Redfin on 60 minutes ... the facts, not the spin
As I've pointed out previously, 60 Minutes and Redfin did a fine job of trashing just about every real estate agent in America if not the world the other night and claimed how they (and only they) can save everyone money. Glen Kelman is a master of spin, he is intelligent and charming (or so I hear). CBS and 60 Minutes gave him his 15 minutes of fame and he seized the moment.
The basic premise of the article on 60 Minutes is that real estate agents charge a fixed 6% commission that is excessive and that they do very little for the money so you should use a company that lets you do some of the work and save money. First of all, 6% is not fixed, I have sold houses at 6% and in certain situations, have sold them for a little more and for a little less commission. It is always negotiable.
As to real estate agents doing very little to earn their commission, I certainly can't speak for all agents and I've run into several that do very little for their client. I know other real estate agents who, like myself, actually do quite a bit of work and spend many hours to take the transaction from meeting the client to showing houses to writing the contract and the significant amount of work required from that point to bring the real estate transaction to a successful closing. Some transactions are easy, others are difficult but Redfin would make you think that all you have to do is go online, see a house or two and magically, you'll be moving into your new home almost effortlessly.
I've worked with clients who have done a lot of homework on the Internet and are very savvy buyers. I've still been required to do a significant amount of work on their behalf. So I was curious as to what Redfin did for their clients and it turns out to be very little.
From their website, they want you to visit open houses or they will take you to visit a few houses at no charge but if you have to see a few more, there is a charge. The real kicker is that they want you to call the listing agent to get to see the house but to tell them that you are being represented ??? by Redfin who will collect the commission for doing nothing while the listing agent is expected to do the work.
Does that seem fair? 
Instructions and scripts are even provided by Redfin so that you can convince the listing agent to do the work that Redfin is supposed to be doing. It's all below, courtesy of the Redfin website.
1. Open Houses
Agents frequently open ... The listing agent’s contact details ...
2. Touring Homes with Redfin Direct
Redfin can also host a private tour ...A Redfin assistant agent (I'm not sure that is legal unless the assistant is licensed but laws vary from state to state) will show you around for three hours...first tour is free. After that, we charge $250...
3. Private Tours from Listing Agents
If you only want to see one property, you can also ask the seller’s agent ...identify yourself as a Redfin customer...
Calling the Listing Agent...When you call the listing agent to arrange a tour, the listing agent will likely ask ...questions that may be easier to answer using the outline below...
Touring homes with the Listing Agent
As a new brokerage, Redfin is occasionally the subject of questions from the listing agent ...Printing this one-page introduction ...
WOW!
While I know many people would like to save money on a real estate transaction, and after all, who can blame them, finding out what it took to save money by using Redfin was just amazing to me.
I can't even imagine how they overpromise and underdeliver on the listing side with their flat fee listing program.
Here are a few more tidbits. Glen Kelman has admitted that Redfin is not profitable yet because their fixed costs are high. Yet they only have physical offices in Seattle and San Francisco and if you want to meet an agent in Los Angeles, Orange County, San Diego or Boston, you have to do so at a coffee shop.
Thank goodness for Starbucks.
They claim to have very experienced real estate agents (in my previous post, I considered them to be flipping hamburgers at McDonalds just prior to joining Redfin) yet they do not have as many transactions verified by the Seattle MLS (headquarters and where they have operated for a while) as they are claiming. Yet they go further by indicating that most real estate agents that you might hire who don't work for Redfin are likely to be inexperienced agents. Come on, surely you can do better than that one.
Finally, as to the idea of saving money. As everyone saw Lesley Stahl cozying up to Glen on the show, winking coyly about the idea of high commissions being paid to these "scoundral" real estate agents, does anyone believe she would really use the services of a firm like Redfin for her personal real estate transactions.
I'm a good shopper and I like to save money. I go to Costco and Wal Mart and purchase basics at a savings. I go to the mall and buy shoes from Nordstrom's. I could get some serviceable shoes from Wal Mart but I like to wear Cole-Haan. My watch is from Tiffany, not a Timex.
I'm not an anti-discounter, there is a place for both Wal Mart and Nordstrom in today's world just as their is a place for both a full service quality real estate agency and a discount agency like Redfin. What I didn't like about the Redfin article on 60 Minutes was the implication that you will get all the service you are accustomed to and pay less.
You always get what you pay for. Get the facts, not the spin.