Redfin: Just Another Used Car Salesman

Posted on 02. Aug, 2011 by in News Feed


This is what bugs me about Redfin. They are a venture backed company led by a bunch of really smart people who had a chance to dynamically transform the real estate industry but instead they are following the same old playbook designed and developed by the used car industry.

Check out their most recent blog post: “Five Redfin Agents Rank in the Top 10 Boston Area Buyers Agents“. Seems straight forward enough. They identify where their data comes from and what criteria they used to determine the results. The only hitch is that they are building a story on top of a questionable foundation.

If I told you I was a buyers agent you would assume I represent buyers right? Me too. Yet after only a few minutes of research I confirmed that every single one of Redfin’s top producing agents are representing both buyers AND sellers. I even found some transactions that had a Redfin agent on both sides of the deal! A practice that while legal in Massachusetts is considered extremely anti-consumer and has even been outlawed altogether in a number of states.

So Redfin, while not outright lying, is bending the truth just enough to get you to sign on the dotted line. They wrap up the sales pitch for their super great “buyers agents” by encouraging you to “get great customer service while working with some of the most successful and active agents in the region” but nowhere in this “pro-consumer” company’s bid for your business is the warning that just like Jimmy from the used car lot your friendly Redfin “buyers agent” interests may not be aligned with your own.

A dual agent cannot satisfy fully the duties of loyalty, full disclosure, obedience to lawful instructions which is required of an exclusive seller or buyer agent. The dual agent does not represent either the buyer or the seller solely – Massachusetts Mandatory Licensee-Consumer Relationship Disclosure

I guess it’s no wonder the word “Redfin” instantly conjures the image of a shark in my head.

PS: For whatever reason Redfin’s data seems to be inaccurate for Ryan Wilson. According to MLSPIN data he had actually represented a buyer in 14 transactions over the noted period with a total dollar amount of $6,152,950. This would have put him in the number 3 spot and shifted Redfin agents Hanna Driscoll and Adam Welling down to the 4th and 5th spots respectively.

PPS: Marla Mullen who works an EXCLUSIVE BUYER AGENT for Territory.com, never accepts listings and bills at a flat rate instead of a percentage commission closed 8 transactions over the period with a total dollar amount of $4,314,465. This would have placed her in the top 15 overall.

PPPS: If anyone from Redfin reads this, your link: “Boston-area agents” is improperly linked to the Seattle area agents page.

11 Responses to “Redfin: Just Another Used Car Salesman”

  1. Terry Sanford 2 August 2011 at 3:35 pm #

    I went back and using the same methodology I tried to recreate the Top 10 data table but I came up with slightly different results…

    1. Hans Brings – 35 Transactions – $18,444,600
    Coldwell Banker Residential Brokerage – Waltham

    2. Risa Bell – 24 Transactions – $12,480,853
    Redfin Corp.

    3. The Kelly & Colombo Group – 18 Transactions – $5,759,900
    RE/MAX Executive Realty

    4. Dave DiGregorio – 14 Transactions – $8,849,500
    Coldwell Banker Residential Brokerage – Waltham

    5. Charlesgate Realty Group Team – 14 Transactions – $5,950,500
    Charlesgate Realty Group, llc

    6. Ryan Wilson – 14 Transactions – $6,152,950
    Keller Williams Realty

    7. Hannah Driscoll – 13 Transactions – $7,916,900
    Redfin Corp.

    8. Matthew Zborezny – 13 Transactions – $5,768,500
    Redfin Corp.

    9. Brian J. Fitzpatrick – 13 Transactions – $4,312,500
    Coldwell Banker Residential Brokerage – Waltham

    10. Nancy Roos – 12 Transactions – $5,973,500
    Redfin Corp.

    10. McGeough Lamacchia Team – 12 Transactions – $4,830,400
    McGeough Lamacchia Realty, Inc

    10. Robin Gilman – 12 Transactions – $4,511,550
    RE/MAX Executive Realty

  2. Matt Goyer - Redfin 2 August 2011 at 5:02 pm #

    Hi Terry,

    Thanks for your interest in our blog post!

