60 Minutes Aftermath: Hell Hath No Fury Like a Realtor Scorned

Redfin and the traditional real estate industry duked it out on 60 Minutes last night.

The segment aired second, after Mitt Romney took a stand against polygamy, but was the most popular video until losing out to a wayward penguin who swam 3,000 miles to Peru (Sasha Aickin just sent an e-mail around saying “we beat the penguin,” so I guess we’re back on top).

Here in Redfin Seattle, we watched the show in a conference room with a mixture of apprehension and desire; people brought their families and we all made fajitas. Seattle PI reporter John Cook showed up and began taking video with his digital camera.

Then the segment got rolling. Our favorite moments:

  • Rob McGarty wearing a blazer for the first time in his life, Kelly Engel stealing every scene, Fadi Hafzalla rolling up his sleeves and getting down to business.
  • The strange Borat-like moment when the traditional Realtor was asked if she had refunded any commissions last year (“absolutely… NOT”).
  • The traditional agent’s explanation of why real estate agents charged nearly four times per transaction what they once did: increased postage costs…
  • The terrifying loss of perspective as the camera panned back on the National Association of Realtors’ sign as if it were a Star Wars spaceship.
  • B-roll of me complaining about our $4,000 copy machine, which is just so typical, cheap and mean-spirited (I HATE that thing).

Everyone in the conference room got quiet when the CEO of a company that had once embraced a business model similar to Redfin told Lesley Stahl he’d lost $33 million. Then we all cheered up when someone said we don’t have to worry about that because no one will give us $33 million.

And then the phones started ringing off the hook, and all of us — developers, executives, testers — scampered back to our battle-stations to answer them.

The website groaned under the load; first from 4:40 to 5:00 p.m., after the piece aired on the East Coast, and then again from 7:35 to 7:50 after the piece aired on the West Coast. Before our routers tapped out, we had served 40 times the volume of content that we normally do. We put up an emergency home page with search disabled. But without the Google Analytics tags on our standard home page, we could not see to see: we have no idea how many people saw that page.

It was fun working the front-lines. Many folks wanted to know if we could sell their property in Aruba, Italy, Mexico and Canada (Redfin dedicated agents immediately volunteered to handle Aruba, Italy and Mexico). One disgruntled 60 Minutes viewer called Donald DeSantis and told him he hoped he “died a slow, excruciating death” with one delicate body-part somehow wrapped around his neck.

A man with an ecumenical-sounding “SpiritJohn” e-mail address asked if I wouldn’t mind some constructive criticism; sure, I replied. Then he called me a “sissy” who “has been defrauding the American public for decades” (I started at Redfin just over a year ago; I wasn’t able to drive two decades ago). A third called and asked for Kelly Engel, then told her off. A very nice real estate agent e-mailed me offering herself as a corporate hair-stylist. A far-right radio show host asked me to name the “government bureaucrats” who blocked real estate reform.

Robert Scoble and Greg Swann reported a huge disturbance in the force, as hundreds of “60 Minutes” viewers descended on their site in search of Redfin (Robert’s blog about Redfin is the 7th Google search result for a Redfin search; we weren’t able to find Greg’s in the result set). A blog post that challenged Redfin’s facts began by noting I was a Harvard MBA (I never went to Harvard, I do not have an MBA). Another real estate blog argued for higher commissions (“6% is squat”) and lusted after Lesley Stahl (“what I wouldn’t do to have that blond hang out with me for one day as I go prospecting”).

For all the consumer enthusiasm, thousands of real estate agents and brokers have mobilized against CBS. The President of the NAR sent an e-mail to all 1.4 million members describing herself as “disappointed and dismayed” and encouraging agents to give CBS a piece of their minds. CBS News posted the text of the piece, alongside 46 pages (and counting) of comments.

Now it remains for us to sort through all the e-mail, call everyone back, and pick up where we left off building our little business. Thanks to everyone for all your kind wishes. If you have further thoughts on the segment, please just leave a comment below.

