Redfin announced their 3.0 version here.
I think Redfin should roll out a new version every year, because they are the only ones doing the talking – it makes the environment more exciting. They come off as innovative and cutting-edge, but it’s only because no other major brokerage puts up a fight.
If it weren’t for Redfin, would there be any innovation in the real estate business?
Zip Realty is in the death spiral, Hurt-U-Sell/Assist-2-Sell are non-existent, and the major traditional companies still run full-color newspaper ads or corny Super Bowl commercials and pray that their agents can bring in business the old-fashioned way.
Redfin offers two compelling reasons for consumers to do business with them:
A. Their terrific website, which has to be a great loyalty-builder.
I think consumers would be happy with one of the above, and Redfin offers both! Yet, they aren’t a major player in San Diego – in fact, they have barely made a dent.
According to the MLS, Redfin sold 188 homes in SD County last year, or less than 1% of the 33,069 total sales.
They have 22 licensees on the MLS who have local phone numbers, so they have a decent-sized crew here – plus the two compelling offers above. They really should dominate , but they don’t – why not?
Reasons Why Redfin Doesn’t Dominate:
1. They don’t have “killer instinct”, from the top down.
Glenn Kelman has insisted on ‘playing nice’ with other brokers and agents. The latest 3.0 version sounds like more of the same; that he wants to operate within the traditional confines of big brokerages. He has received $46 million of venture capital, which has allowed him to be very patient. But after 5+ years, we have only seen occasional tweaks or gimmicks – he’s not blowing up the entire industry (which deserves to be blown up).
It’s the same with the local salaried agents – they are graded by their clients, so they will play nice too. The agent reviews read great on their website, which re-enforces the lovey-dovey sales technique.
2. Redfin gets an undeserved bad rap with traditional agents.
Other agents are slow to accept change, and will always consider Redfin agents as part of some renegade discount brokerage. If it comes down to taking an offer from a Redfin agent, or from an agent or brokerage they feel more comfortable with, Redfin will lose most of the time.
It is undeserved because Redfin agents at least know their way around a deal – they are full-timers who are in the game daily, which you can’t say about most agents.
3. Soft agents sell what’s left to them by aggressive agents.
The most successful agents work on commission, because they can. They typically possess superior market knowledge, but most importantly, they have the most effective sales skills.
The top agents sell the best deals, because they have the killer instinct that makes them ultra-competitive – they want to win. The soft agents sell the leftovers.
4. Redfin claims to be transparent, but….
When you see that Stephanie Walker has sold 50 deals in the last 12 months, that is her whole team’s total, which on the website looks like it includes 10 other people.
There is no official guidelines in the world for reporting sales, so no big deal, but if transparency is their rallying cry, then they should make it more obvious that 50 is the team’s total, and not one person.
Redfin also claims to have the best agents, but with no industry standard, they just sound like the rest of the fluff spinners. They deserve credit for making client satisfaction a key component of their program, but to then to twist it further and call your agents the ‘best’, is stretching it.
In summary: I am a fan of Redfin – their website is top-notch, and I loved when they published the sales statistics on every agent. I hope it comes back!
All four items above could be remedied, and if done, I think Redfin could take over the real estate world one day. Glenn, if you are reading this, I could tell you how to do it. But it will cost you! 😆
P.S. I took the death spiral remark from a comment at this link that also reviews the Redfin change:
Here is another article – with great comments: