Seattle startup Redfin, which has raised over $8M, doesn’t have much time left on the dock - they are sucking for air and here is why.
First - Their website just plain sucks.
Q: If their mapping technology is so great, why did they take it off of their homepage?
A:Because everyone left their site while the homepage was loading – that’s why.
Now, instead of the homepage, the search page takes what feels like an hour to load, then it only takes 50-60 more clicks to zoom in on an area, then only another hour for the map to re-load, then a little more zoom, then another 45 minutes or so.
Now I get to look at the roof of a home for sale. Technology rules!
Sure a few geeks, with nothing else to do, like to use it (I am not ripping on geeks, I am one myself), but the general public wants a fast, easy to use website that they do not have to learn how to use. Just ask Craig and Sergi.
Second - Their founder recently quit or was fired. Enough said.
Third - They do not make money.
Their model will simply not support a business. They are basically giving away the $8M+ that they have raised to any buyer willing to use their service. I have news for Redfin – you will not survive on your margins…period. Impossible. End of story.
Fourth - They are not doing much business. In this blog post, they claim to already have two pending in sales in California – after two months in the market. Two pending sales in two months? With how much money these guys are spending on PR- that is absolutely horrible. Their financial backers have to be freak’n out.
In closing,I have to say that I whole-heartedly believe that real estate and the Internet go together like peanut butter and jelly – its a perfect match. But I think that the VC’s and Entrepreneurs starting these new Real Estate 2.0 companies better get back to basics before they go broke. Real estate buyers are looking for properties – not the latest widgets. I understand that adding needless steps to a process is something that some people think is cool – but like parachute pants and fancy flash websites – they are fads that will eventually go away. When it comes down to it – simple always prevails.
September 15, 2006 at 12:58 am |
You do know that Redfin has trademarked the term “Real Estate 2.0″ don’t you?
http://www.futureofrealestatemarketing.com/real-estate-20-market-leader-redfincom/
- better watch out…
Welcome to the blogsphere! I look forward to more posts.
September 15, 2006 at 3:00 am |
hey there intresting post would you care to join our group blog …. a weekly quality post would suffix
. We’re trying to grow our readership currently we’re ranked at number 38 on http://botd.wordpress.com/?lang=en. Jsut drop me a comment at our blog if you’r intrested 
September 16, 2006 at 9:15 pm |
Great article..I totally agree. I am going to set up a blog about Cleveland real estate soon. I will add you to my blogroll when I do.
September 18, 2006 at 6:08 am |
[...] Redfin Will Flop Like a Fish Out of Water By Real Estate 2.0 [...]
September 18, 2006 at 5:32 pm |
[...] A new real estate blog has appeared “Real Estate 2.0 — Just another Web 2.0 web log” and its first post is titled “Redfin will flop like a fish out of water“. [...]
September 18, 2006 at 8:33 pm |
The only useful real estate site online is Realtor.com . All others are a complete waste of time.
September 20, 2006 at 2:29 am |
I disagree, there is a small, obscure, very quite little start-up in Austin, Texas called zooven showing Austin area data, that lists the MLS, FSBO and is very easy to use. They appear to be selling listings to FSBO and agents and I’m sure there are more of these small sites to come. Realtor.com is crap and will eventually be over run, when others amass more data.
September 20, 2006 at 8:11 pm |
[...] The response I have received from the real estate (and others) blogging community has been overwhelming. I want to thank you all for the interaction, debate and support. I think that most of us believe Redfin would not have been pissy about the name of this blog if I did not write up a negative review of their website in my second post. [...]
September 23, 2006 at 5:44 pm |
[...] Real Estate 2.0 predicts Redfin will flop like a fish out of water posted at Real Estate 2.0. [...]
October 6, 2006 at 11:41 pm |
[...] September 20th, 2006 by Kevin Zillow-bashing is a favorite pastime in the real estate blogosphere, second only to its cousin Redfin-bashing. The Zillow bashers have (at least) a triumvirate of beefs with Zillow: 1) Its raw data is suspect 2) Its home-valuation algorithm, even if it were based on good data, could not possibly lead to an accurate Zestimate because it doesn’t, and can’t, consider non-quantifiables like views, amenities, smell, etc. 3) To protect consumers from over-reliance on a Zestimate, Zillow’s home page should have a big, bold disclaimer about 1) and 2). In an effort to address 1) above, Zillow today announced that home owners would be able to “wikifi” their home’s data if necessary. So is Zillow’s raw data (mostly from county records, I believe) really that bad? The results are in from a quick, highly unscientific study comparing Zillow’s data on 10 random properties in Menlo Park, CA, with local MLS records. The county got 6 properties completely right. Of the remaining 4: [...]
December 6, 2006 at 3:50 pm |
What the heck is going on with you guys??? You showed so much promise and then…..nothing for 3 weeks. Are you out of the bloggin business?
December 26, 2006 at 3:02 am |
Letting christmas fade off to the past and going thru some of my bookmarks…I was here before because I have this blog bookmarked…. But Ido not recognize it, so you must have made some serious changes in the design?
January 12, 2007 at 4:50 am |
Redfin was just cited in Reader’s Digest, pretty much talking about the monopolistic real estate brokerages and how a daring few are standing against them, Redfin being the only one mentioned. Interestingly, it mentions sites and blogs such as this. I figure they’re going to see a LOT of extra traffic over the coming month or so.
