image source: condodomain.com
Snatched from comments in this article: The First & Second Moments of Consumer Delight
We agree that the statement about how traditional brokerages maintain high commissions is over-broad and unnecessary. We will change it in our next release, due out at the end of February.
Having said that, we are still opposed to broker-sponsored rules that govern how Redfin and others display listings that don’t pay a commission. It seems possible to oppose such rules without personally insulting anyone. And it is undeniable that if the large brokerages opposed these rules, they wouldn’t exist. But folks like you who do oppose these rules feel unjustly tarnished by such a general statement about traditional brokerages, which is why we will change it.
We would also note that we have never called anyone unethical or greedy, though we do feel that commissions paid by the seller create unwelcome conflicts of interest between buyers’ agents and their clients.
I think that the realities are setting in that finding more likenesses between traditional and online models his goals may be reached more quickly and more easialy.
Are there commonalities? I’m willing to listen, are you? Or has the damage already been done…
Jonathan Dalton
February 5, 2008 at 12:41 pm
What are you asking, Benn?
> We would also note that we have never called anyone unethical or greedy, though we do feel that commissions paid by the seller create unwelcome conflicts of interest between buyers’ agents and their clients.
Okay. Fair enough. And what is Redfin doing to change that? Let’s check their website …
Redfin’s fee for representing a home-buyer is usually one third of the commission paid to the buyer’s agent by the seller. Redfin refunds to you the other two-thirds of that commission. Emphasis added.
The conflicts are “unwelcome” but if they’re paying their buyers back, then it’s cool? There’s a word for those who pontificate on the evils of others while ignoring their own place in the same corral. But don’t pay any attention to the man behind that curtain. Just focus on the booming voice and the special effects.
As a side note, I can list ANY home on my company’s corporate site with the seller’s permission. No co-broke required.
Benn Rosales
February 5, 2008 at 12:54 pm
I’m vague because I’m looking to see if you see any commonalities in some of the beefs Redfin has with the status-quo way of doing things.
A lot of folks beef with NAR, and disintermediation and more, so I’m wondering if there are common grounds- is there really a sincere desire on either side change the real estate landscape.
I think Glenn’s first statement was very telling and I’m wondering if there’s an opportunity here…
Thomas Johnson
February 5, 2008 at 1:08 pm
Redfin could take the high road and refuse to accept commissions from those pesky listing brokers. He doesn’t even get it. The listing commission is paid by the seller to the listing broker. He could always refuse the payment.
This is the divorcing the commissions issue which has been treated extensively on BHB
I wonder if Kelman’s VC investors want to hear that he doesn’t like the rules by which he has to play, after he has burned through how many millions? . Do they understand that they bought into a football team trying to play baseball?
[link adjusted]
Jonathan Dalton
February 5, 2008 at 2:26 pm
I don’t believe they’re legitimate beefs, Benn. It’s nothing more than the same old anti-agent spin. It’s survival is based on the current system. It cannot survive in a world where buyers proactively choose a buyers agent because when they pay for their own representation out of pocket. Many who would use Redfin for a rebate will go it alone rather than pay anyone. Such is the reality when dealing with a fiercely independent market segment.
Molly Hadley
February 6, 2008 at 12:43 pm
With bemused interest I’m watching and reading (I’m famous 🙂 , on two different blog sites. Why do brokers exist? To provide info to folks who don’t want to go to all the bother of finding it themselves, to stay focused on the transaction until completion, and to act as a liason between parties to ensure a successful transaction. Am I leaving something out?
I’ve had some darn savy clients who could have very easily bought or sold their properties without my services. Those smart people choose to use me because having someone ithey trusted in the middle brokering the deal seemed the intelligent thing to do. It could have been as simple as they didn’t have the time to devote to the deal, they didn’t have the amount of info I did, not because I was hording it, but because I spent every work day over the course of years emmersing myself in the market details and they didn’t. And finally, it could have been to give themselves distance from the negotiation so they could focus on their bottom line and not get caught up in an exchange with the other party. (objectivity in the negotiation.)
The fact is, brokers were invented to fill a need and buyers and sellers liked the service enough to keep it in existance. MLS services were devised, implemented, and maintained by real estate brokers to facilitate sales. I’m all for throwing open the doors on that info but I understand why r.e. professionals don’t want to give away their livelyhoods. Those listings represent trusted relationships that have been fostered with clients. I’m not about to publish my client list for all to see and mls services aren’t interested in giving it away for free either. I don’t think Kelman gets it. He’s so focused on being the buyers best online houdini tech friend and protector and next big idea thinker that he’s forgetting that buying is tied to selling and there is a much larger picture than he’s looking at. Maybe he will get it and survive the trial by fire becoming an online pheonix of phenomenal proportions.
T. Longo
March 22, 2011 at 2:51 pm
Wow…looking back 2+ years ago. If I had only left Glenn hanging upside down, we may have been able to take more market share 🙂