60 Minutes: Redfin Saves $27,000 vs FranklyRealty.com Client Saves $152,000!

Last week 3 people texted me (or would that be “text me”)
saying “Turn on 60 minutes,” yet I missed it! (see it)

America was lured in by the… 20 year long regurgitated story “Attack on the 6% Realtors” and comments about “saving thousands.”

After watching such a biased infomercial, of course Redfin seems like a no-brainer. Well my blog readers have a brain, so here it goes…


Sidenote: Normally I’m not a fan of NAR, but I did agree with most of their comebacks (click to see).

I have written extensively on my bias opinion on the pros and cons of rebating and discounting including:

I would like to focus on the “savings” comment put forth by 60 Minutes’ case study.


After they were done laughing and giggling on their couch about how they saved $27,000 and how they could spend it on their wedding, they made an under-the-breathe comment that they sold their place for…

$10,000 under what Redfin recommended that we list it for.”

In this comment I see two things to question:

1) “$10,000 Under List”

2) “The list price recommended by Redfin.”

So let’s start with the latter…

If some of their agents do as many as 8 closings a week, might it be remotely possible that they might have a strategy of listing low in order to sell fast? I’m not saying they do, but would that make sense to anybody besides me?

And for the “$10,000 under list,” while I oftentimes say that “Many Listing Agents Suck” See RealtyTimes article or my blog, one has to wonder if another motivated agent that had more time to devote to the listing might have:

  1. Landed them full list ($10,000 higher)
  2. Started higher and ended higher ($15,000+ higher)
  3. Got a bidding war going, resulting in a much higher net ($32,000 like our Realtor Megan’s listing, see blog).

In my biased opinion, the best way to get the most for the house isn’t to find one buyer, but to find at least TWO buyers. I don’t believe in pricing low to start a bidding war, but I do believe in getting as many buyers into the process as possible. A process that can take an extra 8 hours in one day for one agent, while netting the client another $32,000.

Back to the “$27,000 total in savings,” that was for buying and selling. If we assume that they bought a bigger place, they probably “saved” $12,000 on the listing and “saved” $15,000 on the purchase.

I’m confident, and I have references to back me on this, that I can consistently do at least $12,000 higher than a discount agent. I wish there was a way to prove this with statistics, but they would just be manipulated.

Instead I can only give real world examples:

  1. Megan, with FranklyRealty.com, had a recent listing (See Bidding Wars? It’s The Staging Stupid!) The initial discussion regarding the starting price at the listing appointment was roughly $550,000 (seller’s opinion). After staging, light remodeling and further research, and many hours of work, the starting price was set aggressively at $570,000. The end result was 3 offers and a ratified contract $13,000 higher. While I’m confident in these number being an example of hard work, Redfin might also find an example of an agent that did a similar great job. And if that person was so great… I would hire them and pay them double, because they are worth it. (think about that for a second, if you could offer value way beyond discounting, wouldn’t you start charging accordingly?) 

    Sidenote: ZipRealty, another discount firm (some disagree with that term, see blog comments/debate), according to one blog is full of disgruntled, newer, and underpaid agents that are overworked. External blog: What’s Wrong with zipRealty


  2. FranklyRealty.com Saves Client $152,000 should be the next 60 minutes update.


The above is actually a true story. It was a hot seller’s market, and with proper marketing and about 10 stressful non-stop hours the $499,000 listing was bid up to $601,000. One thing is to bid it up, another is to actually close at this price. Especially after several attempts to renegotiate, and appraisal issues. Yeah sure, I got a few bucks for the incremental difference, but that is nothing compared to the unexpected $102,000 in their pockets. Sure they could have “saved” and sold it fast FSBO, but they wouldn’t have been able to get anything near wha
t I got them (their words).

Then on their purchase, they loved a house that was getting 8 offers. At FranklyRealty.com we don’t write normal looking offers, and that sets us apart immediately. Each offer is different. I can’t publish all my tricks here, but when was the last time that you saw a contract that put the Realtor’s ENTIRE commission on the line as a promise that we wouldn’t renegotiate the offer? That is powerful. Also we run a CRA ™ Comparative Realtor Analysis report (see it here on RealtyTimes.com) amongst many other systems that net our client more.

