TechCrunch reports that Redfin has secured another $12M in financing. I'm sure this bothers some in our industry, others probably have no clue what a Redfin is.
TechCrunch said of Redfin:
"If you find a home you like and want to place an offer, Redfin will represent you in the buying process (they have a call center with licensed real estate professionals to guide you)."
Well…. telling the buyer to call the listing agent and talking them into showing you the home, and then having YOU the buyer complete an on-line "Wizard" to fill in a purchase contract hardly qualifies as "representation", but the fact remains in some markets (not in Phoenix, yet) you can buy a home through Redfin and get some of the commission rebated back to you.
A lot of agents fear Redfin. While I think what they claim to be "representation" is preposterous, the fact is, anyone is welcome to introduce whatever real estate model they think will work (within legal limits of course, which IMHO, Redfin pushes with regard to fiduciary responsibility).
There is Walmart, and there is Nordstrom's.
There is Taco Bell and there is Ruth's Chris.
There is Redfin and there is "full service" real estate brokerage.
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?
The internet isn't going away. I suspect Redfin will, but even if that happens, someone else will come along. "Traditional" agents have several options. They can: 1) bury their heads in the sand; 2) run away; 3) whine and cry about how unfair it is; or 4) change and adapt and kick some ass.
I'm opting for the latter option.
Others Opine: SeattlePI, Bloodhound, Inman (subscription req'd soon), Redfin blog, CondoDomain, 3Oceans, 360 Digest, Kris on Bloodhound, FoREM, Jonathan Dalton (a MUST read!),
[tags]Redfin, real estate models[/tags]
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I am with the “latter option” camp myself.
In almost every market I can think of, there has always been “discount” counterparts to the “premiere” providers. I don’t mind these things. Why? Because I believe the consumer has the right to choose.
I have been maintaining a home for quite sometime. When I go to the grocery store, I have learned what can be purchased “off brand” and what cannot while still maintaining effectiveness and quality. This is not much different. Great professionals will continue to thrive because clients understand their value.
Continue to provide value, continue to be in business.
Kick ass, indeed. Redfin has been in San Diego since the beginning of this year, yet I have seen no real evidence. I am actually looking forward in a twisted sort of way to the first time we find ourselves on opposite sides of the same transaction. I do not fear them, as I know that their target audience is not mine. That, and I honestly think they will fail. Having said that, I admire their tenacity.
I’m not sure how any of the e-real-estate models is going to ultimately succeed. I have a couple of clients right now who are both very intelligent, well educated, tech savvy, thorough researchers, and generally the kind of people who would be most likely to use e-services.
Neither of them would think for a second of trying to handle their sale & purchase on their own – we talk daily, and each day I’m able to impart wisdom gained through experience that you just can learn “on the web.”
I think it’ll be a long time before the people in the “latter camp” go away!
I wanted to respond to the comment by April. If you really believe in a ‘right to choose’, why do realtors protect access to information about listings so carefully? Why are you being sued by the DOJ? The MLS is a closed, uncompetitive marketplace that only benefits agents. Try and imagine if stocks were bought and sold like houses. The SEC would never allow the games you play.
The bottom line is realtors will do *anything* to protect their undeserved 6% commission.
True Believer – I am glad you stopped by and more glad you asked an excellent question.
I am not a spokesperson for the NAR, so I can only answer for myself and the agents I do business with.
The MLS is not so much closed – at least so far as I can tell. Most agents I know have the IDX search on their website that went straight into the MLS. I had it for a long time until I rebuilt my site – you didn’t even have to sign in or register to use it – it was just there.
I have not yet paid to integrate the MLS service into my personal website, so I have added tons of self search links – from my own company to Trulia and Zillow – again, no sign up by me required. You can go to my site and search to your heart’s content – all I will ever know about you is somebody in that general vicinity was there.
I have also spent quite a bit of time showing prospective clients everything in the MLS – without a contract and without payment or the suggestion of a relationship – I like to call it service.
And you can’t compare the SEC to the NAR to the FDA to the DEA to the NCAA – they are all different animals.
I hate the fact that you have such a bad taste in your mouth for the real estate industry, but your thought that I – or most agents I know, would do anything – is just not true. Most of us have not in anyway attempted to stop any of the other business models from succeeding – I, for one, have wished them great luck. I appreciate new ideas and consumer choice. I also know that the clients I have worked with appreciated the client versus the consumer relationship. For those that prefer the other, I am glad Redfin is there to accommodate them.
Jay – sorry I took up so much of your space and linky loved myself in the comments…
The eternal question, will e- this or that come to affect significantly this business or that. The answer of course is yes, but not in the way that you imagined. 12mil in financing should not be sniffed at, as insignificant.
You raise some common sense arguments though.