Redfin Transforms: The End of the Beginning?

Now this is not the end. It is not even the beginning of the end.  But it is, perhaps, the end of the beginning.

- Sir Winston Churchill

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One of the true pioneers of the new generation of real estate companies, Redfin, has launched a new partner program:

Redfin released a sprawling, glorious update to our website last night that changes Redfin in two fundamental ways:

  1. We built data-driven agent profiles, showing every deal our own agents have done and every customer review, even on deals that failed.
  2. We opened up our business to partner agents and we published all their deals too, surveying old customers for reviews.

How does this change Redfin as a company? Well, when we upgraded our own service last November to offer unlimited home tours and a choice of agents, everyone said we were becoming less virtual. And now that we’re connecting consumers with partner agents, folks will say we’ve become more virtual.

Actually, I think the change to Redfin as a company is far deeper and far more subtle than what folks will say.

The Peanut Gallery

A hint of what’s changed comes from Gregg Swann of the Bloodhound Blog:

If Redfin can make five figures a day on what may not even amount to a single full-time staff line, that’s a killer business.

Maybe even such a killer business that it will replace client-representation altogether. Implausible? One of Redfin’s planned expansion cities is Phoenix — where our numbers are worse than Kitsap’s. Of the RE 2.0 players, only Estately.com does anything like this, but Redfin could go into the referral business virtually anywhere, virtually overnight.

And Louis Cammarosano of HomeGain said with maximum succinctness, over Twitter: “It means they are becoming like Homegain.

John Cook at TechFlash took Redfin to task:

The concept is not new. In fact, Seattle area companies such as Estately and HouseValues.com also earn money through agent referrals. But the program is a big switch for Redfin, which has always touted the customer service focus of its agents. Kelman said he was “terrified” that the partner program “could screw up the brand.” That’s why the company interviewed all of the partner agents and implemented an agent review system on the Redfin Web site. It also reserves the right to remove partner agents that are not living up to customer service requirements.

Kelman downplayed the possibility that Redfin would move entirely to a partner model. “There is something in Redfin’s blood that we like having direct relationships with the customer,” he said.

This change is a fundamental one.  This is not a mere extension of the Redfin model and philosophy.  It’s something else.

What Was Actually Done

TechFlash post above actually has a pretty good brief description of what Redfin actually launched:

Starting today, the company has aligned itself with 35 real estate agents from 13 different brokerage firms in nine counties. The agents, which receive a profle page on Redfin and must have completed 15 transactions, pay Redfin a 30 percent referral fee on any completed deals. Redfin then refunds 15 percent of that fee to home buyers, keeping the other 15 percent.

But Redfin has more info on this front:

Every single one of these partners committed to our consumer-friendly values as a prerequisite to joining the program:

  1. Technology: the partner refunds part of his commission to the client because the client asks for service online using our tools.
  2. Service: the partner is not allowed to do any of the funny-business around forcing someone to use him when buying a house; the partner earns more when the client is satisfied.
  3. Transparency: the partner publishes information about all his deals, and all his reviews; the partner provides the service requested by the consumer and nothing more unless asked.

Furthermore, rather than sending the “leads” to the agent (or multiple agents), the Redfin model places that power in the consumer’s hands.  The consumer sees the deals, failed deals, activities, etc. of the partner agent, then actively chooses to contact that particular agent.

So, the major differences between Redfin and other models are:

  • Power to choose in the hands of consumer
  • Transparency on agent quality metrics
  • Refund back to the consumer

But all of that, still, fails to address the central, subtle, and fundamental change.

The Change

Basically, by going to a ‘partner’ model, Redfin is no longer responsible for the consumer service experience.

Now, Glenn Kelman and others at Redfin vigorously dispute this:

The story said that we had been “terrified” about potential problems in our partners’ customer service without explaining that we said that to introduce the steps we took to avoid those problems. (emphasis added)

And

We planned for Redfin’s partner program in a financial model built in 2007. We experimented with it earlier than that, canceling the program in 2006 after it became clear that we had no way of being accountable for good service to the client.