A good agent should approach buying a house like an acquisition of a company. Thus winning contracts for less. In this case the 8 offers were bid up to approximately $800,000. Why in the world would somebody take our lower offer? Well because money is not the only motivating factor. When we got that house for only $750,000 my clients were in shock after just getting approved by the lender to get bid up to $800,000. They saved $50,000.

So it doesn’t matter if the market is hot, cold or you are buying or selling, an aggressive agent can save you much more, and do it in a way that all parties are smiling in the end.

Ok, I got sidetracked. The point is that what a great agent does can’t be compressed into 8 closings a week per agent.

So you have to pick one:

  1. “save on commission” or
  2. “net more.”

Bottom line is,

I used to rebate… but then I got… good.


Frank Borges LL0SA- Virginia Broker/ Owner FranklyRealty.com

Blog.FranklyRealty.com Featured in BusinessWeek, CNBC, WSJ etc.

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Videos at YouTube.FranklyRealty.com
Keywords: Housing bubble? Arlington, Alexandria, mls, homes, Real estate, Virginia, Alexandria, 22201, 22314, Fairfax Va, DC Realty, Realtor

  • 24
  • May
  • 2007

25 Responses to “60 Minutes: Redfin Saves $27,000 vs FranklyRealty.com Client Saves $152,000!”

  1. Bryant Tutas says:

    Come on Frank, You’re going to give us all a bad name by actually working for a living! I thought all us Real-a-ters did was open doors and fill in blanks? :)
    Your post is a perfect example of what a true professional does. Very good Frank.

  2. Megan- FranklyRealty.com Agent says:

    Thanks for the shout out, Frank.

    As you say, not all Realtors are paper pushers and we can save our Clients real $. In fact I just helped my recent clients purchase a new home for $27,000 LESS than Asking Price PLUS got them a brand new roof. And for the Condo they currently own, we got multiple offers the first weekend and is now Under Contract for ABOVE Asking Price – the highest price since August 2005 for the same model! And the new buyers are so happy and “over the moon” that their contract was chosen. I am proud to be a Realtor and part of FranklyRealty.com



  3. Missy Caulk GRI, e-PRO says:

    Frank, well thought out post.

  4. Tchaka says:

    Frank, I’m sorry to say that $152k will not get me a new Lambo, so I’m now accusing you of false advertising!

    When I watched the segment on Sunday my immediate thought when she said “saved $27000” was what you eloquently wrote out. Yes, there’s a possibility that the did come out ahead and that Redfin did a good job. But I’m not yet convinced. I can sell any house at list…….it’s a matter of how low I list it. Unless the seller is in a jam and needs to sell in a hurry, I’m not sure how that’s a benefit. You “save” money by selling your house way under. My other issue with Redfin from a business standpoint is why would they rebate 2% on the buyers side? Assuming 3%, you’re giving away 2/3 of your profit. I can see rebating and don’t have a problem with it, but I know most clients would be elated to get a percent back. I feel Redfin’s undercutting their own profits.

    Lastly, I don’t see any typos so you don’t look dumber. >:-)

    – Tchaka

  5. FRANK LL0SA Broker says:

    Hey Tchaka, How about a used Lambo?

  6. Tchaka says:

    Oh I understand the logic behind it, but I still think it’s bad business sense. I am happy getting a point back as are most people. I would be elated to get 1.5% back, again as would most. I am willing to bet there are diminishing returns at 2%. I’m sold at 1-1.5%. Keep in mind that I’m playing the role of someone who doesn’t know the benefit of a full-service realtor.

    – Tchaka

  7. Dan Allred Thousand Oaks Real Estate says:

    Frank-Bravo! One of the best responses I have heard to the redfin lies!

  8. FRANK LL0SA Broker says:

    Hey Dan, I don’t think Redfin is lying at all. They are doing a great job at marketing their company. Why shouldn’t they?

    60 Minutes is the one that made the one sided story.

  9. Mike Stankewich, MBA, e-PRO - ZipRealty, Inc. says:


    You cited ZipRealty as another discount firm in your blog. ZipRealty is a full service brokerage. Our business model is completely unlike Redfin’s.

    On the listing side, we offer full services plus a featured listing on our national website. Services include professionaly printed brochures, professional photographs and virtual tours, open house advertising in the local papers, syndication of the listing to other real estate sites, open houses, for sale sign, inclusion on the MLS, as well as full representation all the way to the closing. We provide as much as, and probably more than most traditional brokerages. Our commission fee may be a little lower and varies with the market. In Southern California we try to get 5%, although other brokerages may try to get 6%, I read that the national average is about 5.2%. We offer the buyer’s agent competitive market rate commissions.

    On the buyer’s side, we get most of our leads from the ZipRealty website. To have these leads stay with us, we offer them 20% of our commission on the buy side as a rebate, which is acceptable and legal in our markets. Again we offer buyers full service and full representation. This includes showing them properties and whatever other assistance they need. We attend the inspections with them.

    If you take the time to review what we do, you will not associate us as a discount firm. We take pride in our full service and customer care. We have one of the highest customer satisfaction rates in the overall industry.

    ZipRealty is a publically traded national real estate company which a presence in most of the major US metropolitan markets. We are continuing expand into other metropolitan markets. We are Internet based, however we offer personal local service to our clients.

    It is an insult to call us a discount brokerage and associate us with Redfin.

    Please correct your blog, since you must have misunderstood what ZipRealty is about.

  10. FRANK LL0SA Broker says:

    Hey Mike,

    I didn’t say that ZipRealty is a partial service firm, but they DO discount as a standard policy on the buy side, so they are a discount firm in my book. That has a negative connotation to some, but it shouldn’t. Nothing wrong with discounting and if I were you all, I would say “we discount and we do MORE than a full service firm.”

    But ZipRealty used to discount more when they first started didn’t they? Kinda like… Redfin (but not as extreme). They have reduced what they give as rebates and they make it harder to give rebates…. Why? Probably because they got good!! Their website searching capabilities are matched by few others (as in REAL functionality, not just your typical big name MLS regurgitation website) , and they started to figure out… wow, people don’t really care as much about getting a rebate, they care more about an awesome product and services.

    With the web traffic that ZipRealty gets, and their great website, I wouldn’t be surprised if they removed the rebate and didn’t miss a step.

    Mike, I’d love to hear your take on ZipRealty agents being paid pennies on a salary basis as described in that other blog. Is it true? Is there high turn over? Are they employees or does each agent work under the same model as a Remax?


  11. Mike Stankewich, MBA, e-PRO - ZipRealty, Inc. says:


    Thanks for the reply. I still think there is a difference between offering a rebate and being a discounter. I recently went to Bloomingdales Home Store and bought a Cuisinart coffee maker that they had on sale and which had a manufacturers rebate. I don’t think most people would consider Bloomingdales as a dicounter nor Cuisinart as a discount product. I could have gone to K-Mart and bought a Mr. Coffee product. I think there is a difference.

    Thanks for pointing out that we have an exceptional website that offers the consumer a lot. That is one of the key unique part of our business model.

    I have only been with ZipRealty for a year and a half although I have been doing real estate for 7 years. Therefore I cannot speak on what they did years ago. It is a relatively new company started in 1999, so I am sure there has been an evolution over the 8 years.

    As for commission splits they are relatively low but in line with starting splits at most other brokerages. I worked at two other conventional brokerages in the past. However the lead generation provides us more business. I would rather sell 3 properties at a 50% split than one at an 80% split. You do the math and you will see I am grossing more money. In addition we get bonuses for customer satisfaction based on closing surveys of the buyers.

    Technically we are employees, although we do not receive a salary and our compensation is by commission. However we get reimbursed for some expenses such as association and MLS fees, cell phone costs, ISP costs, milage, etc. The company also pays for signs, business cards, professionally printed brochures, marketing materials, and professional photographs and virtual tours of listings. Thus our operating expenses are low which increases the net amount we make from our commissions.

    We work from our homes, thus the company does not have the overhead expense of maintaining agent offices. This combined with technology allows us to offer the rebates to buyers and a slighty lower commission to sellers.

    As for turnover, there is a lot in our industry. In my district I do not see the turnover to be any higher than with the previous two companies I worked for. I cannot comment on RE/MAX, since I have not worked for them. They are a franchise so it may depend on the individually owned offices.

    I hope you now have a better understanding of our company.

  12. Mike Stankewich, MBA, e-PRO - ZipRealty, Inc. says:

    Thanks Frank

    I think you understand now that we are a full service, similar to the traditional firms, with a technology twist.

    We are not like nor do we agree with the Redfin model, however they are free to try whatever they want.

