Here's a wrap up post now that my sale is complete. Overall I'm happy with the money saved, but the redfin agent was way too overworked to do what they promised so I cannot recommend them.
Shortly after the property was listed on the MLS, my redfin agent stopped communicating with me without notice or explanation. I had recently told him that I wasn't happy with the way that he was overpromising and underdelivering. I made it clear that I was still fully on board but that he would have start doing things when he promised for me to be satisfied.
This was shortly after the positive 60 minutes piece gave redfin a lot of new business. I've heard estimates that their business increased 3x to 10x from the 60 minutes story. So my guess is they figured they wouldn't have the time to make me a satisfied customer and hence wouldn't get their commission from me. They have a guarantee that you can get the full $3k or $4k listing commission back if you are unhappy with redfin's service. So their customer service guarantee seemed to have a perverse effect of causing them to abandon me.
The most common and effective selling strategy for condos in my complex seems to be to underprice them to incite a bidding war. Most of the condos in the complex sold this way in the spring, in less than 2 weeks. This strategy seems to require a full service broker to contact local realtor buddies about the "amazing underpriced property deal" to hook lots of offers in a short period of time, then to get them all to raise their offers because "you'll never get it for the listing price". It's sort of a benign bait and switch.
The fact that my agent was unavailable to even set an offer date made it impossible for me to implement any semblance of this strategy. Because my agent was based out of San Francisco 25 miles away he didn't have the local buyer agent contacts to stir up interest.
About 2 weeks after my agent abandoned me, a redfin VP out of Seattle read my postings here on early-retirement.org and contacted me to try and make things right. I was genuinely impressed by his dedication... it was clear that he was overworked but made room for me in his busy schedule. About 3 weeks after the abandonment, an offer came in on my condo, on the same day that I was reassigned a new, more senior redfin agent.
The full service agents I had interviewed had suggested pricing my condo in the range from $575k if I wanted a fast sale or to use a discount broker, to $600k if I wanted to be aggressive with a full service broker. None of the full service agents had said I could get more than $600k for it, except one that said I "might" be able to get $615k in a bidding war if I offered it at $600k.
I noticed that other recent properties were selling well, so I decided to be optimistic in my asking price. My initial listing price was $615k, and I dropped the asking price down to $605k when I wasn't getting much action and my agent was MIA.
The offer that came in was all-cash for $600k. The buyer's agent that made the offer was one that I was considering hiring to list the property. I got some satisfaction out of her having offered $600k when she had originally told me there's no way I would get $600k with redfin. Although to be fair the market had risen a bit between her comps and the offer.
Several condos had recently closed but I didn't have access to the MLS selling prices, so I asked my new redfin agent for comps so I could put the offer into perspective. The new redfin agent was too busy to get the comps to me until 6:30pm when the offer deadline was 8pm, and I was a bit annoyed that whenever I asked questions about the contingencies in the offer he would steer the conversation away by saying "that's not important is it?". It seemed unlikely that he had the time to read the offer all the way through, so it was up to me to see if there was anything of concern.
When I got the comps I could see strong evidence that my local market was rising and that $600k was too low a price. The last sale was a condo that was listed at $605k had sold for $632k. What was a bit disconcerting is that the redfin agent didn't seem to have the time to really evaluate the comps and give an educated judgement on whether the offer was reasonable... he just pushed pretty hard for me to accept the $600k offer. This is a concern I have with the redfin business model... redfin is pretty clear that they don't make judgements about the value of your property. Negotiating a good deal requires knowing exactly what the property is worth, so I wonder how effective they can be at negotiating without knowing the value. It was clear that my new redfin agent knew his stuff and was an experienced negotiator, but he seemed to be under more pressure to close the deal than to get me the best price.
I decided to reject the $600k offer, and the next day counteroffered $607k. A few rounds of massaging contingencies, and that all cash deal was accepted. It was pretty cool having these offers flying around over the ether with buyer, buyer's agent, selling agent, and seller all in different physical locations. Everything was sent via pdf files over email, which was very different from when I was buying my place 9 years ago and it was all paper carbon copies. Having a laserprinter, scanner and software that could convert multipage scanned documents to pdf was very handy.
I am happy with the price I got, especially considering that I saved about $15k by going with redfin rather than a full service broker. However I do think it is likely that I would have gotten a higher selling price with less work and less hassle on my part by going with a good full service agent. Knowing what I know now about redfin's time constraints, I would definitely not recommend them at this time. Once they have ramped up capacity they should be a good choice in the future, for those who have time and want to take charge of their sale. Their blog shows that they stopped accepting new listing customers right around the time I was getting a new agent, so it's clear they understand the issue. But I would ask why they didn't stop accepting new business much earlier when it was clear they were overloaded.
Redfin's providing the paperwork is a tremendous, underappreciated benefit of the redfin business model as opposed to FSBO. I used to think it was slimy of RE agents to reject offers that didn't come in on the "California Association of Realtors" boilerplate. After watching how much liquidity is gained by not having to pore over the boilerplate on every document, I can somewhat understand why an agent would not want to deal with strange forms. The fact that redfin used "California Association of Realtors" forms for all the disclosures and deal paperwork is a smart competitive advantage over the places that just list your place on the MLS. Using the CAR paperwork could very well be the factor that makes a buyer's agent choose to work with you rather than a FSBO that doesn't use standard forms.
Go Redfin Go!