We could have offered a year ago the referral programs typical in the industry, selling the client out to multiple unnamed agents for a fee. There was ample financial pressure to do so. We stuck to our guns to create something much better, building an entire accountability system and a set of tools for a client to ask a particular agent to perform a particular service, interviewing every partner agent in person, and checking each agent’s references over a year back, so we could offer a partner program consistent with our values. These values are why we radically cut the profitability of the program by offering half our fee back to the consumer. (Emphasis added)

For what it’s worth, I completely believe Redfin.  And furthermore, Redfin might very well be successful.

I'll Show You the Money!!!

Redfin's Ambassador of Kwan

However, there is a large gap between “building an entire accountability system” and actually being accountable.

Redfin is a brokerage in the markets in which it is active.  The agents who work for Redfin are employees of Redfin, and Redfin as an entity is accountable to the actual consumer for the service experience.  In fact, while I don’t know for sure, I’m going to guess that Redfin has a certain “Redfin Way” of “Redfin Service Standards” or whatever that it enforces on its agents.

If I’m a Redfin agent, and I don’t live up to Redfin’s performance standards, then Redfin has a variety of tools and methods at its disposal to enforce standards.  With these partner agents, no matter how well Redfin screens ‘em, Redfin only has one way to enforce standards: remove them from the program.

If I pick a partner agent, and have a terrible experience, who do I get to blame?

The Liability Question

A way to crystallize the issue is to consider legal liability.

Suppose that some unhappy consumer sues the partner agent after a deal goes south.  (Not saying this would happen, but thinking about lawsuits help clarify some issues.)

Im blind for a reason...

I'm blind for a reason...

The agent’s actual broker would be named in the lawsuit, since legally, the agent is just representing the broker.  The broker’s E&O insurance would come into play, and the lawsuit would then focus on whether the agent’s acts/omissions rose to the level of professional malpractice.  The broker’s processes, standards, training, screening, etc. would all become relevant as to establishing liability under respondeat superior theory.

Where does Redfin fit into this?

On the one hand, the consumer would absolutely sue Redfin.  After all, Redfin supposedly screened all of its partners, and built an “entire accountability system”.  That a crappy agent slipped through resulting in a big loss for the consumer means that the consumer has a reason to sue Redfin.  After all, he went to Redfin to find an agent, and relied upon Redfin’s representation as to quality, professionalism, and ethics.

On the other hand, Redfin’s defense would presumably be along the lines of, “We ain’t the boss”.  They would presumably assert that respondeat superior does not apply in their case, because the agent doesn’t work for them.  They don’t control the agent’s actions.  All they’ve done is made an introduction between the consumer and the partner agent, and the consumer chose to work with that particular agent.

(I suppose, in theory, Redfin could choose NOT to fight liability and embrace it wholeheartedly in order to preserve their ideal of customer service… but I doubt that very much.  Lawsuits focus the mind in interesting ways.  Plus, does Redfin’s E&O insurance even cover these ‘partner agents’?  Would Redfin’s insurer really agree to that without a substantial hike in premiums?)

If the agent’s broker — the actual “boss” in theory — is held liable, would they not consider bringing Redfin in as a third party defendant?  Or bring an indemnity claim that goes something like, “Your program caused our otherwise ethical agent to do bad things, so now you owe us money”?  I know I would advise the broker to bring such a suit, were I representing them.

With the other lead-gen sites, like Homegain or HouseValues, these issues never arise.  All that those sites promise to consumers is that someone will be in touch, and they pass the lead on.  They’re merely a marketing conduit.

Redfin’s program goes far, far beyond that… but they’re not ultimately accountable to the consumer client from what I can tell.

The Brand and Ideals Question

That Redfin would disavow responsibility for a poor consumer experience through Redfin is, to say the least, a sea change.  As Glenn says quite passionately:

We will always, always fight for the consumer: exposing information about agent performance the world has never seen, offering the best value we can, paying our agents based on customer satisfaction, negotiating with Realtor associations to publish more data.

