This is me in a comment at Mike’s Corner. Mike Price is looking for nominations for the most influential mavericks in the real estate industry, individuals and companies. Share your thoughts with him.
I’ve been thinking about this quite a bit lately, although the words I use in my own mind are closer to “renegade” or “heretic.” And the context is immense, at least to my way of thinking: The story of The West, in capitals, as against The East, is the story of Socrates, the man who chose to die rather than bend to the will of the mob. The Nazarene was the key popularizer of the tale, but if you look for it, you will find it reflected in every enduring story of The West.
Most fundamentally, The West is the heretic, the renegade, the maverick, the man or woman who stands — “not high it may be but alone” — for new truth, standing down all of received wisdom. This is why The West is so outrageously dynamic, where The East, broadly defined, celebrates and venerates that which is traditional and unchanging.
So who would I pick as the maverick individual and company bringing the most change to the real estate industry right now?
Glenn Kelman and Redfin.com.
My experience of the man has been overwhelmingly negative, and I don’t care for the way the company operates: It foists its agency responsibilities onto listing agents, then publicly vilifies them if they object to this cowbird-like behavior.
But someone at Redfin.com — or possibly some unknown maverick — figured out that the contradiction of the listing agent compensating the buyer’s agent could be exploited to market advantage, and this one innovation, in due course, will — at a minimum — divorce the two commissions from one another, resulting in a true buyer’s agency at last. It may also serve to eliminate the proprietarian idea of the MLS, a serendipitous side-effect.
I don’t think Redfin.com can survive as a business, at least not in its present form. Its head-count is huge for the volume it is doing. The proportional rebate system makes it impossible for the company to move down market, where the greater volume of transactions are to be found. And, in the long run, divorced from the listing agreement or not, buyer’s agent’s commissions are going to drop to a rational level. The future belongs to actual business people, among whom few are to be found in the real estate business today.
Even so, my vote for the mavericks of greatest contemporary influence on the real estate industry: Glenn Kelman and Redfin.com.
Now, just my luck, my remarks will incite anew the rash of inane comments from “Simon”, Redfin’s Kelmaniacal sock-puppet, but this is the price we must pay. It were well for us to love the truth, but it is sufficient merely to live with it…
Technorati Tags: blogging, compensation for buyer representation, disintermediation, real estate marketing
Mike Bliss says:
Give me a smaller and hungrier Real Estate Agency over a bloated one anyday. I want my Realtor to be gentle with me as a buyer but aggressive enough to bring me what I want, and super aggressive for me when I sell. I think the larger firms lose sight of this, and though I do not live in the Pheonix area, I would seek out a hungry firm like yours if I needed to relocate. It’s not about wham-bam-thank-you-ma’am sales and forget ’em like some of the lesser agents have been doing for the last few boom years. It’s about forging a relationship that will last years. I’ve had my buyer’s agent over to my place for cocktails and will use her again, when I must.
October 23, 2006 — 3:52 pm
ardell dellaloggia says:
I have met many people who have “thought about” using Redfin, it’s one of those easier said than done kind of business models. Most buyers really don’t know how to “do it themselves” as many For Sale By Owners and For Sale By Owner business models soon find out. Doesn’t work well for the “What do I do next?” kind of buyers.
Still, I think the business model could work, though it could work better without the “showing property” feature.
If there were no mls fee, as you seem to espouse, Redfin would soar! If there were no Procuring Cause issues to prevent agents complaining if they see houses with an agent, and then go buy it on Redfin, the business model would be fabulous!
So be careful what you wish for there, Greg 😉 How do you propose an agent would be protected, without Procuring Cause, if they showed a buyer property until the found one, and then the buyer went to Redfin to purchase it and get back 2%?
October 24, 2006 — 2:08 pm