Redfin runs out of other brokers’ agents to milk, resolves to milk its own, instead.

“There are two real estate brokerage business models: Selling houses or milking agents. Redfin yearns to discover that it can’t do either.” –Greg Swann

I’ve spent much of this month documenting how ineptly Redfin.com lists homes for sale. It wasn’t something I set out to do. I’ve been dour about them since I discovered CEO Glenn Kelman’s racist staffing policies, but I had never paid any attention to them with regard to real estate. They have mattered nothing to my business: I’ve never had a Redfin showing, never shown a Redfin listing.

But I was simply amazed by what I found. Just as with iBuying and the carrying costs of owning non-producing housing, every experienced broker knew that salaried agents would not produce. But even so, I was unprepared for what I found: Multiple bone-headed deal-killing errors in each listing, with those errors repeated in listing after listing. Since the MLS listing is the gatekeeper to showing and every succeeding step in the purchase process, if the listing repels the buyer, the home cannot sell.

And they don’t. Many listings Close over 90 days, some over 180. They have a lot of Cancelled and Expired listings, as well, with many of those at huge DOMs. Strangely, a significant number of these sellers relist. Having already lost six months and 20% of the property’s value, why not truly go for broke?

So after only 18 years of insisting that salaried agents are better, Redfin now proposes to become a split shop. The splits are crap, but that kinda doesn’t matter, taking account that the commissions are already cut to the quick, thus to market to people who think saving 1.5% on commission makes losing six months and 20% of the property’s value worthwhile.

And that would be the real problem. Redfin makes a point of not understanding real estate, so their plan is to recruit an agent who no longer exists – the top producer. The team leaders and rainmakers who actually sell homes are working at 95% to 100% splits – but the number of people involved runs from five to fifty. The idea that any successful agent would trade away his independence for less money and corporate chicken guano seems a stretch to me.

Instead, as before, Redfin will appeal to agents who want to coast. Somewhat better incentives imply somewhat better efforts, but nothing motivates like the specter of starvation, which is why straight commission sales works so well at surfacing people who can actually do this job: You either brought dinner home or you didn’t.

Kelman’s post is full of lies, of course, but the big lie is that becoming a traditional brokerage is a recruiting tactic. Redfin got a new funding commitment on Tuesday, so Wednesday’s announcement that incentives work looks to me like the dowry for that marriage. It won’t help. Redfin will still be inept. It’s still salaried everybody, with slightly better bonuses on anorexic commissions for the licensees.

But even allowing for every fantasy about turning the listings over faster, Redfin’s most fundamental problem remains: Its client base.

They went out of their way to recruit clients just like Redfin’s founders: Highly analytical people, confident in their knowledge, incapable of quick decisions, impervious to practical advice. As much as I am aghast at how ineptly Redfin sells its listings, I know that a significant part of the problem is the sellers.

Redfin took amazing technology and deployed it in pursuit of the worst available customers. It’s a marketing blunder for all the ages, the blunder that launched thousands of botched transactions. They started off by cow-birding other brokers’ listing agents, then moved on to stiffing other brokers’ buyers’ agents. Now that he has successfully killed buyer representation, Kelman needs new agents to vampire: His own.

Bad news? Good news? You decide. Either way: It won’t work.