Redfin, the Seattle-based brokerage that launched as a disruptor, has brought it’s Redfin Direct service to Texas. Announced publicly last week, Redfin Direct soft-launched two weeks ago and already has active participants.

Redfin Direct gives real estate buyers in Dallas, Houston, Austin, and San Antonio the ability to make direct, online offers on Redfin-listed homes without the help of a buyer’s agent. 

In other words, paying zero commission.

The company has 231 active listings in North Texas. According to NTREIS data, Redfin has a 0.7 percent market share for units and an 0.8 percent market share for sales volume in North Texas.

“We have seen 10 offers thus far,” said Tony King, Redfin’s Texas broker. “Clearly, there is already a demand for this type of service in North Texas.”

Who are the buyers, what are the price points? King says he hasn’t seen any high-end luxury Redfin Direct sales as of yet, but Redfin Direct buyers are coming from across the board: investors, more-informed home buyers, even some first-time homebuyers who have done their research online.

“In places like the Park Cities (and Preston Hollow) we represent an incredible value,” said King.

But local brokers say Redfin Direct is no big deal: Consumers have always been able to buy homes without an agent in tow.

“Consumers have always had the ability to purchase direct from a seller and listing agent, that part isn’t new,” says Chris Kelly, President and CEO of the Ebby Halliday Companies.  “However, guiding a buyer and protecting their specific interests is the entire point of buyer agency. Helping to identify the property is just step one of about 100 that the buyer’s agent does, and is likely one of the smallest parts of their value proposition. Representing and protecting the interests of buyers should be expanded not diminished.”

Redfin also believes this could jump-start Redfin listings. If sellers can make their homes more competitive on price (minus the 3 percent agent commission), they might be more likely to list with Redfin.

(more…)

The business of buying and selling real estate becomes more competitive every day – as potential homebuyers can now simply swipe right or hit up their smartphone app store to make one of the most important decisions of their lives – and it’s critical for experienced Realtors to have the tools and education they need to stay in the game.

The business of buying and selling real estate becomes more competitive every day – as potential homebuyers can now simply swipe right or hit up their smartphone app store to make one of the most important decisions of their lives – and it’s critical for experienced Realtors to have the tools and education they need to stay in the game.

Andy Bearden, the founder of Insight Realty Network, said there’s a lot of chatter about how technology is a major “disruption” in today’s real estate market – but the big picture shows it’s more than that.

“I’m maintaining that the disruption has to do with the brokers and the agent,” he said. “Agents have figured out that if they’re going to survive Zillow, Redfin, and Amazon, they’re going to have to figure out what the plan is. They’re spending all this time with ‘legacy brokers’ trying to figure out how to compete, and nobody is showing them how to do that.”

Insight Realty Network

Insight Realty created a transaction fee model, which isn’t uncommon, but they’re also looking only for experienced agents and showing them how to navigate new waters.

“We want our team to be the best-trained, best-qualified people,” Bearden said. “That’s our niche within transaction fee brokerages. Agents are facing competition from new business models, new brokerages, and pre-profit companies that have all this money from Wall Street and don’t need to make any money. The existing broker has to come alongside them and instead of being a recruiting machine, help them compete against those disruptors.”

(more…)

 

There is a lot of talk to sort through when it comes to “disruptors” in the real estate industry, including the focus on technology and alternative listing models, such as flat-fee listings and or iBuyer sales.

But that’s not where the real disruption is happening — those are just strategies, says Andy Bearden, founder of the Insight Realty Network. The real disruption the industry faces is the seismic shift in the relationship between brokers and producers.

Andy Bearden

Experienced agents are becoming more demanding of value and will not tolerate a broker that cannot deliver simple things like a returned phone call or timely payments. They want brokers who are business partners and are committed to helping them build a solid business. A broker that will help them build wealth so their family can thrive and they can give back to their community.

“I find it funny that some brokerages teach that the key to wealth building for agents is to help the brokerage to recruit,” Bearden said. “The key to wealth building is to get your personal finances in order, run your business like a business, and invest in real estate.”   

Insight helps on all three fronts with the tools, education, and encouragement people need to finally earn what they are worth.  “And we return every call by the end of the day,” said Bearden.

(more…)

Just two months after entering an agreement, Redfin’s new program that cuts out buyer’s agents has RE/MAX out the door.

It was a quick divorce from a two-month romance. And to be honest, sort of a head-scratcher.

In mid-March, RE/MAX, the 40-year-old, Denver-based national real estate franchise broker announced a unique partnership with Redfin, the tech-focused brokerage that has morphed over the years, from trying to wipe out the Real Estate agent to employing them with discounted commission fees. The partnership gave RE/MAX agents exclusive access to Redfin’s agent referral program — albeit at a discounted rate (25 percent versus 30 percent of the agent’s commission, the standard for referral fees) — in 5,000 U.S. ZIP codes and throughout Canada, where Redfin recently launched its highly navigated home search website.

Ostensibly this was done, RE/MAX leaders claimed, to partner up with an online brokerage.

“Redfin is a good complement to the RE/MAX model, given their online presence and our offline presence,” Kerri Callahan, RE/MAX’s chief financial officer, said to Inman News in March. 

Leaders of both companies were crowing about reciprocal revenue potential, but the honeymoon ended on Monday.

Redfin’s launch of a new program that would essentially cut out buyers agents altogether had one unanticipated result: RE/MAX withdrew from its corporate partnership with Redfin. 

“Redfin has the utmost respect for RE/MAX as a company, for its agents and leaders. RE/MAX agents who already work as Redfin’s partner agents will continue to be our partners, and RE/MAX agents can continue to enroll in our partner program, but Redfin can now enroll partner agents from other brokerages to serve Redfin.com visitors in the U.S. and Canada,” the company said in a statement.

(more…)

Alex Doubet of DOOR, a flat-fee brokerage.

We all know Alex Doubet, his flat-fee brokerage Door, which is home-grown, founded and it turns out funded right here in Dallas/Park Cities. We know the story of how he founded the company right out of Harvard, because he thought his mom had paid too much to the agent when she listed and sold her own Park Cities home.

(Real estate brokers get paid thusly: the broker on each side of the deal takes, on average, three percent of the selling price of the home, which is split 50/50 broker/agent. So, if a house sells for $500,000, the seller and buyer’s broker(s) collectively take $30,000 off the table for themselves. But the 3% commission rate is almost always negotiated, especially in higher priced properties, as is the agents’ split. The Door way would be a $10,000 commission on this deal.)

Alex, like many Millennials, likes to think of himself as a disruptor. And he has done a terrific job of promoting himself to date, with billboard ads, even appearing on stage at Inman Real Estate Connect in NYC, which is a pay-to-play gig but hey, you get what you pay for. He listed a challenging neighbor’s home that did not sell, but they were very pleased with the service.

There is nothing new to his flat-fee brokerage model, that has been tried and, in some cases, proven successful at certain price ranges. It may even be successful at “uncertain” price ranges, too, as home prices contract.

But what is watchable about DOOR is that he is getting people to write checks to expand the company.

(more…)