January 28, 2007 at 6:08 am |
We don’t have a fancy map showing the roofs of properties for sale, but we link to as many Southern California mirror MLS’s as we can. Our site provides robust information without a committment to a brokerage, unlike our competition. We are also flat fee on both sides of the deal. $5000 on the buy side and credit the difference back to the buyer. $6000 on the listing side and no going up the street to the C-21 listing and making 3%. We just bought “flatfeerealestateblog.com” and hope to have it up and running for anyone to comment whether they agree with our platform or not. But, as I was asked before that I wasn’t trying to make any friends in the industry and I replied sure I was, buyers and sellers. Although we advertise in Los Angeles on the largest AM talk radio show the real estate industry is ignoring us. Of course we aren’t bragging to investors about two deals to get their money either.
February 8, 2007 at 4:33 am |
Redfin is revolutionary. How can you not go there? Average savings 10,000+. In a very short few years traditional real estate agents can kiss their jobs goodbye, unless they’re willing to comply with the new way of buying/selling real estate and know that consumers aren’t stupid and have access to info on line and don’t need to be paying them ridiculous (agents) amounts of $ for things they can do themselves now that they have access.
February 8, 2007 at 10:35 pm |
Funny how the comments have changed so much in the past 6 months. Went from Redfin being worthless to Redfin being “revolutionary” and about to change the Real Estate market.
Whoever wrote the initial post……gotta any other ideas I can bet against in the next 6 months?
April 15, 2007 at 9:31 pm |
We all assume that everyone in the world is computer literate and why would anyone pay a full service agent for info they can get themselves and pay all this money out. While I will conceed that there are many smart folks out there that may benefit from Redfin, it is also true that there is no substitute for the right agent that can protect your interest. I expect in the coming years to read many stories of unscupulous sellers who are able to pawn a property off on some unsuspecting buyer who may be educated well online, but does not deal with real estate on a day to day business and so may not see some of the pitfalls that may appear. Secondly everyone sees the big money these agents take in and they become jelous of what they make ( human nature I guess ). But no one ever talks about the endless hours in the car, on the phone and computer working for that commission most of which goes to a broker who has expenses of their own and without whom there would be no association protecting the consumer’s out there. I don’t have a crystal ball to say whether Redfin will be around in 5 years, but let’s get off our high horse about all the BIG money that we want to take out of the hands of the Realtor working to feed his family. I know a lot of good agents that do not make a half a million a year and do not drive 200,000 automobiles. Let these guys make a living if they can offer you the service you need use them and if not do it yourself if you are that confident
May 13, 2007 at 11:32 pm |
Hmmmm. Nice piece on 60 minutes tonight
May 14, 2007 at 12:03 am |
I think Redfin is the greastest thing to come along since sliced white bread. Real Estates offices have been screwing the public long enough. Hope to see Redfin succeed From ocean to ocean. I see MLS is getting their politicians ready for a fight. I pray they lose.
May 14, 2007 at 12:28 am |
SCARED…LOL REAL ESTATE SALES ARE A RIP OFF…LOL
May 14, 2007 at 12:38 am |
Redfin rocks! This is the end of the traditional real estate agents.
May 14, 2007 at 2:50 am |
Really. Six percent on California properties and prices – ridiculous.
Real estate industry is over-manned and it should shrink 25 or 30% to be realistic. Then fewer people will sell more homes and actually make a living rather than HOPE to do so.
REDFIN is an option. People want options (they may not use them, but they WANT them.)
May 14, 2007 at 2:56 am |
Will the NAR and CAR have the political clout to keep progress in the real estate industry in the dark ages? Not sharing the MLS is not meeting the fiduciary obgliation to the seller paying the commission. A real estate agent can sell property anywhere in California, but can not get access to non-local MLS, nor a commission. Interesting.
May 14, 2007 at 12:17 pm |
Interesting about Redfin’s free CBS ad. I noticed that CBS did not really do anything to really present how the current Real Estate Industry works and why. It’s a very complicated if you really take time to look at.
There will always be companies like Redfin. I think that’s the way of the world. I like competition and I think it makes us all better business people and more responsive to consumers. I however believe that companies like Redfin will fail because of themselves not because of their competitions effort to kill them, as was indicated in the 60 minute segment.
What Redfin does with buyers should be illegal. If Redfin does not take the full sellers fee then the listing agent should rebate it via a commission reduction to the home seller.
After all it’s the sellers money that was used to attract selling agents. If I where a seller I would demand this. This is problem # 1 with Redfin. There are other discounters doing this as well and I protect my sellers by structuring listing agreements this way.
Problem 2. Redfin’s business model will only work if they have the traditional full service brokers to play against. What is going to happen if they meet with any real success. The better mouse trap me too companies will pop up like weeds and there goes the market share required to make this model work. All of them would have to push up rates charged to consumers to stay in business or cut services offered. Maybe both.
Problem 3. I still believe that no matter how much technology improves in helping consumers with home selling and buying, It still does not replace the human element. Redfin indicated in the 60 minute piece that they have agents on the phones but do the agents really know the market. Do they know how the zoning changes that just happened at the local planning meeting will change property values. I have worked with enough buyers and seller to know that you have to spend time with them to understand how to help them. If you don’t they will end up unsatisfied and never come back for any repeat business. Even the younger people today that are extremely comfortable with technology need this kind of service. Companies like Redfin usually start by picking the low hanging fruit off the tree then they have to buy a bucket truck for the rest or not pick them. Does this help consumers?
Problem 4. As transactions grow the demands they place on the inside agents will grow. Burn out will occur and the agent will make many errors. Errors in this business are expensive. Each state has it’s own laws regarding agency relationships and will require agents that work and understand each states laws. Checklist will help but being intimately familiar with the local turf critical. I don’t think the folks at Redfin have a clue about the costs of this.
