So…you may be wondering what all the Hoo-Ha is about.
The posts and comments in the above links are embarrassing to the Real Estate Industry at best, and convey a HUGE misunderstanding between the “Agents and the Nerds”.
Remember Glenn’s “Memo from Nerd-Land to Realtors: Drop Dead” post? Well…let’s just say the Industry’s immediate response to Redfin’s Scouting Reports was that same message…in reverse…for now.
The issues are many and varied, as they always are.
How many transactions does an agent have under their belt was the primary focus of this Redfin attempt at “transparency”.
* * * * * * * * * * * * * *Why is TRUTH creating so much controversy? Simple. Who’s Truth???* * * * * * * * * * * * *
LET’S LOOK AT ONE OF THE KEY POINTS OF THE DISPUTE
USING THE CHART and SCREEN SHOT BELOW.
OK…Right off the bat…HOUSTON…WE HAVE A PROBLEM!!!
In this corner…we have Ms. Traditional Agent with 8 sellers and 7 buyers in a 12 month period.
In this corner…we have…drumroll please…Ms. Redfin Agent with 37 “deals” in a 12 month period…no destinction between listings sold or buyers helped and 212 “DEALS IN A LIFETIME!” with no “lifetime” stats for anyone else.
Since every ONE Redfin agent is FIVE licensed agents, per the Redfin site,
that 37 for “the Redfin Agent”
is really only 7.40 compared to Ms. Prudential’s 15,
isn’t it?
37 “deals” divided by 5 licensees = 7.40 each.
C’mon Matt…I love ya. But treated everyone “the same”? I know you truly believe that in your heart of hearts…but your model is just so different that it stacks the deck in your favor. I’m sure after reading this, you will understand what all the hoo-ha is about. That is my goal…to bring both sides a little closer together, so Scouting Reports may in fact BE a future reality.
It would be great! It could be great! But, you can’t expect mls sytems or other agents to “stack their deck” the same way that your model does, can you? I mean really.
If one Traditional Brokerage put ALL the company’s sales in the names of TEN of their 100 agents…wouldn’t you call them “Liar, Liar…pants on Fire?” …and yet, that is what you are doing. God Forbid a Traditional Company would do that…you’d tear them to shreds!
Below, See Why the Redfin Data is SO MISLEADING! in a comparison of this type.
There are tons of comments all over the internet freaking out about all this, and rightly so, and from both sides of the equation.
To my good friend Jeff Turner who said to me that Homebuyers Didn’t ASK For THIS, I offer this quote,
“Steve Jobs Knew What We Wanted Before We Knew We Wanted It.”
THAT is what Redfin, and as Glenn Kelman put it “Nerd-Land”, is all about. The Traditional Industry makes what THEY want consumers to want…and then spoon feeds it to them with a little bit of sugar to make the medicine go down.
It is near impossible for Traditional Agents to understand Redfin, or Glenn Kelman, or Matt Goyer, because we are in the same industry, kind of. That makes every act of theirs “suspect” in the minds of their traditional brokerage “competition”. Or…perhaps…the darts are thrown merely to hold them at bay.
BUT what OUR INDUSTRY needs to “get” in order to understand Redfin and the Future of Real Estate, is the understanding of “Nerd Values”. I stole that term from Craig Newmark.
If you can understand Craig Newmark…even just a little bit, and I urge you to try, you will understand Redfin and what Redfin is about.
A few relevant quotes from Craig Newmark as seen in this video:
“Doing WELL by doing GOOD.”
“The SEA of Goodwill”
“…good intentions are REQUIRED…”
“LikeMinded.Org”
Nerd’s WILL: – “Annoy Them Into That Mode That Has Value.”
People Call Redfin “an outsider” BUT…remember this…Craig Newmark when creating Craigslist was ALSO “an outsider”.
Redfin is to Real Estate as Craigslist is to Classified Advertising.
The Nerds will be heard, and will infiltrate every aspect of our lives, until they beat down the selfish intentions and replace those with good intentions. That is the FUTURE. That IS Social Media. That IS blogging. That IS The Internet.
“People are normally trustworthy and generous, and the Internet brings the good out far more than the bad.” Craig Newmark
The Future of Real Estate will lie in these principals. The Nerds will “annoy (us) into that mode that has value”. In the meantime…the industry as a whole…well most of it…will keep responding with THIS.
