Redfin's new secret weapon: Want to win bidding wars? Host your own!
Redin's gotten a lot of visibility in local and national press this Spring, positioning itself as experts on bidding wars. Last week, their CEO told the Los Angeles Times they're teaching their agents "how to win a bidding war;" and now, as the image above shows, they're extending that educational programming to homebuyers in Boston. What's mind blogging is they also appear to be poised to host their own private bidding wars!
Click on any of the Redfin's "Sneak Peek Open Houses" listed in Boston.com's Calender section and EventBrite and you will read:
Redfin Agent [name deleted] and the Listing team invite Redfin customers to an exclusive “Sneak Preview” of a listing that will be “live” on MLS after this special Open House. We’re not advertising this to the general public (emphasis added), because we want you to have the chance to see it first!
I don't mind if an individual home owner selling "for sale by owner" (FSBO) invites friends and neighbors to preview their home, in fact we recommend it. But when a listing agency limits their open houses to their "customers," they mock their own marketing materials that promise "maximum exposure" and betray their fiduciary duties to their seller clients.
And that's just the half of it.
Wonder how Redfin (1) disclose their conflicts of interest to buyers, and (2) whether any of their buyer clients who have been "abandoned" look for a real buyer agent to represent them without a conflict of interest? Those questions beg another we've asked before: Is Redfin willing to disclose how many of their own buyer clients are competing in bidding wars against other Redfin clients?
By the time you read this, Redfin may cancel the Sneak Peek Open Houses planned in Boston and Dedham tonight, June 19, 2012 at 5:30pm. It appears that they've already moved their Multiple Offer webinar from tomorrow to Monday.
Once a champion of technology and transparency, increases in minimum fees and shrinking rebates have undermined Redfin's original positioning as a money-saving business model. Worse, now they're playing the same "hide and seek" game with new listings that old school traditional agents do. Add their Tweet yesterday complaining that "low appraisals [are] screwing up deals," and IMHO, they've lost their credibility as both consumer advocates and buyer agents.
Should this blog post close by cautioning DIY home buyers that Redfin's conflicts of interest may cost you more than their rebate, or thanking Redfin's for providing more evidence of the return of an unsettling trend, also reported by the Los Angeles Times: listing agents are trying to sell listings before they hit the MLS (a technique known as "pocket listings"). That practice heightens a sense of urgency and scarcity, real or imagined, among home buyers, increases prices and in-house sales, and makes revenues look good for companies who would like to go public. Two weeks ago, the 800-pound gorilla of in-house sales, the parent company of Coldwell Banker, Century 21, Better Homes & Gardens, Sotheby's International and other real estate brands, filed their IPO; will Redfin be next?
If investors think Facebook was overvalued, they should do a double take on dual agents and designated agents before they get taken, again. How do consumers make sure a real estate agent is really on their side? Ask the brokerage to include a Pledge of Allegiance in their contract (see buyer sample and download informational brochure below). If you're a seller, (1) do the same, (2) never agree to designated agency or dual agency, and (3) get a comprehensive marketing plan to maximize the exposure of your listing via the MLS and all other real estate portals BEFORE you sign a listing agreement.
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