Discussion

  • http://www.bloodhoundrealty.com/BloodhoundBlog/ Greg Swann

    > we weren’t able to find Greg’s in the result set

    Fifth and sixth on Redfin.com, second only to Redfin’s own sites. If I invested any effort in the task, we could overtake you.

    Enjoy your moment, Glenn. You can’t work in bread and butter neighborhoods, so you’re stuck quarrying for rich nerds. How much money does the company lose on each one? Worse news: We could get real reform in the real estate industry at any time, and then you’re done for.

  • Steve

    Is Redfin a public company? Once the MLS is opened up and this internet thing catches on Katy bar the door. I’m ready to drop some investment cash NOW!!

  • Philip Knowles

    Mr. Swann:
    If “real reforms” took place, Redfin would be available in every state and people would have a freedom of choice of who they deal with. If your so right, why do you feel the need to respond in such a defensive and agressive manner? what are you afraid of?

    Hopefully Redfin service will come here to Canada.

  • Glen Burrough

    I have been licensed since 1972, a Broker in 1978, and in 2004 when I opened a flat fee service in Visalia, Ca., One Broker suggested if he was’n working for a New Home Builder, he would put out a contract on me! I’m a dues paying Rebel…out for change in the the Real Estate Industry. I began selling any home for $3995., I upped my fee to 2.99%, 3.99% and now 4.99%, and make much less than when I closed 43 escrows in 1983 and made 47,500., while being a Number One agent for Conventional Broker at the time! My hat is off to you…if I wore a hat! If you need help in the Central Valley California’s Agricultural Region, I know the Market, Teach Real Estate Investors, using Gary Keller’s “The Millionaire Real Estate Investor” a fantastic book. Best Wishes, Glen Burrough at: pinnacleonere.com PS: when you come out of retirement and start fresh at age 70 you gotta love the challenge!

  • http://www.bloodhoundrealty.com/BloodhoundBlog/ Greg Swann

    Hi, Philip. I’m not afraid of anything. If you join us at BloodhoundBlog.com, you can find out how the real estate industry will be reformed, if it is. Redfin, despite its posturing, could not exist without retaining the worst aspects of our industry.

    Steve: Watch your money. Redfin does not and probably cannot turn a profit. This has nothing to do with the MLS, it has to do with the cost structure of real estate brokerage.

  • http://www.redfin.com Sasha Aickin

    Greg,

    > Fifth and sixth on Redfin.com, second only to Redfin’s own sites.

    FYI, I think that rather than “redfin.com” Glenn typed in “redfin” to Google, which puts the Bloodhound Blog article on the 4th page of results. I’m guessing that’s what he did because I did the same thing and got equally confused. You’re absolutely right about the placement in the “redfin.com” search.

    I think we both unthinkingly typed “redfin” because we never call ourselves “redfin.com”. For whatever reason, we follow the two (until now) unwritten Web 2.0 rules about company names:

    1) Never use a name that has anything to do with what you actually do; preferably the name you use won’t even be an English word. (Flickr is the big exception here; it at least evokes an idea of photography.)

    2) Whatever you do, don’t add “.com” to your company name. (I know of no exceptions.)

    To some degree, all the major web 2.0 sites follow these rules: Zillow, Meebo, Twitter, Kayak, Del.icio.us, etc.

  • http://www.searchingseattleblog.com ARDELL

    I think the Corporate Hairdresser is a great idea. Hire her. She can write some offers in between doos.

  • Gene

    I sold my town house in Florida and did it as For Sale By Owner. The neighborhood was great so selling was not a problem. Here is the this you will find funny. I had a Realtor contact me about the sale and said he had a buyer and if I went through him I could increase my price for his fee.

    If you start up in Wisconsin sounds like a great job opportunity.

  • BART

    I love looking on the internet for property. I think the standard real estate agent will like doing business this way. Just think, no driving people around wasting time and gas, not having to prospect every person you see, and the truth of the 6% commission is: you have to split it with the person that is your broker. Not to mention the MLS fee that is mandated in every area. I have sold real estate and liked it. This is new and exciting
    that’s all. Better not start a fight with technology. You will lose. I would like to be part of this.

