Category: Redfin.com (page 1 of 8)

October 26, 2023

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

by Greg Swann

Suburban Phoenix Real Estate Broker

How bad is your listing agent?

“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?

Oh. Nevermind.

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 Read more

July 17, 2021

Buyer Agency Project: Buyer agents offer no value today.

by Brian Brady

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

“I just showed three houses this week, out in L******, and all of them had 2% co-brokerage fees. Learn to sell, listing agents”

I read this post (paraphrased), from a former car salesman with a Florida real estate license, in a Facebook group the other day. The irony of it was too delicious to pass up so I responded with something like this:

“It is laughable to watch an agent, who can’t sell a buyer on the value of his services, complain about the fact that his compensation is set by another real estate agent. Sell your value to your buyer, charge a fee for the services you will provide, disclose how that buyer brokerage fee will be paid, and negotiate a contract which pays you that fee in a manner which benefits your client”.

I may have taken a snarky swipe at the original poster but I don’t remember because he deleted the thread. Good. I am sure the guy was just airing his frustrations but that sort of weak sauce is the last thing I would want on the internet if I were him.

Let’s talk about the REALITY of real estate brokerage in 2021:

1- While price appreciation may have slowed, the real estate market still has a supply/demand imbalance. This means that homeowners can negotiate lower commissions to sell their homes.
2- Listing agents, with the right property, have little to no need for buyer agents today. If it is priced at fair market value, entered properly in the MLS, and aggregated across all of the realty bots, buyers will line up to tour the home. Thus, paying a co-brokerage fee of more than $1 seems like a giant waste of money.
3- The US Department of Justice doesn’t like this at all and the National Association of Realtors has lost any power to perpetuate the existing compensation model. Expect buyer brokerage compensation to change.

Every time this subject comes up, buyer agents wail and grind their teeth. The most common comments I read are “It’s so hard to work with buyers nowadays, I DESERVE to get paid more; I practically work for minimum wage”. Read more

October 31, 2020

Overnight News: Hey, Redfin: What happens when you tell everyone you’re racist – and they believe you?

by Greg Swann

Suburban Phoenix Real Estate Broker

“Redfin? Now that’s good eatin’!”

Here’s the deal: If disparate impact is automatically racism, Asian and Jewish people should be suing pro-athletics. That’s what Glenn Kelman needs to say to swat the race pirates away.

Financial hurdles seek to qualify Ants and disqualify Grasshoppers. This has nothing to do with race, but every financial hurdle will seem to have disparate impact on different racial groups, depending on how exponents of those groups have expressed Ant or Grasshopper values over time.

That cannot possibly be Redfin’s fault. But Redfin and every brokerage that has transaction minimums – including all of the major iBuyers – will be devoured by race pirates until they are willing to explain how Ants get ahead in the world.

Getting ahead on my gloating, from September 22:

Greg Swann: A fun fact about #iBuyers? Every buy-box is redlining.

Color-me-Redfin is getting spanked:

AP: Fair housing groups: Redfin ‘redlines’ minority communities. Cannot not be so. Six Flags “redlines” short children – and dwarves! – on all the good rides.

Housing Wire: Redfin faces “redlining” lawsuit claiming it favors white neighborhoods. White people should sue about the even-better service the even-better-qualified Asian clients are getting. And everyone should sue waiters for the way they fawn over the big tippers!

In the so-far unspanked world:

CNBC: Smaller American cities see big interest from urban flight. CTRL-F ‘riot’; not found.

Forbes: The Serious Disconnect Between A Hot Residential Real Estate Market And The Coming Tsunami Of Foreclosures. CTRL-F ‘riot’; not found.

SFGate.com: San Francisco curbs virus but once-vibrant downtown is empty.

City Journal: San Francisco, Homeless Encampment: A new plan to turn the whole city into a shelter system might finally be the breaking point for residents.

Fox Business: American shoppers panic-buying as coronavirus spike aggravates year of upheaval.

The Federalist: Yes, Media Are Rigging The Election Against Half The Country. Here’s How.

Neil Patel: It’s Easy to Predict the Loser in Tuesday’s Election.

Matthew Continetti: The Next Populist Revolt.

Tyler O’Neil: Biden Pledges to Gut Religious Freedom Protections, Saying They Give ‘Hate’ a ‘Safe Harbor.’

September 22, 2020

A fun fact about #iBuyers? Every buy-box is redlining.

by Greg Swann

Suburban Phoenix Real Estate Broker

“Totally not redlining!”

The image is a map of Zillow’s sold iBuyer homes in the densest parts of Metropolitan Phoenix.

