Trevor Smith writes (and I respond):
Your comment about Redfin is not only ignorant it is probably borderline libel.
Please feel free to pass my comments and my contact information along to them.
Do you even know exactly what services Redfin does or does not provide?
No. What I do know is that they are attempting to build a business model based on the buyer finding the house themselves (in many cases seeing it via the listing agent) and then going to Redfin to have them write the contract.
Redfin is not doing much less than your typical traditional agent, and they are providing their customers thousands in refunds… hmmm sounds like a great business model to me.
In most states there is a little issue called procuring cause. Here is how Redfin handles it – per their website.
If you are referring to the fact that they do not show their buyers prospective properties, this is no longer true either. So, as far as I am concerned, praise God for Redfin and other discounters who are awakening America to the fact that REALTORS are overpaid.
Your email address would seem to indicate that you ARE an agent with John L. Scott (known to be a highly successful and very reputable full service company) so truthfully, I do find it a bit odd that you choose to praise God for Redfin.
The part that would not align with your own long term survival is your belief that Realtors are overpaid – if in fact, you are one. The FTC monkeys (I believe I originally referred to them as “Howler Monkeys”) share your belief – so you aren’t alone on this point. Additionally, you state that Redfin isn’t doing much less than the typical traditional agent. Yes they are – they are not really performing the vital functions of any traditional buyer agent: taking the customer from the initial contact all the way through to the closing. They are asking the buyer to go and find the house and then “give us a call and we will write it up for you”.
I have no quarrel with any agent or company that wants to rebate part or all of their commission to any or all buyers. If you want to “cut a deal” for a friend of yours or cut that same deal to anyone who will do business with you – it is fine by me. If anyone wants to start a real estate company and simply charge less – wonderful, it is the American Way.
Redfin – and they are not the only intentional leeches – there are dozens and dozens of them – always have been, always will be. There will always be people who look for ways to scam the system and take advantage of the situation. Here is their President and CEO, Glenn Kelman (from their own blog) testifying before The Subcommittee on Housing and Community Opportunity. Here is a slightly different version I found with Google. Notice that the one they have on their site didn’t include the following:
“…Just so you know where I stand, I am here today to ask that Congress act: … to ensure that consumers are able to access directly all the relevant information stored by multiple listing services about a property, so they don’t have to rely on agents.”
He wants the Federal Government to take the MLS (a Realtor created tool, designed and intended solely to offer compensation to fellow Realtors) away from Realtors and “open it up to everyone” – so he can make money as a result.
If this isn’t “I would like something for nothing” (the basic viewpoint of a criminal), what is? Here is a detailed report from a Sept 4th post from Greg Swann.
“Refunding” money they didn’t really earn by not providing any real service isn’t much of a “consumer benefit”. Take any company, any action by any company or individual or organization and pretend it could continue unchecked (nothing could or would stop it) and really think through the various ramifications. If Redfin could (don’t worry, they won’t) actually get all the business do you seriously think that there would even BE brokers left offering 3% for them to “refund 2/3 of”?
No. It is a stupid and failure bound business model that will go nowhere fast. A company like that isn’t going to even try to start up in any city with a median price that is less than 300k? Take a few cities like San Francisco and Seattle out the equation and go out into Middle America and let’s see Redfin’s consumer-minded benevolence at work.
As for calling the FTC monkeys… are you serious? You probably think the guys at Enron are innocent too.
No, I believe only some of the criminals at Enron got what they deserved. But in answer to your question, “As for calling the FTC monkeys… are you serious” Yes. They work for me. I help pay their salaries. They don’t pay mine. It is damn shame when people who work for me (I am a United States citizen and a Realtor) don’t seem to understand that listings don’t “belong to the public” – they are the property of the listing broker and as such, can be handled in the manner the listing broker deems correct. The very idea that they “think I earn too much” and also feel the need to “do something about it” clearly shows they don’t have their heads on straight. Here is lovely piece of pointless crap (that I helped pay for via my quite considerable tax dollars) the FTC legal minds found necessary to get out to the public. Only now, it is a broken link.
Enron crook, Jeff Skilling’s lawyer, David Petrocelli is getting 70 million dollars for his failed defense of Skilling. Maybe after his fee gets reduced to the “correct amount” they can get Porsche to lower the sky high prices they insist on charging.
I know for a fact that Porsche keeps their prices high so they can just keep getting more money.
Trevor Smith says:
First, I want to say that you are incredibly articulate and a great writer. You know what you believe, you’ve researched it, and you stand by it. So, as far as that goes I respect you.
Second, I am with John L Scott, where I charge 4% commission for a full service listing package. I love John L Scott, and my Broker has been very supportive of my business model.