  • Voice Of Reason

    There were so many mistakes made in the 60 minute segment it wasn’t even funny…. okay maybe to you guys. But to say that EVERY Realtor charges 6% is wrong. I am one that has worked with FSBO’s for FREE and have also made 6% full commission. Further, to say that the STATES ban rebates is NOT completely true either….. I have offered rebates as FL. allows it so long as it is diesclosed to all parties… .HOWEVER… lenders will often not accept it. So why aren’t we exposing that side of it?

  • http://www.gatosblog.com Jim Gatos

    I wonder how I can get a free infomercial from CBS? Wow…

  • http://myblog.daltonsazhomes.com Jonathan Dalton

    There’s a talk show that runs on Univision where men routinely come out, have their arms pinned by security and are slapped around by the folks they have wronged. The “duking” it out on 60 Minutes was about the same – only one side was given the opportunity to throw a punch.

    But hey, it was a great 13-minute ad that you folks got free of charge.

  • Unregistered User

    Could I possibly be represented by an agent who never sees the house I’m buying? How is that possible?

  • Unregistered User

    Could I possibly be represented by an agent who never sees the house I’m buying? How is that possible?

  • Jean Raynor

    I hope you can help me when I’m ready to sell my house in two to three years. But we’re in Olympia. Do you plan to expand this far?

    We don’t mind paying a commission, but $36,000? We will need as much money as we can get in order to buy something else, such as a condo.

  • http://www.edynblog.com Edyn Real Estate

    Glenn and Redfin Staff,

    Congrats on your press and exposure. It must be an exciting time for all of you as you watch you vision get heard by more and more of the public. I’m not sure though why you are trying to spin the real estate industry as a bad guy though. If you believe that you are it’s savior, good for you, but the consumer will speak with the all mighty dollar. I am reminded of a story of a hair salon in Denver Colorado that was full-service and charged a begining price of $35 for a hair cut. A Cost Cutters opened up across the street, with a big sign in the window “We charge $9 for a Haircut”. This full service salon felt it was in trouble didn’t know what to do. How do you compete with such low prices? They figured it out! They put up a sign in their window “We FIX $9 haircuts”.
    Discount models have been in the business since the ’70s. Discount, flat fee, rebate, refund is nothing new.
    Glenn, you and your staff are doing a great job of PR and marketing but just because you shout the loudest doesn’t make you right. The same can be said for NAR and Realtors. We are all shouting that we are right and we provide value. Everyone needs to stop shouting, shutup and actually start providing some value.
    Glenn, I have watched you on many online videos. You are a likeable guy. You are creative, passionate and determined, but if I could offer up some advice. You have the ability to make some change and be a leader, but by shouting about how wrong people are, and pointing fingers is only going to make people dig their heals in even if you are right. Try some honey. Focus on what we all have in common. Believe it or not, the real estate industry is concerned about the consumer, we are justing taking different routes to get there. Try persuasion, instead damnation.

  • B. Martinez

    Your simplistic approach to a complex and somewhat litigous business is sad for the consumer and a boom for the attorneys in Ca. Unfortunately regulations in place were designed to combat the unethical agents we have. Your model of agents who sit at a computer and guide the consumer thru a very complicated transaction will no doubt cost the very customer your attempting to help more legal costs than they gain on A REBATE. Due to the lack of control I’m sure E&O insurance is not available. R.I.P.

  • http://www.redfin.com Glenn Kelman

    Hi there Edyn Real Estate:
    Thank you for the excellent advice. We try to focus first on customer service, second on technology. We believe this has allowed us to offer a meaningful alternative to traditional service, which is why we have attracted the attention that we have. My own personality is somewhat beside the point, though I feel like a dork whenever I see myself on TV. The overwhelming majority of our public comments are about our own service. When asked, we will say loud and clear that we believe the industry needs reform, but we don’t have a beef with individual real estate agents and mostly we are just proud of what we have done so far for our customers. I am not sure where anyone has heard me criticize individual agents, though if I have, it will undoubtedly show up as a comment on this blog post in a jiffy. We sometimes get stuck in a defensive posture though, so your advice is very welcome.