I can list many more. But real estate is a competitive expensive business. I don’t believe that most people will replace a personnel relationship with technology any time soon. Think about it. How many houses does a normal person buy or sell in their life time. Would you trust this valuable possession to just anyone. I would not.
May 14, 2007 at 7:31 pm |
When I work with buyers and sellers technology is maybe 10% of the experience. And I cannot imagine paying a buyer to buy one of my listings. The seller may offer a give back but the broker should never bribe a buyer.
May 15, 2007 at 2:23 pm |
In reply to Doug’s comments: It is not the seller’s money that attracted anybody. If you know anything about real estate, you would know that the money to purchase a house typically comes from the buyer. That might just be my understanding though. So, if the money is coming from the buyer, it would make sense to give the money back to the buyer.
May 15, 2007 at 2:55 pm |
Take a look at how on-line dating (very touchy feely, just like real estate) really works. A lot of lookers, no takers and the good ones don’t ever make it on line. ( :
May 15, 2007 at 10:00 pm |
In reply to James Rawson.
I can understand why one would think this. But I respectfully disagree for this basic reason. The seller owns the property. The seller can price it however fairly or unfairly they want. If the the buyer agrees to the terms of the seller (Which would be the seller keeps the 2 percent) it’s the sellers money. Again it’s all negotiable as everything in real estate is. As a listing agent in a transaction like this I work for the seller. I look after the sellers interest. I could care less about the buyers interests. So if the buyer negotiates better than the seller cool. If the seller negotiates better than the buyer cool. I still believe I am correct in my statement. It’s the sellers money.
Doug
May 18, 2007 at 9:24 pm |
Right after redfin takes off , Im gonna start an internet grocery company that delivers food to your door.
May 18, 2007 at 9:28 pm |
Ray, we pay commissions to non members of MLS everytime. Do a lot of business, do you?
May 18, 2007 at 9:33 pm |
The commission comes from the seller, its their money. Puuuulese people, if your not in the business, by all means ask questions but don’t act like you understand the real estate business.
May 19, 2007 at 12:07 am |
SELLER PAYS THE COMMISSION BIG LIE…
James Rawson is 100% correct. The fallacy that the seller pays the commission has been a traditional broker ploy since the cooperating commission structure was invented. When a consumer buys anything, all the money that comes out of the buyer’s pocket, or the buyer finances pays for everything in the transaction. Just because the seller didn’t get the money doesn’t mean the buyer didn’t pay for it.
If the seller paid the commission it wouldn’t be included in the transaction and it wouldn’t be used as a basis for the assessor to determine the amount of property tax.
If there is no real estate agent’s commission in a transaction, does the seller still pay? Stop reading out of your office’s client prospecting handbook!
The seller and the listing agent decide and agree on the amount of buyer’s agent’s commission and if the buyer does a lot of the work then they are not only entitled to a rebate or credit in my opinion, but realtors are encouraged by C.A.R. to give some of it back to the buyer to help with closing costs or whatever even if they provided a full service to the buyer.
Doug you are struggling to justify something that the evolution of information dissemination is going to make obsolete. Look at what Expedia did to the travel agents. Again you claim that this is one of the most important purchases someone will make in their lifetime and I agree. However, I do not respond out of the realtor handbook of client manipulation by saying you need a professional to hold your hand throughout this important life decision. No, instead I tell people to become informed so they know that they’re getting the most for their money. Who cares more about whether you live in your dream home? You; or a realtor getting a $10,000 buyer’s agent bonus on top of the commission?
This bonus doesn’t even have to be disclosed to the buyer, but it’s ethical??? Give me a break. How much value does that buyer’s agent bonus add to a property?
On a side note I am personally working on a few of the largest MLS’s in Southern California. Being on the MLS committees I am trying to get one MLS from San Luis Obispo to Mexico and make it accessible to the public.
MRMLS (Inland Empire) is ahead of the ball and already offers a public mirror version of their MLS. This gives the public robust information, no bells and whistles, no advertising and no realtor leads. This new site I am working to create will provide just robust information about all the properties for sale showing the accurate status and every property from every agent and broker on the MLS.
The agents that think hoarding their listings from the public will keep them in business will someday be working at Lowes, but I am going to help save them, at least for their listing commission. The reason is, there is no way to determine how long a buyer’s agent has been working with their client. It could have been three days, a month, six months or longer, but with the current commission structure you cannot predict how much the buyer’s agent should be paid. If the buyer wants their hand held and doesn’t want to do any of the work then the buyer should pay what ever the agents can get. It’s when the buyer does the work that I have a problem with the agent getting all the commission, so with us they get it back because they do some of the work.
But, for realtors to infer that the consumer has to have their hand held by a professional is disingenuous at best and unethical at worst. All information including city, county and state codes are now available online; at least in cities that are online.
Let the consumers that want to become informed about the market and their transaction become educated and they can determine the level of service they need and should pay for.
May 20, 2007 at 1:00 am |
James Rawson is 100% correct. The buyer pays for everything associated with the final purchase price of the property. Traditional brokers con the public into thinking the seller pays so the buyer’s agent’s commission can remain their little golden prize.
Don’t fool yourself. If you buy anything period, cars, lamps, plasma tv’s, and homes the buyer pays for everything. It either comes out of his pocket or he finances it.
Realtors will try to justify this fallacy as best they can, but if the seller pays the commission then why is commission included in the purchase price and used by the assessor to base the property taxes on?
