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Category: Redfin.com (page 7 of 8)

October 23, 2006

Identifying mavericks: Socrates, Jesus, Cyrano and — Glenn Kelman?!? We don’t have to love the truth, we just have to live with it . . .

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Suburban Phoenix Real Estate Broker

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This is me in a comment at Mike’s Corner. Mike Price is looking for nominations for the most influential mavericks in the real estate industry, individuals and companies. Share your thoughts with him.

I’ve been thinking about this quite a bit lately, although the words I use in my own mind are closer to “renegade” or “heretic.” And the context is immense, at least to my way of thinking: The story of The West, in capitals, as against The East, is the story of Socrates, the man who chose to die rather than bend to the will of the mob. The Nazarene was the key popularizer of the tale, but if you look for it, you will find it reflected in every enduring story of The West.

Most fundamentally, The West is the heretic, the renegade, the maverick, the man or woman who stands — “not high it may be but alone” — for new truth, standing down all of received wisdom. This is why The West is so outrageously dynamic, where The East, broadly defined, celebrates and venerates that which is traditional and unchanging.

So who would I pick as the maverick individual and company bringing the most change to the real estate industry right now?

Glenn Kelman and Redfin.com.

My experience of the man has been overwhelmingly negative, and I don’t care for the way the company operates: It foists its agency responsibilities onto listing agents, then publicly vilifies them if they object to this cowbird-like behavior.

But someone at Redfin.com — or possibly some unknown maverick — figured out that the contradiction of the listing agent compensating the buyer’s agent could be exploited to market advantage, and this one innovation, in due course, will — at a minimum — divorce the two commissions from one another, resulting in a true buyer’s agency at last. It may also serve to eliminate the proprietarian idea of the MLS, a serendipitous side-effect.

I don’t think Redfin.com can survive as a business, at least not in its present form. Its head-count is huge for the volume it is doing. The proportional rebate system makes it impossible for the company Read more

September 18, 2006

Is Real Estate 2.0 nothing more than a cabal of cheaper and more-efficient moral midgets . . . ?

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Suburban Phoenix Real Estate Broker

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I’m up to my elbows in Ajax (“You’re soaking in it!”), but I don’t want this to get washed away in the suds: With respect to Redfin’s assertion of propriety, Kevin Boer at In The Trenches (blogrolled) provides a plausible explanation for how Redfin might be so adept at identifying impropriety.

An idea has been bugging me, and I don’t know what to do about it. Realtors are too much identified with The Real Estate King, the cheesy, sleazy used car salesmen. But there is another image of the Realtor, one among those we used to call The Better Men — maybe stodgy, maybe stuffy, but a man of firm and fixed principles. Real estate 2.0 (come and get me!) might bring us greater efficiencies, but if it brings us even worse behavior — how is that a benefit? Zillow.com whispers the truth and shouts the lie. The listings aggregators steal content like bums in Grand Central Station mining the coin returns on pay-phones. And Redfin.com seemingly devotes its every living moment to making street criminals look like men of character. This is not an improvement.

If you think about this at all, please think carefully. I am up to my elbows in Ajax — with which I intend to cleanse Phoenix of every last greasy remnant of The Real Estate King. But we gain absolutely nothing if we remake our industry as a cabal of cheaper and more-efficient moral midgets. The realty.bots might be famous and they might have a lot of money behind them. But if they are our future, we might as well have changed nothing…

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September 7, 2006

Shadowing Zillow, filleting Redfin, and a “Just Plane Smart” approach to change in the real estate business . . .

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Suburban Phoenix Real Estate Broker

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Dustin at Rain City Guide is giving stat-dancing lessons today. I am neither as talented nor as interested as he is, but I do have an interesting statistic to reveal: Debunking Zillow.com is averaging well over 100 unique hits a day. All of my extended Zillow rants do very well, and Debunking Zillow.com comes in third if you Google on “zillow.com” — which many visitors to BloodhoundBlog are doing every day. It pays to keep things in perspective: Our Zillow traffic can’t hold a candle to that which is landing directly on Zillow.com. But for anyone looking for a second-opinion, and apparently many people are, it’s right there on the shelf next to the branded product.

There are two memes I hear all the time in the disintermediation debate that I think are incorrect. The first is the implication that anyone who expresses a skeptical or negative view of one or more of the dot.com RealtyBots is either an actual luddite or is in some way frightened by technology, disintermediation or simply change in any form. The second is the idea that disintermediation in the real estate industry will — or will not — take the course followed by travel agencies and stock brokerages.

