Redfin on 60 min

[ns2524_IHB]

Did you guys watch Redfin on 60 min last night? Very interesting expose about online real estate companies. <a href="http://www.cbsnews.com/sections/i_video/main500251.shtml?id=2796105n">http://www.cbsnews.com/sections/i_video/main500251.shtml?id=2796105n</a>



It should ansewr some questions about:

<a href="http://forums.irvinehousingblog.com/discussion/261/re-agents-are-they-worth-it-and-are-there-other-options/#Item_33">RE Agents, are they worth it and are there other options?</a>

 

[Trooper_IHB]

Why doesn't Redfin (and all other E realty businesses) just create their own MLS.....like an EMLS. And keep the conventional Realtors from accessing or posting on it. We'll see who wins. Who says the existing MLS is the ONLY service that can handle such data. C'mon programmers ! Get to work. Create a whole new type of data base that does virtually the same thing, but doesn't infringe on their precious MLS. Is it possible?

 

[nirvinerealtor_IHB]

<p>Trooper,</p>

<p>I am following Redfin and see if the business will grow or contract. I found the following info in the DRE webpage.</p>

<p>Broker name: Yevgeny Voloshin. Thanks for ns2425's post, I got to see the broker's face.</p>

<p>License date since January 02, 2006</p>

<p>Former business names: Global Equity Solutions and Appliance Computing Inc. Looks like the broker is a Techie - probably a programmer </p>

<p>Refin currently has 8 agents: 5 in the bay area, 1 in OC (Irvine 92602), and 2 in LA area.</p>

<p>I checked the Refin listings, they do coop with other agents at 2.5 -3% commission. The strange thing was they tell coop agents to contact the seller for everything!. If Redfin does not show up due to far distance, then who is representing the seller?. I will need to check with my broker about this type of set up.</p>

<p>8 Sales persons and 66-80% buyer's rebate and $3,000 per listing, Mr. Voloshin will need investors to fund his own MLS and/or his company overhead. I think his biggest income would have to come from buyer leads which are coming from the Redfin listings on the MLS.</p>

<p>There are always issues and questions after the transactions close. I wonder how Redfin does post-sale customer service.</p>

 

[awgee_IHB]

"I checked the Refin listings, they do coop with other agents at 2.5 -3% commission. The strange thing was they tell coop agents to contact the seller for everything!. If Redfin does not show up due to far distance, then who is representing the seller?. I will need to check with my broker about this type of set up."

<p>Doesn't sound strange to me. It sounds like Redfin is catering to the new breed of home seller who realizes that what they need is a marketplace on which to show their home, but they realize they do not need anyone to "represent" them. It seems folks are figuring out that selling and buying agents actually represent themselves and their own commissions and a buyer and a seller have much more negotiating freedom without the extra 5-6% they have to pay. It seems like the seller is representing the seller. Thank goodness for entrepeneurs like Mr. Voloshin who can create a win-win situation for buyer and seller and save both some money.</p>

 

[Trooper_IHB]

<p> "<em>The strange thing was they tell coop agents to contact the seller for everything!" </em>.</p>

<p>Holy Cow NIR,</p>

<p>If I was going to save up to 25K by fielding phone calls from buyer's agents, I say "call me at 3:00 am if need be". Can you say that? I would be working for me 24/7, totally dedicated to only <em>one</em> listing.</p>

<p>I can see how Redfin, and all the other upstarts like it, will eventually be the traditional Realtors downfall. I believe it has to do with pure greed and collusion on the collective Realtors part....refusing to drop below 6% because "I'm worth it". Agents not showing homes to prospective buyers because their split on commission might only be 2% (on a negotiated 4% listing). To me that means the house I'm trying to buy just got jacked up 42K in price, so the seller can cover your commission. It also has <em>contributed</em> to the rapid acceleration of home prices due to this fact. Tell me what justifies you making 21K (your 3%) on the sale of a 700K home? </p>

<p>I'm originally from Connecticut, we only needed a lawyer to handle the closing. A Realtor was not necessary unless you chose to use one. My parents bought and sold 4 homes this way. They stuck a sign out in the front yard and marketed it themselves. It worked every time and saved them boatloads. I believe that saavy sellers have finally decided to stop being lemmings and investigate other options and have seen beyond the irrational fear of "but we HAVE to use a Realtor....God forbid, it's a minefield out there"! </p>