May 21, 2007 at 10:11 pm |
I’m a buyer. I found a house on my own that I want to buy. I went to their website and put in an offer. It has been 3 days and I still waiting for an initial call back. Where is the basis service?
May 21, 2007 at 10:41 pm |
Mike, if you are in Southern California and you wanted to put in an offer, have access to email and a web browser, got us a pre-approval letter, proof of down payment funds and overnighted a deposit check, we would have had that offer to the listing agent 2 hours after we received the good faith deposit check. Check us out, we are the future of (truly ethical) real estate transactions. Todd Kolber, President of U.S. Real Estate Depot.
May 22, 2007 at 2:53 pm |
To Robert and Todd,
You must understand that in any contract negotiation that everything and I meaan everything is up for grabs. Just because the MLS list data show a selling agent commission of a certain amount does not mean it’s so. I HAVE AND KNOW OTHER AGENT THAT HAVE reduced this amount at the closing table to make a deal work. It’s all negotiable. UNTIL IT’S NEGOTIATED IT IS THE SELLERS MONEY. Period. You guys need to study contract law a little more.
Doug
May 23, 2007 at 8:58 pm |
You’re dead wrong Doug. The buyer is the ONLY one bringing money to the transaction, therefore he is the ONLY one paying. Sorry, I don’t buy the anecdotal nonsense from the, “What to tell the buyer’s” realtor’s handbook.
Contract law has nothing at all to do with it, but a little common sense does. Maybe someone here needs to get some of that.
May 26, 2007 at 7:36 pm |
I’m a Realtor, but in favor of limited service brokerages, as long as they provide advice to the client. Real Estate transactions are very complex, full of problems, and require a level of expertise that only a full time experienced agent can possibly have. Going without an agent is like going to court without an attorney. You can do it, and you might win, but you are really throwing the dice.
If you understand how a real estate transaction is closed, you’d know that the seller DOES pay for the commission. Does he bring money to the transaction? Well, no, he doesn’t bring a big roll of hundreds to the closing table, but neither does the buyer in most circumstances, they bring financing. When you look at the HUD (closing statement), it’s divided into two columns, just like your accounting books. On the left side the HUD list all of the seller’s expenses, and monies received. On the right hand side, all of the buyers expenses and credits from the seller are listed. You will always find the commissions listed as a debit on the SELLER’S side of the transaction. On the buyers side, you will see no mention of the commissions, in either a debit or a credit.
The commissions paid to the listing agent are not negotiable, as the listing agent has a written contract agreeing to pay the listing agent a certain commission. The seller may choose to offer whatever they want to the buyer’s agent, however most MLS boards require that the listing agent pay the buyer’s agent no less than the amount offered in the MLS listing. The listing agent has also agreed in his contract with the seller (in most states) to pay the buyer’s agent a minimum commission.
Even if you ARE able to skirt MLS rules (or, I guess, perhaps some MLS boards don’t have these rules) and say you won’t pay a limited service buyer agent his full commission, you would be doing your client a DISservice, not a service! If I’m a limited service brokerage, I’m telling my clients that if the selling agent won’t pay us the 3% fee, then we can’t give 2% (or whatever) back to you. So either don’t look at those homes, or realize that you’re going to have to negotiate harder on the home to make up for the commission refund you won’t be getting. This works much like the brokers who decide they’re doing someone a favor by offering 2.5% commission instead of 3% to buyer’s agents. Guess how many 2.5% commission homes we show our buyers? Try ZERO. If you’re trying to rip us off here then you’ll probably try and rip us off in the rest of the transaction – no thanks.
May 26, 2007 at 8:41 pm |
Brian you aren’t worth arguing with. I don’t have time. I’m getting busier, are you? I’m not a limited service brokerage per MLS rules and your arguments are exactly why you’ll end up working for Lowes one day.
Brian>>Guess how many 2.5% commission homes we show our buyers?Try ZERO.
But, thanks for reminding the consumers that you are only interested in showing homes that offer the most commission, because I’m sure they will realize you truly have their best interest in mind.
Tell the public here how they can get in touch with you, because I’m sure your comments will attract many new clients.
See ya at Lowes!
May 27, 2007 at 10:17 pm |
Todd I’m not a limited service broker, but I do understand how real estate works, and I expect you don’t and that’s the real reason you don’t have time to post any more on this. You’ve obviously spent a LOT of time going back with other people, so you must have some time in your schedule.
Further, I’ll remind consumers that I’m not going to show them homes where they will have to pay a premium, and where the seller is represented by a Realtor without much wisdom. I’ll remind them that that seller has already indicated that they wish to deal unfairly and that any transactions with that Realtor/seller team will probably be difficult, suspect, and unlikely to be cooperative. Additionally, I’ll tell them that there are plenty of homes out there without those headaches.
I guess you are one of those Realtors, and your deceptiveness is shown in your response. You say that “you are only interested in showing homes that offer the most commission.” Well, you know well that expecting a commission that is market rate can not be equated with “homes that offer the most commission.” That was a deceptive and manipulative argument – the kind any buyer can expect from a Realtor who offers less than the market rate for the buyer’s Realtor.
See you at Lowes? Perhaps, but you’ll be the one loading my car.
June 22, 2007 at 10:46 pm |
Odd the arguments back and forth on this blog given the original post was about Redfin and it’s impending demise. Almost a year later, Redfin is still around and the site works pretty well…
As a consumer, I personally don’t think ALL realtors are evil, money grubbing salesmen. They are a FORM of a sales person though and that’s nto a bad thing. If I had a $24 million dollar mansion, I’d be hard pressed to sell using an internet list service. And thus would contact a realtor (and probably a lawyer) to help assist in the transaction. But my $600k house looking to buy an $800k house, I’m looking to retain as much equity as possible to reduce my down payment as well as make any upgrades to the new palce.
