August 4, 2023 at 8:58 AM #902540
When they first came around I tried to explain that their business model simply could not and would not work. Understanding real estate brokerage as I do I knew the day would come when they would have to admit that.
That day was yesterday on their conference and while they didn’t completely come out and say it all the pieces were in place showing that they have realized their original business model was flawed and never would work.
1. They were going to cut commissions and the cost of buying via rebates to buyers.
Those rebates are gone now.
2. Employed agents would have less personal benefit at stake and would look out for the buyers more. They would do higher volumes of transactions and be more skilled.
More than 50% of their business comes from outside agents they refer leads to and they are taking steps to increase that. Like Zillow they realized the most profitable business model is selling leads to agents
3. Employed agents would not only become more skilled but would accept lower wages for the certainty of a paycheck
They are piloting a problem to allow agents to work in house but bring in their own business and be paid on a different comp plan (i.e. agent keeps most of commission on own deals like a traditional brokerage). This represents a clear shift toward having their agents become independent contractors that do their own business like a traditional brokerage but pay for leads they receive in house. The big old school brokerages have done this on a smaller scale with corporate relocation business. Redfin is gonna try to do it on a larger scale with leads they generate from their app.
But they are essentially becoming a traditional old school brokerage. The general public will realize that in a few years.
Redfin is becoming Coldwell Banker, Berkshire, Compass et al.
Its over. All that is left is for the dust to settle and for it to be apparent the employed/salaried agent model was never going to work.
For all its criticism the traditional real estate brokerage/commission model has evolved over many years and persists because it works.August 4, 2023 at 9:02 AM #902541
Its all here in the conference call transcript from yesterday if you understand how to read between the lines
I knew this was coming based upon the falling transaction volume and bought puts two days.
Just closed them out for a 5X profit this morning.
Put a fork in that model.August 10, 2023 at 1:12 PM #902611
You sure do toe the realtor line pretty consistently. Peck at San Diegan who choses to move to Utah like a mama bird protecting her nest. Ditto anything that threatens the traditional realtor ransom.
You might want to spend some energy getting the San Diego Association of Realtors in order – reports are that over $1M was embezzled and the SDAR did nothing after being told of such.August 10, 2023 at 10:23 PM #902613
With all due respect this is complete and utter BS. Lets start here with my post earlier today
I have no personal stake in what happens. I have created a financial picture that does not depend upon income from selling real estate. I still stay engaged in the business but it really doesnt impact my personal finances
Now onto Redfin. They had a business model which couldnt make money in the best of times and I knew that because I understand the economics of real estate brokerage. Now we are in a very tough market and they are tossing out their business model and stepping into the traditional model. It was never gonna work.
How about your Redfin buddy? How is he doing? Still with them? Still in the business? Of course not!
Onto econprof who i have no issue with moving to Utah. What I have an issue with is him playing politics and throwing CA under the bus. he claims to have been an expert economist, contractor and investor. he was here long enough to be set for life along with future generations of his family yet he made one bad decision with SD real estate after another. I rib him because he just wants to blame CA rather than taking personal responsibility for his own decisions.
As for SDAR, I was never a member and never a fan of that organization. I have always stayed with the better run Board up in North County (NSDCAR). Even still they are all trying to hold onto their personal fifedoms across the country and Id rather see the whole thing consolidated nationally. But again SDAR? Not my problemAugust 11, 2023 at 6:40 AM #902614
My Redfin friend is doing great! Still with them and he has more business than ever! Has to hand some off it is coming in so fast.
20,000+ of your fellow San Diego realtors are part of SDAR. Not a very good look for your profession.August 11, 2023 at 8:53 AM #902615
Do I need to remind you this is Piggington. In God we trust everyone else bring data. Here is data from earnings call
transactions down 33%
45% of transactions were done by non-redfin agents. They were referred to independent agents
2022 was already a low volume year and 2023 is far worse.
Lets go with 2022 as base year = 100
100 – 33% of transactions = 67
67 x 55% of transactions by in house agents =37
RDFN agents did 37% the number of transactions as they did in 2022!
That’s scorched earth not doing great!
RDFN is planning to phase out even more and take that to 55% or more referred out next year and transaction counts are still dropping.
Its likely 70% of their in house business is gone next year if not more!