Third, I recently interviewed with Redfin. This is not because I don’t like John L Scott, but becasue I believe in Redfin’s model. I believe that the REALTORs who will succeed in the next 30 years will likely adapt to a model similar to Redfin’s (ie lower commissions)
Fourth, by interviewing at Redfin, I learned EXACTLY how Redfin operates their business, and so when you say that Redfin is not procuring cause… respectfully you’re the monkey… because you’re wrong. Redfin, does show houses to their buyers, does do the paperwork, and does take it to closing. That is procuring cause.
Fifth, I agree with Glenn regarding the MLS. I understand why you don’t agree. I understand that this interferes with the traditional REALTOR’s business, but in the long run, it is beneficial for the consumer. A public MLS will force REALTORS to do a top notch job for less money, or get out of the industry.
Sixth, I like the FTC, but you don’t have to agree with me on this.
November 20, 2006 — 2:28 pm
Trevor Smith says:
BTW: If you don’t want the public to view all MLS data, why is there a huge button on this blog’s homepage saying, “Search the Complete Pheonix MLS.” Isn’t that a bit misleading and hypocritical?
November 20, 2006 — 2:54 pm
Cathleen Collins says:
> BTW: If you don’t want the public to view all MLS data, why is there a huge button on this blog’s homepage saying, “Search the Complete Pheonix MLS.” Isn’t that a bit misleading and hypocritical?
The easy answer to this question is you are conflating different agents. Russell Shaw, who is a power agent with John Hall & Associates (a Phoenix brokerage) and who wrote the specific Redfin piece you’re commenting on, is a frequent contributor to the BloodhoundBlog. The IDX search on the MLS that you reference is through BloodhoundRealty.com, which is Greg Swann’s brokerage. So no hypocracy – two different people are responsible.
November 20, 2006 — 6:03 pm
Trevor Smith says:
Cathleen,
Thank you for your clarification regarding that. I am new to the Bloodhound blog and I did not realize that. Please accept my apologies. I would be interested however, to see what Greg’s opinion is of allowing public access to the MLS. (including sold data)
November 21, 2006 — 3:02 pm
Cathleen Collins says:
No apology necessary Trevor. People often assume that a weblog represents the point of view of an individual, and often that’s the case. Greg writes prolifically, probably several posts a day. Russell’s on top of it, with probably one post a day. And I would probably be exaggerating if I were to claim that I posted once a week. When we started out blog, people kept confusing what I wrote as having been written by Greg, even when my post referred to Greg in the third person. (They probably thought he had some wierd Queen Victoria affectation.) That’s why we added thumbnail photos of ourselves under the title of each post, to make it easier on our readers to know who’s talking.
As to Greg’s opinion on who owns the MLS, you can see all of his articles on the subject by searching on MLS using this site’s Search function. But I think you’ll get a good idea by reading his reaction to Trulia’s oversized denouncement of the MLS.
While you’re at it you might be interested in reading what Greg has to say about the organization you hope to be employed at. There’s a lot, so I really do recommend you use the search function to look for Redfin. You’ll see that Greg and Russell are pretty much in agreement with that, too. And there’s good reason. We are all about great customer service, and about transparancy, and about not hoarding information, but none of this is justification for abusing another person.
November 22, 2006 — 8:29 am
Trevor Smith says:
Are Greg and Russell in agreement that the folks at Redfin are “criminals?”
As far as the MLS goes – lets not kid ourselves, its a monopoly. You have to belong if you want to succeed in real estate. I feel that the MLS I belong to (NWMLS – Seattle) might as well be a part of the Mafia given the way that they control their members with ridiculous rules (i.e. we can’t use the word MLS on our websites or we’ll face a $5000 fine) and overcharge their members (Dues, fees, Supra, fines, etc).
One positive thing about NWMLS is that we don’t have to be a part of NAR to join (even though I am). In many areas you have to be a part of NAR to be a part of the MLS – talk about a racket. So most REALTORS are then paying $400-$600 a year to be a part of their MLS, and then an additional $300+ to be a part of NAR and their local board. No wonder NAR is one of the most powerful lobbies in DC. Heck, here in WA state they have an office less than 100 yards from the Capitol Building.
You can read my thoughts on NAR at
http://seattletacomarealestate.blogspot.com/2006/10/realtor-vs-real-estate-agent.html
My sympathy lies with the consumer, not NAR, and not the MLS. Companies such as Redfin, which are companies that advocate for the consumer, will be the companies to succeed in the years to come.
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Despite my strong opinions, I would like to give this blog a stamp of approval for being detailed, well organized, and well written. I don’t agree with you guys on many things… but its a pleasure to be dealing with professionals.
-Trevor
November 22, 2006 — 10:28 am