Redfin, 60 Minutes, whatever…

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The real estate blogiverse is all abuzz about the 60 Minutes segment that aired last night featuring Glenn Kelman of Redfin.

I TiVO'ed the segment, but haven't viewed it yet. UPDATE: I watched it. Doesn't really change the gist of this post.

Why not?

Because honestly, I don't care.

Love him or loath him, Kelman is a master of spin, and a marketing wizard. The guy probably ought to run for public office. 

Why don't I care what Kelman and/or 60 Minutes had to say?

Because whether we like it or not, discount brokerages and flat fee listings aren't going away. Agents need to learn to compete, or get out. That may sound crass, but it's just the way it is. I don't need to watch 60 Minutes to get another Redfin infomercial, or to hear whining about how real estate agents make too much money. I can get that stuff within 10 seconds of firing up a web browser.

"Discounters" are everywhere, in every industry. "Full service" companies are everywhere, in every industry. Walmart and Nordstroms, Sizzler Steak House and Ruth's Chris, Joe's Used Cars and the Lexus dealership, the attorney advertising at 3:00am and the high falooting guy in the $3,000 suit, Redfin and us. 

Personally, I enjoy exceptional service. I also enjoy exceptional value. I happen to think we provide both in our real estate practice. We have clients that have confirmed that on numerous occasions. Are we the agent for everyone? No. Is a discount brokerage better suited for some? Probably.

I happen to subscribe to a few very fundamental truths: 1) You get what you pay for; 2) what goes around comes around; 3) karma is a bitch; and 4) there is no such thing as a free lunch. Simple thoughts, I know. But I learned most of them from my great Aunt, who at the age of 104 was sharper than 99% of the general population.

If I were the average home buyer or seller, would I use Redfin? Absolutely not. I firmly believe in the four fundamental truths outlined above and I'm not going to purchase or sell the most valuable asset of my life without full representation.  But if someone out there wants to spin the wheel of chance and take a risk, then who am I to stop them?

Is the real estate industry broken? Probably depends on how one defines "broken". It works, but it could most certainly work better. The Internet clearly isn't going away. Will a web site replace a real estate agent at some point? I don't think so. Many people like to bring up the disintermediation of travel agencies and say, "You see! We don't need travel agents anymore, the same thing is going to happen to real estate agents!" To that, I say, "Fooey!" Comparing buying a plane ticket online to buying a home online is not comparing apples to oranges. Heck, it's not even comparing fruits to vegetables. In the buying frenzy of two years ago, we sold several homes to investors sight unseen. However, none of those buyers were planning to ever live in the home (or even see the home). I feel quite confident that the number of people willing to live in a home purchased solely on photos, or a lousy virtual tour, or web site statistics of the neighborhood are quite small. More importantly, it's difficult for a piece of software to educate, negotiate, market, and ensure legal obligations are met on both sides. 

The Redfin's of the world (should) cause us to look at what we offer, to evaluate the value-added services we provide — and to use that evaluation to grow and develop those services. Alarmingly, there is a significant portion of the real estate sales community that had probably never heard of Redfin before last night. This was just confirmed with a quick poll of my office associates. Six are here right now. One saw the 60 Minutes segment, the other 5 didn't. None have never heard of Redfin before last night. All 6 are now bemoaning how "discount brokers are going to ruin it for everyone." "It" I presume is real estate as they've come to know it. "It" is changing, and will rapidly leave them in the dust if they don't learn to change and adapt. 

 

For hours of reading on Redfin and the 60 Minutes segment, check these: 

Google Blog search for "Redfin".

Technorati search for "Redfin".

I haven't looked yet, but I suspect many on ActiveRain are venting. 

Some discussion is occurring on Point2 Agent's RELiberation as well.

UPDATE: Here is the best post on this subject yet

[tags]Redfin, disintermediation, discount real estate brokers, 60 Minutes[/tags] 

 

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About the Author
Jay Thompson

I'm a real estate broker in Phoenix, Arizona and the publisher of the Phoenix Real Estate Guy blog. I tend to drive too fast and scream at the University of Texas and Denver Broncos football teams. My two kids are smarter than most adults I know and my wife is simply amazing.

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  1. You know it's up on my blog! My husband had a different view than I did so I was FINALLY able to get him to guest blog!

    Look, what it boils down to is Redfin wants to practice Real Estate but not have to pay Realtor dues or be held to any standards (like say, the Code of Ethics). My husband equates them to Wal-Mart; pay little, get less- surprise!

  2. Doug Quance says:

    You're not alone, Jay.