This is an emotional issue for us. We are less interested in proving TechFlash wrong, or even in convincing you that Redfin will succeed or fail — which is still an open question — than we are in establishing what this company stands for: making the real estate industry better for the consumer. Maybe nobody else cares that this company actually stands for something. But we do. We always will.

Does that include accepting legal liablity for the actions of your ‘partner agents’?  If it does, then in what way are those ‘partner agents’ different from your own employees — except that they’re not really subject to discipline/training/enforcement by you?

If it does not, if Redfin’s program stops short of accepting legal liability for the misconduct or negligence by partner agents, then that is a fundamental change in the Redfin brand.  And I daresay it represents a change of the Redfin ideals in a subtle, yet profound, way.  Sure, Redfin can still work to make the real estate industry better for the consumer.  But it won’t do it directly, by training its agents, by implementing its policies and procedures, and by serving the consumer.

That might be fine; might even be great.  Maybe Redfin overcomes some of the acrimony built up over the years this way.

But it is a fundamental change.  He who pays you is your customer.

This is perhaps the end of the beginning...

This is perhaps the end of the beginning...

The End of the Beginning

For the industry, I think Redfin’s move represents the end of the first wave of Real Estate 2.0.  The implication appears to be that new companies cannot implement new business models for real estate.  Trulia and Zillow are not real estate companies; they are media companies in the real estate space.  They make money from advertising.

Homegain, HouseValues, Estately and so on are also pseudo-media companies, but with a pay-for-performance type of ad model.

Redfin was the pioneer of a new model, centered around a fantastic website, direct consumer engagement, and a novel refund concept.  Their obsession with transparency, truly excellent user experience online, and “freakish depth” was the precursor to what the brokerage of the future might look like.

That chapter, I think, now comes to a close.  The new real estate companies have found that they cannot make money directly from consumers.  Okay, fine.  What does the next chapter look like?

No one knows of course.  But it does seem to me that the battle lines are getting drawn as follows:

On the one hand, the new entrants must find ways to derive revenues from real estate agents; on the other hand, the existing brokerages must find ways to make consumers happier and provide more value to its agents.  The midgame, then, represents a struggle on the one hand over consumer service/experience coupled to value delivery to agents, and a struggle on the other hand over getting money out of agents.

We are living through interesting times in real estate.

-rsh

  • http://blog.findwell.com Kevin Lisota

    This is an obvious acknowledgement that Redfin needs to monetize its best asset. It’s best asset is a really nice website, NOT their brokerage model. Glenn has acknowledged two things about their brokerage model directly. First, they are almost exclusively a buyer’s agency, with 92% of their transactions coming from buyers. It is hard to succeed as a broker by skipping 50% of the brokerage market. Second, he has acknowledged the difficulty they have had converting their millions of web hits into paying customers. Clearly if they cannot convert, they must monetize their website in other ways. I would predict that the referral model is the first step in many attempts to get paid for their website.

  • http://blog.findwell.com Kevin Lisota

    This is an obvious acknowledgement that Redfin needs to monetize its best asset. It’s best asset is a really nice website, NOT their brokerage model. Glenn has acknowledged two things about their brokerage model directly. First, they are almost exclusively a buyer’s agency, with 92% of their transactions coming from buyers. It is hard to succeed as a broker by skipping 50% of the brokerage market. Second, he has acknowledged the difficulty they have had converting their millions of web hits into paying customers. Clearly if they cannot convert, they must monetize their website in other ways. I would predict that the referral model is the first step in many attempts to get paid for their website.

  • http://robhahn.wordpress.com/ -Rob

    I think that’s right, Kevin. And I figure the smarter players out there are figuring out their own strategy by looking at what Redfin is doing.

    I just thought the acknowledgment (in a way) that a web-based company cannot make money directly from the consumer is what makes this so important. If Redfin with its amazing website couldn’t do it, then frankly, I don’t know that anyone could do it.

