Category: Redfin.com (page 2 of 8)

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

I had this news last night, under embargo, but I was tied up with geek stuff. The Cliff’s Notes: In areas where Redfin.com has MLS reach but does not have its own agents on the ground, starting today it will begin offering client referrals to agents it has screened and whose performance it will monitor and publicize on its website.

What follows is a piece of an email sent me by Redfin.com CEO (and BloodhoundBlog contributor) Glenn Kelman:

Maybe this seems like deck chairs on the Titanic because it doesn’t fix sub-agency – which I agree needs to be fixed — but it seems like a step forward to us. I mentioned it when we increased our prices and offered unlimited tours, that we had one more rabbit in the hat.

Starting tomorrow Redfin is going to start connecting folks in outlying areas to real estate agents who work for other brokerages. This has been done many, many times before, and it’s something Redfin could have done years ago, given all the traffic we have in outlying areas.

The Redfin twist – and the reason we waited so long — is that we wanted to do in a customer-centric way that also works for agents. Here’s what that means:

1. Data: We suck in data about all the agents’ deals for the past year and we survey all their clients and then we publish *everything* — reviews, deals – on a continually updated web page. We survey every new deal too. The reviews we got are mostly good – too good right now – but that’s because response rates are low for long-past deals with only happy people replying. We do show every no-response, and every deal where the agent did not provide an email address for a past sale (they can’t do that going forward).
2. Consumer in charge: The consumer is in charge, choosing the agent he wants to work with based on all this performance data (see attached screenshot) & he can fire the agent any time – no procuring-cause, no leads, no fees for leads, & the consumer always knows what he’s signing up for.
3. Referral fee Read more

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

I’d like to introduce you to some really nice folks. Take a look:

The couple on the left are the Anybodys, Jeff and Janice. Jeff is a middle-manager for GE. Unless he owns a Pizza Hut. Unless he’s a Civil Engineer for the county health department. Janice is a schoolteacher — or a stay-at-home mom — or the assistant manager of the parts department at the Saturn dealership.

On the right is their real estate agent — real live real estate agent Allie Howard.

This is good real estate marketing, profoundly effective in all kinds of ways. Virtually anybody can see themselves as the Anybodys. They are exceptional examples of everything that is unexceptional in American middle-class life. And Allie is just geeky enough, just semi-hip enough, just po-mo enough and just down-to-business enough to connect with the Anybodys in the intense but decisively temporary marriage that is a home search.

Everything in this photo is perfect. The clothing is casual but expensive — in just the right colors. That hand-written type face is an homage to the “Hello!” of the original Macintosh. Everything about this image is devised to make you feel comfortable about proceeding with a real estate transaction with Allie.

So who is responsible for this inspired piece of marketing?

Redfin.com, that’s who.

That’s right, the home of the geeks is working very hard to become the just-geeky-enough place for Janice — not Jeff — to shop for a home.

Just two weeks ago, Redfin CEO Glenn Kelman was wondering among the Bloodhounds if hi-tech companies like his would crush all the Mom and Pop brokerages. But here we see that self-same Kelman working very hard to compete with Mom and Pop on their own turf.

Let me make two interstitial points, if I might.

First, do not underestimate Glenn Kelman. We’ve beat up on a lot of people in the last 30 months, but, as far as I can tell, Glenn Kelman is the only one among them who is actively trying to figure out what he’s getting wrong. That doesn’t mean we have been right, necessarily. But Kelman is going to keep testing and revising his Read more

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

When I represent buyers, I see my biggest responsibility as taking the fear away. Yes, I need to find and show houses. Yes, I need to write contracts and supervise inspections. Yes, I need to husband everything through the lender and the title company. But the job of jobs is to serve as a security blanket for the buyers, to make them feel safe and comfortable throughout the process.

Whatever Redfin.com’s buyer pool might think they want from a buyer’s agent, in general they’re not that different from other buyers. They might like the idea of a very robust search tool for identifying homes. They might like the idea of a streamlined purchase process, Amazon-does-residential-real-estate. But when the dollars hit the dirt, they want to know that they are being marshalled through the home buying process by an experienced professional — someone who can do all the chores that need to be attended to, but also someone who can inspire the quiet confidence that permits buyers to sleep through the night in what might otherwise be a nightmarish experience.

