Industry maverick Redfin today launched an initiative aimed at defining and protecting real estate consumers’ rights. (See Inman’s coverage here, unfortunately behind a subscription wall.) CEO Glenn Kelman gave myself and some others a preview of it yesterday and asked if we would be willing to put our name down in support of it. Knowing full well it could draw the ire of my fellow agents and re.net writers, I decided to do so.
Why did I do so?
Not because I am uncritically accepting of everything Redfin foes; quite the contrary, I have called them out on blurring the distinction between correlation and causation (see my articles Redfin Numbers Food Fight and Agents Who Take More Pictures are Better Negotiators), I have criticized their advertising as needless stick-it-in-the-eye tactics, and I have criticized Glenn for making reckless statements to the media that do nothing to endear him to the real estate community.
Not because I think Redfin’s business model will revolutionize the industry and change the way things are done forever. Quite the contrary, I remain skeptical that reimbursing 2/3rds of the commission on the revenue side, while spending heaps of money on the technology side, is a long-term recipe for success.
Why then am I supporting this initiative? Simply because I like the idea of somebody shaking up this industry and standing up for the consumer, and if that “somebody” happens to be a competitor, so be it. I have never doubted Glenn’s commitment to being firmly on the consumer’s side, and I have no problem with his company making money from it. I don’t even have a problem with Redfin getting positive publicity from it because I know that’s not the primary reason they’re launching this initiative.
As this conversation continues — which will no doubt become quite contentious, as befits many Redfin initiatives — we’ll get into the meat and potatoes of the Bill of Rights itself. I’m not in unanimous consent on all the issues — for instance, I think there are situations in which dual agency is not only needed, but is best for both clients — but overall I like what I see and I’m happy putting my name behind it.
Tags: Alternative business models, Consumer, Glenn Kelman, Industry, Real estate, Redfin
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13 responses so far ↓
1 The Real Estate Consumer Bill of Rights | Rain City Guide | A Seattle Real Estate Blog... // Apr 2, 2007 at 9:07 am
[...] Greg Swann of BloodHoundBlog in Arizona, Kevin Boer of 3 Oceans in the CA Bay Area, Kris Berg and I were contacted by Glenn Kelman of Redfin prior to the Inman anouncement and asked to support The Consumer Bill of Rights on Redfin’s site. The email we received is posted in Greg’s article today. [...]
2 BloodhoundBlog // Apr 2, 2007 at 9:18 am
Redfin.com’s Real Estate Consumer’s Bill of Rights: A wolf in sheepskin clothing . . ….
I am a hardliner on the subject of reform in the real estate industry. Over the last nine months, I have written at great length about, among other things, the skill-set required to survive in the future of full-service real estate, empowering buyers, …
3 Blue Collar Agents Blog - Redfin Introduces Consumer Bill of Rights // Apr 2, 2007 at 9:44 am
[...] Also, take a look at Greg Swann’s, Ardell’s, and Kevin Boer’s view on the Bill of Rights. [...]
4 Afthird // Apr 2, 2007 at 10:24 am
This is Redfin’s bill of self serving rights, not the consumers.
Keven, before you jump on board how about pushing to get a good set of rights. I suggested they add these three to their bill of rights:
1. Know how experienced your agent is. How many years have they been a real estate agent. How many homes did they personally transact last year. How about the year before, and the year before that? In how many transactions were they representing the buyer and how many the seller?
2. Know if your agent is a local market expert. How many homes have they personally sold in this neighborhood? How about this zip code? How far away do they live? How long have they lived in the area? Have they been around long enough to see the ups and downs of the real estate market? Is your agent involved in the local community?
3. Know how much expert realty advice you will receive from your agent. Will they use their market knowledge to help you find the perfect home? Will they advise you on if a property is a good or bad investment? Will they tell you to avoid homes that are bad choices based on their experience? Will they personally be on the lookout for a home that meets your needs even before it comes on the market?
5 Kevin Boer, Realtor, 3 Oceans Real Estate // Apr 2, 2007 at 10:41 am
Those look like excellent suggestions to add in to this initiative. I’m under no illusion that the first version is the final and best thing we could ever come up with.
6 Redfin’s So-Called Bill of Rights | Phoenix Arizona Real Estate - Dalton’s Arizona Homes Blog // Apr 2, 2007 at 2:58 pm
[...] 3 Oceans Real Estate: Redfin Launches Consumers’ Bill of Rights [...]
7 James Hayton // Apr 2, 2007 at 3:11 pm
Kevin, I am a real estate agent with Windermere in Kirkland, WA and I read your blog every now and again…I really enjoy your little tidbits…Keep up the good work!
