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As someone who is currently looking to buy a house in the crazy Bay Area, I can tell you exactly why Redfin doesn't quite work. The Redfin real estate agents t
by steven2012 14y ago
As someone who is currently looking to buy a house in the crazy Bay Area, I can tell you exactly why Redfin doesn't quite work. The Redfin real estate agents themselves aren't as dedicated to the clients as a traditional real estate agent is. Sure, you can see places, they will give you advice, and place orders for you. But with a dedicated agent who is getting fully commission, you are getting a lot more soft services than you would with a Redfin agent.
Case in point: I have a friend who was looking strictly through Redfin, and whenever he found a house he would like, he would talk with the Redfin agent, and they would get a bid together. He was getting nowhere, and what was more frustrating is that even though they had the Redfin agent, they still felt alone and frustrated.
I suggested my real estate agent. She went to his house, talked to them about what they wanted, and then proactively started looking for houses for them, in addition to him scouring MLS at the same time. She would actually suggest different areas of the Bay Area, instead of just SF because it looks like $850k won't buy you a decent house in a decent area anymore.
The other thing that is really helpful in today's market is that she encouraged my friend to submit multiple offers at the same time, ie. bidding on 2-3 different houses. This is something Redfin actively discouraged. It's a bit grey area, but in this market, you can't afford to pass up any opportunities since the probability of getting a house is so low. As well, she works for a large brokerage, so she is always trying to get the inside scoop on new houses that are about to hit the market. They still haven't gotten a house yet, but they are less frustrated by the process and they feel a lot better knowing that they are getting good guidance from someone who is dedicated to helping them getting a house.
If you are a sophisticated real estate buyer, and all you need is an agent to do all the documentation for you, then Redfin will likely work for you. But most people aren't, and in a broken market like today in the Bay Area, Redfin will be less successful, because what you really need is someone that knows the tricks of the trade and will help you bend the rules a bit.
- smackfu 14y agoI'm not sure how valuable it is to build a system that works well in a crazy market, considering how many more markets are not crazy. Yes, there are markets where speed is the most important feature, and properties tend to have multiple offers and go above the selling price.... but that is a pretty far edge case.
- steven2012 14y agoThe average homes in the Bay Area are much higher than in many, if not most, parts of the US. Also, lots of inventory move, and this is the second time in about 10 years where the markets have gone "crazy". If they sell one home in the Bay Area, it could be the equivalent of 5-8 homes in the MidWest where houses average 150k. If I were Redfin, I would try to ensure that my system worked in these "big fish" market where the revenues would be higher, regardless of what the market conditions are, instead of trying to work in the smaller, less expensive markets where you would need to make up for a lot more volume just to get equivalent revenues.