Thanks for the great post, Ardell. I think a lot of the disagreement stems from what you’ve explained. Many of us are happy to live in “Nerd land” and open to the new public stats, but we won’t stand up and applaud misleading comparisons cloaked in the banner of “transparency”. There were a lot of other issues that were also suspect, but this one has to be clear to those who view themselves as techies. If you can’t compare your stats to your competitors on an even playing field, you must be hiding something. It might be legal, but it’s not anything to be proud of.
RE: Redfin and Craigslist, I wouldn’t go so far with the comparison. Craig Newmark created a free service for anyone to use. Redfin is trying to build sales and traffic for an IPO. Very different motives here.
I ask you to entertain the possibility that Redfin is INDEED to Real Estate as Craigslist is to Classified Advertising.
Not ALL of Craigslist services are “free”. Redfin Forums are FREE and their purpose is to educate. I post there to educate, to answer questions. Neither I nor Redfin answers the questions to “get” business. We answer the questions…because people have questions that need to be answered. Why else would Redfin let you and I help them answer these questions on their Corporate Site?
If you watch the video of Craig Newmark you will hear him say in his own words that Nerd Values are NOT about being “altruistic”. It is about “moving in large numbers for common good”.
Absolutely…and from day one…or maybe day 152, I forget now (haha) Redfin has been about those Nerd Values and coming together for the common good. Craigslist makes money as does Redfin…that does not change the fact that they come from the right place. They may not always get it “right”, but they come from the right place.
This post is more to them than to the traditional brokerages. Because they still want to believe that they are not “stacking the deck”. But all we have to do is “do it their way”, as I noted in my post, and they will quickly see…that the deck is indeed stacked. And they will respond accordingly…and well…because they truly are good people.
I wouldn’t even delve into the bad vs. good, just different business models. There’s nothing wrong with being motivated by profits (yes, there is absolutely profit potential from anyone answering consumers’ questions on your corporate site–it drives traffic to your site, and increases subscribers).
I think there’s a gap in perception between techies and agents. Techies believe what they’re doing is right, so breaking some rules to do it is ok. I’ve been there, and many times I’d agree, you have to “break some rules” to innovate. However, that’s more of a statement about breaking through the old way of thinking. This isn’t Expedia breaking into an open travel industry, though. This is a company that asked for membership in MLSs and then decided the agreements it signed weren’t important.
There’s certainly much to commend about their business and technology abilities. All this talk of “common good” sits at odds with the most recent development. Maybe it was just a mistake. They’ll have the ability to show that.
Thanks for using a Steve Jobs quote with me. I’m honored. And I know you know that. 🙂
Actually, I didn’t say consumers didn’t “ask for” this. I said they didn’t care about it.
My exact quote: “Ardell, I think consumers don’t care about this data. They barely care about agents putting good photos on their listings. :)”
That smile at the end was my way of saying, consumers can’t be the driving factor. Just as that was not me saying you don’t need to take good photos, I was also NOT arguing that someone should use what the consumer wants or cares about as the driving factor in creating a transparent look at the real estate industry. To the contrary, I’m a huge proponent of the notion that real change can’t come from inside any industry, let alone the real estate industry, or by carefully examining what the majority of consumer think they want.
Is Glenn Kelman the Steve Jobs of the Real Estate Industry? He’s obviously a very bright man, but I have no idea and I’m not interested in that debate whatsoever. But I do believe that the half-truths (lies) that permeate the real estate marketing arena – how many #1 agents can there be in one area – need the exposure of a transparent system. Someone needs to do it right. What Redfin released may have been great, had the MLS data they were pulling their data from been accurate. But it wasn’t. I’m not sure it ever will be.
But even if it were, that data alone is not enough. As a consumer, I don’t understand what they mean, except that I might be able to tell whether someone was lying to me or not. Is someone who has sold 100 homes better for ME than someone who has sold 50? Those numbers mean nothing to me without a behavioral context as well. If they are combined with peer (if only Realtors® could tell the truth about each other) and consumer reviews that add context, then they may have some real meaning for me. If an MLS can’t make it happen, then smart brokers should.
But hey… I’m a consumer. What I want doesn’t matter. What will revolutionize this industry and restore consumer trust in this industry as whole is what matters. I’m for anything that will help do that.