Anyway, all I can say is I am glad that you are willing to put down your name in favor of something such as this…It’s not a perfect bill, but that is not the point in my mind. While I disagree with a few things that Refin/Glenn are doing/saying…I agree with them wholeheartedly that the industry is in need of reform. In my mind consumers deserve more. Regardless of whether you stand on the full service side of the fence or the limited service side, everyone needs to acknowledge that the real estate industry could use a shift in thinking. I readily welcome a more consumer centric attitude…
Just my 2 cents…
8 RE Agent in CT » Redfin Consumer Bill Of Rights Is McWeaksauce // Apr 2, 2007 at 8:31 pm
[...] What on earth is going on with the parseltongue utterance from Redfin? Catch up to the plot from Greg Swann, Kevin Boer and Ardell DellaLoggia, they all take different views. Redfin leaked the news to all three and Kris Berg early. No report from Kris as yet – she turns a bigger profit than Redfin though, so she can take her time. [...]
9 Jonathan Dalton // Apr 2, 2007 at 8:37 pm
If it truly provided some benefit to the consumer, Kevin, I would support it. But I’m seeing as much here to protect and promote Redfin’s model than anything else.
As I said somewhere (I’ve lost track) … if you support this, then you support Redfin’s model over whatever model you may have. If you’re against it, you’re being painted as being un-American and against mom, apple pie and everything else.
I’d hate to think we’re so desperate for reform that we’ll settle for self-promotion disguised as concern in the interim.
10 Danilo Bogdanovic // Apr 3, 2007 at 10:28 am
Great concept, but…
How about doing a random survey of home buyers, home sellers as well as renters and asking THEM what they want their rights to be. If it’s the “Consumer” Bill Of Rights, then shouldn’t consumers have the most input?
11 Wisest of the crowds » Consumer Bill Rights - thanks Glenn! // Apr 3, 2007 at 12:23 pm
[...] A lot of people have spent considerable time weighing in. Notable positive reviews include Kevin Boer of 3 Oceans Real Estate and Joel Burlesome of Future of Real Estate. Notable undeclared bloggers are Ardell Dellaloggia of Rain City and Christine Forgione of NY Houses for sale. A thorough and negative review comes from Greg Swann of Bloodhound. All worth a read. [...]
12 Reuben Moore // Apr 6, 2007 at 7:28 am
Red Herring Real Estate….
Redfin’s “Real Estate Consumer’s Bill of Rights” and their entire business model is a distraction from the real structural issues in the real estate business. The Redfin goal is not to address the issues in our industry, but to simply take advantage of them.
I propose we re-name them, “Red Herring Real Estate”.
13 Reuben Moore // May 5, 2007 at 10:03 am
Consumer protection, Redfin style:
Redfin tells their buyers to contact the listing agent to view properties. If the listing agent is uncooperative, Redfin threatens to simply bypass the listing agent and go directly to the seller. Redfin’s thinking is that the listing agent is not going to like this because the seller hired the listing agent to sell the property and they will be hopping mad when they (the seller) discovers that the listing agent is refusing to show their property.
I wonder what is going to happen when Redfin inevitably encounters a listing agent/firm that offers the same type of consumer protection to the seller.
Buyer: Hi, we’d like to see your listing at 101 Main Street.
Listing Agent: Hey, that’s Great! Are you working with an agent?
Buyer: Yes, we hired Redfin to represent us as our buyer’s agent.
Listing Agent: Excellent! All of our properties are MLS listed, and as MLS members, Redfin can show it to you.
Buyer: But that is not the way Redfin works, we need you to show it to us.
Listing Agent: Nah, my own clients keep me pretty busy. And besides, the game’s about to start.
Buyer: Hello, Mr. Seller? I am a potential buyer interested in seeing your property for sale.
Seller: Great! Call my listing agent.
Buyer: You know, I did that. And, he would not show it to me! Can you believe that?
Seller: Well…are, you already working with a real estate agent?
Buyer: Yes, we are working with Redfin.
Seller: Well, I am not familiar with that firm, but no doubt, they would be delighted to show you the property.
Buyer: Well, no Mr. Seller, that is not how Redfin works. You see, when we use Redfin, the listing agent or the seller must show us the property.
Seller: I see, well I hired a real estate agent to sell my property because I don’t have time to deal with it myself. That’s the whole reason I agreed to pay them a commission.
Buyer: Well exactly! And, can you believe that that listing agent you hired is not willing to do what you are paying them for?!?
Seller: How’s that?
Buyer: Well, he won’t show me the property!
Seller: You know, as I recall, the majority of the real estate commission I am paying is actually turned over to the buyer’s agent.
Buyer: Well, you see, Redfin rebates two-thirds of their commission to me, as the buyer.
Seller: Well, okay, I guess. I mean, I really do not care what they do with the commission so long as my property gets sold. Nevertheless, I am paying them to show the property.
Buyer: Actually, Mr. Seller, as the buyer, I am the only person bringing money to this transaction.
Seller: That may be true, but as the seller, I am accepting a net less than the market value of the property in order to fund these two real estate agents. So you might say that we are each paying our share, maybe? But okay, for the sake of argument, YOU are paying the buyer’s agent to show you the property. So, get them to show it to you….
Buyer: Well, not really, because they are rebating the money back to me.
Seller: So, you are NOT paying them to show you the property?
Seller: Well then, who exactly are you paying to show you the property?
Buyer: Ah, I guess, no one.
Seller: Have a nice day….
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