Me thinks your friend has adopted the realtor Pollyanna façade
As for SDAR that was embezzlement by management of a trade association plain and simple. That individual should be in jail and likely will be once things shake out over time. It has nothing to do with the realtors or the profession. Its white collar crime which exists in every industryAugust 13, 2023 at 12:05 PM #902616
Geez man you are really something.
I did not say all of Redfin was doing great or that Redfin business is up. I said my friend is doing great. He tried to take a vacation this summer and was inundated with so many sales transactions that he had to abbreviate it.
You make a very common mistake in thinking that statistics can give you the entire picture when they do not.August 13, 2023 at 12:10 PM #902617
“Its white collar crime which exists in every industry”
You overlook that the SDAR board is being charged with retaliation. We shall see where the lawsuit ends, but at this point it appears to be wider than one bad actor.August 14, 2023 at 7:13 AM #902618
If you want to be proven wrong you can DM his name. I can prove otherwise and will DM you his actual production not his Pollyanna façade. I dont know where he works but this is an example from your area. There are 4 male RDFN buyers agents who serve San Marcos area. Here is their Summer production this year.
Perhaps your friend is chasing buyers but not producing like the rest and worried about job security as they have already cut 1/3rd nationwide
1 sale this Summer
None Since February
1 sale this Summer
2 Sales this SummerAugust 14, 2023 at 7:25 AM #902619
Im not overlooking anything. It was white collar crime and appears to be a cover up by the other execs. It is an indictment of leadership of a trade association not the industry.
FWIW there are plenty of problems with the industry as there are all industries. The compensation of agents persists because it is what works.
Ive been doing this for over two decades. Ive made people millions, never gotten so much as an irate call from a past client, never had a single black mark, have kept far more people out of making mistakes by advising against things that personally cost me career earnings that must be close to $1M over those two decades. Someone with my experience, track record and skills would not have a hard time justifying a billing rate of $100/hour. Lets cut that in half to $50/hour
I go out with people all the time for 4 hours. Potential buyers arent going to write me a $200 check each time I do that let alone $400. Most of them end up not buying anything
My clients call/text me all the time. There is NWIH they would pay me each time they call or text for advice or with a question. Most of them end up not buying anything
I spend hours doing research for my clients trying to find them the right thing. they would not react kindly to weekly bills of $200 to $500 just for the work I do behind the scenes. Most of them end up not buying anything
If I could only bill those that actually complete a transaction I would be better off working at In n Out, we all would and the industry could not exist.
The system is what it is because it has evolved over many years with countless disintermediation attempts but nothing else works
If you have a better way Im all ears. Billions have been spent trying to find one by some pretty sharp folksAugust 14, 2023 at 7:49 AM #902620
One last thing. I went on the RDFN site and they display each buyers agent’s production over the last 12 months. I then went to the MLS and ran the actual production for each agent. Every single agents production was inflated by 30 to 50%!August 15, 2023 at 6:49 PM #902622
You like to argue. No question about that. Just look at the Goodbye to San Diego thread that you revive from the ashes every chance you get.
Look, he tells me he had his best year ever. I have no reason to doubt him. He’s always busy. I’m not going to ask him to break out his books – we’re friends who share a drink or two in the evening, not business partners.
You still seem to be under the assumption that you can interpret data correctly. I’m not so sure that’s true.August 16, 2023 at 8:13 AM #902623
I definitely like to argue and debate ideas.
No interpretation of data is needed. It is raw data from the MLS database. It doesn’t need me to speak for it. It speaks for itself
You don’t need to ask him to break out his books. I can do it for you all via PM
As for the GtSD thread that one serves a few purposes. It exposes a few myths:
The demise of SD/Coastal CA myth that the media has perpetuated for decades.
It exposes the myth of those who leave under the guise of political reasons but are really motivated by personal reasons which are almost exclusively financial. Some leave for personal reasons related to family. Many either cant afford to stay or more often than not cant afford to live the lifestyle they think they deserve based upon the real estate wealth they were gifted living here. I see this over and over again. There is no shame in any of this but dont throw CA under the bus when you leave. It was good to you!
And the thread is fun!August 16, 2023 at 8:33 AM #902626
Oh and I also like and am not afraid of the truth. Something that is rarely openly discussed in the real estate profession. Everyone is the neighborhood expert, everyone is a top realtor, everyone is #1. The truth is there is massive hyperbole among agents actual production. Always has beenAugust 17, 2023 at 2:30 PM #902627
Here you all go. This is the kind of interview a CEO gives to pre-announce his company is about to get trounced the next several earnings reports.
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