<p>Regarding the stranglehold on the MLS, I'm thinking along the lines of Redfin creating a competitor. Kind of like how your FICO score is monitored and reported by "The Three Major Credit Bureaus". Three different companies, doing virtually the same thing...with the same data. Yes, it would take capital....not sure about the viability of gains on such an investment. I'll leave that up to you economics folks. I do know this, competition is always healthy for the consumer.</p>

<p>.....and by the NAR shielding the MLS from Redfin, etc., I feel it is hurting the consumer. But we'll let the Supreme Court tell you that. </p>

<p>Thank you for your comments. I enjoy hearing things from your perspective and I've created a mental picture of what you look like "puffing" ! You get beat up in here once in a while. No disrespect here, just dissent.</p>

<p>.</p>

<p> </p>

 

[nirvinerealtor_IHB]

<p>Trooper,</p>

<p>I got a good laugh out of you saying you picture me "puffing" . If you have had trusted me you would be calling my "puffing" as "guidance" instead. That is why I said this business is all about trust. Very similar to marriage. I considered myself very "blessed" to be gainfully employed in RE; I would meet a complete stranger and they would give me all their personal information such as SS# as they felt that I can be trusted. </p>

<p>I think realtors in CA have too much responsibilities and competition is fierce. Commission rate is not set by law. You wonder with so many realtors competing, why rate is still hoovering around 5-6%. And the sellers are the ones who are accepting these rates.</p>

<p>Things always look very different from the outside.</p>

<p>I have no idea how well companies like Redfin would fit in the real estate landscape as time will tell. As you said, there is a demand for low/no fee real estate services; and Redfin is responding to such. I do not see anything wrong with that. However, the broker is only licensed since Jan 2006, a very slow period. Hmm!</p>

<p>As far as information being blocked as claimed by Redfin. This is not a fair statement. You know well that sites such as Homeseekers.com and Realtor.com have been supplying properties info to the public for years. The LIMITED informations are downloaded from the MLS, which is financed by agent yearly dues of several hundred dollars EACH.</p>

<p>You would not want the credit agencies to provide your FICO information to the public.</p>

<p>Same as a seller, you would not want the MLS to tell your neighbors you have to sell because of a situation like divorce, lost of job, ..... You would not want to MLS to tell everyone that your house is vacant so anyone needs a place to crash at night can break in your house. You would not want your neighbors to know that you are offering too low or too high of a commission to agents. The list goes on. Private information should stay private. </p>

 

[Owen_IHB]

<p>Redfin obviously makes sense if you can find the house yourself. Irvine is a perfect example of where Redfirn will flourish, I think. The reason is that a buyer in Irvine does not need a lot of expertise to find a neighborhood or to find a unique house or to evaluate pricing. Every neighborhood was built around the same time with many of the same houses, so comparables are easy to get. Variations between houses and neighborhoods are obvious and often minimal. In Irvine, there is not of a lot of expertise involved in finding a house or neighborhood, nor is there expertise involved in pricing houses. </p>

<p>In summary, for Irvine, a real estate agent probably cannot add any much if any value for a buyer. The buyer can search online, view pictures and tour houses that seem interesting. Exactly what additional service does the agent provide a buyer in Irvine?</p>

<p>Now in places like Los Angeles, Laguna Beach or Long Beach, where there is a lot of variation in the housing and neighborhoods, and where it might be harder to find a unqiue house, a real esate agent may add value, potentially worth the 3% fee. </p>

<p>The travel agent analogy is somewhat apt, although not perfectly so. Sure, buying a house is not the same as buying a ticket to Cleveland. But in Irvine at least, housing can be readily evaluated and priced just like commodites such as airfare.. However, there will always be a need for travel agents for special or complicated travel.</p>

<p>I haven't thought as much about what the value agents add for sellers. They definitely add some if they have to show your house 50-100 times!</p>

<p>I think the toughest question agents have to answer is why their commissions have stayed at 6% when the price of housing has doubled (or whatever) in the past 8 years. Agents expenses have not doubled during this time. So shouldn't commission percentages have gone down a little?</p>

<p>I don't begrudge real estate agents for trying to make a living. But in certain situations (e.g. Irvine), I think they will go the way of travel agents. </p>