So I understand the need for some level or service – realtor or web based.
And so far, we don’t see a huge need to sell with a realtor given the condition of our home and the need to retain our money. But we will need the legal aspect taken care of. But given our local Help-You-Sell agency is run by a licensed realtor, this seems to be the best compromise so far.
I personally don’t think the realtor or web service is an end all. There’s going to be demand and need for both for quite some time. To say the web will destroy an entire service sector is stupid. We all know that. For people to make the gross generalization that all realtors are crooks or don’t earn they money is also stupid.
July 5, 2007 at 10:14 pm |
Redfin may still be around, but I have had an opportunity to work with them, and find that some of the staff is a typical high-ego, small professionalism group. They’re high on themselves because they are part of a start up, but not professional enough to manage it and make it look like a real business. This will kill them like swallowing arsenic: from the inside. Oh well.
July 8, 2007 at 2:39 am |
for every great new startup there are those who love to bash such startups in.
i say, you’ve (Rob) have got absolutely no guts to even handle a start up, That’s probably why your bashing it in shamelessly.
Seriously. Saying bullshit about another company only tells me that you’re a horrible person.
August 1, 2007 at 5:06 pm |
I just stumbled across this blog, and find it ludicrous that people argue over whether the seller or buyer is paying for commissions.
Who cares?
It all boils down to this…
The listing broker EARNS a commission/payment for providing a service, that is listing the home, printing brochures, advising the client, processing paperwork, providing expertise, etc.
The buyer’s broker also EARNS a commission/payment for providing a service, that is helping the buyer find homes, setting up showings and showing homes, advising the client, processing paperwork, providing expertise, etc.
It doesn’t really matter if the seller, buyer, lender, or Aunt Jenny across the street “pays” for commissions. The fact is, both listing and buyer’s brokers earn a commission for their services, and they walk away from the closing table with some form of payment. Fair enough?
Now…what those brokers do with the payment they earned is their own business. If the listing broker wants to rebate money back to the seller with the money they earned, it’s their business. Likewise, if the buyer’s broker wants to rebate money back to their buyer with the money they earned, it’s their business.
What a person or company does with the money they earn is their business, including giving it back to their clients as rebates. To me, it has absolutely nothing to do with who “paid” that money. Once I earn it, it’s mine to hand out to whomever I want as I please, and if I want to structure a business plan around giving rebates back to my clients, that should be my prerogative.
Why should the seller or listing broker have any say whatsoever in if I rebated money I earned back to my buyer? They shouldn’t, because it’s none of their business what I do with it. I rightfully earned it, it’s my money, and I should be able to invest it, spend it, or give it to anybody I want, including rebates back to my clients.
I should point out that currently I do NOT rebate monies back to clients, but I think it’s a valid business strategy for people who choose to do so, and that sellers and their brokers should have zero say in what a buyer’s broker does with their commissions.
August 5, 2007 at 2:30 am |
I agree, Redfin’s current model is not sustainable, and it makes other Realtors look bad by pretending to make the industry “easy”
I have agents that work with me that are just as high tech as Redfin, yet they can’t take on anymore business. Yet, Redfin claims that they can make profits on volume?
Did you ever hear the story of a guy that was busted for stealing a Coke Zero?
The police asked:
“What do you think you are doing?”
He said:
” I thought it was free, it says ZERO”
The Police asked:
“And how do you suppose Coke would make money?”
The stealer asked:
“On Volume!!”
Ok, so we agree that Redfin can’t survive on such tight margins.
BUt here is the question. Can you fault a buyer or seller for using them?If they are losing $20k (or whatever) per deal, is that bad for consumers?
If Amazon.com had a new competitor that sold cameras for 50% off, and you knew you would get the product before bankruptcy, can you blame them for using that company?
If you buy or sell a home today, does it matter if that company is in business a couple years later?
Frank Borges LL0SA- Owner/ Agent
August 9, 2007 at 5:59 am |
I was on yahoo search for real estate and came here basically by accident. I started to read and was very amused.
You guys have to be either the dumbest or the most closed minded group of people.
Maybe being high (drunk or stoned) some nights in the 70’s with my friends and bullshitting into the wee hours about crazy things such as “one day im going to be a billion-aire, how they would ask? By selling water, oh how they laughed and so did I. And one day everyone will walk around with there own phone. LOL
Who would have ever known!
Video rentals (Blockbuster) laughed at on-line Net-flix “they wont last they cant rent all the movies a consumer can watch for a $4.99 monthly fee and mail free and return mail free no extra costs to customers. No late fees. They will be broke in one year! Their business is up in 3 years 400%!
Now Blockbuster offers the same deal!!!! And, not doing as well as Net Flix! LOL
All the sites of buying products on line all the big companies said “oh they want to come into the stores to see and feel what they are getting, P.S., On-line product sales are up 650%!!!
Every store now has there own websites just for on-line shoppers, but they werent the first! They were non believers!
Car sales, you have to go to a dealer to buy, they all said that! You know to kick the tires!
We all know they all have their websites for new and used cars today, interner sales are up 75% due to cutting salesman commissions, now managers handle the web business or a salesman that works on Volume!
Someone posted ” whats next on line grocery shopping”?
funny how that was mention as a negitive statement.
