Redfin: Swashbuckler or Dissembler?

No one likes a good press release more than I do. This press release here from the folks at Redfin claims the  the role as the industry’s swashbuckler who saves consumers money and dismisses the rest of the real estate industry as mere gifters of wine. Well….

I rather resent the implication that I only gift wine. I run the gamut of gifts from potted plants to small appliances. I have a special affinity for toasters.

Let’s talk about the premise of the press release: Redfin has saved consumers $100 million in fees by integrating technology and forward thinking real estate agents. Redfin offers up a fascinating support article about the real estate industry creating $8 billion in social waste each year here. Must be a British phrase “social waste”.

There are about five back stories here but the first thing that strikes me is that Redfin is talking about the “saving consumers money” rather than their own revenues. As a private company, they can reveal that information or not. Good marketing thrust from the Redfin guys.

I like Redfin’s website. Sleek and slick. I like this positioning…who wouldn’t want to be a swashbuckler? Other than that, they haven’t cracked my day to day consciousness.

The press release says that Redfin has entered 19 markets. Glenn Kelman, Redfin’s CEO,  states that it has been hard to find good agents who will succeed in the Redfin model. I can see why. I think they pay agents to be on call to show houses for a fixed fee (I heard $12) and then mandate the commission rebate that the agent will offer the buyer.

About two months ago I calculated that Redfin did a fraction of 1% of the revenue in MRED, the northern Illinois MLS. My Baird&Warner  office in suburban St. Charles appears to have done more revenue than all of Redfin in the Chicago Metro area.

There are many realities behind this press release. It’s one that I would write if I needed to say something, get my company back on the social media boards, but didn’t have my own numbers to use.

Hmmm….Redfin uses a time-honored real estate marketing technique…talk about one set of numbers when you want to distract from the real story, which is your own performance and success in the market. Disingenuous and amusing, but not quite what I’d expect from a swashbuckler.

 

Leslie Ebersole, Real Estate Broker
962 S Randall Rd St. CharlesIL60174 USA 
 • 630-945-7935

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About Leslie Ebersole

I am a Realtor with Baird&Warner Real Estate in St. Charles, IL. I am deeply committed to helping sellers and buyers navigate and succeed in this challenging real estate market. I list and sell homes in the western suburbs of Chicago, including St. Charles, Geneva, Batavia, Elburn, South Elgin and Wayne.

Comments

  1. glennkelman says:

    Hi Leslie, good post. I meant no disparagement by saying that I underestimated when starting out at Redfin how deep the relationships are between agents and their clients. It’s very hard to start a brokerage when you have no clients of your own.
     
    Our Chicago business generates more than $4 million in revenues a year, and nearly double the gross commissions; the business is up 76% from last year.
     
    We would have grown much faster if we could have found more good agents earlier in the year. As the market turned up, we had to refer more business to partners than we would have liked.
     
    And yes, we know that B&W is the big dog in Chicago and will be for many, many years to come.

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