Taking on the New York Times’ fawning coverage of Redfin.com, Jim Kimmons at Transforming Real Estate details the details behind the cooperation/compensation model of real estate brokerage:
The contention that the listing agent should be pleased to show an “eager buyer” the home when they come with no agent is just not going to function in the way presented. Let’s say that I’m a listing agent and have say 20 listings. I know that many homes get shown upwards of 40+ times before selling, but let’s use 30 for an example. Also, I’m not sure how you can call someone an “eager buyer” when you’ve never met them and they’ve never seen the home, except in a drive-by. Now, using an hour each as a conservative example, if every buyer was a Redfin client, then this listing agent would work about 600 hours and drive a lot of miles in meeting “eager buyers” at their listings. Buyer agents do this all the time, but that’s what they get the 3% for.
Don’t stop there. There’s a lot more that Jim covers.
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