though they were legitimately concerned about tracking and verification issues.

    I also share professional and ethical concerns about the buyer’s lack of onsite representation in these situations and the vagaries of perceived dual agency (independent of discounting this issue by what the law says), but that’s a whole different discussion and up to the buyer to choose as they so desire.

  32. Scott,

    The whole concept that the buyer agent somehow has to tow the seller or seller’s agent’s line is outdated. The rules need to change in that regard. If amont of “work” was really a factor in compensation, you would have to look at what you did for each seller at the end of each transaction, and rebate to the seller when the sale was easier. You don’t do that do you? So your fee is NOT about exactly what you did or didn’t do and stays the same regardless, but you hold the buyer agent to a different standard than you do yourself? Agree that is traditional thinking. But it is traditional that has to “get real”, not Redfin.

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  34. The real losers in the dalton/kelman diatribe, as presented, are the brokers.

    It is nonsense and debilitating to the brokers to equate technology with competition. Technology is a prmary tool brokers will need to bring to bear on their business to provide the highest quality of service to their clients. If Dalton prefers the term “skill” over “service,” then why not include the mastery of the available technologies in that skill set?

    Trying to bully Redfin in front of a friendly and scared audience just gives the technophobic brokers a momentary sense of security, while cloaking the huge pink elephant in the room…the truth that a broker who ignores technology will be left behind. period.

    There are dozens of sites out there built to benefit the brokers help them use technology to better serve their clients. Our site US Condo Exchange is one such site.

    The future will be fun and profitable for those who embrace the tools available.

  35. Mr. Condo,

    I don’t necessarily disagree. But until traditional brokerages recognize that technology should, in some…not all cases, reduce the cost to the consumer, the point is moot.

    Everyone wants the traditional brokerage to spend more money on technology…but that isn’ the answer to the real question. When is technology in the real estate business going to impact the cost of service to the consumer? At least those consumers who embrace it?

  36. Technology has impacted a majority of businesses (not just real estate) and the availability of it hasn’t necessarily reduced the cost of much of anything. It’s just another tool to be used. As an agent that used to work in the tech sector I can say with some confidence that it is rarely enough to cause major shifts in pricing for any product or service although in some cases it does.

    Also, the cost of keeping up with technology is significant for most businesses. Just because you might save a cost in one area doesn’t mean you haven’t paid for it in another. Case in point, I do a lot of internet advertising for my client’s listings – so does Redfin – but I also have to pay for my own website (no venture capital funds except my own) and when I buy a new computer server and customer relationship management to make sure we maintain good records for our clients (as is required) then that’s $5k out of pocket in one month. Yes, it streamlines my business but it’s more expensive than keeping reams of paper and there are updates of software over time, and on and on.

    The reason that homes listed with agents are even available to the public is because many cooperative associations have spent a lot of money putting in place the technology that would allow that to happen. A broker’s website might easily cost six-figures to develop and there is constant maintenance and upkeep. We know that consumers in large part already embrace it – over 70% of all home purchasers start their search using the internet. Powerful numbers.

    A report just came out in January of this month from NAR that shows Buyers and Sellers use technology but they also want personal services. There is room for all kinds of business models – none has been a “catagory killer”. Back when RE/MAX started (early 1970’s) it was thought within the “traditional” brokerages that this was a major threat. Granted, 20% of all US commissions are now paid out to RE/MAX associates but we haven’t decimated the “traditional” brokerage any more than Redfin will do. Consumers want choices – and all Redfin does is give them one more. If you want to read how new entrants (meaning agents) into the real estate field impact it then I would suggest reading “Can free entry be inefficient? Fixed commissions and social waste in the real estate industry” Written by Chang-Tai Hsieh; Enrico Moretti for The Journal of Political Economy; Oct 2003.

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