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Old 03-14-2018, 03:51 AM
 
5,682 posts, read 7,271,193 times
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Quote:
Originally Posted by BoBromhal View Post
personally, I agree that what Rakin posted was across the line - because he attributed it to all Redfin agents. It may very well be true of the vast majority of Redfin agents in his market.

One poster said the Redfin agents in their market were all experienced, but looking for more stable income.

In my opinion, they may be experienced, but the most successful agents would not get paid at Redfin rates. In my local market, Redfin absolutely does not get numerous successful, experienced agents to leave other brokerages to come work for them.

To understand the Redfin model, you should understand the history of the company. Only in the last 12 months did they come to realize the old adage "list to last", meaning that listings drive the business. When they list a home, they probably get 1-10 BUYER leads of varying quality/readiness to buy.

There's no way to make a profit on 1% (with the things they do and the layers of people they have) all by itself.
But their listing agents are not also buyers’ agents, correct? Not that it really matters I guess, since just_because’s most recent post is actually pretty true.

Probably doesn’t make too much difference but it looks like in Raleigh (and Charlotte) it is 1.5% with a $4,500 minimum. So anything under $300K would be a higher %.

I’m not too familiar with their selling process, but the buyers of my house used a Redfin agent. She was very knowledgeable and professional. We might have even used her for buying if we didn’t already have a contract with a different agent. But yeah, I’d guess buying is more profitable for them. I could be wrong but I believe the “refund” the buyers got was only about 0.5%.
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Old 03-14-2018, 04:30 AM
 
Location: Cary, NC
31,624 posts, read 55,362,882 times
Reputation: 30183
Quote:
Originally Posted by GoPhils View Post
But their listing agents are not also buyers’ agents, correct? Not that it really matters I guess, since just_because’s most recent post is actually pretty true.

Probably doesn’t make too much difference but it looks like in Raleigh (and Charlotte) it is 1.5% with a $4,500 minimum. So anything under $300K would be a higher %.

I’m not too familiar with their selling process, but the buyers of my house used a Redfin agent. She was very knowledgeable and professional. We might have even used her for buying if we didn’t already have a contract with a different agent. But yeah, I’d guess buying is more profitable for them. I could be wrong but I believe the “refund” the buyers got was only about 0.5%.
Redfin is often identified as a Tech firm, rather than as a real estate brokerage, and is a publicly traded entity.
As the original entity was "Appliance Computing," prior to renaming as Redfin, the roots are perhaps not in real estate brokerage at all.
Ergo, it is plausible to ponder how profitable RDFN can be, either in a Tech model or brokerage model.

The confusion in identity is apparent when considering CityData policy, wherein Redfin gets a free pass vs. any other brokerage firms. We are allowed to link to them, recommend them, and promote them.
I.e., I can post a Redfin IDX link to a listing, but with enforcement being penalty of termination of CD membership cannot post my own IDX link, or a Coldwell Banker, etc, IDX link.

The ROI for basic successful brokerages with good stewardship of capital funds is very very high.
How does a company go about burning tens of millions of dollars annually year after year? Perhaps by pursuing and promoting a Tech firm model?

https://www.marketwatch.com/investing/stock/rdfn
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Old 03-14-2018, 08:01 AM
 
1,528 posts, read 727,401 times
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Quote:
Originally Posted by MikeJaquish View Post
Redfin is often identified as a Tech firm, rather than as a real estate brokerage, and is a publicly traded entity.
As the original entity was "Appliance Computing," prior to renaming as Redfin, the roots are perhaps not in real estate brokerage at all.
Ergo, it is plausible to ponder how profitable RDFN can be, either in a Tech model or brokerage model.

The confusion in identity is apparent when considering CityData policy, wherein Redfin gets a free pass vs. any other brokerage firms. We are allowed to link to them, recommend them, and promote them.
I.e., I can post a Redfin IDX link to a listing, but with enforcement being penalty of termination of CD membership cannot post my own IDX link, or a Coldwell Banker, etc, IDX link.

The ROI for basic successful brokerages with good stewardship of capital funds is very very high.
How does a company go about burning tens of millions of dollars annually year after year? Perhaps by pursuing and promoting a Tech firm model?

https://www.marketwatch.com/investing/stock/rdfn
'Appliance Computing' is no smoking gun. Redfin is very open that it was started by industry outsiders rather than old school insiders. So there is no 'perhaps' and no further investigation on that point required. They don't hide it and I think that this is wise positioning.

There is no confusion in identity with consumers and the CD rules that you must abide by do not create confusion with consumers.

Traditional brokers invest relatively little in their businesses (i guess that's what you've spun as 'good stewardship of capital funds') - they bring on loads of contractors which have very low fixed costs and agents must fund and do just about everything themselves. You can't compare this with a company that invests in hiring proper employees as it expands aggressively into new markets and builds its business from scratch. Investors are obviously interested in the tech vs traditional model for valuation purposes but putting that aside, it's a very different model no matter how you slice it. Let's see how it pans out - I'm not arguing whether it's going to be successful or not but it's simply illogical to compare ROI of a traditional brokerage with Redfin's model.
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Old 03-14-2018, 08:46 AM
 
Location: Rochester, WA
3,833 posts, read 2,058,876 times
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Quote:
Originally Posted by MikeJaquish View Post
The confusion in identity is apparent when considering CityData policy, wherein Redfin gets a free pass vs. any other brokerage firms. We are allowed to link to them, recommend them, and promote them.
I.e., I can post a Redfin IDX link to a listing, but with enforcement being penalty of termination of CD membership cannot post my own IDX link, or a Coldwell Banker, etc, IDX link.
This is a VERY good point. If you're saying I can't post a link to a property on our own page, as an example or a point of conversation... but a Redfin link would be allowed?