    For all of the consumer-centric talk in Real Estate today, it seems incontrovertible to me that RE still remains agent-centric in financial terms. That is the end of the beginning.

    -rsh

  • http://robhahn.wordpress.com -Rob

    I think that’s right, Kevin. And I figure the smarter players out there are figuring out their own strategy by looking at what Redfin is doing.

    I just thought the acknowledgment (in a way) that a web-based company cannot make money directly from the consumer is what makes this so important. If Redfin with its amazing website couldn’t do it, then frankly, I don’t know that anyone could do it.

    For all of the consumer-centric talk in Real Estate today, it seems incontrovertible to me that RE still remains agent-centric in financial terms. That is the end of the beginning.

    -rsh

  • http://utah.blueroof.com/ Greg Tracy

    If there is value in something you have built then it is natural to monetize it. The challenge lies in doing it with some integrity.

    If you are just selling leads there is no integrity in that.

    I am licensing BlueRoof to new areas and went through a similar process as Redfin, speaking with agents to find people I felt would best represent my brand.

    I think finding certain agents, based on their experience and service standards, and then partnering with those agents and making them accountable to the integrity of the brand they are representing offers integrity.

    This is a very good move on Redfin’s part because Glenn cares about partnering with the right agents. If the consumer has a great experience through your brand and there is accountability to those agents then it is a good service.

  • http://utah.blueroof.com Greg Tracy

    If there is value in something you have built then it is natural to monetize it. The challenge lies in doing it with some integrity.

    If you are just selling leads there is no integrity in that.

    I am licensing BlueRoof to new areas and went through a similar process as Redfin, speaking with agents to find people I felt would best represent my brand.

    I think finding certain agents, based on their experience and service standards, and then partnering with those agents and making them accountable to the integrity of the brand they are representing offers integrity.

    This is a very good move on Redfin’s part because Glenn cares about partnering with the right agents. If the consumer has a great experience through your brand and there is accountability to those agents then it is a good service.

  • http://robhahn.wordpress.com/ -Rob

    Greg –

    Thanks for the input. :)

    I guess the thing I’m curious about is when the consumer does NOT have a great experience through your brand. To say there’s accountability to those agents — because you/Redfin cut them off from the program — does nothing to make whole the consumer who has a grievance. Again, while the legal liability situation is extreme, it helps to illuminate the degree to which Blueroof or Redfin or Estately or any of you guys are willing to be accountable for the actions of someone who is not your employee and does not hang his license with you.

    Furthermore, I’m curious as to what you mean by “finding certain agents, based on their experience and service standards, and then partnering with those agents and making them accountable to the integrity of the brand they are representing“. Which brand are they representing? The Blueroof brand or their own brand? Do they know that they are representing the Blueroof/Redfin brand? Do they care?

    What makes them accountable, especially to the integrity of your brand? Are you providing training? Weekly meetings on ethical practices? Sales meetings in which you stress the standards of service expected? Do you have virtual office managers that provide oversight to their work? (Not that brokers do this today, but in theory, they could and should.)

    I agree that this is a very good move on Redfin’s part; I also agree that Glenn and team care very deeply about customer service and consumer experience. But this move definitely strikes me as a step away from a total focus on customer service that only an integrated brokerage can provide.

    Am I missing something crucial?

    -rsh

  • http://robhahn.wordpress.com -Rob

    Greg –

    Thanks for the input. :)

    I guess the thing I’m curious about is when the consumer does NOT have a great experience through your brand. To say there’s accountability to those agents — because you/Redfin cut them off from the program — does nothing to make whole the consumer who has a grievance. Again, while the legal liability situation is extreme, it helps to illuminate the degree to which Blueroof or Redfin or Estately or any of you guys are willing to be accountable for the actions of someone who is not your employee and does not hang his license with you.

    Furthermore, I’m curious as to what you mean by “finding certain agents, based on their experience and service standards, and then partnering with those agents and making them accountable to the integrity of the brand they are representing“. Which brand are they representing? The Blueroof brand or their own brand? Do they know that they are representing the Blueroof/Redfin brand? Do they care?

