At Last, The Outrage is Over (Introducing Redfin Select)

Evan, one of several old roommates who still put me up on visits to San Francisco, is perhaps the most dignified person I know. He has the deep, resonant voice of a Jewish Darth Vader, and the oddly punctuated speech of Christopher Walken. He rarely blinks and when he does, it seems like an important decision. His smile is friendly but also somehow knowing.

So when I spied Evan scurrying across a rainy SOMA street last month, it was almost a relief. “Look at Evan,” I said to another roommate. “What’s he doing out in the rain?”

“Going to another open house,” the roommate replied. “Didn’t you hear? Evan’s a die-hard Redfin fanatic.” Then the next sentence made my heart stop. “He’s always trying to get into listings.”

That Evan might have to worry about how to tour a house he wanted to buy worried me. We knew already that our customers needed broader property access, and had thought out loud about different approaches to the problem (which also includes one of my favorite exchanges between commenters, about the difference between proctology and colo-rectal surgery), but seeing someone struggling in the wild was a fresh outrage all the same.

Now, at last, after several improvements to tours already, the outrage is over. Thanks to the crusading efforts of Michael Young (especially), Scott Nagel, Marcella Branniff, Ellie Wilkinson, Bryan Selner, Marni Buchanan, Josh Sanders and many others, Redfin is now offering a premium home-buying service, which lets our clients tour homes to their heart’s content. The name of the service is Redfin Select.

With Select, we take you on tour twice a week, every week, until you find a home. When you do, we give you a 50% commission refund, which is usually worth $7,500 on a $500,000 home.

The commission refund is a tad smaller than the 67% we offer the clients of our original online home-buying service, Redfin Direct. But 50% tax-free is by any measure a whopping check at closing, and scotching the anxiety about how you get into a property is , for many clients, priceless. Now you have no excuse not to buy through Redfin…

Clients can enroll in Select by signing up for a home tour and getting the forms from the field agent; you can also get the forms by emailing select (at) redfin (dot) com. The forms don’t obligate you to work with Redfin, but they do help us remember who gets 50% and who gets 67% back at closing. And since Redfin Direct itself offers two free tours (and the ability to buy more at $250 a pop) there’s no need to decide between Select or Direct until after the first two tours.

As you may have surmised already, this isn’t an official launch. We haven’t rented any camels or biplanes or aging rock stars to launch Redfin Select, because we’re only taking 20 clients at first, so we can be sure to have enough tours to go around for everybody, even on short notice. The trial period will last a month or more, albeit with more and more clients.

This means that Redfin Select will only be available in a limited area — Seattle, Bellevue, Mercer Island, Redmond, Kirkland — at first, but we hope to expand the service over the summer to other markets. To do that, we need to build a better application for scheduling home tours, for us and for our field agents, which we’ll bundle with lots of improvements to how Redfin handles your favorite listings.

For now, let us know what you think of the service, and thanks for all the ideas so far. To learn more about Select, read on…

(Camel photo credit: Iqbal on Flickr)

Bonus link: live tape of 20 centimeter worm found in woman’s gut, not for faint of heart.

Discussion

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  • http://www.altosresearch.com mike simonsen

    Good move, Glenn! I knew you had it in you!

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  • http://www.ericbramlett.com Eric Bramlett

    Home buyers want to actually see the homes?

    • http://www.newhomesteps.com New home building guru

      I think home buyers do want to see homes. Hmmm?

  • http://activerain.com/blogsview/459995/Redfin-Born-a-Discount Redfin: Born a Discounter but always knew they were a Traditional

    [...] I hate to see Redfin move their business model away from the edge. The edge is cool, daring, and exciting. They sought to revolution the real estate industry. Their first vision had panache; “no buyers agents”, schedule your own showings, drive yourself, and because you are not using a buyer’s agent you save a bunch of money…

    …At this point I wonder if Redfin is still a game changer or are they just carving out a niche as an efficiently managed real estate brokerage?[...]

  • http://www.phoenixrealestateguy.com Jay Thompson

    I was going to comment on Select, but then I watched that video. All of it. How absolutely revolting!

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  • http://thehairfarmer.com Hair Farmer Joe

    Glenn – I thought it was very interesting when you told me that experience in the real estate industry is a liability, but see that now that you have a little industry experience yourself, you are realizing that many of these roads have already been traveled.

    I’m glad to see that you are adapting, but with the Seattle area real estate market finally following the rest of the country into the tank, it may be too little too late to save your investor’s money.

    One question – are you going to be using your same newbie, inexperienced agents to service any “Select” clients – or will you also have “Select” agents?

  • http://blog.redfin.com/blog/author/glenn%20kelman Glenn Kelman

    Hair Farmer Joe, I don’t remember our meeting. I can imagine myself saying there’s value in a new perspective on real estate but inexperience is not an asset. I worry every day that Redfin won’t learn fast enough everything we need to figure out about our industry, our markets and our business.

