and it is a good thing!
Looks like they just published the first of a 4-part series on real estate blogging (only by subscription after today!). Lots of good stuff from some of today’s heavy hitters!
It was great to see Todd of Lenderama get some exposure for his (very cool) REMBEX search tool.
Also want to say thanks to Greg… I think he’s running one of the best real estate sites on the web, so it means a lot to me when he gives credit to RCG for some of his inspiration.
While I’m talking about Inman, I thought I’d mention that, like many other real estate bloggers, I’ve been invited to participate in their Blogger’s Connect at the very end of July. I’m definitely looking forward to it as I had a lot of fun last year in San Francisco… From the overview:
The content, speakers and workshops are being designed in the blogosphere. We have invited 20 leading real estate bloggers to use their blogs to reach out to their readers to invent the program.
Imagine the first “user-generated program” including panels, topics and sessions. Could be silly, could be interesting — certain to be fun.Bloggers Connect will begin on Tuesday, July 31 with a party and then all-day sessions on August 1. Fun and crazy events are being built into the program including the Dive Bar Tour, the Haight Asbury experience and the blogging romp.
Jon,
wonderful analysis. I don’t buy their stats either. i believe most of their clients are newbies.
M
Hey Jon,
Nice post.
Where did we claim that 90% of our customers got a negotiating advantage?
Our full revenues include a significant California contribution but there is no denying we are losing money.
Enjoy Maui!
Regards,
Glenn
Mark-
There is a product for every buyer. If thier product niche is ‘newbies’ and ‘techies’ they have a pretty large population. I don’t know if I would their stats are unbelievable as much as I would ask for additional info.
One point I should have pointed out more in my post was the heavy weight investors and the fact Seattle’s own king of the Monopoly board (Vulcan) is enough for me to believe knows what they are doing.
Glen-
Before Amazon, who would have thought loosing money isn’t the new key to success 🙂
Did I say 90… I mean .9… I made the change on the post. If you could find 90% advantage, maybe you would start charging more 🙂
Thanx Jon:
Since I am in Washington County Oregon (west of Portland – Intel Country), and Redfin hasn’t infiltrated yet, we Realtors LOOK @ numbers ALL differently. You can skew them anyway you want to make yourselves the KING! (LOL!). There is enough business to go around. Some will choose Redfin, some will not. I’ve always felt this is a “relationship” business……does Redfin?
Jim Frey-
Great point. Something I believe we all loose track on is just like what Expedia did to travel, maybe Redfin will be the same to real estate. Some people will still want the interaction and personal touch of a circle R realtor.
I know for a fact if I was buying a home, say here in Maui, where I know nothing about locations, I would need a realtor to tell me what seperates the different areas… and therefore justification for full commission… but if I know the house I want to buy and it is more or less paperwork… then 3% is in fact a steep price to pay.
Jon
Hi Jon,
I thought I’d give Redfin a shot, and one aspect that really bothered me is they would call the sellers (or seller’s agent) to verbally offer a price that was anything less than asking price. They do this to make sure that the seller will accept it before they go through the effort of actually writing and presenting an offer. If the seller says no, they will never present the actual offer. While I understand the monetary necessity of this as a super-discount broker, its hard for the buyer to stay in the game.
The following is a true story. I offer full price for a house. It is a FSBO and the sellers don’t want to pay the 1% commission (which works out to about 5K for this house) that Redfin essentially charges. Sellers reject offer verbally and Redfin does not present written offer. Next day, another couple negotiates price down by 5K…….
In retrospect, it would have been better to call an agent and try to get someone to write one up for you for a nominal fee…..
On the plus side, the folks at Redfin work very hard and they are really friendly.
Jon:
EXACTOMUNDO!
(Did I hear someone say – “This isn’t rocket science”!) LOL!
My only experience with RedFin so far has been through a co-worker that used them to sell his townhome and subsequently buy a condo.
On the townhome sale (March 2006) they sold in 10 days – and comparable units have to this date sold within 2% of their selling price.
Likewise, the condo he bought using RedFin as a buyer agent sold after 2 days on the market – also within 2% of all comparable sales from April 2006 to date.
In his area appreciation has been flat since March 2006, and in that kind of market, RedFin performed quite well.
He used the rebate for new carpet.
there is no doubt that redfin rebate is good. buyers gets some money for down payment or some fixes.
since most of the inventory is online, the advantage traditional agents had is slipping away. I think, more and more buyers may choose Redfin model.
I’ve talked to many buyers and there concern is that many traditional agents are not truthful. when the press is full of news on price decline, they still argue that it’s a good time. wonder, when is not a good time. redfin doesn’t do that.
M
Here’s a new blog about the 2200 Westlake complex. Pretty funny insight into the problems there:
2200life.blogspot.com
OOps:
http://2200life.blogspot.com
To win a multiple offer, sometimes it takes presenting in person, many times well after 8pm in the evening, having your client waiting in your car, or a close by restaurant for that convenient last minute signature. All this so we can screw up the stats by negotiating a sales price more than the list price because the that price escalated because of competing offers. Will a Redfin agent do this for their client? If not, what are the odds the Redfin client will prevail in an multiple offer scenario? At times it takes every ounce of experience and negotiating skill to acquire a property for a client for OVER a list price. But damn, that makes us look bad in the “stats” department.
Greg, that’s an interesting question. In my co-workers case, the RedFin agent was completely on the ball – the offer was in on the first day, and accepted on the second. My impression is the RedFin agents are less experienced in general, but work hard to make up for it. (that’s a potential liability too I admit).
Bill, I uderstand what you’re saying. I”m poking at the number that Redfin cliams thier clients pay 99.329% and other MLS agents 100.233. Unless they’ve been directly involved in a multiple offer deal, people dont’ know or appreciate the effort agents go through to assist their clients in a bidding war. As the conventional agent is commissioned they’re more likely to be out until 11:00 pm to do what it takes. Redfin are salaried with bonus. Based on incentive, how hard do you think in the end they’ll work for the client?
Bill, I have literally dozens of stories that I can relate personally and through other agents on how a Redifn client missed an opportunity. I heard one Tuesday, where a Redfin agent would not write a purchase offer last Sunday eve. Seller had 2 offers and elected not to wait until Monday, with full disclosure by the listing agent to the Seller that it the Redfin offer that wuld be in on Monday. The Seller made the choice not to wait, which is his right. You can say your friend had a good experience, I’ll be able to cite dozens of negative experiences. Then you can dig up negative experiences other friends had with other agents, and it goes on.
We’re poised for active spring market and we’re already seeing the increase in multiple offers in specific areas and price ranges. Many high emotionally appealing homes will escalalte in price. Here are some questions: Will the Redfin agent show the home or even SEE the home that is being offered on? How much research will be done to assist the client with an offer that makes sense? Will the agent accompany the Buyer to an inspection, (most likely will have to be a preinspection on a multiple offer). Will they do what it takes including personally presenting the offer to the Seller, and then sitting outside their house for over an hour while the Seller sorts thier offers out? By and large the best and most experience agents prevail in these situations. Buyers who are represented by new, lazy or limited service agents rarely win.
A LOWER PRICE is not the best measure of negotiatling skill. In a contract. We negotiatie price, inclusions and exclusions, contingencies, dates and other issues. As I stated before, sometimes it takes every onuce of skill to acquire a home for a buyer OVER the listed price.
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