In N.Y. we have a company Fresh direct, they started 5 years ago and did struggle for the first two, the third they stopped losing money and now in there fifth year they made a profit of 35 million dollars, now why would anyone not want to go to the supermarket? LOL
Laugh all you want guys, I bought 3 houses on line site unseen (I am a businessman, and investor, I AM NOT IN THE REAL ESTATE BUSINESS AT ALL) and like someone mentioned, A consumer has to smell the house.
I dont have to smell the house even though you thought that was important! Just want to say, stop thinking you guys can hold back the future, time is money to me and if I can save time thats more money in my pocket, that goes for any product or goods or anything I buy ON LINE! I also bought two cars on-line this year, Toyota Avalon for my wife and a DTS Caddy for myself. I love the super-highway!
By the way my brother-in-law works in a car dealership in F & I dept. (finance and after sales, hes the guy you buy the warranties and some other must haves from) IN 1983 he made $375,000 on his returns I was shocked when i saw that, last year he made $112,000. He said soon people besides buying on-line will walk into a dealership and just walk up to the computer screen and click what options you want and what warranty and any extras you want, Hence, NO MORE SALESMAN, Dealerships no more commissions to pay or maybe they will keep 1 or 2 in the whole dealership of 10-15 people they now have.
Welcome to the future guys! Or is it becoming the present!
By the way, My business has also felt the rath of the powerfull internet, prices down and competion UP!
This superhighway does not discriminate any certain business! YOU HAVE TO ADJUST AND DO WHAT YOU HAVE TO DO BEFORE IT BITES YOU IN THE ASS! Now I use it to my advantage EVERY CHANCE I GET, TO GET EVEN!
Sincerely, AL P.
November 6, 2007 at 4:57 am |
Redfin is still here. Still growing and still selling a ton of Real Estate.
November 19, 2007 at 9:47 pm |
Just sold my house with Redfin recently. They’re still around and just raised more money
November 22, 2007 at 9:24 pm |
To Chris from Aug 1, 2007. I wish that I had more time to read what ignorant people are writing in blogs so I could respond and blow them out of the water.
The point of the buyer’s agent’s commission discussion is crucial because if there was no commission offered there, then there would be no Redfin or for that matter my company either. The point is to let those that want to do some of the work, pay less money. This does not happen with the traditional brokerages.
The issue is exacerbated further when traditional agents tell buyers not to worry about how much the commissions are because the seller pays for them. Furthermore, in the industry it is absolutely legal, ethical and for some a practice, that the buyer’s agent is able to tell you and advertise that they can represent you for free in a transaction where they know they are going to be offered a commission and possibly even a separate bonus. None of which has to be disclosed unless asked about by the client.
I sure hope I can buy or sell things from or to you other than real estate, (being licensed I have standards to hold or I can be punished by the MLS board, ask Redfin about commenting on other’s listings) because you don’t care who pays the commission. You even suggest that Aunt Jenny will pay. I’ll bet you’d care a lot if you had to write a separate check for it. That is why the government has withholding from wage earners. They would never write that check without whining and complaining.
I’ll take that to mean you are not very savvy in business transactions. There is an old saying for people like you. “Better to keep quiet and be thought a fool, rather than speak up and remove all doubt”.
Although I own a real estate brokerage, my clients do care and are informed about who pays the commissions. They have been as high as $80k. I do not have to be politically correct and polite to the stupid people Chris. They aren’t smart enough and won’t be using my service anyhow!
We just closed another deal and have saved clients over $200k in commissions in less than 1.5 years before negotiations are even considered. Commissions that otherwise would be in some agent’s pocket paying for their Ferrari.
Oh yeah, and we’re doing it without VC money.
February 9, 2008 at 8:50 pm |
Paragon
Paragon
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March 5, 2008 at 7:43 am |
It all sounds fine and dandy- until you get to the part about the seller holding their own open houses and property showings. For my clients, this is just not something they want to begin to tackle. They are happy to have someone else do this for them and handle all the details.
Redfin is interesting, but not putting much of a dent in things at all, if you ask me.
March 5, 2008 at 10:16 pm |
Learn facts about the life insurance industry
Information on the life insurance industry
March 7, 2008 at 2:10 am |
Sorry Geoff.
Redfin comprises almost 5% market share in the greater Seattle area. And in the all important SF Bay Area, Redfin has comprised nearly 1% and growing. Growth potential has nowhere to go but up!
March 23, 2008 at 7:51 am |
I work a pretty large area and have yet to see a Redfin listing in the part of Los Angles county I serve.
I just ran both Refin’s broker IDs on the Socal MLS for any closings in LA county and it comes back with six closings total since they have been MLS subscribers under 3 million in volume. Give them the benefit of the doubt at 3% per closing. There were three under $500k so there is $9,000 for Redfin and their customers did not get $10,000 on those closings. The rest all below 700k.
Even if there are some that slipped through the radar, that is not a very big impact for such a large trade area. Will Redfin go away? Probably not but they have no market share here and this is a declining market to add to their start up concerns.
March 28, 2008 at 3:02 am |
Sorry Ted. Obviously I was talking about the SF Bay Area and Seattle, not the greater SoCAl area.
April 4, 2008 at 1:50 am |
The online companies will survive this down turn and when the market changes my money will be on those companies. My company wants the consumer to be more pro-active in their home purchase so we try to give them as much information as possible. We make our transactions as transparent as possible including taking no referrals fees from anyone and making our commission clear as day. Traditional agents hate it so much they won’t even take our business card when we do a deal with them, but I don’t care. My clients will buy from us regardless of which house it is. And Oh My God, how dare I even think of mentioning that the consumer become more pro-active in their own transaction! A Realtor would never stand for that. I believe that flat fee commissions and the unbundling of real estate services is the future of real estate and that is to help the consumer not agents. Agents will try everything to justify the high commissions, like open houses, home magazine and newspaper advertising, placing properties on every rogue website on the net, and for people that do not want to be involved in the transaction, they should pay it. But, for those that want to save money, be more involved in their transaction and understand the market for themselves instead of relying solely on someone that has a different incentive and motive than the consumer, there must be Redfins, Buysides and of most of all U.S. Real Estate Depot’s. Here’s to the future of real estate transactions!!!
