Thread: My REDFIN experiment is a FLOP! The concept is all wrong!

I agree completely and am not surprised by your results at all. Very few of our past clients would have even possibly fit into the narrow Redfin mould. Most need (and want) all the hand holding, advice at every step, assistance finding a mortgage, insurance, contacting utility companies, etc.

On the other side of the sale there are flat rate listings. We've tried it for nearly a year now, and to date there are no takers. People either don't have the money up front, or simply wan't the full package and don't what to do it themselves. So far the callers we have had for it have talked themselves into a normal listing.

-Tim

yeah, I'm not so hot on there little set up...I kind of see it like the dot com boom...now we see it and soon enough we'll be saying "now we don't" but hey..I guess they meant good with it and saw an opportunity and went after it. I just don't like them very much and would never tell a client to use them....but that is just me. what do I know? haha

Funny they had made the same argument about Wal-Mart and how impersonable and crowded they are and how Amazon had never made a dime on internet shopping. This is simply creating a new habit that people can adjust in the long run. I am still scared.

I just don't think it's will have much of an impact because unlike walmart and amazon, it's not something most people do weekly or monthly. So it's not something most will become acustom to or learn enough on their own to do comfortably. There will be a few, but I think it will be a relativly small number. In large enough markets (and in states were such a rebate is legal) it may be enough to run a business on such an approach.

-Tim

Originally Posted by Falcon Living

Funny they had made the same argument about Wal-Mart and how impersonable and crowded they are and how Amazon had never made a dime on internet shopping. This is simply creating a new habit that people can adjust in the long run. I am still scared.

I just don't see it. Wal-Mart provides a service that works for a discount. It looks like REDFIN provides a discount but no real service.

From June 16 to July 8, Redfin is not accepting new listing customers. You can submit listing information now if you'd like, but we will not contact you or list your property until July 9. If Redfin has already committed to listing your property, you can be sure that we will continue to meet your highest expectations.
But why are we turning away new business? In Southern California, new listing business increased by a factor of ten in one month; in the Bay Area it tripled. Continuing to take new listings would strain our ability to offer customers great service. Since one of our core principles is putting customers before profits, we are focusing on the customers we already have.
We will continue to represent buyers because our buyers' agents still have the capacity to serve an increasing number of new customers well. We will only resume listing properties when we can offer every new listing customer the same fanatical service that got us this far in the first place, which we expect will take us a few weeks. You can send us feedback via our blog or by using a form to send us e-mail.
Thanks for your support, and we apologize for this interruption in our service.
Regards,
Glenn
Dave, Mike and I decided to do this after a conference call last night about California, where several of our agents have been working for weeks without a day off. Some of the increase in demand is simply seasonal, some of it is the result of being on 60 Minutes, some of it seems like a freak of nature.
At company meetings, we always talk about how happy customers are more important to our long-term success than profits, and so we felt that we had no choice but to stop taking new listing business. Restaurants and planes fill up, doctors sometimes can't take new patients. You can add more tables or seats, you can rush through appointments, but the people already committed to you don't appreciate it.
Someone already asked me if this is a PR stunt. No, it is not. If it were, we would have announced it on Monday morning, with a press release, during a competitive lull. We are discussing this here on the blog on the assumption that people would find out about it sooner or later, and they may as well find out from us. We got the word out as soon as we could; a few engineers have had to stay late to make changes to our site. Thank you Savan, Shahaf and Jeff for giving it up on a Friday night, to Cynthia too.

Originally Posted by realestatefla1

It`s amazing how many people are afraid of the unknown. Several weeks ago 60 minutes ran a story on Redfin and it`s e-commerce business model. For whatever reason it seemed to have caused a BUZZ in the "Real Estate Industry" and many Realtors were visibly shaken. We like to try new cutting edge marketing ideas so we decided to experiment with the Redfin idea and concept, it`s not a new concept by any means,but the marketing of this company I must admit is suburb! When you spend zillions in getting the "BUZZ OUT" this happens people start believing the perception,not the Reality. It appeared Leslie Stahl did!