    Mr. Martinez: Redfin has errors & omissions insurance in every state in which we operate. We have had no problem getting it, and we have never been sued.

    Jean: we’ll try to get to Olympia by next year, but no guarantees…

  • Philip Knowles

    Mr. Swann:
    The way the NAR has responded to Redfin, and the manner in which you and the other contributors to BloodhoundBlog present would leave one to conclude that you all perceive Redfin as a viable threat!

    If you are correct if the position that you take on Redfin, combined with the premises that you insist that Redfin will not succeed, then why the need to respond, argue, convince?

    Of course in order to offer a rebate the very commission that is condemned would need to be maintained. But, shouldn?t the choice of who one retains for real-estate services be that of the consumer?

  • http://www.edynblog.com Edyn Real Estate

    Glenn,

    You are a gratious, considerate person and I can not imagine the amount of stress that you under go with the personal attacks and business model attacks you get daily. When you say “we will say loud and clear that we believe the industry needs reform,” why is that needed? I can see you saying it needs alternatives, it needs choices. However when you say it needs reform that implies that even the consumer is wrong and stupid for choosing to do business that way. Be an alternative, be a choice. People love choices, they don’t like to be told or FEEL that they were wrong or are wrong though. Look, if you really are about the consumer, why try to make them wrong? The consumer might feel uncomfortable doing business a new way, the consumer might feel judged by you, for feeling comfortable with a “traditional” broker. If you are truly for the consumer, wouldn’t it make sense to stop making them wrong?

  • http://www.Johnbeckssuccessstories.com/ Richard

    congrats on the launch! I definitely look forward to playing on the site! :)
    http://www.Johnbeckssuccessstories.com/

  • Mattb

    Edyn Real Estate,

    Your comments prove you don’t understand us consumers or the market. If it weren’t for Refin trying to reform the industry the consumer wouldn’t have a choice. Glenn and Redfin have been fighting for us to have the choice of not being extorted for 6% of the sale price.

    The only people calling consumers stupid are the agents who say we cant possibly understand a homes value without using an agent to conduct the transaction.

  • http://www.edynblog.com Edyn Real Estate

    mattb,

    Thank you for correcting me and telling me I don’t understand the market and consumer. I will make sure that I work harder with the personal relationships I have and study the economics and trends of housing better.

    reform: the improvement or amendment of what is wrong, corrupt, unsatisfactory. To put an end to.

    choice: an abundance or variety from which to choose

    There is a difference. Mattb, How many homes have you bought and sold? In how many differenct places? In how many differenct types of markets?

    If the consumer wants choice, that’s one thing. But to reform, is to say “this is wrong.” Some people want to drive a HUMMER, some want to drive a MINI. That is choice. To say everyone has to drive a MINI, would be reform.

  • Billy Jean

    I think you are brilliant! When I saw the episode I thought to myself, “Finally-someone who gets it!”

    I was a realtor and I left very shortly upon entering due to the cookie cutter mentality of other realtors, and always feeling choked by the NAR, MLS, and paying dues on local, state, and national levels!!!! There was just something wrong with the industry.

    I never slept good at night after having someone sign a contract with me charging 6%. Especially people who were retiring, or had big dreams of what they were going to do with the cash from the sale of the house.

    Even the cuts are messed up. 6% sale, with 50% of your money going to the broker if you were the buying and selling agent. If you worked another realtor, I only got 3% and then had to give 1/2 of that to my broker.

    I love real estate! Everything about it is fascinating and I could eat, sleep, and breathe real estate. The only problem with real estate is who governs it!!!

    Again, you guys are amazing! You take care of the consumer and the agents!!! I love you guys and hope you have much success!!