    I haven't seen it – nor do I intend to see it. I get the idea without the commercial.

    I don't see them as bringing anything magical or new to the process of buying and selling real estate.

    They certainly don't deserve the media attention they manage to get.

  3. Seth says:

    It's in your TIVO, and you should watch it.

    Why?

    Because some of your potential new and existing clients (the very network access which part of the 6% I imagine is appropriated to cultivating and maintaining) will have seen it.

    Isn't that enough cause? The ignorant masses will be armed with a 60-minute-ish slant on the issue, and will probably look to you for balance and context. But you will be equipped only with, "…honestly, I don't care…" They may want to hear how you defend your position, your commission, and how you might have responded to the question to which the realtor in the piece had no answer. They may just want to hear your confidence in any response, provided it isn't stained with an obvious trace hubris or arrogance.

    Could you really assume that avoiding a story directly related to your livelihood (from one of the premiere news sources in the country) will somehow strengthen your stance, or render the story less relevant? Didn't some wise man once pronounce "know thine enemy as thyself"?

    Do you really not care about seeing first hand how this piece came across — to you; how the perception of this piece will affect you, your circle of influence and your business? Nah.

    In my collegiate and professional tenure, when presented with defending or advocating one of many sides, I found it most helpful (and even necessary) to educate myself on all sides, however difficult it may have been to know them intimately; perhaps the r/e industry, as is too often the case, is immune to this tactful and comprehensive approach.

    Just watch it!

  4. Jay, do you know what the story is on how they found that Realtor that was interviewed? There was a lot of "I can't answer that" (aka "I dunno, the NAR Talking Points didn't cover that") and "I'm not the realtor for you"— this isn't representative of the majority of the other 1,299,999 Realtors out there…

  5. I disagree. Talking points are crucial for those who ARE apt to not figure it out for themselves (sad but common in our country). Look, you and I are used to the more intelligent (well, usually) world of the blogosphere so we forget about "the Others"- I would venture to say that 70% of Realtors don't even know what a blog is or that it can be used for business purposes. Those are the people who DO need talking points.

    BUT, I think NAR used Realtor dues to use a PR Firm that didn't equip the aforementioned people well enough- just look to the Realtor who was interviewed. Talking Points work well in politics because they are easy to memorize and the repetition of a unified message organizes movements effectively.

    Personally, had I been approached by the uber-liberal CBS team, I too would decline because I know that no matter what I said or how intellectual (I think) I am, editors will paint their predetermined picture regardless of my words. Too bad CSI is on CBS- I really liked that show :(

  6. Hey, you can't disagree on my blog! :) But you do make some good points…

    "I know that no matter what I said or how intellectual (I think) I am, editors will paint their predetermined picture regardless of my words."

    That is certainly a true statement! I've been quoted in local and national publications before and on more than one occasion I thought to myself, "that's not what I said". These folks are master editors, and it's not difficult to take a quote from two portions of a conversation, mesh them together, and give whole new meaning to the original intent. The 60 Minutes piece was obviously very heavily edited (yes, I finally watched it — Seth made me do it) so who knows what all was really said (on both sides) on and off camera.

  7. There are many real estate companies around that use technology to cut costs and share those savings with their clients. For some intelligent alternatives to Redfin, check out http://BetterHomeSelling.com & http://BetterHomeBuying.com

  8. Richard – your links appear to be mainly empty directories. What's the point? Do agents pay you to put their link in your directories? How much? With BetterHomeBuying.com, you've got a 3+ year old domain with a Google PR of 0 and no backlinks other than from comments in a blog today and a seminar from 2004. (Soon you'll have a link from this blog too. But be advised that MANY blogs have comments tagged with "nofollow"–meaning search engines won't see links in comments.)

    It will be difficult to get any organic search results with nothing more than a list of states on your home pages. How are you driving traffic to these directories?

    I'm not meaning to pick on you, I just don't get it. Help me understand….

  9. Seth – thanks for stopping by and commenting.

    I fully intend to watch it, that’s why I TiVo’ed it. I just don’t see it as earth shattering news and don’t really see the urgency.

    I am fully prepared to “defend my position and commission”. I don’t really need any lessons from Glenn Kelman or the hand chosen Realtor of 60 Minutes. I’ve read most of what’s been blogged about the episode, I’ve read a lot of Kelman’s previous drivel, and I’ve heard the mainstream media’s slant before. Seriously, other than being able to respond to any clients direct inquiries about my feeling on the segment (and the bulk of my clients already know exactly how I feel about most of this) there’s not a whole lot of compelling reason to flip the TV on — particularly with 24 about to come one.

