two general questions

[rkp]

First, if you are using Best Buy as a place to see and feel products and then buy online, Best Buy is losing money regardless of an employee's time showing you the product or not.  And as you know, this is a real problem for B&Ms and hence the idea of experience zones and acting as a demonstration site more than a selling site.

Second, if you care about the time and money factor of the individual, then you should really tour more houses with redfin.  Their touring agents are paid for just touring and arent the ones that make the offer (as told to me by redfin agent 2 years ago).  They are happy to show you more houses as they get bonuses on ratings of each tour.  Redfin as a company loses money if your only intention is touring with them and not purchasing through them.  But they know this and explicitly state that there is no obligation on their website.

 

[eyephone]

I had good experiences with Redfin Agents. (Nothing bad to say about them, professional, nice)

BUT I never used them to buy or sell.

 

[qwerty]

Redfin is aware that people use them to see houses and make offers with someone else. If Redfin doesn't have a problem with it than no on else should either.

So you know this for a fact? You've spoken to Redfin agents who are totally okay with this? I have a feeling you're just defending USC with a bit of hyperbole.

I should go post over at the Redfin forums and see what they
say.

Redfin agents are salaried not commission based so they get paid whether they show 1 home or 30. So the agent salaries are somewhat of a fixed cost similar to best buy fixed costs for store rent and display costs. Redfin incurs the costs whether u view a house or not just like best buy incurs the rent/salaries/display costs whether u go in the store or not.

I'm sure Redfin builds into their cost model these folks that use their agents but don't plan to buy with them. And if Redfin had an issue they would change their business model right?
https://www.redfin.com/real-estate-agents/redfin-agents

 

[irvinehomeowner]

Second, if you care about the time and money factor of the individual, then you should really tour more houses with redfin.  Their touring agents are paid for just touring and arent the ones that make the offer (as told to me by redfin agent 2 years ago).  They are happy to show you more houses as they get bonuses on ratings of each tour.  Redfin as a company loses money if your only intention is touring with them and not purchasing through them.  But they know this and explicitly state that there is no obligation on their website.

I understand that.

But that doesn't mean it's okay to use that as an excuse to have a buyer use them to do the work when they have no intention of using them. Or at minimum, to say there is no "expectation". Like you said, Redfin loses money on buyers who don't transact with them, so I would think Redfin would have some "problem" with a buyer who knowingly does that.

 

[irvinehomeowner]

So Redfin agents don't get any bonus if they represent a buyer in a sale?

It's like going to a car dealer and telling the salesperson that you don't plan on buying from them, you just want to drive the car... you think that salesperson won't mind? Sure, maybe he'll do it and hope you do end up buying with him because he impressed you but there is that "expectation" thing again.

 

[rkp]

Second, if you care about the time and money factor of the individual, then you should really tour more houses with redfin.  Their touring agents are paid for just touring and arent the ones that make the offer (as told to me by redfin agent 2 years ago).  They are happy to show you more houses as they get bonuses on ratings of each tour.  Redfin as a company loses money if your only intention is touring with them and not purchasing through them.  But they know this and explicitly state that there is no obligation on their website.

I understand that.

But that doesn't mean it's okay to use that as an excuse to have a buyer use them to do the work when they have no intention of using them. Or at minimum, to say there is no "expectation". Like you said, Redfin loses money on buyers who don't transact with them, so I would think Redfin would have some "problem" with a buyer who knowingly does that.

I don't understand what you mean by problem.  Corporations have financial models and adjust for this.  As a company, they know how much each tour costs and they are ok with providing unlimited free tours for now.  Thats their choice and if they find it financially too expensive, they will change it. 

Your issue is with the individuals using the policy to their maximum advantage.  That is more about morality.  Personally I am with you and wouldn't be happy if we were doing that or friends were doing that.  Heck I have stopped being friends with people who constantly buy use and then return stuff. 

So Redfin agents don't get any bonus if they represent a buyer in a sale?

YES!  Associate agents just tour and have no incentive what so ever on the purchase or lack of.  Hence Redfin advertises them as completely unbiased partners in your home search.  They will tell you if its a horrible location etc.

And to your car dealer analogy, that is probably the closest business to this.  The individual salesperson might have an expectation but the dealership sure doesn't.  They make test drives free in hopes that their salespeople can convince you of buying from them.

 

[irvinehomeowner]

Ahh... I didn't know that Redfin agents don't receive any type of incentive or bonus from closing a sale.

I guess I could have saved IrvineRealtor a lot of time and just used the Redfin associates (but I would still feel weird about that).

 

[eyephone]

Ahh... I didn't know that Redfin agents don't receive any type of incentive or bonus from closing a sale.

I guess I could have saved IrvineRealtor a lot of time and just used the Redfin associates (but I would still feel weird about that).

Depending on the area, Redfin also has a coordinator to schedule appointments for the agents. I'm thinking of the over head monthly costs.

