Impact of Redfin’s ’13 Minutes’ on Realtor Fees
It’s not uncommon for visitors to arrive at RealtyBaron.com after asking a search engine, “Are real estate fees negotiable?”. Notice the query is not “how” to negotiate, but rather “if” negotiation of a Realtor’s price is allowed.
That very question coupled with Redfin’s appearance on 60 Minutes has me thinking about upcoming listing appointments this summer. With 13 million viewers, 60 Minutes may have awakened the U.S. consumer—many who had previously assumed real estate fees where non-negotiable—and inspired them to bargin with Realtors while huddled around a listing presentation.
Consumers motivated to haggle (i.e. downward pressure on Realtor fees) combined with a weakening real estate market that requires more time and money from Realtors to market listings (i.e. upward pressure on Realtor fees) makes for a very, very long summer for Realtors.
May 17th, 2007 at 8:05 am
The 60 minute effect seems to be spreading. Howard Clark did a piece yesterday on his radio station discussing (in favor of) the 60 minutes piece and the changes RE faces as Redfin and others start shaking up the industry.
May 30th, 2007 at 8:03 pm
Redfin’s business model is verystrong, it exploits three entry points that the NAR leadership has failed to address:
1. Superior time management (Allows for MUCH HIGHER profit margins when actual work time is factored in)
2. Consumers are more sophisticated( YOUTUBE & MYSPACE) and comfortable with computers. So, when an agent says “I’ll upload pictures to the MLS” the consumer is thinking ‘my 12 year old can do this’.
3. Free publicity from the DOJ to ‘Sixty Minutes’ has forced the NAR to allocate resources to try and deflect the media blitz.
Basically, it boils down to performance and how that perfromance can help the seller reach his goal. The fact that Redfin has to be licensed, just like any other agent, effectively negates any comments directed their way from full service brokerages.
Couple that with clients that are comfortable with uploading pictures and video, and the percieved value of agents drops because this is not seen as dificult.
Finally, I believe that NAR’s stance on the issue of listing control will ultimately lead to its undoing. Even if the NAR wins against the feds they lose because their concerns are not aligned with the customers. They have provided a blueprint on how they can be beaten.
July 12th, 2007 at 4:59 pm
So what exactly is Redfin???