Brian Boero calls it the “most disruptive online real estate play in years.” He was talking about Redfin’s new agent scouting reports.
Here is the short version. Straight from the MLS to you, Redfin now brings you statistics on closed transactions for every real estate agent who is a member of the MLS in their market areas. They call it their Agent Scouting Report, and it sounds good on the face.
As quoted on the 1000Watt blog, Redfin CEO Glenn Kelman had this to say:
In some cases, what you’ll see is that an agent at another brokerage is a better fit for that neighborhood, an inevitability that has been a source of great controversy within Redfin. Why would we ever help anyone realize that a Coldwell Banker agent is her best choice?
But once you ask that question, you’ve already framed the debate in terms of short-term consequences rather than long-term principles. It leads you down a path where every market analysis concludes that it’s a good time to buy, and every review of a Redfin agent is five-stars.
The world doesn’t need more brokers like that. It needs a broker who will just tell the truth, the whole truth, and nothing but the truth. We’ll win more clients that way than we’ll lose — and we’ll win everyone’s trust.
The truth, the whole truth, and nothing but the truth. So noble! Except, that is, when the presentation of the “truth” is conveniently inconsistent. I’m calling horse hooey.
It’s important to remember that Redfin is first and foremost a real estate brokerage. They are not philanthropists or public servants. Their goal is to profit, not to selflessly educate and empower the poor, confused consumer. Publishing agent ratings online may or may not be a good idea, but if Redfin didn’t perceive it as a good idea for their business and bottom line, they wouldn’t bother.
The potential gold from agent “scouting reports” is being mined in two ways. First, and most obviously, the data will likely prove to be the SEO mother lode, adding eyes and value to an already (admittedly) robust website providing an awesome home search experience. (This much I am willing to admit. I am a reasonable guy.) What may be less readily apparent is that, despite Mr. Kelman’s protestations that principles made him do it, it is an opportunity to portray Redfin agents as being among the top in production.
First, I’ll begin by saying that while there have been complaints of data inaccuracy in some markets (in fact causing Redfin to temporarily suspend the agent reports in Washington, D.C. and Arizona), my very quick look at the San Diego data suggests the numbers are mostly correct. But, as with all numbers, they are subject to interpretation.
Without caveat or context, the consumer is left to make sense of a bunch of statistics being offered up like tablets from the mountaintop. And the biggest issue I see is the reporting problem associated with the popular agent team model. This, by the way, is only a problem for traditional agents; for Redfin, it is an opportunity to use imperfect data to their benefit. I believe they know exactly what they are doing, but more on my conspiracy theory in a moment.
Take the typical agent. They work solo. They show homes, list homes, meet the property inspector, the appraiser and the termite guy, they write and negotiate the contracts, and — well, you get the idea. This agent may close 10 or 20 or 50 transactions in a year, and it’s all there on the website for your enjoyment.
Now, take an agent team. In the team concept, all sales are recorded under the team leader’s name. The team may be a husband and wife team (guilty as charged), it may be a group of agents numbering several or several dozen (effectively a brokerage within a brokerage), or it may in fact be a brokerage. In these cases, the scouting reports for the individual licensees working under the front man or woman will suggest that they have no visible means of support and that your transaction will represent their maiden voyage into the exciting world of real property transactions. The team leader, on the other hand, will appear to be the hottest thing since Tabasco. For the consumer, there is no way to make the distinction.
Who is the better agent? The team leader or the traditional agent who is CEO, COO, CFO, Customer Service Rep, IT Department, and head dishwasher? That is up to the consumer to decide. What is important is that you can’t answer that question just by looking at the numbers.
But what if that’s all you’ve got? Enter Redfin. Unless you live in a lean-to far above base camp, you know that their lead agents do the high profile work – they ink the contracts, and the sales record under their names. Behind them, however, is a host of support staff, from field agents who actually show the homes to transaction coordinators who actually do the transactional work.
As Seattle agent Marlow Harris wrote, “Traditional agents don’t have ‘field agents’ to show homes or millions of dollars of other people’s money to build websites or to refund in the form of buyers rebates… They (Redfin) are doing it to make themselves look good and to manipulate the numbers to give the impression that their agency and individual agents are superior.”
Do I hate that Redfin is publishing this data? Not really, as long as the data is accurate. My numbers are solid. Have at it. What I do take issue with is the feigned higher ground upon which they are planting this flag. Admit that you are publishing statistics for profit and in a way that suggests your agents are awesome sauce compared to the rest of us, other “lesser” agents, and then you might at least win my respect on points.
For the big finish, I’ll offer this interesting observation. If transparency is truly your motive and altruism your end game, why portray the numbers differently for Redfin and non-Redfin agents?
Look me up, and you will find many search choices: Sellers in last 12 months; buyers in last 12 months; sellers in last 3 years; and buyers in last three years.
Now look up a San Diego Refin agent. What you get is clients in the last twelve months. What happened to the buyer/seller breakdown? What about the three-year history?
My guess is that with a little time and traction under their belt, that might change – because the numbers will suddenly smile more favorably on Redfin. That is, after all, the point — make no mistake. Caveat emptor.
Update: Redfin pulled their Agent Scouting Reports yesterday citing issues with the data. That didn’t take long.