 

[usctrojancpa]

I've had a few clients that used Redfin to show them the homes and then they had me write up the offers and get the transaction closed for them. 

Is that really fair? Why didn't they just use you to show them the home?

It's not for me to say if it's fair or not as I wasn't the one that made that decision.  Both clients approached me and asked how they can maximize their commission rebate from me (my rebate is based upon how much work/effort is used to assist in purchasing a home) so they opted to use Redfin to show them the homes instead of having me show the homes.  There's no implied or explicit expectation from the buyer and agent that the agent the shows a buyer a home is going to be the one that writes the offer on it (if an offer is written on it), whether the agent showing that home is a Redfin agent or a non-Redfin agent. 

Something about this doesn't sit right. Guess your "smart" clients found a loophole in your pricing structure 

Not really....basically the less work I do = client get a larger commission rebate.  I try to align what I get paid with the time/effort that I spend (using a little bit of the principal/agent incentive structuring from the operations management class that I learned in my USC days). 

Loophole meaning they figured out how to get the best rebate from you.  I know this redfin scenario is no skin off your back.

Yeah but remember that I'm the one that decides what I will rebate.  So if they are asking for too much of a rebate I say no.  I think Redfin is great (I should have started it because I did rebates before they came along....oh well).  Redfin works great for some, not for others.  There's plenty of business out there for everyone, including Redfin.

 

[usctrojancpa]

There's no implied or explicit expectation from the buyer and agent that the agent the shows a buyer a home is going to be the one that writes the offer on it (if an offer is written on it), whether the agent showing that home is a Redfin agent or a non-Redfin agent. 

There isn't? Isn't that part of your work/effort model? If you were the one to show them the home wouldn't you have *some* expectation for your work/effort?

No agent will close 100% of their clients, that's just the nature of the business.  That's why commissions are as high as they are (the risk is incorporated in the commissions).  Whether it be job loss, relocation, divorce, or the client going to another agent.  My work/effort incorporates that I will not close on every buyer that I show homes to.  Keep in mind that I also don't have a commission split with my broker so that gives me a lot more flexibility in giving rebates than an agent that works at a larger broker where the split is 20-30% of the gross commission.  I rather give the part of the commission to my buyer, not my broker. 

 

[usctrojancpa]

I understand you guys see it differently but imagine if I asked USC to show me one home, told him I was really interested but then had another agent represent me in the purchase. I'm sure there would be a little "expecation" there.

IHO, I've had dozens of buyers that I showed several homes to that never ended up buying a house through me.  Whether they ended up buying another house with an agent or not buying at all, it doesn't really matter to me.  I don't hold grudges or get bent out of shape like some agents would and I know that I won't close 100% of my buyers...that's just reality.  You win some, you lose some.  Believe it or not, but I actually enjoy showing homes as I learn about neighborhoods and see new floor plans.

 

[usctrojancpa]

Ahh... I didn't know that Redfin agents don't receive any type of incentive or bonus from closing a sale.

I guess I could have saved IrvineRealtor a lot of time and just used the Redfin associates (but I would still feel weird about that).

Yeah, Redfin agents are paid a salary and then provided a bonus based upon the client feedback by the people they have worked with (whether they close or not).  I know this, because I got contacted by Redfin a few years ago seeing if I was interested in being their agent or taking their overflow business (partner agent).  Obviously I wasn't interested in with either of their propositions. 

All that being said, I would never proactively tell buyers to use Redfin or another agent to show them homes and then use me to write the offers.  It's completely different if they are the ones that already decided to do that.

 

[irvinerealtor]

What about changing agents on existing homes.  What if you saw a home with an agent in the past and now would like to proceed with a new agent. 

Thanks again for the helpful information. 

I see that your thread has been derailed by an equally-interesting topic, but I'll do my best to answer your question regarding resale purchases:

Generally, you are able to switch to any agent you wish, at nearly any time. If you are unhappy with your service from your existing agent, you can begin working with a new one. While there are a few circumstances revolving around the definition of "procuring cause" that may cause an issue of whether or not the new or former broker gets paid for assisting you in your purchase, for the most part you are ultimately free to work with who you want in the end.

Some examples for your humor and review:

Full Court Pressure (If you liked it then you should've put a ring on it)

A limiting factor that some brokers require is signing a Buyer Broker Agreement that formalizes the relationship between parties. In general terms, it states that the broker commits its agency to doing its best to help the buyer find a home. This can include their terms of rebate offered, term limit, and cancellation terms. Some brokers swear by it and promote the policy stating that they KNOW that the people working with them are committed to working with them and they give their very best efforts. They smell a lead and want to LOCK IT DOWN.