Really…you think people who look for homes to BUY on the internet “don’t care” if the photos suck? CA must be very different from WA in that regard then. I’ll have to ask my children in CA, who do look for homes to buy on the internet. My Tina likes when the photos look crappy…because that means she may be able to afford it. HaHa! So “good” for her = “crappy”. More information is good…crappy or not. It’s “good” for someone. Hidden information…not so “good”.
To the extent that Nerds formulate the next step based on the common good (which does not mean they can’t also make money as a result) yes, Glenn Kelman and the people at Redfin and the Venture Capital Money that supports that effort is the equivalent of Steve Jobs and all the people who helped implement what Apple created.
Is Redfin, and the manner in which they display information about homes, the equivalent of an iPhone or an iPad as to how it improved the way many people view real estate info online? YES!!!
Does their ability to see homes displayed “the Redfin way” change the value of real estate and all the underpinnings of that value? YES!!!
“Those numbers mean nothing to me.”
If an agent came to your house saying he was the TOP agent and sold 100 homes, and the Redfin site said he sold THREE homes…it would at least spark a level playing field intelligent discussion. Your being armed with some facts…even if they are incorrect facts…would even the field. Perhaps he has a really good reason why Redfin says 3 and he says 100. But you deserve to have the information to ask the question…no?
The reality is that agents look at $ volume more than # of units. No one really wants to be “the kickass” agent that sells 150 $30,000 pieces of crap for a bank. Total $ volume $4,500,000. They’d rather sell a dozen $375,000 homes or 6 $750,000 homes. So no…# of homes sold does not mean much, even in the agent world. In fact too many usually means pretty sleazy work. A good agent can rarely do a great job for more than 36 in a year TOPS!. 24 more like it in a good market. 12 in a slow market.
Most people would rather have the individual time of an agent who sells 12-36 houses a year, especially if they are buying or selling a home worth $500,000 or more, than one who sells 150 a year. People read too much into the net result of what The Scouting Reports would be. A bunch of egos got knocked over, when in fact, the agent with a dozen is often the most respected agent by both his clients and his peers than the 150 units agent who knows no one’s name, and loses more than he closes by missing a lot of details.
But if the numbers come out eventually…all of that will come out too. More information out there breeds more and better discussion about that information. Except for the “Na Na Boo Boo” people. But even the Na Na Boo Booers will get over the shock of it…and better info will flow from it…eventually.
Most good change starts with a big shocker! Like Rosa Parks sitting in the front of the bus.
🙂
In the end, what we want, Jeff, doesn’t matter. Not sure if it should either. Love the “if only Realtors® could tell the truth about each other” line. I think as it stands right now, the fear of some violation of the code needs to go away for that to even be a possibility.
Well, this is not about whether consumer care about good photos or not, but yes I do believe that. Why? Because so many online listing have crappy photos. If consumers really cared, they’d take action. They say they want great photos, but their actions speak volumes about how much they really care. Over and over again agents who don’t service their customer well continue to get listings and continue to suck at that aspect of marketing the home. When my neighbor recently began searching for homes in Texas from here in CA, they were shocked at the overall poor quality of the photos. So, yes, by the actions, the action of allowing it to continue, consumers don’t care about quality photos. 🙂
“f an agent came to your house saying he was the TOP agent and sold 100 homes, and the Redfin site said he sold THREE homes…it would at least spark a level playing field intelligent discussion. ” That’s exactly what I said the only value was.
” A bunch of egos got knocked over, when in fact, the agent with a dozen is often the most respected agent by both his clients and his peers than the 150 units agent who knows no one’s name, and loses more than he closes by missing a lot of details.” That’s EXACTLY my point. The numbers alone mean little. Behavioral context is a key element.
Kudos to Kelman and crew for pushing the envelope. I applaud their failure. I truly do.
Thanks Jeff! I really appreciate your stopping by! Always good conversation.
I dig you. 🙂
(That was all I really wanted to say, but the Rain City Guide comment filter told me it was too short and suggested I try again. I thought it was perfect.)
I agree. 🙂
Well put Ardell. Although I’m still trying to get my head around “incorrect facts” I am glad somebody posted something that makes sense on this issue.
