Theo K. Browne: Why I’m Bearish on Redfin (Part I)

Monday, September 24, 2018

Why I’m Bearish on Redfin (Part I)

Disclaimer: I have worked with many Redfin agents, many of whom are great at what they do, and who are a joy to work with. This is not a commentary on Redfin’s agents’ performance. This is an observation of the overall consumer experience that Redfin provides, which typically involves multiple agents and showing assistants.

I’m coming to terms with the fact that I’m old. While some are excited about Redfin & their technology, I don’t get excited about technology that doesn’t immediately show me value, and I’m pretty convinced that things like QR codes & AI chatbots won’t replace me any time soon. I feel the same way about Redfin and the plethora of “real estate industry disruptors” popping up every day. They’re tired, they’re introducing nothing new, and they will go out of business as soon as we see another downturn. Just like Zip Realty.

Why do I know this? Because consumers really care about service. Redfin is simply a discount brokerage and discount brokerages can’t provide excellent service at scale. How do I know that Redfin can’t provide excellent service as a discount brokerage? Their largest market is Seattle, they’ve been there for 14 years, and they are sucking wind in the service department. Don’t believe me? Check out their Yelp profile. Here’s a quick rundown:

That’s 67 positive reviews, 6 neutral (I could argue that a 3 star review is actually a negative review), and 38 negative reviews. So, at the time of this article, 35-40% of Redfin’s customers had a negative experience. At best, they’re offering a C- customer service experience and at worst, they’re offering a D- experience. In the real estate industry, that’s terrible. It’s abysmal.

Redfin has a customer experience problem in a big way. Unless they can solve that, they will follow in Zip Realty’s footsteps. There’s no reason to believe that they will solve this problem with their current business model. They’ve been trying in Seattle for 14 years.

Just for fun, here are some of my favorite reviews:

If you are an good or and expert in house hunting, Redfin maybe for you. If you a novice like me, it would have been much better to hiring a full service agent… – Steve C.

Horrible service always dealing with multiple people who didn’t have any information the person would always claim the were new. House did not close on time, and pay attention to the fine print of that 1 percent listing fee not as it seems… – Phillipmuk Z.

Pro: I love the RedFin mobile app. Absolutely love – love – love RedFin’s mobile app!
Con:
On the RedFin website, after you have chosen a RedFin agent you would like to work with, it’s only natural to assume you would be working the most with that person right? Nope… – Jared P.

I bought a home using a Redfin agent last fall. I wish I had spent the extra money to use a real Agent…The selling Agent never even saw the house with me… – Kathi M.

Stick with your well-known and respected Seattle-area realtors – Coldwell Banker, Windermere, any local agency. Redfin is a cut-rate company and it’s reflected in the service, stemming from how they treat their employees… – E P. (Sidenote, the review problem extends to Glassdoor. Will address in Part II.)

They are clearly just an online marketing group pretending to be in the real estate business…They offer the “lower commission” but I also think that the agent put less work into the deal… – J M.