Zero Pressure (It's Just Lunch)

Other brokers do not use a Buyer Broker Agreement. I would venture to guess that this is the strong majority (TI members can confirm or deny this based on your experiences). I know that buyers can be very resistant to signing a BBA for fear of getting locked into a bad relationship and many/most brokers have a fear of rejection. They'd rather hope they've got a committed client and show them 50 properties than know that they're likely going to be dumped when it's time to actually write an offer, so they don't ask.

Pink Spoon (aka: try before you buy)

This is admittedly my approach. It's a lot of what goes on with my participation here at this site. I'm very comfortable with sharing my experiences and plethora of past mistakes to assist many participants here and lurkers alike, knowing full well that they'll likely hire a relative or another broker to assist them when their time for RE needs is upon them. Likewise, I am happy to show someone several properties without commitment. Ideally I'd like to have some proof of qualification (preapproval and/or proof of funds) to know that the buyer CAN buy a home if we find what they're looking for, but sometimes that's not feasible. Likewise, buyers and sellers want proof of the broker's qualification, as well, so this "free trial" works out well. But after a certain point, I have a "moral contract" conversation with them. If after spending some time with me to see how I work, someone wants me to spend my time, my energy, my $$$, and my network to help them get what they want, I ask if they can verbally commit to working with me exclusively towards reaching that end (buying/selling/leasing/managing). If they agree, and it works out: great. If they don't want to commit, that's fine, too: we can part ways, no harm, no foul.

Team Cushman ("My word is stronger than oak.")

Admittedly, it occasionally (but I'd say rarely) happens that someone does verbally agree and then at the last minute reneges on their word. For those few times it does suck financially, but they get to live with being a d-bag and I get the benefit of having those types of people out of my life. Win-win.

-IrvineRealtor

 

[socal78]

This thread has officially jumped the shark.

 

[irvinerealtor]

Redfin's official stance on Procuring Cause -https://www.redfin.com/definition/procuring-cause

"Finally, due to the procurement cause a Redfin client cannot buy a home with Redfin that they first saw with a non-Redfin agent."

 

[irvinehomeowner]

Interesting, buyers can use Redfin to show them homes and they can purchase with another agent, but Redfin can't do the reverse.

In all fairness, to me, the agent who shows it, should be the one who gets to represent the buyer... but others feel differently.

 

[Irvine Dream]

Interesting, buyers can use Redfin to show them homes and they can purchase with another agent, but Redfin can't do the reverse.

In all fairness, to me, the agent who shows it, should be the one who gets to represent the buyer... but others feel differently.

I am with IHO on this one.  I think any agent that knows a buyer used someone else to view the property and then decided to switch agent to make the offer purely for economic reason, should refuse to write the offer. 

 

[rkp]

Redfin's official stance on Procuring Cause -https://www.redfin.com/definition/procuring-cause

"Finally, due to the procurement cause a Redfin client cannot buy a home with Redfin that they first saw with a non-Redfin agent."

Odd.  On their FAQ which I imagine gets more hits than a definition page, its clearly written that they will still work with you:
https://www.redfin.com/buy-a-home/faq#1668280

"What if I am already working with an agent?
If an agent has already helped you find a property, Redfin recommends that you make an offer through that agent. Redfin cannot help you tour or make an offer if you're already working with another agent. If you believe your agent is not delivering the value you expect, you can end your relationship with that agent and use a Redfin Agent. In the event you signed a buyer's agency agreement, you must first inform your agent in writing of your decision. Please read this agreement carefully to ensure there are no other obligations to the agent following termination; if you are unsure about the terms of the agreement, you can call us, or consult with an attorney. If you have not signed a buyers' agency agreement, you can inform the agent of your decision in any way you like."

 

[qwerty]

Interesting, buyers can use Redfin to show them homes and they can purchase with another agent, but Redfin can't do the reverse.

In all fairness, to me, the agent who shows it, should be the one who gets to represent the buyer... but others feel differently.

What if an agent you are working with for the first time shows you a house and it's the first one you tour with them and it's the first time u are meeting them and they are rude and you get a bad feel about them. Would you still use them to write the offer on what is likely the largest purchase of your life?

 

[bones]

Interesting, buyers can use Redfin to show them homes and they can purchase with another agent, but Redfin can't do the reverse.

In all fairness, to me, the agent who shows it, should be the one who gets to represent the buyer... but others feel differently.

What if an agent you are working with for the first time shows you a house and it's the first one you tour with them and it's the first time u are meeting them and they are rude and you get a bad feel about them. Would you still use them to write the offer on what is likely the largest purchase of your life?

I'm not as absolute on this, but going back to the redfin/client/USC scenario, I think what's off about it to *me* is that the clients are purposely using another agent (I know USC said redfin, but really, they could be using non-redfin agents too) to help minimize the work their actual agent is doing to maximize a pre-discussed/negotiated rebate.  So for me, it is the intent that's "off".  I have no problems with someone changing agents mid course b/c of service, personality clashes, etc, etc.