On Refins web site it clearly states:The concept of Redfin is simple:home-buying program that combines an e-commerce application with the services of a local, experienced agents. Home-buyers who can find a home to buy on their own get 2/3rds of commission refunded at closing. The agent handles home tours, pricing advice, offer presentation, negotiations, inspections and the closing process.

Nice and simple, buyers should be ecstatic to receive 2/3rds commission for driving around and securing a home, right? WRONG!!
Our informal experiment was tested on three different buyers, we explained to them we`ll send them the MLS listings, they`ll email or call us with the homes they`d like to see and if they like any we`ll write the contract and send it to the Sellers Agent! Presto, Chango, we sit back at our desk like the Redfin people and wait to write offers which naturally are accepted within hours as the Refin CEO explained to Leslie Stahl on 60 minutes.
Well, let me give you an indication of how it didn`t work and what went wrong!
Couple #1 Mindy and Jeff: Two very bright urban professionals from Coconut Grove want to live in Weston, Florida, we email back and forth for 4 days and finally speak on the telephone, they give me their criteria i send them 10 properties we agree that Saturday is a great time to set up appointments for them and i arrange for them to view these homes. One major issue, out of the 10 properties they wish to view only 1 agent can meet them at the home, the other 9 are on SUPRA or combination Lockbox, out of that 7 are in gated communities which means that an agent must accompany them. I politely explain this to Mindy and Jeff and they really want to see these homes, I explain that if i have to come out and show them property I can ill afford to rebate my 2/3rds commission to them, after all the Redfin model makes it look so EASY!!! The couple agree and we place an offer on a home, no answer yet from the seller, but the Redfin model has alot of major flaws.

Couple #2 Heather and Gregory are from Boston, they`ve heard of Redfin because they`re in Boston. They haven`t had anyone tell them anything good or bad about the company or the 2/3rds rebate program. I send them 30 properties before they arrive, I detail maps,schools etc. to these people,they`re extremely grateful, they`ll be arriving this Friday. One problem, they won`t be able to have a car, they need someone to pick them up at the Hotel and show them property! Again, I shake my head, "THIS REDFIN CONCEPT' is supposed to be so easy i keep repeating to myself!!! How the heck does Redfin accomplish this task from a laptop and office without taking a client out I wonder?!!

Couple #3 Jose and Beth are from Davie, they`re renting right now and need assistance with a mortgage. They`ll be ready to start looking in another month or so, therefore, the concept of rebating them 2/3rds commission isn`t that important to them, what is important is securing the right mortgage for them!

My Redfin experiment was a failure! I`m not criticizing Redfin at all for having this type of business model, what i don`t get and this is where we`re confused is how do the agents at Redfin get other agents to "Open Doors" for their clients?
What seller would allow a stranger to enter into a home without a licensed agent next to them, what Real Estate office would incur the liability for allowing people to enter into a home without an agent?
Do you realize how many wackos there are?
My other concern is that no matter what our profession still entails ONE-ON-ONE service and that`s FACE-TO-FACE, no matter how savvy a buyer they still want to know that their Realtor is there. I don`t care how many emails you`ve sent, at the end it`s all about meeting and greeting the client and no virtual e-commerce will change that!!!

Thanks for sharing your experiment with us! I have never been a fan of Refin's business model and the 60 Minutes feature irritates me every time I think about it.

the part your missing out on is when the unlicensed buyer calls the selling agent, says, hi i am acting as my own realtor, please show me this property. the realtor either does it or says no. If he does it, fine. But if the realtor says no, the buyer submits a contract CONTINGENT ON VIEWING THE PROPERTY BECAUSE THE AGENT REFUSED TO SHOW IT, the listing agent is legally bound to go to his sellers and submit this contract. it makes them look ridiculous, and redfin can get a news story written about it

That is great that someone test REDFIN's idea in real life. That's right, we are afraid a new ideas sometime, but also they are attractive to us and make us think "Why I didn't come up with that?.." However, to test new idea -- is bold approach. I really admire realestatefla1 and appreciate his feedback at whole experiment.