I guess Paul Allen knows something you don’t? Could it possibly be that Real Estate is not a fixed commodity? That new developments need to actually be advertised? That most new developments have on site sales staff that actually show prospective buyers what the inside of the new home will look like (in person)!

I guess Vulcan and Paul Allen realize that 99.9% of buyers still want to view the home before they make an offer on it or are willing to close escrow? You see Simon not every home is the same; therefore, a real estate purchase has many more intangibles then buying the cheapest possible seat on a flight or buying the same new white Toyota.

By the way, commissions are not fixed and there are many companies out there that have different commission models. One thing that All Successful real estate companies share is that over the long term their income is greater then their debts. Is Redfin one of those companies or are they being propped up by venture capital? It is my prediction that Redfin will eventually either go out of business or their owner will make a bundle selling off the company to the next sap who believes Real Estate is broken and needs to be fixed.

The bottom line is Paul Allen and Vulcan are sending mixed messages by not putting their own money where their mouth is! I wonder how many other venture capical companies are thinking twice about investing in Redfin now?

Realtors benefit the most from the housing boom. The commission they charge are basically a tax to the American people. We talk about oil companies price gauging, but we never talk about Realtors price gauging. A $200k house requires as much effort to sell as a $1M house, yet for no reason, realtors’ profit grew from 12k to 60k, sometimes for representing the very same house. What do realtors do that RedFin can’t? There may be some super paranoid people or internet illiterate people who prefer to use a realtor, but at least give buyers like myself an alternative so I can save up some money for the new carpets. I personally know couple realtors who own 8+ properties and flip them like hamburgers, with the money you and I feed them. I sometimes question if the realtors are the one who jack up the housing price.

Enough said, I think realtors are a friction in the market, a parasite to the society. Crudos to Redfin for empowering consumers and starting this revolution.

Thanks so much for clearing up some lingering questions we’ve had.

I am certainly not against John L. Scott’s marketing of the Vulcan properties…. I think they can produce the kind of slick marketing and sales staff support that their graphic designers have already created. I think having a “Brand Name” is of utmost importance and selling the sizzle along with the steak is imperative, especially if we see a glut of new condos and the competition heats up for those Buyer’s dollars.

One more question… you mention that you and your associates are Realtors “but of course we are realtors ourselves”, but I could not find you nor Redfin in the Realtor database. Perhaps you have forgotten to pay your dues! Or perhaps you believe “Realtor” is synonymous with “Real Estate Agent”. But Realtors adher to a strict code of ethics. You can find out more information and a complete copy of the Code of Ethics here: http://www.realtor.org/mempolweb.nsf/pages/code

— Marlow

The number of pending and closed transactions is an accurate leading indicator of success in a new business. Of course we are anxious to share good news, but we have always been explicit about exactly what we’re counting. Exaggeration only hurts our reputation.

As for Vulcan, Redfin had not been interested in taking on Vulcan’s listings when our program was still in beta, so we did not pursue a meeting. Vulcan contacted us following your posting and now we are meeting, but nothing is likely to come of it, because we don’t think Vulcan personnel will want to host open houses.

The premise of our service is that some consumers want to do the legwork, and leave us to handle the negotiations and paperwork. When potential Redfin listing customers want an agent to host open houses, we recommend agents who work for John L. Scott and Windermere. Redfin, especially Redfin beta, isn’t for everyone, and we have never pretended it was.

As for the “Hall of Shame,” we agonized over whether it was an appropriate post. Fundamentally, we believe that the Internet supports fair markets by creating an open forum on the reputations of buyers, sellers and their agents. On the other hand, we also believe that it is very important to collaborate with our counterparts at other brokerages, the overwhelming majority of whom are complete professionals.

Our main concern has been that the posting would undermine our efforts to build rapport with our peers in the industry. You may be convinced that we don’t respect realtors, but of course we are realtors ourselves, and I for one would not spend time posting on a realtor’s blog if I did not respect your opinions.

The issue for us is how, when traditional escalation channels have failed, to deal with the occasional agent who actively and aggressively seeks to discourage one of our buyers from making an offer. Do you share our outrage at this agent’s behavior? Do you think we were wrong to stand up for ourselves and our clients? What remedy do you recommend we pursue?

I probably don’t have time to participate further in this dialog, but I am interested in what you have to say, and I will leave you to have the last word. Apologies in advance for any typos, as it has been a busy day. If you would like to meet to discuss the issue, I’d be happy to get together with you. My e-mail address is glenn (dot) kelman (at) redfin.com.