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Anti-Consumer Bill of Rights
By karim April 3, 2007
This Redfin Consumer Bill of Rights thing got me thinking …Glenn has it all wrong. Here is my list:
1. Shut your pie hole! You get the services we prescribe. One size fits all.
2. Shut it! The way your agent makes money is his or her business even if it results in misaligned incentives ( this is an economics doohicky that means giddy-up!)
3. You are committed to an agent if that agent saw you first or called it first. Next time wear your cloaking device idiot.
4. Your agent’s job is to put lipstick on the pig. All other services are redundant and therefore easily dismissed….cut your own #$@!ing grass!
5. Agents are trained by Jedi Masters to find that singular point of harmony between a buyers and sellers interests….plus money more is better than less (duh!).
6. There will be no commission refunds. Full stop.
7. The only houses for sale are the ones your agent takes you too see….trust them implicitly.
8. Have an open discussion about a house for sale… as long as it is in your toilet and by yourself. We will not tolerate free speech in NARmerica.
9. See only partial information available about a house for sale. Too much information confuses you silly little consumers. Here, have a lollipop!
10. Be sure your agent will show your house to everyone but the cheap bastards that will never pay the sticker. Good agents can tell..trust us.
Tags
incentives, housing, agents, housing industry, redfin, bill of rights
Comments
Reuben Moore says
4:39 am, April 4, 2007
Karim -
While I believe that Redfin’s business model is dishonest, I love this list of yours. It flows from the well-deserved reputation of my business. Redfin’s problem, long term, is that they are not really trying to solve the issues at hand - only take advantage of them.
Matt Goyer’s Real Estate Blog » Blog Archive » Anti-consumer bill of rights says
10:50 am, April 4, 2007
[…] As a contributor to Redfin’s Real Estate Consumer’s Bill of Rights I particularly enjoyed Karim’s post about the Anti-Consumer Bill of Rights. It’s almost as entertaining as reading agent blogs. […]
Blue Collar Agents Blog - My Currency’s Anti-Consumer Bill of Right’s says
9:22 pm, April 5, 2007
[…] My Currency, a Zillowesque San Francisco based company, posted a great post in response to Redfin’s Consumer Bill of Rights. If Redfin’s version was written by Luke Sywalker then My currency’s version was written by Darth Vader. Check it out: This Redfin Consumer Bill of Rights thing got me thinking …Glenn has it all wrong. Here is my list: 1. Shut your pie hole! You get the services we prescribe. One size fits all. […]
Reuben Moore says
7:20 am, April 6, 2007
Red Herring Real Estate….
In fact, Redfin’s “Real Estate Consumer’s Bill of Rights” and their entire business model is a distraction from the real structural issues in the real estate businss.
I propose we re-name them, “Red Herring Real Estate”.
karim says
8:23 am, April 6, 2007
I see your point about the messenger interfering with the change message. Nobody wants to be an accomplice to the commercial objectives of others if there is doubt about validity or true motivations. Thats why people on TV aren’t ugly…if they were, it wouldn’t matter how good they are, we still would watch ;-). Beauty masquerading the content. Think Bay Watch.
So maybe Redfin needs a really attractive person to carry the message. Pam Anderson lobbying capital hill? That would be news worthy and no one would care about the content.
For what it is worth, I do think that Redfin’s commercial objectives are aligned with consumers…and that Glenn isn’t ugly.
Reuben Moore says
12:20 pm, April 9, 2007
Karim -
Near my office, there’s a guy on the corner selling watches and other stuff. It’s a real bargain - he sells for about one-tenth the retail price. Very pro-consumer!
karim says
12:04 pm, April 10, 2007
Well the notion of “you get what you pay for” is certainly true in a broad sense but there is no denying that the economy is full of over priced goods and services. That is why things like private labeling and firms like costco have done so well.
Do you thing that there are a few of your colleagues over-charging for the skill they bring to the table? I think that RE industry has room for variation in pricing. I don’t mind hiring a rookie if I pay that person a rookie price. Having said that, I may want to hire a full-service pro and pay through the nose to get the care and expertise.
Reuben Moore says
12:28 pm, April 10, 2007
Karim - I am totally with you. In fact, I could not agree more. But, BUT, that is not the problem I have with Redfin. I could not care less what they charge, or whether or not they offer a rebate.
Redfin is charging for services not rendered. Technically, Redfin is accepting offered compensation for services not rendered. The problem is not that Redfin has a different price/service-level proposition. The problem is that the Redfin business model relies on full payment for discount service (if that). This is theft. The fact that they rebate part of this ill-gotten gain is beside the point.
If we could focus less on the rebate question and more on the get-for-what-you-pay-for question, this debate would make a lot more sense to me. And yes, Redfin’s customers are getting more than they pay for - just like someone who buys a stolen watch from the guy on the corner. But for every happy watch buyer, there is a victim. Redfin’s victims are the sellers and the listing agents.
Our firm has decided to vary the offered buy-side payout based on service-level of the buyer agent. You mentioned, you-get-what-you-pay-for - If they are full service buyer agents we pay the full commission. If they discount on service, we discount on payment. Rebate? That is not my problem….
Seems fair, no?
karim says
2:51 pm, April 18, 2007
Hi Reuben,
Sorry I am just getting to this but I missed your comment earlier.
I see the issue in terms of WHO the service reduction is impacting. If the service reduction to a Redfin customer is impacting the selling agent by requiring more services to that Redfin buyer then it does seem logical for the selling agent to get paid more. However, if the service reduction is impacting the Redfin buyer than it is the buyer that deserves to get “paid”.
So I agree that you have the right to hold back commissions if you are working more. But if the impact to you as a listing agent is neutral, the commission should go to the buyer.
How can this be wrong?
Reuben Moore says
8:13 am, May 8, 2007
Hi Karim -
Yeah, I too have been remiss in follow-up here.
The discount brokerages (including Redfin) argue that they can charge less because they are one, more efficient, and two, ask their clients to pick up some of the tasks traditionally done by the agent. This is actually great - as far as it goes.
But, the fact is there are things a buyer just cannot do on their own - simple example - view property. Yes, I mean inside and out, not just on the internet. In this case, either the buyer’s agent must interject themselves. Or, the buyer’s agent must shift this task to the listing agent.
In fact, the business model of many discount brokerages, both discount listing firms and the newer discount buyer agencies (like Redfin) rely heavily on “duty shifting”.
So, I agree with you totally - If the impact to [the other side] is neutral, the benefit of the discount firm should go to their own client. But, the fact is, the impact is rarely neutral. All I am suggesting is that an agent/firm perform the responsibilities for which they are paid. If not, they should not be compensated for them.