Redfin, 60 Minutes, whatever…


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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