How Can You Be A Discounter if There is No Standard Price?

A random follow-up thought to the 60 Minutes controversy: one thing we’ve always wondered about is how traditional real estate brokers can insist on calling Redfin a discounter while strenuously maintaining there is no standard commission? The six percent commission is supposedly an emotionally void concept, but anyone who offers to charge less is reviled like a deformed little frog. How can we (so eagerly) categorize any broker as a discounter if there is no standard price to discount from?
17850011_0c85eaf9bc_m.jpg

For all of brokerages’ blandishments for consumers to consider factors other than price, are we ourselves able to think about any of the ways a brokerage can be different (technology, customer satisfaction metrics, negotiating approach, agent compensation, satisfaction guarantees, business model) if it also happens to price its services differently? We hope so.

I know it’s just semantics, but I’ve been thinking about it a lot lately… and feeling a little bad about having posted so infrequently.

Discussion

  • http://blog.comeover.com Alex Mather

    Right now you’re a deformed frog and the other frogs are laughing at you, calling you names, and generally being mean.

    If you’re customers are happy and you’re making money, who cares about your “deformity?” Who cares that they’re calling you names? If you fulfill your promise of being amazing agents at a lower cost to consumers, in time the deformed frogs will outnumber the “normal” frogs and consumers will forget which set of frogs is which.

  • Nick Davis

    how traditional real estate brokers can insist on calling Redfin a discounter while strenuously maintaining there is no standard commission?

    Now that is a conundrum for the traditional crowd!

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

    Alex, good point on the “making money”. Is Redfin doing that yet?

    Glenn, to me, it’s not about discounting it’s about limited service. Discount all you want just don’t limit the services. If you want to call your self a discounter, a rebater, a refunder, go ahead. It doesn’t matter what we call it. I think you are on to something, just don’t be afraid to admit “we’re wrong. this isn’t working” and reinvent again and again and again until you get the right balance.

    Are you making money? If you are still looking for VC, I assume you are not and it might be time to reinvent. My partner and I are putting capital into our start-up by selling my homes, my cars, and my wakeboards. I have to make a profit with-in 6 months or get ready to reinvent fast.

  • Nick Davis

    They are trying to make a mockery of Redfin:

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

  • http://www.georgia-new-homes.net Stephen Graham

    Glenn @ Redfin,

    I’m glad to see that you gave some great exposure to the rebate model through 60 minutes. The consumer now has access to the information necessary to make an informed decision when buying. If you guys are coming to Atlanta, we look forward to competing with you.

    Good Luck!
    Stephen Graham
    http://www.georgia-new-homes.net

  • http://www.cavespot.com Cave Spot

    Companies like Redfin give the consumer more choice which is a good thing. Choosing between full service, discount, etc. should be up to the consumer.

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

  • nonymouse

    why do agents keep calling it a discount or limited service? They clearly do not understand the business model because redfin can deliver the same things with less hassle.

    They seem so crazy and defensive right now that they sound totally ignorant and incapable of presenting a sound argument.

    And what is their definition of “full service?” Blow jobs at the open house? Happy endings at the lock box? shampooing my carpets and painting my house? yard work?

    or is their definition printing flyers and chauffering customers?

  • nonymouse

    why do agents keep calling it a discount or limited service? They clearly do not understand the business model because redfin can deliver the same things with less hassle.

    They seem so crazy and defensive right now that they sound totally ignorant and incapable of presenting a sound argument.

    And what is their definition of “full service?” Blow jobs at the open house? Happy endings at the lock box? shampooing my carpets and painting my house? yard work?

    or is their definition printing flyers and chauffering customers?

  • http://www.georgia-new-homes.net Stephen Graham

    “How can we (so eagerly) categorize any broker as a discounter if there is no standard price to discount from?”

    Still awaiting an intelligent response to that question….

  • Rick Rodriguez

    Who is paying the refund, rebate, discount, or whatever? Redfin or the Seller of the property Redfin sold? My guess: it’s the Seller. So, how is Redfin giving a discount? I think it’s the Seller that pays….so it’s the Seller that’s giving the discount, and redfin is piggybacking on the Seller’s dime.

  • http://totalnetentretien.com RoxboroCarpet Cleaning

    Wonderful post , You hit the
    nail on the head, I just don’t understand why people quite get it.
    I’m not for sure how many people I’ve talked to concerning this very
    thing in the past month, and they just don’t grasp it.

    I as well am associated with carpet restoration and it is
    quite good to see fellows associated this business with the same mentalities and positions
    , Excellent post! I plan to visit this blog from now on, on a regular basis