    You’re correct that our agents represent both buyers and sellers. However, for this blog post we’re only looking at deals in which they represented buyers. And we totally agree that dual agency is anti-consumer, but we do think it is okay to have two agents at the same brokerage represent the buyer and seller separately. If we did have the same agent represent both sides of the same transaction please drop me a line at matt@redfin.com with the details and we’ll look into it.

    Also, here is what we’ve written about previously on this issue:

    http://www.redfin.com/definition/dual-agency
    http://www.redfin.com/home-buying-guide/agent-roles
    http://blog.redfin.com/blog/2007/04/the_real_estate_consumers_bill_of_rights.html

    Re: Ryan Wilson and Marla Mullen, we double checked our data and can’t explain the discrepancy. We show Ryan with 10 deals (though under Zip Realty not Keller). For Marla we show 7 deals.

    We’re pulling our data from MLSPIN through our feed, not through the MLS interface, we’re filtering out sell-side transactions and filtering out team deals. The counties we’re looking at are Middlesex, Norfolk, Suffolk, Bristol, Essex, Plymouth and Worcester. If you drop me a line at matt@redfin.com I’m happy to send you our data.

    And thanks for the heads up about the broken link :).

  3. Glenn Kelman 2 August 2011 at 5:49 pm #

    Dual agency is when one agent represents a buyer and a seller on the same property. Redfin specifically prohibits this, publicly and as a matter of policy. We have never done it and never will.

    That said, we of course allow one Redfin agent to represent buyers and sellers on different listings. It would be nearly impossible for us or any broker to offer local expertise if our Cambridge agent couldn’t work with buyers and sellers in the Cambridge area. There is nothing unethical about this practice. We can better serve customers by letting someone work with buyers and sellers in one small area, so the agent can really know the market.

    There is also nothing unethical about different agents from one brokerage representing buyer and seller on the same property, provided the two don’t collude with one another, or have access to one another’s information. It would be impossible for a brokerage to reach any size whatsoever otherwise. No one would list with Redfin or any other decent-sized brokerage if, by listing with that broker, you were disqualified from working with any of that broker’s buyers.

    To say that Redfin promotes dual agency just because our agents represent buyers and sellers, but never on the same property at the same time, is just wrong.

  4. Terry Sanford 2 August 2011 at 6:17 pm #

    Hi Glen -

    Thanks for the comment.

    We are going to have to agree to disagree on this one. The practice that you are describing is designated agency which is technically a form of dual agency. Designated agency does address some of the most egregious conflicts of interest posed by dual agency but it does not remove them entirely.

    As far as your agents not being able to offer local expertise unless they work with both buyers and sellers I would be happy to introduce you to living proof that this is simply not true.

    I can also certainly understand how difficult it is to ramp up to a “decent sized” brokerage while maintaining the principal of putting the customer first. I have personally struggled with the issue while developing my own brokerage but impossible? Come on! Is there no change the world attitude left over at Redfin? I can think of a half a dozen large exclusive buyer brokerages in the Boston area alone.

    Obviously I am biased on the subject and I probably come down too hard on you guys but I watched Redfin start and I have watched it grow and from my perspective it has shifted away from being revolutionary and towards simply being better at the same old game. No small accomplishment in itself but certainly less than I had hoped for.

  5. Terry Sanford 2 August 2011 at 6:25 pm #

    Matt -

    I just answered Glen with regard to the dual/designated agency. I agree that designated agency is much much better than straight dual agency but you are still left with the structural conflicts and it’s only a matter of time before these infect your company’s service and its culture.

    RE Ryan Wilson it looks like he switched offices to Keller Williams mid quarter. I just did a simple search in MLSPIN using his agent ID and the two additional deals showed up. I did the same for Marla Mullen (full disclosure Marla works for my firm Territory) and it shows 8 closed buy-side transactions. It might be the county restriction that is causing the discrepancy as I didn’t make any restriction there.

    Thanks for the comment. Good luck all around.