April 12, 2008 at 9:53 pm |
I think Redfin, like most flat-fee real estate companies will survive the down-turn and even prosper! It’s traditional brokerage that’s in jeopardy. The real estate industry is changing and homeowners want more control over the buying and selling process. The traditional brokerage is antiquated and inefficient, do we really need more SUV’s in the selling process? Besides, there’s too much money left on the table by both the buyer and seller. The fact is all of this can be done online, which is where it’s going. We use to get our cars pumped at full-service gas stations in the 60’s, but how many of those do you see around today? It’s the same direction the real estate industry is moving toward and it’s good thing for consumers who need all the help they can get in keeping more of their own hard-earned equity!
April 18, 2008 at 3:13 am |
Thank you, Todd and Jim. You had the courage to say what many are afraid to say. Future generations of home buyers will applaud you.
If history has taught us anything, it says that you can not fight the will of the people forever. The Revolution belongs to the people.
Case and point. Look at the way the travel agency has changed. From travel agents to consumers booking their own trips online.
May 2, 2008 at 9:55 pm |
Thanks Chris. I appreciate the kind words. I hope someday my company can help you save money on YOUR HOME PURCHASE. After all, it is not the agent’s money, it’s yours! Oh no, did I just say that?
You are 100% right. The travel industry is a perfect example and is one of the reasons traditional agents are trying to band together the MLS so Microsoft or Google can’t do it again, only to them.
May 30, 2008 at 11:56 am |
To compare a person’s largest financial investment to purchasing a vacation or car doesn’t make sense, it’s apples and oranges. Most sellers have a tough time clean, de-cluttering and de-personalizing getting their homes ready for sale. Throw a career, kids, marriage, divorce and/or a relocation on top of it……..there’s little time for “more control”. Like any market, it’s great that people have options. FYI, the boomers are going to be high maintenance and will cringe at the thought of their commission going to a buyer to buy his/her new furniture.
November 12, 2008 at 3:54 am |
As a traditional Realtor I have experiences with good agents, bad agents, new agents, old agents etc. But I could not of been more disappointed with the recent experience I had with an on-line company mentioned many times in this blog. The online agent seemed to be operating from a playbook. She has no idea what she is doing, misinforms her buyer
and lets the buyer take complete control of the transaction. Face it, how could she know what she is doing? Doesn’t know the area, never sees the house or the client. Next somebody will figure out a way to give a client a rebate for brain surgery and have an online doctor do the job. The buyer
getting the rebate is the one getting screwed cause of bad representation. Problem is these such buyers think they are so smart. Just wait till they
get caught in a dificult transaction. The online agent will not be there to save the deal because they are clueless and only getting a salary
‘A Good Job Is Not Cheap – And A Cheap Job Is Not Good!’
November 17, 2008 at 12:20 pm |
I also happened upon this discussion by accident. I was looking up a property online. All the different points of view and ideas are very interesting.
I am in the process of buying a new home and have a comment regarding buying a house sight unseen………I wouldn’t do it.
I do look on the internet for properties to visit but have found that PICTURES CAN BE DECEIVING.
It has been my experience that most properties look lovely on the Internet. However, before I invest my money, I also want to get the ‘lay of the land’ and i want to ’smell’ the property…… an idea someone else thought not important. But I offer that this simple action can save one a lot of headaches AND money. A brief visit to even the most promising property can dispel this perception by its smell. When you arrive at the house, walk in, and can smell the mold in the basement or in the walls………it is time to turn around and walk out. You can’t do that online. I could go on about other items you find when you actually see the property, but you get the idea. Well, one more. Wood floors. The wood floors can look beautiful online, until you visit and see that they all need to be refinished. Enough said.
The reverse is also the case. I have seen pictures of a home online that do not do it justice. Recently, my friends and I looked at three different condos. The one I fell in love with from the pictures on the Internet was the one we liked the least. And the one I threw in because it was in the same compound, we liked the best. Pictures of it were not well done. The third also looked better in person but we didn’t like the building.
I want to visit a property before investing my money in it. But then, I also want to actually drive a car before I buy it. I do not like big surprises where my money is concerned. Most times the surprise is not a good one.
Regarding expenses incurred by real estate agents for their services. Two areas I think can go away in the near future are maintaining an office and print advertising. I have yet to visit my realtor’s office. It has not been necessary. We communicate online and by cell phone. I have yet to look for a property via print advertising. If these two factors alone were taken out of the equation, a lower fee for agents’ services would not be unreasonable whether for the buyer or the seller.
January 29, 2009 at 3:08 am |
Oh my god it’s 2009 don’t you redfin bashers feel like idiots now. How
in sales are they up to. Fools what a bunch of uninformed ignorant fools.
January 29, 2009 at 3:10 am |
Oh my god it’s 2009 don’t you redfin bashers feel like idiots now. How
much in sales are they up to. Fools what a bunch of uninformed ignorant
fools.
February 2, 2009 at 8:08 am |
My husband and I are looking to buy a home in the next few months. We are not ready for an agent. I made the mistake of emailing a listing agent about photos of a property, and that apparently qualified me for receiving three emails a week from him about properties he thought I might be interested in, how great interest rates are, etc.
