A Crazy Decision

In a few minutes, Redfin will post on its website a short notice that we cannot take new listings:

From June 16 to July 8, Redfin is not accepting new listing customers. You can submit listing information now if you’d like, but we will not contact you or list your property until July 9. If Redfin has already committed to listing your property, you can be sure that we will continue to meet your highest expectations.

But why are we turning away new business? In Southern California, new listing business increased by a factor of ten in one month; in the Bay Area it tripled. Continuing to take new listings would strain our ability to offer customers great service. Since one of our core principles is putting customers before profits, we are focusing on the customers we already have.

We will continue to represent buyers because our buyers’ agents still have the capacity to serve an increasing number of new customers well. We will only resume listing properties when we can offer every new listing customer the same fanatical service that got us this far in the first place, which we expect will take us a few weeks. You can send us feedback via our blog or by using a form to send us e-mail.

Thanks for your support, and we apologize for this interruption in our service.
Regards,
Glenn

Dave, Mike and I decided to do this after a conference call last night about California, where several of our agents have been working for weeks without a day off. Some of the increase in demand is simply seasonal, some of it is the result of being on 60 Minutes, some of it seems like a freak of nature.

At company meetings, we always talk about how happy customers are more important to our long-term success than profits, and so we felt that we had no choice but to stop taking new listing business. Restaurants and planes fill up, doctors sometimes can’t take new patients. You can add more tables or seats, you can rush through appointments, but the people already committed to you don’t appreciate it.

Someone already asked me if this is a PR stunt. No, it is not. If it were, we would have announced it on Monday morning, with a press release, during a competitive lull. We are discussing this here on the blog on the assumption that people would find out about it sooner or later, and they may as well find out from us. We got the word out as soon as we could; a few engineers have had to stay late to make changes to our site. Thank you Savan, Shahaf and Jeff for giving it up on a Friday night, to Cynthia too.

Discussion

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

    Given your agents don’t get hired unless they have completed a couple dozen deals, shouldn’t they know that the real estate business often involves working several straight weeks without a day off?

    I can’t believe the VC folks were told you were taking a two-week holiday from new business during what is traditionally the busiest time of year.

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

    Jonathan, the VC’s aren’t looking for a liquidity event for years, so they’re as focused as we are on the long-term quality of the brand. Overall, everyone is very happy with the company’s financial performance. That said, I can’t pretend that it’s good news that we’ve had to do this.

    And yes, I know that traditional real estate agents don’t get a day off during the busiest time of the year either, and I don’t know how you do it. It’s a tough job. In the case of our agents, it seems to be especially stressful because they’ve been at the office late into the night, every night.

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

    Late nights are tough, Glenn. They’re also a part of the business for better or worse, as I know you know.

  • Bob

    Glenn, don’t listen to this fool, he is just upset that people finally have a different and better avenue for real estate transactions.

    Also, you might want to send your legal team out looking for real estate agents who are infringing on your trademark right now, as I have seen on a few blogs.

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

    Bob,

    Flat rate listing companies have been around for quite some time. Many offer options at prices lower than Redfin’s.

    None, to my knowledge, have ever taken a two-week hiatus from listings in the middle of the busiest season of the year.

    Not sure what business you’re in, Bob, but most companies when faced with overwhelming demand don’t turn customers away for two weeks.

    People working long hours doesn’t fly as a reason, not in real estate where that is the norm.

  • Mike

    Dalton is obviously a full commision realtor. Every person with less than half a brain knows that Realtors are in it for themselves. I am in the high end market and hate when I have to pay some realtor (same as a car salesman) 2% or more. It is a complete rip off. When will the general public see this? I hope Redfin catches on :)

  • disgrunt

    The Redfin fans on this thread are apparently not Redfin customers, at least on the listing side. RF is doing a terrible job for their customers with active listings at present. The business model doesn’t support busy-ness, which is why RF probably shouldn’t be held as the heroes of the real estate space right now. A company like Yahoo with more resources could easily start a brokerage and do much better to support their customers.

    I’m in SF, and I’ve had more problems getting my agent to respond to phone calls, much less getting my house sold. The only potential bidders I know about died on the vine probably waiting on the same 1-business-day phone response delay that I am.

    Right now, I wouldn’t advise my worst enemy to sign up with Redfin. I actually applaud the suspension of the listing service. I hope it’s permanent, actually, for Redfin’s sake, so they don’t trash their image any more than they have.