    But I’ll watch it.

  10. ARW – I don’t know the whole story. Ardell on Rain City Guide (who I have no reason to doubt) said she was contacted by 60 Minutes to do the segment, and summarily dismissed them when they wouldn’t budge off the 6% thing. Ardell said Marlow Harris was also contacted and either rejected them or they rejected her, I can’t tell which. Both Ardell and Marlow are prominent Seattle area agents and bloggers, and I could certainly see them being contacted by the media (they have been before).

    (all this was buried in the comments of a post on RCG – http://www.raincityguide.com/2007/05/14/redfin-on-60-minutes-%e2%80%93-something-to-monitor/ )

    And it wouldn’t surprise me one iota that the mainstream media would nix the idea of having an articulate, outspoken agent on their show who would be willing to challenge their vision of the status quo… Virtually every agent I know has “adjusted” commission rates for one reason or another. I think they’d have to dig fairly deep (at least around here) to find an old-school agent who wouldn’t budge off the mythical “standard” of 6%. Hence my choice of words when I said they hand picked the agent.

    And I saw talk on RELiberation (a “network” site) PRIOR to the show airing where some said to have the NAR talking points handy in case the media contacted them after the show. What hooey. People need to learn to speak for themselves, not regurgitate some “talking points”.

  11. Douglas Trudeau says:

    Jay, Great comments. Tied yours into the list I have built at the end of mine. When you get ready to read Active Rain I recommend reading what a non-Realtor wrote in Is ActiveRain the Best Advocate For Real Estate? He made some good points and has drawn a lot of favorable comments.

    You get what you pay for is so true. I can't wait for my Listing appoinment today. All the blogs and comments have prepared me for any objections. What a great forum to reinforce Stephen R. Covey's 7th Habit "Sharpen The Saw."

  12. Greetings,

    Nice Posted! Its so very informative and knowledgeable for your visitors or readers.

    Thank You for sharing.. Keep up the good work..

    More Power,

    Freddie Aguilar

    Real Estate Investments

  13. Richard Cook says:

    Hi Jay,

    I really enjoy your blog and the quality of your reader's comments.

    To the point, I found the 60 minutes piece to be somewhat behind the times. How long now has this argument been going on, this argument that always seems to boil down to them versus us? I would say there is room for all. I would also note that many independents are dropping their commission rates to compete with the big brokerages. This will eventually create great leverage the result of which is yet to be revealed.

    This ³US² is not an amorphous lump of discounters, to be looked at with disdain. At SellSmart we provide a yard sign, open houses, laminated postcard mailings while suffering the increase in postage, placement in the MLS, and every other service that ³THEM² offer. Other than a lower commission and a buyer rebate there is no difference between us and them. We provide innovative technology such as the Knockbox that adds another layer of service. Enabling buyers to tour a home right from the curb, at one of the most influential moments in the home shopping experience.

    As you stated earlier;

    ³Virtually every agent I know has ³adjusted² commission rates for one reason or another²

    Are those agents that ³adjusted² their commissions a threat to traditional real estate? I would say no and neither are we.

    I have to take issue with ³you get what you pay for.² I cite Google Mail, Hotmail, Blogger, WordPress and there are many other free tools out there that help shape the mindset that ³free is cheap² is dead. I note these especially because they are free yet so robust, but I am not trying to equate software to selling or buying a home. Just that the cliché ³ygwypf² as an argument is only that – cliché.

    Thanks

    Richard Cook

    SellSmart Real Estate

  14. Richard – great comment, thanks! You make an excellent point about "YGWYPF". This very blog is running on WordPress. It's a fabulous platform that didn't cost me a dime (other than the time spent on it). As you noted, software does not equal buying or selling a home. But the point is taken.

    "Traditional" real estate is changing. Agents that don't get (or believe) that are in trouble. They just don't realize it. Yet.

Trackbacks

  1. [...] Thompsson from The Phoenix Real Estate Guy makes a strong point for you get what you pay for in Redfin, 60 Minutes, whatever… Add [...]

  2. [...] past few days – from questioning the business model, to wondering out loud the relevance of even watching the segment – opinions are very interesting to read. The most thoughtful and engaging opinions of course are [...]

  3. [...] TechCrunch predicts a "really big fight between realtors and Redfin is still to come".  Sounds like a complete waste of time to me.  If/when they arrive in Phoenix, some agents may simmer and sweat. To me, it'll be another 5, 10, 100 agents in a sea of 48,000 other agents. Just as we don't fear Zillow, we don't fear Redfin. Said it before, and I'll say it again… what's the big deal about Redfin? [...]

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