Article here says that Redfin, a Seattle based flat fee, on-line real estate brokerage has finally earned a profit and that that spells trouble for the conventional brokerage model. Could be. My late father was a member of Squadron A between the two world wars and had a cartoon from the 30’s depicting a statue of a soldier in a reared-up jeep. That was supposed to be ridiculous and funny and it was: until the Polish cavalry took on Hitler’s tanks.
So we will see. Life is change, and those who can’t adapt don’t make it. Just ask a polar bear.
14 Comments
July 11, 2009 at 10:15 am
Buggy Whip Boy -
You obviously have not been paying attention. Technology will eliminate the non value added middleman. That would be you, Dude. It is a certainty. What don’t you see? You are blinder than Stevie Wonder, for Pete’s Sake. (We hung this week.)
I walked him to his car. Halfway there, I pretended I bailed out on him. He freaked. It was pretty funny. Bought him a cognac after at the filly bar and he was cool. We laughed about it. He kept feeling my face though. That freaked me out. And he neighed while he did it.
Anyway, retool you tool. You don’t have long.
Your Pal,
Walt
July 11, 2009 at 10:26 am
Never heard of Redfin until your link. I went to the website and don’t see what I might save. Here’s how they price:
“A traditional listing agent usually charges 3% of the final home price. On a $500,000 home, 3% is $15,000. Aside from what you pay Redfin, we recommend that you pay the buyer’s agent a traditional commission of either 2.5% or 3%. This ensures traditional agents will show your listing, and still lets you save thousands on the fee to Redfin as your listing broker.”
By my math, and hey, I’m an English major, the total is still 5 1/2 to 6%. My broker, when I have bought and sold over the decades, gives me a discount on her commission fee, as a courtesy and to encourage loyalty. Loyalty trumps saving money on an unknown, at least in my book.
July 11, 2009 at 11:02 am
“Life is change, and those who can’t adapt don’t make it. Just ask a polar bear…”
… or a Republican!
July 11, 2009 at 12:03 pm
I’m not losing sleep over Redfin, Back Country but agents who think that all they need to do is grab a listing, slap a keybox on it and wait to get paid might want to consider what else they have to offer.
July 11, 2009 at 12:34 pm
Since Greenwich isn’t in Redfin’s service area, I went to their website and entered the closest zip that is, Bedford, 10506. There are 94 listings, the ones I opened have “Partner Agents”, RE companies that are highly regarded….Houlihan Lawrence, Ginnel, etc. I have to assume there’s something in it for these good companies to choose to be a Redfin partner, likely seeing how many buyers shop online first? I don’t see Redfin eliminating any middlemen, but it may make some hungry agents work a little harder. never a dad thing.
Life is change indeed. This Republican is always on the cutting edge – see my new 4G cell phone?
http://tbn0.google.com/images?q=tbn:MoMc6hPBRVl58M:http://3.bp.blogspot.com/_NVIyqlcHzR4/SPSjNtsqeTI/AAAAAAAADDU/qOct7R1h8zA/s400/oldcellphones3_18_06_08.jpg
July 11, 2009 at 12:54 pm
To Retired IB’er: you might want to hedge your position…
Rasmussen Poll (07/09/09): “Voters now trust Republicans more than Democrats on eight out of 10 key electoral issues, including, for the second straight month, the top issue of the economy. They’ve also narrowed the gap on the remaining two issues, the traditionally Democratic strong suits of health care and education.”
http://www.rasmussenreports.com/public_content/politics/mood_of_america/trust_on_issues/trust_on_issues
Just sayin’…
July 11, 2009 at 3:09 pm
The key to survival in a world in which technology threatens to eliminate the non-value added middleman is to … duh … make damn sure you add value. Keep at it, Chris.
July 11, 2009 at 4:21 pm
Hey Walt – were you not yourself a “no value added middle man?” You know brokering your fund to fund with all the phony due diligence? Just asking…
July 11, 2009 at 6:05 pm
Any middleman, whether a GS M&A banker or a salesman at MB Greenwich or Greenwich realtor, has same dynamics….most suck and are parasites who deserve to be disintermediated by tech/commoditization; however, in my expce, the top <5% of middlemen more than justify their fees in value added via their superb service and/or advice
July 11, 2009 at 10:07 pm
Backcountry…I believe the article says they charge a flat fee of $5-7K so if you add the 2.5-3% they recommend for the other broker, on a $2MM home the maximums commission would be $67K vs. $120K at a full 6%. The question is how many people will sell or buy a $2MM home this way.
Where I come from the fastest growing broker for homes over $1MM provides full service and markeing but only charges 4% vs. others at 5-6%. Sellers seem to think that extra 1-2% makes a difference, but only when coupled with traditional service and marketing.
July 12, 2009 at 8:16 am
Greenwich Gal -
No I wasn’t. I was selling access to Bernie. And everyone knew it. They didn’t start on this due diligence crap until after we found he wasn’t stealing for us, he was stealing from us. Who woulda thunk?
Your Pal,
Walt
July 12, 2009 at 10:06 am
Dude -
Would you care to retort?
http://finance.yahoo.com/real-estate/article/107302/10-things-your-real-estate-broker-wont-say.html?mod=realestate-buy
Your Pal,
Walt
July 12, 2009 at 1:38 pm
Paco,
In my younger days (some might say foolish years), I use to hope for a Republican president and a Republican congress.
Wiser man that I am now, I realize the wisdom in seperating the branches of government among the parties. Gridlock is good for government, it stops the politicians (Rep or Dem) from making too big of a mistake.
So I am all for the Rep. making gains in the mid term elections and breaking the Dem’s lock on both branches of government. However, unless the Reps make some serious changes to their approach (which was the point of my original comment) I think the likelihood of that happening is very, very slim. Hope your Rasmussen poll is right, but I have my serious doubts.
July 13, 2009 at 8:11 am
Nice find Walt. In an ideal world, I think I would like to FSBO my home and buy with a buyers agent. I always fear my agent isn’t telling me about all the offers or is just in a rush to close the deal and collect the commish….Bottomline, I don’t always trust what my own agent has to say.
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