    I just do not want ZipRealty to be associated with their business model. We are much different than Redfin and more in line with the conventional brokerages.

    Thanks for your understanding.

  13. Diane Cipa says:

    The most amazing thing to me in this post is the pictures of the houses. These homes would sell for around $125,000 and 250,000 in our area. Geez.

  14. FRANK LL0SA Broker says:

    Hey Diane,
    All that hard work, and all you can comment on is the photos of the houses?? ;-(

  15. million says:


    Your point is relying too heavily on a transaction you closed during the loose-money, irrational exuberance peak… but anecdote becomes data if you have enough anecdotes so I’ll give you the benefit of the doubt.

    There’s a foreclosure at 2008 North Cleveland St, Arlington, VA 22201. It’s a 2/1.5 988sqft listing for 609k by L&F-Greenbelt. The prev owner bought for 570k and then defaulted on the 80%, bank probably wrote-off the other loan. “As is”, new kitchen, cozy, nice yard, definitely needs some work as it has cracked windows, unfinished basement, etc. Shocker, I think it’s too high… especially since the prev owner bailed on 40k less than the current list. Initial thoughts on price?

    here’s the tiny URL:



  16. frank says:

    I knew you would harp on the time of the marketplace (bidding days). You must have been speed reading though.

    The part that was impressive wasn’t so much the $101,000 increase (well actually that was impressive EVEN in the biddin war days), but the purchase that was made for $50,000 UNDER the top contract, also during the same bidding days.

    So regardless of the marketplace, a good agent can get you a better NET. I really doubt your friends at Redfin would have taken the extra steps to help them REDUCE their own commission (lower price= lower commission) and help their clients save a bundle. I could be wrong. Show me a Redfin agent that does that, and I’ll show him a pay raise.

    As for the foreclosure, are you going to the 1021 foreclosure today? The other 1021 foreclosure didn’t even make it to the courthouse steps.

  17. million says:

    yes, the 50k under top bid was impressive. and RedFin recruits local agents w/ a minimum number of closings (according to their propoganda) so they have some experience and get paid based on a customer satisfaction survey – don’t know what questions they ask.

    can’t make it to the steps of the courthouse today, unfortunately.

    i’m more interested in the SFHs in foreclosure. they are popping up all over, more so along 4 Mile Run/Walter Reed… 22204 is a target rich environment. the lenders really took that zip for a ride.

  18. Anonymous says:

    Most people don’t live in a bid-war market. Glad you can do that. Quite a few assumptions here and quite an ego – both serve you well.

    Anonymous. Yes, because I’ve seen what super-egos do to non-believers.

  19. FRANK LL0SA Broker says:

    You have missed the point.

    Selecting reading will do that.

    It doesn’t matter what marketplace it is, a good agent, with an ego or not, can save you more.

    In a “bad” market, an aggressive agent will take FAR more time and energy and get you a lower net. In my opinion, a rebater will want to just get the deal done fast!

  20. Anonymous says:

    I just had a scary experience with Redfin-their agent wanted to list our townhouse for more than $100K less than we’d been quoted by a couple realtors who really know our subdivision. The Redfin agent showed us comps that were much smaller and didn’t have nearly the amenities as ours. We explained our rational for our pricing (we’ve done a lot of research ourselves and knew we were on firm footing), and showed her other comps, but she refused our listing. I think they just made the case for paying more for realtors who have a clue about your neighborhood…

  21. FRANK LL0SA Va Broker- BLOG.FranklyRealty.com says:

    Dear Anonymous,
    Can you email me directly? I’d love to keep tabs on the progress of your sale, especially what you close for.


  22. Anonymous says:

    Can Redfin really sell?

    Has anyone else really pulled their statistics?

    Do their VC’s (venture capitalists) really believe all their propaganda? Can’t wait until they look for their return. They’ll be lined up like Indymac’s investors…

  23. FRANK LL0SA Va Broker- BLOG.FranklyRealty.com says:

    Hey Anonymous, Do you mean sell homes or sell the company?

    I like Redfin. And sure they sell homes. I just sent somebody over to Redfin today.


  24. […] frequently said “I used to rebate, but then I got good.” (see Realtor Rebates also see Redfin Saves $27,000 vs FranklyRealty.com Client Saves $152,000! […]

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