Then they are being treated like a tech company... ala Zillow or Realtor.com.... not like a brokerage... With a result that is NOT really fair.
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Old 03-14-2018, 08:51 AM
 
Location: Cary, NC
31,624 posts, read 55,362,882 times
Reputation: 30183
Quote:
Originally Posted by Diana Holbrook View Post
This is a VERY good point. If you're saying I can't post a link to a property on our own page, as an example or a point of conversation... but a Redfin link would be allowed?

Then they are being treated like a tech company... ala Zillow or Realtor.com.... not like a brokerage... With a result that is NOT really fair.
Meh.
CD is private enterprise where we visit freely.
"Fairness" is theirs to decide.

But, it is a confusing standard, for sure.
It is partially muddied when we see consumers who think Zillow is a real estate site, or who take pop appraisals at face value.
I don't know if a RDFN agent is allowed to advertise listings with IDX links, or prohibited.
The standard certainly opens the door to that activity.
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Old 03-14-2018, 09:02 AM
 
131 posts, read 111,907 times
Reputation: 49
Quote:
Originally Posted by GoPhils View Post
But their listing agents are not also buyers’ agents, correct? Not that it really matters I guess, since just_because’s most recent post is actually pretty true.

Probably doesn’t make too much difference but it looks like in Raleigh (and Charlotte) it is 1.5% with a $4,500 minimum. So anything under $300K would be a higher %.

I’m not too familiar with their selling process, but the buyers of my house used a Redfin agent. She was very knowledgeable and professional. We might have even used her for buying if we didn’t already have a contract with a different agent. But yeah, I’d guess buying is more profitable for them. I could be wrong but I believe the “refund” the buyers got was only about 0.5%.
Wanted opinion bec you sold a house where the buyer used a Redfin agent. We are considering Redfin when we buy.

The fact that you knew that the buyer's were using a Redfin agent AND will getting a refund from this transaction, did it effect your decision to negotiate? I mean, did you think that they (buyers) are getting refund so I will not come do on price or not contribute towards (or contribute less) towards closing cost?

In our case we are talking about a $600-$700k purchast (appx $3000 rebate).
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Old 03-14-2018, 12:20 PM
 
5,682 posts, read 7,271,193 times
Reputation: 3193
Quote:
Originally Posted by notkim View Post
Wanted opinion bec you sold a house where the buyer used a Redfin agent. We are considering Redfin when we buy.

The fact that you knew that the buyer's were using a Redfin agent AND will getting a refund from this transaction, did it effect your decision to negotiate? I mean, did you think that they (buyers) are getting refund so I will not come do on price or not contribute towards (or contribute less) towards closing cost?

In our case we are talking about a $600-$700k purchast (appx $3000 rebate).
Well they did actually offer higher than the list price, but they did get us to agree to repairs. It crossed my mind when discussing the repairs, but ultimately it wasn't really a factor for me. Technically the seller is only paying their own agent who shares it with the buyer's agent (who for Redfin then shares some with the buyer), but I know some sellers may not see it that way.

I don't think it will really effect your initial offer but if anything, it may effect your ability to negotiate closing costs. So you might want to build in a little cushion with your offer or something. However I bet a lot of sellers may not even know much about Redfin and that a refund from them is even a thing.
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Old 03-14-2018, 01:20 PM
 
51 posts, read 56,379 times
Reputation: 139
Quote:
Originally Posted by notkim View Post
Wanted opinion bec you sold a house where the buyer used a Redfin agent. We are considering Redfin when we buy.

The fact that you knew that the buyer's were using a Redfin agent AND will getting a refund from this transaction, did it effect your decision to negotiate? I mean, did you think that they (buyers) are getting refund so I will not come do on price or not contribute towards (or contribute less) towards closing cost?

In our case we are talking about a $600-$700k purchast (appx $3000 rebate).
We purchased using Redfin - a house in the $600K range. We were up against a 2nd offer, and we're now on friendly terms with the previous owners and have discussed the transaction. It did not impact their decision or negotiating either way that we were using Redfin.

We also sold using Redfin and had 5 offers - one of which was from a buyer using Redfin. It did not impact our decision in any way. Obviously we're pro Redfin though and think well of the process they use, but it also didn't make us more likely to pick the Redfin buyer. It always came down to cash in our pockets at the end of the deal.
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Old 03-14-2018, 01:34 PM
 
6,150 posts, read 3,280,701 times
Reputation: 8363
Debating this myself. Selling an around ~$320k house in the hot Portland metro area where inventory is next to nothing in that price range and houses go pending same day. Picked out a new construction house we want at $400k. Had a good experience with our Realtor buying this place. But given the circumstances I don’t know that we necessarily even need a very experienced full service one.
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Old 03-14-2018, 01:58 PM
 
Location: Salem, OR
13,749 posts, read 31,584,066 times
Reputation: 12115
Quote:
Originally Posted by notnamed View Post
Debating this myself. Selling an around ~$320k house in the hot Portland metro area where inventory is next to nothing in that price range and houses go pending same day. Picked out a new construction house we want at $400k. Had a good experience with our Realtor buying this place. But given the circumstances I don’t know that we necessarily even need a very experienced full service one.
I can't speak for the Portland Redfin agents, but the referral agents they use in Salem are good agents. I do think they screen their agents better than traditional franchise brokerages do. So, I'd at least interview them if you like their model. I'd also suggest a couple other Portland indie brokerages so if you want some other names to interview PM me and I'll get you a couple of names.
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