I don’t want to be sold, I just want some information. Same reason why I hate to buy a used car off a dealership… Just let me gather my facts and I’ll ask YOU when I’m good and ready. And then I’m going with an agent who’s not going to treat me like I’m a complete ignoramus, as it sounds like some of you agents might.
But he never sent any photos even after promising to do so. I realize I’m not giving him any $ to do so, so it’s not skin off my nose if he never replies… But it gives me pause – if the property is so great, why not have photos on the listing? I agree the photos can be misleading, but there are some things that are instant turn-offs that are easily identifiable in photos and it saves me (and my future agent) the time and trouble of trekking out to the home.
My area is not serviced by RedFin, but I have used their site almost exclusively since finding it a month ago. There is so much more information there that is not on any agent’s website from my area. I can look up all of the legal documents pertaining to the property (liens, deeds, etc) on my county recorder’s website myself. I believe in being an informed consumer.
But all in all, I’ll still be dealing with an experienced agent when it’s time to do the actual buying… I’m a first time home buyer, and I do want somebody looking out for me since I realize that as informed as I might be, I don’t know it all and I will appreciate the help.
However, from what I understand about the way RedFin operates these days is that you find the house you want to see, the agent takes you, and if you decide to buy then they help you do the paperwork. Doesn’t seem too far off what a traditional agent does, if you’re willing to do the initial legwork. You can’t blame people for trying to take a little initiative after the nightmare created by the pop of the artificial housing bubble.
March 10, 2009 at 7:34 pm |
Irene mentioned the value of actually seeing a property and that photos can be deceiving. That is absolutely true, when you’re searching for houses online you have to take pictures with a grain of salt. Even for that, other values aren’t necessarily helpful. I’m currenlty seeking a house with “more land”. Well I’ve seen properties that have 2+ acres of land, but still don’t meet my real needs because I want some seclusion and woods. There are houses that have 2+ acres that are 50 ft from their neighbors with a huge field behind the house, and it’s hard to tell which part of the field is yours or your neighbors.
The thing I love about redfin is that is by far the best interface to be able to search specific regions with specific requirements and be able to “look at” and eliminate quite a few quickly. Thus leaving you with some to look at more carefully and visit. Again, a grain a of salt has to be used when looking at images and details. Maybe it’s because i’m younger and have lots of experience with digital photos and computers, but I can personally extrapolate big details most of the time. Like tell if the bathroom really is tiny and not what I wanted. Or even the opposite, tell that I can’t tell how big the room is so I shouldn’t judge it just by that.
I do plan on using the Redfin agents, because it just makes sense. If they’re objectives lie in making me happy and making the sale go through to get the most money they can get; then I want to use them. A traditional agent does not share your best interests. If he helps you get a better deal on the house, he makes less money. If you feel like you didn’t get a good deal, well too bad. If you feel like you got hosed by a Redfin agent they’ll suffer in their commissions. Also the fact that they spend their time working on the things I am not skilled in and not in attempting to understand what i want and trying to find it for me. I had an eager normal agent sign me up for free for mlspin and entered houses that she thought i’d like. 1 out of the 20 she put on the site was a “i’d be willing to look at it, but from the listing it doesn’t look like what i want”. The rest didn’t even meet the specs we saw her write down on paper for us.
So in short. Go Redfin, Go. Technology is the solution to a broken way to find housing. And finally to those who commented that Redfin would go under 3 years go: Too bad, you might have to get another job.
March 16, 2009 at 6:34 am |
Why do people complain about a giving 3% commission to real estate agents and turn around and give 18% tips at restaurants without blinking?
March 18, 2009 at 9:35 pm |
Eric maybe it has to do with the fact that giving someone $6000 for essentially being a middleman is kind of far fetched. Giving a waitress $2 for being a middleman to the kitchen and cashier seems to be a much better deal for a middle man. Your obviously a realtor and think you provide some actual service, but in the future I don’t think there will be realtors at all.
April 24, 2009 at 6:16 pm |
Man did you guys predict the downfall of Redfin! As mentioned it’s 3 years later and it seems that Redfin is doing better in the economic and real estate downfall than a traditional broker.
Maybe because so many young first time homebuyers about to enter the market (like myself), can do the research for the area that we live due to the tools available over the internet. With so much information it just takes time to figure out what the local market is all about, it’s buying a house it’s not rocket science. I mean people have been doing it for generations, Location Location Location. Besides in this market buyers don’t need to get into bidding wars, why bother with so much inventory if a seller isn’t going to budget we can move on.
I guess I thought that this blog was so shortsighted that I had to comment.. good job.
May 12, 2009 at 1:46 am |
Stop back in another 3 years genius. Redfin is currently living off of investor cash and has never turned a profit.
July 2, 2009 at 11:21 pm |
So people are really comparing buying an airline ticket or a dvd to a $500,000 investment?
July 10, 2009 at 4:17 am |
Well guess what! Redfin has officially made hundreds of throusands of dollars in net profits!!!!
Time is on our side. The revolution belongs to the people!!!!
September 2, 2009 at 8:43 am |
This is one of the coolest blogs on the internet. Read a very boldly stated prediction made in 2006, and now examine it three years into the future in 2009. Man, you couldn’t have been more wrong. I think Redfin is one of the best companies out there. I am in the middle of buying my first home and use it extensively and are using one of their agents. It is great. Thanks for posting this, it was fun to read. Like hearing a first grade teacher tell Bill Gates parents he wasn’t going to amount to much. Just good stuff.