    And the idea that Redfin only employs inexperienced agents is factually incorrect. Any agent could research the transaction history of our employees via the local MLS. We only employ agents with experience in at least 20 transactions. I am not sure there are other brokerages at our scale with the same requirement. Less experienced agents work for Redfin in the field but not negotiating transactions. Our customer satisfaction rate is above 95%; we host an open forum for customers to discuss our service at forums.redfin.com, which we have also never seen another brokerage do. The only moderation we provide is to monitor posts for illegalities.

    We aren’t going to direct Select customers to better or worse agents, though we may at some point incorporate other services into the Select program.

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  • http://www.planomatic.com/demo Kori Covrigaru

    Glenn,

    First, I’d like to say I’m a supporter of your innovative brokerage services. I’ve also discussed Redfin with very many buyer, agents, both supporters and vice versa. My question to you (and my fear from hearing various comments) is it seems as though Redfin is slowly adding packages and services that are indeed helpful for buyers and sellers, but at the same time bring you closer and close to a nation-wide standard real estate brokerage. How do you plan on avoiding services until the day you wake up and find yourself on the board at NAR? How can you continue to keep your costs down in order to continue offering refunds to your clients?

    Best,

    Kori

  • http://blog.franklyrealty.com Frank LL0SA- Broker FranklyRealty.com

    First of all, not sure if you heard, but I have 100% proof that the market is about to skyrocket! Yep. Turns out that over the last decade the last 2 times my mom sold her place, the market took off. And being that she just sold a 3rd place last week, are are in for a good ride!

    Anyhow, I did some math on your Redfin Select program. On a $500,000 house the difference is about $2500. So the customer would still be better with the alacarte service if they were going to do 12 or fewer tours right?

    While the $250 sounds reasonable, I still suspect that buyers will STILL want to save that $250. I’m happy to hear that Redfin is cracking down on buyers that lie to listing agents (saying they have no agent) to get a “free viewing.” Kudos to you on that.

    Frank
    Broker FranklyRealty.com (Virginia/DC)

    ps. Also is that $250 paid at closing (deducted) or must they pay up front? Ie if they never buy a home, are they still on the hook for the $250. If not, might be a good way to get a free ride to work a couple times a week.

  • http://blog.franklyrealty.com Frank LL0SA- Broker FranklyRealty.com

    Farmer Joe,

    As a non-Redfin’er agent/broker, I can vouch that at least in the DC area, the Redfin agents are in NO WAY NEWBIES.

    Just last week, one of their agents submitted on a listing that I had. He was responsive. Knew how to negotiate, and he used technology to produce the cleanest of the 5 contracts that I got that day.

    I wish people would focus their energy on sucky agents and weekend warriors, instead of immediately equating “discount” with “inexperience.”

    As for the extra tours, I would imagine that they might consider hiring newer employees to do some high volume TWL “Taxi-ing With License.” Just as you might go to several Open Houses without your agent, sometimes the goal is to crank out 20-40 homes, and for that you don’t need an experienced agent.

    Also this notion of having a high # of agents is hogwash. Many of the local big companies will try to fill out their company photo to huff and puff and look big. In reality only 5-10% of them actually do a sale a month.

    Frank
    Broker FranklyRealty.com (Va/DC)

  • http://www.bonzai.squarespace.com/blog Mike Farmer

    Kori, the only way I know it can be done is through volume, although right now is not a favorable time to be talking about volume. The market will turn around, though. If Glen is strengthening service to attract volume then I think he’s on the right track.

    I have taken a fictional model based on Redfin’s set-up and added service and marketing to the equation, then looked at the volume it would take for one team to be profitable, and the numbers are realistically achievable.

    The trick is to capture the consumers trust that service is not sacrificed — if a company like Redfin can compete on the service end by doing far more volume than the average agent, in a team effort bolstered by technology, and can do it at a significantly lower cost, then when the market turns consumers ought to flock to such an offering.

    However, price speaks for itself but service has to be proven and marketed. Once consumers see they can get comparable or better service at a lower price, it’s a nobrainer — then it’s a matter of creating great, efficient teams that can produce huge amounts of volume. Build it right and they will come. The opportunity for Redfin is to position itself not as a discount model, but rather a superior service model at a lower price.

    Hard to do, but not impossible.

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  • Mary Fornier

    Redfin is the whore of the real estate industry. Real estate is an art and a science when practiced by true professionals who are helping people buy and sell their most valuable investments. It is not something to be turned into a Walmart — actually worse than Walmart — franchise.

    God help us if EVERYONE had to start giving rebates in order to do their jobs. Should attorneys offer free vacations with their law services? Should writers pay YOU to read their books? Should prostitutes give change and 2 for 1 specials?

  • http://www.signatureapartmentlocating.com Austin Apartment Locator

    Sounds interesting. Never heard of anything like it.

  • http://www.apartmentshere.com Austin Apartment Locator

    I wish we had this where I live.

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    Enjoy reading your post! Keep going!

  • Paulyh0905

    Very interesting stuff, check out our 3D floor plans

  • Paul

    I particularly enjoyed reading the post from Mary Fornier, it sounds like she has a real issue with the morals of this site!! Maybe she should look around on some other blogs for say floor plans for real estate she would probably have an opinion on this to!!