In Other News, The Sun Rose in the East This Morning

Those in other markets may be familiar with a little outfit called Redfin. Okay, so it’s not really a little outfit – when you suck down millions in venture capital to get rolling, you’d best not be all that little.

In keeping with this year’s election-centric focus, Redfin is to real estate what third-party presidential challenges have been to politics: a new concept eventually ground into the pavement by the realities of the existing system. Or, put another way, a solution that was in need of a problem.

Once upon a time in the Northwest, Redfin put together a snappy real estate search portal and offered rebates to buyers who used a Redfin agent to purchase. The catch? Buyers would have do to pretty much all the legwork themselves – Redfin agents didn’t search properties, didn’t show properties and in fact wanted their “clients” to call the listing agent to arrange access to the homes (causing some minor procuring cause issues along the way.)

Then came the property tours, where Redfin would deign to show homes for a set time period before turning on the meter and having buyers pay for the privilege of looking at the inside of a home with “their agent.”

Eventually, Redfin’s brokerage model became much like many other brokerages with the lone exception being that their agents were paid a salary versus commission. It could be considered a significant difference – I worked for Charles Schwab, where we made the same argument. Of course in stock brokerage, the other choice was to have brokers cold calling to push stocks and transactions needed or not. In real estate, it’s safe to believe someone calling about a house might really want to purchase a house – a small difference, no?

Redfin came to the Valley a couple of years back, first referring clients to a handful of worthy agents and then hiring a couple of agents themselves; their impact here, as predicted in this space since 2006, has been nil. Once in a while, I turn out to be right.

Anyway, now that I’ve wasted 300 words or so, let’s fast forward to Redfin’s latest “innovation” – having a single real estate agent work with a client rather than the prior service model where the client worked with whoever happened to be available at the time.

No less a real estate thought leader than Rob Hahn found this change incredibly brilliant:

The change from Redfin 2.0 to Redfin 3.0 raises the possibility that there is something about the homebuying and home selling process that is so uniquely psychological, so uniquely human, that a relationship with anyone or anything other than another individual human being is impossible. The implication is that no brokerage company, no real estate brand, can actually control the customer relationship because real estate is so emotional, so diverse, so unique as to require a single human point of contact/control.

That assumption has consequences. Real consequences, that are directly related to many of the hot topic issues of the day in the industry.

Since this got long, I’ll tackle the consequences in the next post.

But what say you? Am I overthinking this? Or am I onto something important here?

People want to work with people and not monoliths?

Of course it’s important. It’s as important – and as brutally obvious – as the sun rising in the east this morning.  It’s something anyone who has spent more than two weeks in the real estate business, and who hasn’t sold their soul to lenders for an REO contract, always has known. People want to work with people.

Yes, Rob … you’re overthinking this. And you’re still missing a major point …

The change from Redfin 2.0 to Redfin 3.0 raises the possibility that there is something about the homebuying and home selling process that is so uniquely psychological, so uniquely human, that a relationship with anyone or anything other than another individual human being is impossible.

That’s entirely incorrect, in as much as the desire for human relation isn’t limited to real estate.

About a month ago I was livid about some things that had happened at BBVA Compass, where I kept getting the runaround from the customer service people in their cloistered call center. Then a funny thing happened – I walked into the branch, they took the time to find out who I was and look for solutions to my problem. I’m far from a macher but I’m treated like one when I walk in the door now.

The title company I recommend, aside from being wildly competent and service-focused, knows who I am and knows how to handle my clients without me saying. And that’s why when I sold five homes in seven days last week, nearly every one of those escrows went to Lawyers Title.

At Stir Fry Paradise, there’s a drink waiting for me when I walk in because the owner sees my car in the parking lot. At Sakana, the sushi chefs know my order by heart. At Brakes Plus, the manager knows how much business I’ve done there and treats me accordingly. Got a problem with an Old Republic home warranty? I’ve got an eight-year business relationship with the account rep and I can pull some strings.

Business … no … life revolves around the type of relationships that, apparently, both Rob and Redfin have discovered. It’s not revolutionary. It’s been there the entire time for anyone who wants to take the time to look at it. The problem is, if you’re trying to be revolutionary or if you’re not part of the industry on which you comment, you may not ever have noticed what was obvious to everybody else from the get-go.

Real estate remains a business where more good can come from a 25-cent hand-written personal note as from the most slick website known to man. Sure, you can search the MLS on this site via an IDX feed – just as you can on two dozen other sites (or more) in the Valley. But you know what? This is the only site where you get me, for better or worse.

My style isn’t entirely like other agents; whether that is good or bad depends on the particular customer. One of my clients waves rhapsodic about the agent who showed them 25 homes in a day and it was the last home that turned out to be the right one. I tend to think I could have gotten to the same place in a half-dozen homes or less because more homes doesn’t necessarily translate to better work effort but, hey, that’s just me.

Something must be working. Past clients continue to refer me to friends and family rather than turn them loose on the mewling hoards of agents here in the Valley. Somewhere, the interpersonal relationship we formed gained value.

It’s good to see Redfin finally has figured that out. Venture capital apparently can’t buy you common sense.

Photo credit: Sean MacEntee via Flickr Creative Commons

Jonathan Dalton

Jonathan Dalton is a 40-plus-year resident of the Valley and has been helping folks buy and sell homes since 2004. He can be reached at 602-502-9693 or info at


  • Jeff Brown 6 years ago

    That’s the most lucid, on target, bestest ever post you’ve ever written. At least from where I stand. Why do most folks wanna ignore the obvious? Redfin has spent millions tryin’ to force others into believing the sun rises in the west. 

    Absolutely stellar, Jon. 

  • Roberta Murphy 6 years ago

    Amen, Jonathan! 

  • Paula 6 years ago

    “This is the only site where you get me, for better or worse.” 
    Venture capital can’t buy relationships either – that’s why people choose you Jonathan! Well written!

  • Jonathan Dalton 6 years ago

    True … but I’ll still take a $6M venture capital check if someone wants to throw it my way.

  • Jay Thompson 6 years ago

    I f’ing LOVE this post. 

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