See that Madonana-like shape running West from the I-17 Freeway. Looks like a pregnant single-mom, doesn’t it? The poster-child of fair-housing law, right there on the map.

Looks like redlining, doesn’t it?

I’ve been watching Zillow’s iBuying results for years now. It always looks like redlining. I warned them about it when I was working as a pricing algorithm.

Is it really redlining? It’s the further fruits of a buy-box that wisely avoids old, small and irregular housing. For all of me, Zillow’s buy-box is much too loose, but the net consequence is that much of the housing Zillow excludes is in contiguous neighborhoods emerging West from the I-17.

Is it really redlining? The neighborhoods Zillow and the other iBuyers exclude in Metropolitan Phoenix are far browner, blacker and redder than the neighborhoods they include. That’s redlining de facto, by disproportionate impact.

Is it possible for investors to work from a buy-box that does not redline in disproportionate impact terms? I don’t see how. The buy-box my investors work from is much more stringent, to the point that we only work in a few subdivisions, by now.

Is it possible for licensed real estate brokers to work as investors without committing hundreds of de facto materially-damaging fair-housing violations by means of redlining? I don’t see how.

That’s why investors should not be licensed, for one thing, but I think it illuminates how poorly thought-out are all the “black lives matterers” among the iBuyers.

Have fun when the lawsuits start – particularly since you’ve all already declared what racists you are.

May 11, 2020

Q: What will #Redfin and the other #iBuyers do when the market actually gets ugly? A: Discover real estate.

by Greg Swann

Suburban Phoenix Real Estate Broker

‘#Redfin Now, as the iBuying service is known, “performed better in a downturn than some had feared,” CEO Glenn Kelman said.’

Downturn? Hasn’t started yet. I don’t like being the bearer of bearish news, but the shit-hammer will be obvious, when it falls.

Primus: Many, many jobs are not coming back. Vacation rentals have cratered. Notices of Default will be mailing soon. Inventory will surge, relative to demand. Prices will fall. When accrued equity has been bled away, actual foreclosures will ensue.

Secundus: The anti-profit sector (government, schools, hospitals, charities) will soon crash from lost revenue. The jobs lost are those currently buoying the coronavirus-disrupted market. Second wave of defaults/listings/foreclosures.

Tertius: Whether or not the grasshopper states get away with fleecing the ant states – note that the Republic itself is at risk from this larceny; what does that do for confidence? – cadillac pensions in the grasshopper states will be getting a haircut. Third wave of defaults/listings/foreclosures?

It took us 14 years to get from where we were in 2006 to where we are right now.

How long until we get back here?

Don’t ask Glenn Kelman. He clearly does not have a clue.

November 16, 2010

Looking for a Realtor designation that really means something? How about this? “Too Outspoken For Redfin.”

by Greg Swann

Suburban Phoenix Real Estate Broker

Redfin.com is in the long, slow process of firing us from their referral partnership program. I’ve known this was going to happen since last Tuesday. It’s what I was writing about in my most influential voice in the on-line world of real estate post:

They piss and moan to each other about me behind my back.
They campaign with each other to try to damage my interests.
They pester contributors here to try get them to abandon BloodhoundBlog.

The actual coup de grâce hasn’t happened yet, but Glenn Kelman placed a sweet call to me last night to apologize to me, as a friend, for not countermanding the bold policy initiatives of his middle managers.

This is nothing to me, for a lot of reasons. I grew up hiding from my poor long-suffering mother, so she wouldn’t have the opportunity to tell me what to do and not do. I spent the first half of my working life hiding from my employers, doing truly remarkable work, like a cobbler’s elf, after the bosses went home. This is why I don’t have a job now, and haven’t had one for decades. I know from experience that if I have anything that looks at all like a job, sooner or later, my fated role will be to serve as the rag doll in someone else’s self-destructive fit. I actually felt that gloomy foreboding twice, on the way into Redfin’s referral plan, so it’s not as if I can claim to have been taken by surprise.

It’s a stupid thing to do, of course, but, while I’ve been fired several times in my life, I’ve never been fired for a good reason. Cathleen and I responded rapidly to every inquiry Redfin sent us, even though many of the referrals they passed along were from loosely motivated, suspicious folks with serious qualification issues. I tried to explain to them that, even though I sell a lot of cheap houses, I’m selling most of them to millionaires, while Cathleen almost always works with very well-heeled homeowners. That entreaty hit a corporate policy wall, with the result that any financially well-qualified buyers Redfin Read more

August 23, 2010

Now or Never

by Glenn Kelman

CEO, Redfin.com

Redfin published more data today arguing that a listing overwhelmingly gets most of its traffic on debut: about four times more than it does only a few weeks later. What we didn’t discuss was the correlation between traffic and a transaction. Is the day-one traffic spike due mostly to rubber-neckers?