    What makes them accountable, especially to the integrity of your brand? Are you providing training? Weekly meetings on ethical practices? Sales meetings in which you stress the standards of service expected? Do you have virtual office managers that provide oversight to their work? (Not that brokers do this today, but in theory, they could and should.)

    I agree that this is a very good move on Redfin’s part; I also agree that Glenn and team care very deeply about customer service and consumer experience. But this move definitely strikes me as a step away from a total focus on customer service that only an integrated brokerage can provide.

    Am I missing something crucial?

    -rsh

  • http://utah.blueroof.com/ Greg Tracy

    Redfin’s accountability is through their online surveys which everyone can see and by cutting off the leads.

    With my model I have interviewed the agents who are representing BlueRoof in their markets. They are top agents (selling more than $12Million in sales/year) who have track records of excellent client service for years.

    The accountability piece is accomplished through our agreement, but more importantly, the agents are paying a substantial amount in marketing every month (which is required by our license agreement) to promote the brand in their markets, they have BlueRoof branding on all of their marketing and use BlueRoof email addresses. They OWN BlueRoof in their markets and are completely invested in the brand because it IS their brand.

    That’s as accountable as you can get.

  • http://utah.blueroof.com Greg Tracy

    Redfin’s accountability is through their online surveys which everyone can see and by cutting off the leads.

    With my model I have interviewed the agents who are representing BlueRoof in their markets. They are top agents (selling more than $12Million in sales/year) who have track records of excellent client service for years.

    The accountability piece is accomplished through our agreement, but more importantly, the agents are paying a substantial amount in marketing every month (which is required by our license agreement) to promote the brand in their markets, they have BlueRoof branding on all of their marketing and use BlueRoof email addresses. They OWN BlueRoof in their markets and are completely invested in the brand because it IS their brand.

    That’s as accountable as you can get.

  • http://www.leadingre.com/ Pam O’Connor

    This strikes me as the Internet version of encumbered corporate relocation/institutional leads, which have been losing favor for many years. What this move should be is a wake-up call for brokers to understand the importance of developing their own company lead generation machine for their own associates. They have the connection and capacity to manage this for top-flight customer service much more effectively than a company thousands of miles away.

  • http://www.leadingre.com Pam O’Connor

    This strikes me as the Internet version of encumbered corporate relocation/institutional leads, which have been losing favor for many years. What this move should be is a wake-up call for brokers to understand the importance of developing their own company lead generation machine for their own associates. They have the connection and capacity to manage this for top-flight customer service much more effectively than a company thousands of miles away.

  • http://robhahn.wordpress.com/ -Rob

    Greg –

    I appreciate the explanations :) I’d just like to explore this a bit more, as I think this is critical.

    “The accountability piece is accomplished through our agreement, but more importantly, the agents are paying a substantial amount in marketing every month (which is required by our license agreement) to promote the brand in their markets, they have BlueRoof branding on all of their marketing and use BlueRoof email addresses. They OWN BlueRoof in their markets and are completely invested in the brand because it IS their brand.”

    So by this, it appears that the agents are (in effect) BlueRoof franchisees — they pay a marketing fee, they own the brand, use BlueRoof email addys, and have the BlueRoof branding on their marketing.

    If a BlueRoof agent gets sued, do you provide them with E&O liability coverage?

    If you get sued by a consumer for misrepresentation, professional malpractice, and fraud, etc. because of something that the BlueRoof agent did (or failed to do), and must pay damages to the consumer, does the agent indemnify you? Or does that get covered by your own E&O insurance?

    Do you or would you assert a defense of non-agency (i.e., you are not the broker, and are not responsible for the actions of the agent)?

    In short, I get that under your system, the agent is accountable; how accountable is BlueRoof to the consumer?

    -rsh

  • http://robhahn.wordpress.com -Rob

    Greg –

    I appreciate the explanations :) I’d just like to explore this a bit more, as I think this is critical.

