This morning, Redfin expanded its online listings offerings to include bank-owned foreclosed homes as well as homes being sold by unrepresented sellers (more commonly known as FSBOs.) One category’s an expanding business, the other’s quickly becoming a dying breed but that’s another story for another time.
Redfin will be getting its data directly from the banks so homes will appear on the site even before they’ve been listed in a local MLS. The company even is going to include the bank contact information so buyers can go directly to the bank (we wish you the best) in making their purchase offer.
Somewhat less inspiring is the FSBO feed … it’s unclear where these listings are coming from, but if it’s from the various online FSBO sites then the data will be far from complete. I’d also be a little surprised if the online sites were willingly surrendering this information, but I’ve been surprised in the past.
Redfin has (incorrectly) claimed they are the first major site to post FSBO listings along broker-listed homes. RE/MAX also allows for FSBOs to be posted on remax.com – I know this because I’ve entered them myself.
In a throw-away line at the end of the e-mail from Redfin, it was indicated that buyers soon will be charged a flat fee “in support of the new inventory types.” It’s not clear whether this flat fee will be in general or just for the FSBOs and REOs, though it seems that it is a more general policy.
If so, Redfin’s suffering from a bit of an identity crisis. Somehow the company has turned from a real estate brokerage enticing buyers with rebates to one that now will be charging buyers for the right to work with a Redfin agent – a step many more traditional brokers have never taken.
The vast majority of us work on a contingency basis: if we find a buyer a house and they buy it, we get paid. We’re not charging for viewing homes … excuse me … after the first couple of trips. And we’re not collecting up-front fees.
It’s not that such policies are good or bad, right or wrong. They’re simply diametrically opposite to the business model on which Redfin was founded. There may be a “Redfin Advantage,” as the company has purported but the question is whether your average buyer will think enough of that advantage – of Redfin’s value proposition – to pay for it outright.
In that respect Redfin’s become like the rest of us … just with an admittedly slicker site.
Vicki Moore
April 30, 2008 at 5:48 pm
And the cradle will fall. I’m sure the banks will be ever so appreciative of Redfin giving their contact information to the public. They’d better get more staff to answer those phones and the endless questions that will no doubt inundate them.
Diversification. When the original business plan doesn’t work as planned you have to diversify your efforts. You know, if at first you don’t succeed try something else.
Jonathan Dalton
April 30, 2008 at 9:57 pm
Those calls ought to be good for entertainment value.
“So will y’all take $120,000?”
“Sir, the broker price opinion came in at $375,000.”
“How about $122,500 but that’s my last offer.”
Bill Lublin
May 1, 2008 at 6:42 am
Wouldn’t it have been fun to listen in on the meetings where these strategies were developed? Or the ones where they decided they needed new strategies?
Can’t wait for the lender to get those calls rom people that can’t even spell REO – or rom agents chasing business – Bet that info gets gone pretty quick
Vicki Moore
May 1, 2008 at 10:44 am
It’s going to be interesting to see what happens. I can’t imagine the banks being happy about even anticipating those numbers being published.