"60 Minutes" Effect? Overwhelmed Redfin Stops Accepting New Listings

Redfin, the discount online real estate brokerage, announced tonight that it has stopped accepting new listings, saying it has been overwhelmed by an unexpected spike in listings in Los Angeles and San Francisco. The company was recently featured on the CBS news show "60 Minutes."

Redfin made the announcement on its corporate blog Friday in a post titled "A Crazy Decision": "From June 16 to July 8, Redfin is not accepting new listing customers. You can submit listing information now if you'd like, but we will not contact you or list your property until July 9. If Redfin has already committed to listing your property, you can be sure that we will continue to meet your highest expectations."

More: "But why are we turning away new business? In Southern California, new listing business increased by a factor of 10 in one month; in the Bay Area it tripled. Continuing to take new listings would strain our ability to offer customers great service. Since one of our core principles is putting customers before profits, we are focusing on the customers we already have."

More: "We will continue to represent buyers because our buyers' agents still have the capacity to serve an increasing number of new customers well. We will only resume listing properties when we can offer every new listing customer the same fanatical service that got us this far in the first place, which we expect will take us a few weeks."

Redfin attributes the sudden surge in listings in part to the "60 Minutes" story.

Comments? Thoughts?

Comments

[Kaye Thomas]

I hate to say it but I believe this is another free publicity grab by Redfin.... I find it hard to see why Redfin can't take more listings.. they don't do anything other then give the seller a sign, a lockbox and some flyers.. they don't provide an extensive market evaluation, or give advice about determing the price, showing the property, advertising or holding open houses..Everything they offer is via the computer.. no one-on-one with the seller. The only reason I can figure they can't take more listings is that they either need a few more signs, must buy some more lockboxes or hire someone to print the flyers.. it surely can't be because of all the services they offer to a seller..

[Cal]

Realtors are very scared of the Redfin model. I am not quite sure why. Either they really do add significant value to the transaction, in which case they have nothing to worry about, or they don't add significant value. In only one of those two scenarios should realtors be scared.

Clearly, by the rapid growth into the high cost new areas some sellers are showing their belief that they can save a lot of money and do a bit of the work themselves. It is also quite possible that these sellers are unimpressed with the current level of service they have had or were offered.

[Mr Income Stream]

The reason they stopped taking listing is because they are not equipped to handle them. They don't have the marketing budget or the personnel. These things require money and in California especially lots of it. The 60 minutes excuse is an attempt to take the light off the hole in their concept. You can't give back the money they are giving back or charge the fee's they are charging and still show homes and advertise them. In a down market advertising is you're savior. They'll go by the wayside like the rest when the realities of what selling real estate is all about come to light. It's easy for their model in an up market but in a down market this model hasn't proven to be successful yet and it was tried in the last downturn.