  6. Terry Sanford 2 August 2011 at 6:32 pm #

    Matt -

    I just reread this to see if there was anything else that accounted for the data discrepancy and I realized that you filter out team deals. Why do you do this? I thought your Redfin agents work with a team of transaction coordinators and field agents?

  7. Matt Goyer - Redfin 2 August 2011 at 11:26 pm #

    We’ll have to disagree about the dual agency thing :).

    Re: data issues. In the data we get through our feed we don’t get individual agent names for team deals… I’m still puzzled about the Ryan Wilson thing. I’ll have to see if he shows as two different people because he switched brokerages.

  8. Terry Sanford 3 August 2011 at 10:08 am #

    Here are my thoughts on designated agency as a form of dual agency…

    Designated agency addresses the most obvious problem posed by traditional dual agency. Specifically that agents lose the ability to negotiate on their clients behalf. However it leaves the fundamental problem untouched. Dual agency creates a financial incentive for a company to steer customers towards its own listings. Allowing agents from its firm to represent both sides of a transaction also ensures that instead of having the full weight of Redfin, its executives and its principal broker behind them a customer may only get the support of a single agent (an agent who’s interests may or may not be at odds with their employer).

    Is Redfin above this? Are they able to put their customers interests before the firm’s financial success? I doubt it. Consider Glen’s admission above that “It would be impossible for a brokerage to reach any size whatsoever” without practicing dual agency. Add to this the promise clearly stated on their website “When you buy and sell with a Redfin agent within a nine-month period, you’ll save an additional $1,000″. I am pretty sure they are paying very close attention to the bottom line as it’s affected by “double-dipping”.

    Does anyone truly believe that Redfin agents who are generating more money for the company by encouraging both sides of a deal to stay in-house aren’t going to advance faster and further? There is a reason that the state of Massachusetts requires written consent from a consumer before allowing an agent to practice dual/designated agency. As much as I think Redfin is cool and god damn is their website slick, if you choose their brokerage service you just might be unknowingly lowering yourself into the sharks cage. Footnote #SHARKWEEK

  9. RealEstateCafe 3 August 2011 at 1:33 pm #

    We first flagged Redfin’s conflict of interest in a comment on our January 2008 blog post entitled, “Misleading home buyers: Conflict of Interest? What conflict of interest?”

    The final paragraph of that comment still rings true:

    “Won’t you agree that the “Conflict of interest? What conflict of interest?” cartoon above fits the final sentence in Redfin’s dual representation policy? With all the media attention they get for being consumer advocates, it amazes me that this conflict of interest hasn’t gotten more exposure.”

    Thanks Terry for calling it to the public’s attention!

  10. David Losh 3 August 2011 at 8:18 pm #

    You probably mean that they sell properties listed by redfin, along with any others. The web site is set up to make an offer online. In the State of Washington I have yet to figure out how an agent can represent a buyer without being involved in the process of the search, or at least see the property before an offer is presented.

  11. Stephen Maury 4 August 2011 at 3:09 pm #

    Thanks for not letting the conversation die, Terry. It’s clear that the conflicts of interest that arise from dual agency exist outside of the transactions where a single agent represents both sides. As the only exclusive buyer’s agency on Nantucket (there is a one agent shop as well but it hasn’t been active in some time) I often get asked why I restrict myself to representing only buyers. The truth of the matter is that I’m no more restricted than agents at any other office. An agent can only truly represent one party’s interests fully.

    The largest firm in my market, and my former employers, benefit greatly from having the largest presence in local print media. The top of mind placement they enjoy surely gains them business. When a buyer contacts the agency after seeing an ad for a property that agency represents, they become a lead and property of a particular agent. That agent may ignore the prospective buyers’ wishes and try and steer them toward their own listings. Or they may give up on trying to sell their own listings altogether and go for the easiest sale. In either case the agent is neglecting their duty to represent the sellers or prospective buyers faithfully. The conflict is unavoidable in designated agency.

    It’s disappointing that Redfin has abandoned their revolutionary philosophy at the foot of this debate.


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