    GO REDFIN!!!!! (I need a t-shirt or something that says that :)

  • http://www.gatosblog.com Jim Gatos

    If Redfin succeeds, it will need an extraordinary amount of sales to do that. So far, I can’t imagine that would work for the general public.
    I have nothing really against discount agents. If I thought I could make a decent living as one I would think about it. I just don’t see most of them surviving, that’s all. Also, I am not too keen on the idea of being strong -armed into showing a property for a Redfin buyer when I am a listing agent because the buyer’s Redfin agent is a computer “clerk”. If you are a buyer’s agent, no matter what, you should accompany that client to showings.. If you as a buyer have to pay additional and upfront for that service, then I guess that by itself says volumes…
    The only reason I have a problem with Redfin is that they come in and basically holler about how bad we Realtors are. If I had to pay $3000 for a couple of signs and a lockbox, and “cookie cutter” service, I guess I’d be looking at the problem with that too… LOL

  • http://www.gatosblog.com Jim Gatos

    I am asking for the truth here…. On your page on the information of your agents, how accurate are the sales figures? About how many sales they closed? Please answer this question only and don’t try to go elsewhere to divert the issue..

    Thanks
    Jim

  • William Critch

    I sincerely hope Redfin makes it to AZ. I’d love to see the starch taken out of the lazy Realtors who just list and dump it into MLS.
    Go gettem Redfin guys ‘n gals

  • http://www.gatosblog.com Jim Gatos

    Well, if I were ever “unconscious” enough to deal with Redfin, I would verify everything they tell me… and I wouldn’t pay no $250 an hour for a “Three Hour Tour”.. LOL. (Gilligan’s Island).. I would also check to see how many actual sales the sales person did do versus how many they say they do….

  • Mary

    Having gone through Redfin, FSBO and also using traditional agents, they each have their own merits. But I can say that using a traditional agent got us into the real estate market without too much stress (but found later that she could have done a little searching on the MLS to really help us out with the initial offer but did not), FSBO worked out great due my being off to show the home and we did all the paperwork, etc., and Redfin was perfect for our relocation to Seattle where we did most of our searching online and needed someone to make a very personal offer. She did and got the deal done. It completely depends on the comfort of the consumer with the real estate market, conditions of the local market, life circumstances, etc. But I would never “use” an agent regardless of the circumstance in order to utilize an alternative.

  • http://www.cavespot.com Cave Spot

    Great episode on 60 minutes. Any plans to come to Canada. I have a strong feeling your model would work here.

    Cave Spot
    http://www.cavespot.com
    Toronto Real Estate Forum

  • http://www.youtube.com/watch?v=ZZzbrftTF0g Leslie Stool

    You have to admit – this is hilarious even if it is not factual.

    http://www.youtube.com/watch?v=ZZzbrftTF0g

  • MattB

    I love how the video has to explicitly spell out the math of the transaction multiple times. I’m guessing that’s for the agents who watch it.

    Although, I think the video begs for a side by side comparison of how Redfin does on the sell side. I know from my personal experience with Redfin I sold in 7 days, for a price I wanted, and set a new record high for any house with in a 10 block radius.

    BTW, my agents name was Rob but I’m not sure why that matters.

  • Lisa

    We have had our house on the market since 2005. The slump had JUST begun and we missed the boat. We need our home sold to relocate. My parents now in thier 80s sold 3 homes and bought 4 all without the use of realtors.
    I did not have the chance to see the 60 minutes show….but will find a way to see it. I saw this clip on yahoo about you guys and next time around….we are using Redfin!

  • http://www.creditmortgage.com Robert Markin

    Hi. I have been reading the entries on this blog, and thought that other readers might be interested in doing some networking. I have been getting loans done in Florida for a lot of buyers who have been struggling. If any of the readers on this blog would like to get in touch about helping their buyers qualify for the loan they need, call me at our office. The number is on our site http://www.creditmortgage.com. Thanks. I am open to your thoughts.