It’s not really about “incorrect facts, it’s that this business is complex. We do some sales outside of the mls. I have done transactions for/with an agent and not shown my name anywhere on it. The name on the closing is not necessarily the person who is getting paid for the work. The agent who is with the client is not always the one who is writing the offer and negotiating the sale and making sure the escrow problems are resolved.
Redfin has a system where Agent A, B and C get all the credit for everyone’s work. In the “real” agent world, that would be considered egomaniacal. My fear is that this threat will make everyone more selfish. Hell, agents are selfish enough. They were not usually all that selfish about “whose name” was on it. But this will likely cause that to change…for the worse. 🙁
Ardell- Well you sure stirred-up
your RE colleagues today! Jerry
I understand what Redfin is trying to do with this information and I also understand why some Realtors would be upset as well when it comes to data integrity.
What I think Realtors are missing though is that consumers in general want agents to be more professional and this is just one aspect of it. Any agent who is doing well should want to vetted by an independent third party. For far too long, Realtors have allowed the part-time unemployed housewife to define the industry which is why the overall respect for agents is so low. As long as the barriers to entry allow anyone to call themselves a Realtor, there will be businesses and enterprises looking to disintermediate Realtors. Face it, 80% of Realtors really shouldn’t be in the business.
Whether agents like it or not, this type of information is going to be readily available one way or the other so agents are going to have to embrace it. The internet is putting a ton of previously secret information in the hands of consumers and sooner or later, they are going to figure out how to use it.
LOs went through something similar with our NMLS registrations. My entire work history is on a public website now that any consumer can check. I like it. It helps me close more loans especially when I know that I have more and better work experience than 99% of my competition. It is that little extra that helps when you need a tie breaker.
“…consumers in general want agents to be more professional…”
That makes a good “sound bite”, but the reality is that consumers in general want agents who are more Personally Involved in the Client’s success. They want an agent who CARES about their outcome.
“Professional” is not always the best word for that. An agent in a nice business suit and pumps, who won’t walk into the yard because she will mess up her expensive shoes is very “professional”, but not usually what a buyer client or even a seller client wants. “too” professional can be a hindrance. Great with the paper of contracts…not so good at “discovery”.
Redfin needs to do this. Somebody needs to do this.
I’d also like to see the different TYPES of transactions the real estate brokers are completing.
Representing buyers.
Representing sellers.
Representing banks.
Representing short sale-sellers.
Commercial, residential, land.
Stats, details.
Now when someone says “I’m a top producer” the consumer can click through and see what those words mean from the context of neutral statistics instead of a subjective opinion from the person who wants to make the sale.
A home buyer or home seller paying relatively the same amount of money to a Realtor who works part time or who is brand new v. a full time career agent does not serve the industry well, or our clients well. It does, however, serve the company owners.
If Redfin doesn’t do this, someone else will. It’s only a matter of time. Just like Zillow. First all agents here in Seattle hated Zillow with a passion. Now they’ve embraced Zillow bc they can provide leads.
If Redfin doesn’t, then Zillow ought to.
Happy weekend everyone!
Thanks for clearing up the “37 deals…” stats. I have always tried to confirm those numbers but my MLS agent searches never seemed to match up.
Okay, it is still unclear.
Nothing is “crystal clear”, Doug. Not even water. 🙂
One of the primary issues is that the Scouting Report wants to show “how long” it takes an agent to sell a house. But mls systems track “how long” it takes a SELLER to sell a house, not an agent.
That makes the mls accurate when it says 52 days to find a buyer. But in one of my real life examples it took Redfin 27 days to NOT find a buyer and me 16 days to find the buyer and then 8 days to complete the inspection. The mls says 52 days for that. So if they post it took Ardell 52 days to sell it, that would be incorrect. The data IS correct. Using it to track how long an agent vs a seller took to sell it would render that correct information incorrect as an “agent” tracker vs a “property” tracker.
In our mls we show Days on Market per listing and Cumulative Days on Market for the house. But nowhere does an mls by design track days on market by agent. If the same agent lists it 3 times…it will show the same as if 3 different agents listed it 3 times.
So the curiosity of “is the data accurate” is a big smoke and mirrors game. We all know the most important data of an agent is more in what they did NOT sell…than what they did. The Scouting Report did not show how many homes Redfin attempted to…but did NOT sell.
If an agent lists 100 houses and sells 40 is that better than an agent who lists 12 and sells 11? Interesting topic. No clear answers.