    “The accountability piece is accomplished through our agreement, but more importantly, the agents are paying a substantial amount in marketing every month (which is required by our license agreement) to promote the brand in their markets, they have BlueRoof branding on all of their marketing and use BlueRoof email addresses. They OWN BlueRoof in their markets and are completely invested in the brand because it IS their brand.”

    So by this, it appears that the agents are (in effect) BlueRoof franchisees — they pay a marketing fee, they own the brand, use BlueRoof email addys, and have the BlueRoof branding on their marketing.

    If a BlueRoof agent gets sued, do you provide them with E&O liability coverage?

    If you get sued by a consumer for misrepresentation, professional malpractice, and fraud, etc. because of something that the BlueRoof agent did (or failed to do), and must pay damages to the consumer, does the agent indemnify you? Or does that get covered by your own E&O insurance?

    Do you or would you assert a defense of non-agency (i.e., you are not the broker, and are not responsible for the actions of the agent)?

    In short, I get that under your system, the agent is accountable; how accountable is BlueRoof to the consumer?

    -rsh

  • http://www.blueroof.com/ Greg

    Hi Rob,

    I appreciate the dialogue…

    The agents who license BlueRoof have E&O insurance and their own, very respectable, brokers. They are not BlueRoof Realtors- they are Keller Williams (both happen to be Keller Williams agents) agents who license the BlueRoof technology and brand to offer value to, and generate business from, home buyers and sellers.

    BlueRoof, as a brand, is accountable in the same way that any brand is accountable- by reputation and the business that we generate (or don’t) through our brand.

    The reality is that me and my team have sold about 1000 properties in my career and haven’t been in court with a client once. Of course it happens, but as I have said for years (as the owner of my own real estate company, as a managing broker for Prudential California, Coldwell Banker in Utah and Better Homes and Gardens in Colorado, and as a licensed real estate instructor) the only real protection and accountability lies with those who have contact with, and represent, the client. That is the agent.

    The brokers, and BlueRoof as a brand, are better off putting their effort into finding the right agents than in figuring out how to deal with being sued because they hired the wrong agents to represent them.

    Brokers today have a unique challenge because they are essentially diminishing their own brands by feeding their listings to third-party listing aggregation websites (Realtor.com, Trulia, Frontdoor, Zillow, etc). So they are empowering these national websites to use their listings to enhance their own brands and build equity in the mind of the consumer, at the expense of their own brands.

    You’ve written beautifully about this topic before, as have I. If a buyer goes to Trulia and finds an agent the next time they want to buy they will go back to Trulia and most likely will find a different agent because the brand they know and like is Trulia, not the brokerage.

    Brokers need to build their OWN brand identities online and give web users compelling reasons to use their website and technology.

    Giving agents ownership in BlueRoof protects me and the brand by empowering the agents to build and grow the brand as though it were their own brand, which it is.

  • http://www.blueroof.com Greg

    Hi Rob,

    I appreciate the dialogue…

    The agents who license BlueRoof have E&O insurance and their own, very respectable, brokers. They are not BlueRoof Realtors- they are Keller Williams (both happen to be Keller Williams agents) agents who license the BlueRoof technology and brand to offer value to, and generate business from, home buyers and sellers.

    BlueRoof, as a brand, is accountable in the same way that any brand is accountable- by reputation and the business that we generate (or don’t) through our brand.

    The reality is that me and my team have sold about 1000 properties in my career and haven’t been in court with a client once. Of course it happens, but as I have said for years (as the owner of my own real estate company, as a managing broker for Prudential California, Coldwell Banker in Utah and Better Homes and Gardens in Colorado, and as a licensed real estate instructor) the only real protection and accountability lies with those who have contact with, and represent, the client. That is the agent.

    The brokers, and BlueRoof as a brand, are better off putting their effort into finding the right agents than in figuring out how to deal with being sued because they hired the wrong agents to represent them.