My sense from watching how listings actually sell is that the spike is real, and that it behooves clients to focus on a perfect debut.

The question was still on my mind when we got together for a monthly business review with Dave Billings, who runs Redfin Seattle. When the conversation turned to listings we’d been struggling with, Dave commented that if a listing doesn’t sell in 60 days, we almost never sell it all.

He also noted that, as time goes on, our system of surveying clients sometimes make agents recalcitrant to tell a long-time client what he really needs to hear, for fear that the client will resent the advice he fills out the survey.

What’s your take? Do most of your sales occur in under 60 days? Or does it take longer for reality to set in?

August 16, 2010

Batting Averages for Listing Agents

by Glenn Kelman

CEO, Redfin.com

Redfin just published MLS data from seven counties across the U.S. on the likelihood that a listing activated in 2009 sold by August of 2010. It turns out that the listing agent got a sale 47% of the time, a number that seemed surprisingly low to us, particularly since staging, photographing and marketing costs can add up.

It’s a pointed question for us. Having spent years focused on buyers, we are just beginning to learn how to make listings profitable. Today we still make more money from our home-buyers than our sellers, and our sellers are more work.

In thinking through the target success rate for our business, we’ve wondered if the 2009 data are aberrational. Have success rates been significantly higher in past years? In 2009, were listings just loss leaders for agents to meet new clients and build their brand? Or do you think that the 2009 rate is what a brokerage should expect every year? What do you think the customer expects?

Maybe a hard year is a necessary prelude to a good year. Adam Wiener, a licensed agent who runs new business initiatives and analytics at Redfin, emailed me this morning to note that many listing agents prefer to catch listing customers on the rebound from their first agent, after their listing has failed to sell. We are getting some of that business, and giving some of that business away to others too; hopefully for everyone the second time will be a charm.

June 18, 2010

Harvesting the Redfin green: Learning how to work with web-based prospects who may not have known they were contacting a Realtor.

by Greg Swann

Suburban Phoenix Real Estate Broker

I built our first real estate web site in June of 2001. I had just gotten my license that May, parking it with an apartment locating service called The Apartment Store. The folks Jeff Brown calls “house agents” like to laugh at niche players in the real estate world, but I passed on three residential brokerages to do rentals. Why? Because I knew I would starve to death — as 85+% of all new licensees do — waiting for my first home buyer or seller. Instead, I took a job where I stood a chance of getting belly-to-belly with five or six motivated people a day.

But: I built the web site because I wasn’t in love with the people I was meeting. Jack English, the broker, had built his business around serving extremely marginal clients — apartment seekers with bad credit, past judgements, felony convictions, etc. Everyone deserves a second chance in life, but, for the most part, I turned out to be a poor fit for the targeted clientele. I moved some interesting people I was delighted to help — for example, two recovered heroin addicts and the sweetest paroled murderer one could ever hope to meet — but I also met a lot of people to whom no one should ever have extended credit.

Even so, the experience was great. I got to talk to a lot of people, showing a lot of apartments and rental homes, and I got to learn, very quickly, what makes the frog jump. That’s why I built the web site: I realized that Jack’s business model was missing a better segment of the rental market. Less-than-ideally-qualified tenants needed help because they didn’t know who would take them and who would turn them down. But there was a much larger, much juicier, much better-qualified pool of prospects out there: People with plenty of money but no time.

That first site, TheApartmentStore.org, was a killer lead generator. No one was doing anything using forms in those days, and GoTo.com was still selling pay-per-click for as little as a penny a click. I was hauling in four and Read more

June 16, 2010

Should Redfin Be Renamed Right-Fin ?

by Brian Brady

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

A La Jolla real estate broker noticed an article on Gawker.com, about a listing Redfin published, offering a currently occupied home (that isn’t for sale). From Coastal Real Estate Stars:

A new listing appeared on Redfin this weekend….1600 Pennsylvania Avenue!

Now, in fairness to the Redfin folks, garbage in= garbage out. Much of the FSBO data they aggregate comes from Owners.com. Obviously, some prankster listed the White House on Owners.com, which the RE.bots (including Redfin) picked up. Still, one has to wonder if last night’s speech caused Glenn & Co to take matters into their own hands 🙂

Clearly, Redfin.com has the best real estate search site on the internet but the glaring marketing lesson here is at the bottom of the post. JR Sullivan saw this as a great opportunity to showcase his own IDX search engine.

