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?
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.
Alex Mather said:
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.
May 25, 2007 3:47 PM
Nick Davis said:
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!
May 25, 2007 5:11 PM
Edyn Real Estate said:
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.
May 25, 2007 5:14 PM
Nick Davis said:
They are trying to make a mockery of Redfin:
http://www.youtube.com/watch?v=ZZzbrftTF0g
May 25, 2007 5:29 PM
Stephen Graham said:
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
May 26, 2007 9:59 AM
Cave Spot said:
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
May 26, 2007 1:14 PM
nonymouse said:
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?
May 30, 2007 1:56 AM
nonymouse said:
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?
May 30, 2007 1:57 AM
Stephen Graham said:
“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….
May 30, 2007 5:04 PM
Rick Rodriguez said:
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.
August 25, 2007 11:50 AM