    Brokers today have a unique challenge because they are essentially diminishing their own brands by feeding their listings to third-party listing aggregation websites (Realtor.com, Trulia, Frontdoor, Zillow, etc). So they are empowering these national websites to use their listings to enhance their own brands and build equity in the mind of the consumer, at the expense of their own brands.

    You’ve written beautifully about this topic before, as have I. If a buyer goes to Trulia and finds an agent the next time they want to buy they will go back to Trulia and most likely will find a different agent because the brand they know and like is Trulia, not the brokerage.

    Brokers need to build their OWN brand identities online and give web users compelling reasons to use their website and technology.

    Giving agents ownership in BlueRoof protects me and the brand by empowering the agents to build and grow the brand as though it were their own brand, which it is.

  • http://robhahn.wordpress.com/ -Rob

    Greg –

    I think I love this comment thread as well. :) Thanks.

    Okay, so basically, it seems to me that BlueRoof (and by extension Redfin to some extent) is a new model of the Franchisor, rather than a new model of brokerage. Effectively, what you are providing is more or less identical to what C21 or RE/MAX provides to its brokers and agents.

    The differences are fairly minor — you grant franchises to agents, while most RE franchisors only work with brokerage companies; you probably don’t have a ton of printed materials or training programs, but your website is a damn sight better. For now.

    The legal liability issue is a bit of a red herring, as I mentioned in the original article. It isn’t so much that I think you or Redfin’s partner agents will be sued; it’s more of an extreme case to examine the degree of accountability that you and Redfin are willing to take on as part of these ‘marketing programs’. (Although, FWIW, I think you may want to double check the franchising laws in your state and the various states of the agents… I remember the Realogy legal folks getting pretty specific about some of the issues. One of them was third party liability. And you may be subject to franchise laws even if you don’t call yourself a franchise; depends on how the business is structured. Right now, based on your description, it sure sounds like a franchise to me.)

    What I’m not clear on is why you, of all people, say that Brokers need to build their OWN brand identities. Isn’t that the precise value YOU are offering them with your admittedly excellent website?

    -rsh

  • http://robhahn.wordpress.com -Rob

    Greg –

    I think I love this comment thread as well. :) Thanks.

    Okay, so basically, it seems to me that BlueRoof (and by extension Redfin to some extent) is a new model of the Franchisor, rather than a new model of brokerage. Effectively, what you are providing is more or less identical to what C21 or RE/MAX provides to its brokers and agents.

    The differences are fairly minor — you grant franchises to agents, while most RE franchisors only work with brokerage companies; you probably don’t have a ton of printed materials or training programs, but your website is a damn sight better. For now.

    The legal liability issue is a bit of a red herring, as I mentioned in the original article. It isn’t so much that I think you or Redfin’s partner agents will be sued; it’s more of an extreme case to examine the degree of accountability that you and Redfin are willing to take on as part of these ‘marketing programs’. (Although, FWIW, I think you may want to double check the franchising laws in your state and the various states of the agents… I remember the Realogy legal folks getting pretty specific about some of the issues. One of them was third party liability. And you may be subject to franchise laws even if you don’t call yourself a franchise; depends on how the business is structured. Right now, based on your description, it sure sounds like a franchise to me.)

    What I’m not clear on is why you, of all people, say that Brokers need to build their OWN brand identities. Isn’t that the precise value YOU are offering them with your admittedly excellent website?

    -rsh

  • http://www.blueroof.com/ Greg

    “What I’m not clear on is why you, of all people, say that Brokers need to build their OWN brand identities. Isn’t that the precise value YOU are offering them with your admittedly excellent website?”

    That is precisely what I am offering- a great brand that is proven. The main difference between a C21 brand and BlueRoof is C21 is an offline brand while BlueRoof is an online brand.

    With BlueRoof360 we build custom websites for brokers and agents with their own branding.

    Either way I want to help brokers and agent get away from relying on third party listing aggregation websites for their online business and help them get away from using template websites.

  • http://www.blueroof.com Greg

    “What I’m not clear on is why you, of all people, say that Brokers need to build their OWN brand identities. Isn’t that the precise value YOU are offering them with your admittedly excellent website?”