May 24, 2010

Is This Normal? (What Seattle Real Estate Agents Earn)

by Glenn Kelman

CEO, Redfin.com

We’ve spent plenty of time trying to figure out what’s fair to pay Redfin agents. As part of that exercise, we analyzed the gross commissions for all Seattle-area (King County, to be precise) agents who closed at least one transaction over the past year (May 12, 2009 to May 11, 2010). The data surprised us, so much so that we thought we’d ask this community if we’re making any obvious mistakes.

We sorted the agents by gross commission, assigning percentiles to each. When we didn’t know the commission on a deal, we assumed it was high: 3% for each side.

Agents at the 50th percentile of pay earned $29,820 in gross commissions. Agents at the 75th percentile earned $75,018. You don’t hit $100K in commissions until the 82nd percentile. Then we graphed the data, showing the gross commissions on the vertical axis, and the percentile of the agent earning those gross commissions on the horizontal axis. The result was a hockey stick:

But then we reasoned that a lot of part-timers are closing one or two deals on the side while working another job; so we excluded all the folks who earned less than $25K in gross commissions. This shifted the graph to the right a bit, but otherwise we still saw a very small number of agents earning a huge proportion of the total commissions in a market:

Then we asked ourselves how much money a good agent — say, someone earning $100,000 in gross commissions — has to shell out in costs each year:

Type of Expense	Traditional Agent, Annual Costs
Brokerage fee	$10,000
Health insurance	$10,500
Marketing	$10,000
Social Security, Medicare Taxes	$6,500
Transportation	$3,600
Cell service	$1,200
Equipment	$1,000
Dues, education	$783
IT	$1,000
Total	$44,583

All told, the data left us scratching our heads. In a fairly wealthy market where sales volume has been increasing, a good agent — someone among the top 15% of his peers — is probably netting less than $60,000 per year. Does that sound right?

March 25, 2010

Adorn that russet Bloodhound in Redfin red: Today we make common cause against stupidity, cupidity, stolidity and inertia in the real estate industry in behalf of the consumer’s right to a fully-informed, financially-sound and fun real estate experience.

by Greg Swann

Suburban Phoenix Real Estate Broker

Redfin.com is coming to Phoenix today — 6 am PDT, to be precise. And they’re coming as a VOW, which strikes me as being a potent marketing advantage, at least in the short run. And the news that might be most of interest here: BloodhoundRealty.com is coming along with them.

As I wrote in February of 2009, Redfin is entering new markets with referral agents as well as its own employees. Cathleen Collins, my wife and business partner, and I will be handling one quadrant of the referred territories.

From Redfin.com’s press release:

Redfin today expanded to the Phoenix metropolitan area, increasing the number of listings available on Redfin’s website by 8%. Phoenix is the third market Redfin has opened since December 2009, and the twelfth overall. Separately today, Redfin is announcing upgrades to its listing service, and new support for short sales.

With this launch, Redfin’s site offers customers the photos and marketing materials used to list properties that recently sold, information previously limited to real estate agents. No other website offers this data, known in the industry as Virtual Office Website (VOW) data, to Phoenix consumers. The new data, which consumers can use to develop their own market analyses, became available last year as a result of an agreement between the U.S. Department of Justice and the National Association of Realtors.

Redfin has access to the real-time database used by brokers to list homes because Redfin is a broker that represents customers buying and selling homes. In Cave Creek, Fountain Hills, Scottsdale, Tempe, Chandler and Gilbert, the company provides direct service, employing its own real estate agents. In the East Valley and the West Valley, Redfin relies on partners. Redfin’s search site covers all of Maricopa and Pinal counties.

Cathleen wants the business. We’re growing fast, and she wants to grow still faster.

Greg wants to be an even-more-disruptive disruptor.

But among many other things I might talk about, there is this: Redfin’s internal praxis actually does impose a performance bar on practitioners. It’s the kind of corporate pencil-pushing I’ve always been lousy at, but Redfin tracks and measures everything. Not for pencil-pushing reasons, but in order Read more

February 8, 2010

Agents of Change

by Glenn Kelman

CEO, Redfin.com

Don Stewart posed an interesting question this morning about whether real estate is changing top-down from the broker or bottoms-up from the agent. In a post about how Redfin sees the real estate industry changing, Don suggested we had focused too much on the laws, the brokers, the MLS data sharing rules and the system by which sellers pay buyer’s agents:

I think that many agents are becoming more client focused, less afraid of discussing value for money, and are happy to be judged by their performance. They are not just trying to grab commissions, they want to build a professional practice. Real change happens from the ground up, not the top down and I see some very encouraging signs.

Don’s right. When I first got into this business, Redfin focused on structural ways we could make real estate better: by surveying customers and publishing responses, by paying agents at least in part based on survey results, by sharing as much data as possible with consumers.