Today Redfin.com moves that much closer to traditional real estate. Redfin buyers will be able to choose the agent they work with, and they will be able to look at an unlimited number of homes at no out-of-pocket cost. But the rebate to buyers will be 50% instead of 67%. The website has been retooled to reflect the higher degree of personal service.

Also today, Redfin will offer new search features on its web site, including tools to make it easier for buyers to investigate the history of distressed and foreclosure properties across multiple MLS listings.

By email, Redfin.com CEO Glenn Kelman offered this explanation:

A lot of this is the culmination of a long process of figuring out we’re a customer-service company, not just a web company or a real estate company, which means we’ve gotten a lot more practical about how we blend online and personal service; we’re trying to do more of both.

Redfin’s on-line search tool is so much more robust than anything else available to consumers, I think the company might be a Read more

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

Via intrepid startup blogger John Cook from his new weblog Where are John and Todd?:

Redfin today said it is cutting 20 percent of its staff as the Seattle online real estate broker prepares for what Chief Executive Glenn Kelman described as a “big dip.”

About 20 employees were let go, bringing total staff at the company to about 75 people.

Kelman said it was a difficult decision, but the right move given how the economic slow down is impacting the residential real estate market.

“Redfin’s whole business will struggle and fight and may yet fail,” Kelman wrote in a message to employees. “But the only way it is possible for us to succeed – and, even today, I believe we will – is if we adapt.”

In an interview, Kelman said that the company had been performing well up until about three weeks ago. Last month, he said executives even felt strong enough about the business to raise revenue projections for next year.

But once the economic meltdown hit Wall Street, Kelman said “deals started to fall apart.” And while October and November may still prove to be solid months at Redfin, Kelman said beyond that the outlook is dismal.

“As the stock market wiped out prospective down-payments, tours and offers dropped 30 percent,” said Kelman in his message to employees. “Transactions that were done came undone.”

More from CEO Glenn Kelman at Redfin’s weblog:

Today Redfin laid off roughly 20% of our employees.

Unlike other startups, our industry’s recession started a year ago, when home prices first plunged.

Since then, we’ve fought like starving animals, and with some success: while industry-wide transaction volumes dropped 33%, we grew revenues by nearly 50%. Traffic grew more than 300%.

Even a month ago, we were raising 2009 revenue projections. All our markets, now including Chicago, contributed profits.

But the past few weeks have seen a major reversal. As the stock market wiped out prospective down-payments, tours and offers dropped 30%. Transactions that were done came undone. October will still be pretty good, then we’re headed for a big dip.

Hence the layoff. Layoffs are painful for any company, but especially for a startup and especially, I Read more

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

The uncontested brilliance of the free market is that it is self-correcting. People like me have been bitching all along that Redfin.com’s approach to buyer representation was misguided if not outright evil. Conceding some huge chunk of the buyer’s agent’s commission to the buyer was certainly consumer-friendly, but pushing the cost of buyer representation off onto the listing agent was vile. “Stick it to the man” rhetoric might play well with Leslie Stahl, but we have no way of knowing how often the listing agent is working for one percentage point of the sales price — or even for nothing.

But: So what. So long as listers were too cowardly to contest Redfin’s claims to having earned the buyer’s agent’s commission even when it had violated the everyday understanding of procuring cause, every erg of outsized bitching was just so much wasted energy. If the Redfin experience was satisfying to its buyers, not much else seemed to matter.

Except…

Of course, the Redfin experience wasn’t satisfying to buyers. As much as they might like the idea of shopping for homes from an on-line catalog, when it came time to actually squeeze the fruit, a surprising number of them wanted to actually squeeze the fruit.

So: Redfin had to provide home tours when its cost structure was built around not providing home tours. Then it had to start charging cash fees for home tours. Then it built an elaborate mechanism whereby buyers could schedule two home tours for free, then pay $250 a pop for additional tours. And today, without fanfare, Redfin.com announces its Redfin Select program, whereby buyers can schedule unlimited home tours in exchange for a reduced commission rebate.

First: All hail The Market, which speaks lucidly even to deaf ears.

But second: Ugh.

Listen to this:

With Select, we take you on tour twice a week, every week, until you find a home.

That “twice a week” sounds a little school-marmish, doesn’t it? “You will walk in single file, boy-girl, boy-girl, in a neat and orderly fashion.” God help the poor relos in town from Thursday to Sunday. Twice a week means twice a week, pal.

Okayfine. Progress is Read more