    That is precisely what I am offering- a great brand that is proven. The main difference between a C21 brand and BlueRoof is C21 is an offline brand while BlueRoof is an online brand.

    With BlueRoof360 we build custom websites for brokers and agents with their own branding.

    Either way I want to help brokers and agent get away from relying on third party listing aggregation websites for their online business and help them get away from using template websites.

  • Steve

    The main difference between C21 & BlueRoof is C21 is the most recognized real estate brand in the world (JD Power awards).

    BlueRoof is a terrific, wait for it…”Local” brokerage in Utah.

    A “Proven Brand’ is one that has a “proven system” that can be scaled anywhere by almost anyone (i.e. Starbucks, McDonald’s or in this case C21 or Re/Max etc…)

    As Rob pointed out a good website does not guarantee “Brand Extension.” Add the fact that Brokerage sites will continue to improve (slow and cheaply, but they will) what is your benefit to an agent long term?

    Partnering with agents who sell a lot of homes, does not mean they provide the “Best service” or are accountable. “World Savings Bank” sold tons of mortgages which Wachovia acquired and the 4th largest bank went under with “Bad Lending.” I am going to guess there was some “Bad selling” in there as well from some “Top Agents.”

    Am I getting this right? It is a BlueRoof brand under a “McGuire Team” brand (fill in any name) under Keller Williams, right? Where is the brand there again and where does the brand loyalty lie for the agent first? Talk about confusing the customer base which is the EXACT opposite of BRANDING.

    Bottom Line: You have a cool website that you license out to some agents who have money, but do not have the time or intelligence that they could create the same site for less in 2009 and get a cool BlueRoof email address.

    Just because you say something (“A great brand that is proven”) doesn’t make it true. It reminds me of those tacky & annoying mailers from real estate agents that I receive at home.

    Nor does quoting Steve Jobs on your site make your product better or proven.

  • Steve

    The main difference between C21 & BlueRoof is C21 is the most recognized real estate brand in the world (JD Power awards).

    BlueRoof is a terrific, wait for it…”Local” brokerage in Utah.

    A “Proven Brand’ is one that has a “proven system” that can be scaled anywhere by almost anyone (i.e. Starbucks, McDonald’s or in this case C21 or Re/Max etc…)

    As Rob pointed out a good website does not guarantee “Brand Extension.” Add the fact that Brokerage sites will continue to improve (slow and cheaply, but they will) what is your benefit to an agent long term?

    Partnering with agents who sell a lot of homes, does not mean they provide the “Best service” or are accountable. “World Savings Bank” sold tons of mortgages which Wachovia acquired and the 4th largest bank went under with “Bad Lending.” I am going to guess there was some “Bad selling” in there as well from some “Top Agents.”

    Am I getting this right? It is a BlueRoof brand under a “McGuire Team” brand (fill in any name) under Keller Williams, right? Where is the brand there again and where does the brand loyalty lie for the agent first? Talk about confusing the customer base which is the EXACT opposite of BRANDING.

    Bottom Line: You have a cool website that you license out to some agents who have money, but do not have the time or intelligence that they could create the same site for less in 2009 and get a cool BlueRoof email address.

    Just because you say something (“A great brand that is proven”) doesn’t make it true. It reminds me of those tacky & annoying mailers from real estate agents that I receive at home.

    Nor does quoting Steve Jobs on your site make your product better or proven.

  • http://www.blueroof.com/ Greg

    Steve,

    You make some good points, many of which I was not actually saying differently.

    And I was simply comparing the model of licensing a C21 (or other) brand with the BlueRoof brand and was not, and am not, saying that they are the same in consumer awareness.

    Best of luck to you in 2009…

  • http://www.blueroof.com Greg

    Steve,

    You make some good points, many of which I was not actually saying differently.

    And I was simply comparing the model of licensing a C21 (or other) brand with the BlueRoof brand and was not, and am not, saying that they are the same in consumer awareness.

    Best of luck to you in 2009…

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