But the most profound change has probably come from our agents. I’m not sure if we attracted the most progressive agents, or if those agents were in fact what made us progressive in the first place. But the longer I’m in this business, the more I’ve come to realize that what I think doesn’t matter as much as what our agents do every day.

What do you think? Is change coming via the agents or the brokers?

February 1, 2010

Redfin.com’s Glenn Kelman comes to Scottsdale to beard the MLS lion.

by Greg Swann

Suburban Phoenix Real Estate Broker

Redfin.com CEO Glenn Kelman is in Scottsdale today and tomorrow for the MLSCOVE Conference, a gathering of MLS executives from all over the country.

Glenn made time for Cathleen and me this morning, buying us breakfast and regaling us with stories of the not-always-smooth path Redfin is traveling.

In real life, the man has a sweet and gentle — even beatific — nature. We saw this when he spoke at the first BloodhoundBlog Unchained event, winning a hostile audience over with a quiet, unaffected honesty.

That shone through again this morning, and, allowing time for Glenn’s son and our pets, we spent most of our time talking about real estate marketing issues: REOs versus short sales, new builds versus resale, the prospects for recovery, etc.

It’s funny, actually, to talk this way, because Glenn Kelman is a star in the real estate firmament, but in person he is fun and personable and very empathetic. Whatever our past differences, I respect and admire what he has been able to achieve with Redfin in such a short time. It was an honor to be able to spend some time with him.

December 21, 2009

Who’s Afraid of Redfin.com?

by Brian Brady

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Bob Haywood, an Owasso, OK real estate agent makes a case for why you should be aware of Redfin.com. Bob articulates, from behind the cloaked wall on Active Rain, why Redfin.com is the REAL agent of change in the real estate industry. Read what Bob has to say:

You should pay as much or more attention to Redfin and what they are doing than you do to Zillow. Am I saying we should ignore Zillow? No! But the group who has the potential to really change real estate is Redfin, not Zillow. And here’s why…Zillow is just an information source. So they give lots of information. Yippee. The information real estate vault is now open to the public. Zillow is just one of many players in the information delivery game. And guess what? Zillow exists at the 20,000 foot level. Their information is not very accurate. You and I exist on the ground level. We know our local real estate market in ways that Zillow will never know. We know what actually sold. What it sold for. What it is actually worth and often, what is about to come onto the market.

Fear Zillow.com? “Not so much”, says Bob and I agree with him. Zillow introduced the Zillow Mortgage Marketplace and it has had no impact on my business these past 18 months. Only one consumer has referenced Zillow’s mortgage rate quotes in their negotiation with me. That consumer did speak a lot about the Zestimate and its inaccuracy; that inaccuracy actually helped me in the negotiation with the consumer because it threw a shadow of doubt upon the accuracy of the mortgage quotes they offer.

And that is why you should watch Redfin. Redfin is a ground level company. They are attempting to take the information and link it to agents on the ground. That’s what makes them dangerous. If they ever get their feet under them and decide that they actually want to be a player nationwide, they could just change the way real estate is bought and sold. And if they do, they could end up owning (many of) us. Already, Read more

Category: Redfin.com (page 1 of 8)

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

by Greg Swann

Buyer Agency Project: Buyer agents offer no value today.

by Brian Brady

Overnight News: Hey, Redfin: What happens when you tell everyone you’re racist – and they believe you?

by Greg Swann

A fun fact about #iBuyers? Every buy-box is redlining.

by Greg Swann

Q: What will #Redfin and the other #iBuyers do when the market actually gets ugly? A: Discover real estate.

by Greg Swann

Looking for a Realtor designation that really means something? How about this? “Too Outspoken For Redfin.”

by Greg Swann

Now or Never

by Glenn Kelman

Batting Averages for Listing Agents

by Glenn Kelman

Harvesting the Redfin green: Learning how to work with web-based prospects who may not have known they were contacting a Realtor.

by Greg Swann

Should Redfin Be Renamed Right-Fin ?

by Brian Brady

Is This Normal? (What Seattle Real Estate Agents Earn)

by Glenn Kelman

Adorn that russet Bloodhound in Redfin red: Today we make common cause against stupidity, cupidity, stolidity and inertia in the real estate industry in behalf of the consumer’s right to a fully-informed, financially-sound and fun real estate experience.

by Greg Swann

Agents of Change

by Glenn Kelman

Redfin.com’s Glenn Kelman comes to Scottsdale to beard the MLS lion.

by Greg Swann

Who’s Afraid of Redfin.com?

by Brian Brady

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