For the first meme, I can discern no evidence whatever. It’s a caricature composed of characterizations rather than quotations with supporting links. Surely I would qualify as a technophile of at least the second rank, and my objections to Zillow.com and Redfin.com have nothing to do with technology, fear or even the idea of disintermediation as such. Zillow.com is deceptive in its portrayal of what it can and cannot do, and Redfin.com is a cowbird that incubates its buyer representation commissions in the listing agent’s nest. I am one of the most pro-innovation Realtors on the planet — and, in case you didn’t notice, yesterday I proposed an innovation that will, as a secondary consequence, obviate Redfin.com’s current business model. What I am opposed to — and what every honest person should be opposed to — is unethical behavior.

For the second meme, I think both the “will” and “will Read more

September 6, 2006

No Memory Hole at Redfin.com weblog, where the dance of the mantises goes on forever . . .

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Suburban Phoenix Real Estate Broker

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(This teeters right on the brink of being either gossip or a pissing contest. I want to document the facts in a permanent way, but I won’t be in the least offended if you press on without reading this.)

One of the interesting defects of the enblogged globe is the de facto Memory Hole effect. If I change the appearance of a weblog, every page will reflect those changes, as though they had been that way forever. If I change a post, it’s changed forever, with no reference to its past form. There are various web-based Wayback Machines, but there is no built-in version history so that you can track what I have done — perhaps with an eye to judging my motives.

It could be there is no Memory Hole at Redfin.com’s weblog.

From a comment by Glenn Kelman at Rain City Guide:

Regarding that reference, I had tried to explain that we deplore a particular tactic, not real estate agents, and I apologized. Later, before returning to this blog, I removed the reference from the blog, and inserted an apology with the same prominence as the original reference. This is because I respect Dustin, because I regretted the implications of my own statement, and because we all believe in fair, civil discourse.

And, indeed, this is the way that particular text appears on the Redfin.com weblog’s home page and at this permalink:

But there is no Memory Hole. The original entry is still on-line:

The reader comments are copied from the old version to the new, but the old version has not been supplanted by the new version, but, rather, duplicated and then edited.

I am drawing absolutely no inferences from this, simply taking note of a body of facts.

Further notice: I just went to set the trackbacks for the two separate permalinks — and they’re the same.

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September 5, 2006

Dissecting Glenn Kelman of Redfin.com . . .

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Suburban Phoenix Real Estate Broker

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From comments at Rain City Guide. I didn’t address this weblog entry from Redfin.com CEO and broker Glenn Kelman because I wasn’t sure how to strike a balance. But today, Dustin Luther offered this:

For those that haven’t seen Glenn’s comments on his blog, I highly recommend heading over to this post.

In case it wasn’t clear, Glenn is clearly not worried about making friends with real estate agents, and even compares listing agents (who don’t want to show their properties to Redfin buyers) to praying mantises who eat their pray: “a grisly illustration of realtors’ hopeful but incorrect argument that showing their own listing can procure cause for garnishing the buyer agent’s commission.”

P.S. Greg: he has a special treat over there for you as well…

This was my reply to him:

> Greg: he has a special treat over there for you as well

I saw it last night. I concluded that the man is a jackass and a fool. In rank order the fools would seem to be 3. Kelman’s clients, 2. Kelman himself, and 1. Kelman’s investors.

Debunking Zillow.com gets dozens of unique hits every day. Let’s go get sued, a blueprint for bringing litigation against cowbird brokers scores fourth when you search for Redfin.com. I think the people at Zillow.com have been very deft in the way they have dealt with criticism. I think Kelman is drunk on his own publicity. The route to fame can be long and uncertain. But it’s just a short hop from there to infamy…

Hustling uninformed newspaper reporters is one thing, but I’ll bet the man doesn’t have the guts to defend his business model in public against an informed questioner.

Further notice: Kelman adds a comment at RCG.

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September 5, 2006

Detailing the mechanics of the Redfin cost shift . . .

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Suburban Phoenix Real Estate Broker

Author website

Taking on the New York Times’ fawning coverage of Redfin.com, Jim Kimmons at Transforming Real Estate details the details behind the cooperation/compensation model of real estate brokerage:

The contention that the listing agent should be pleased to show an “eager buyer” the home when they come with no agent is just not going to function in the way presented. Let’s say that I’m a listing agent and have say 20 listings. I know that many homes get shown upwards of 40+ times before selling, but let’s use 30 for an example. Also, I’m not sure how you can call someone an “eager buyer” when you’ve never met them and they’ve never seen the home, except in a drive-by. Now, using an hour each as a conservative example, if every buyer was a Redfin client, then this listing agent would work about 600 hours and drive a lot of miles in meeting “eager buyers” at their listings. Buyer agents do this all the time, but that’s what they get the 3% for.

Don’t stop there. There’s a lot more that Jim covers.

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September 4, 2006

Working the numbers on real estate business models . . .

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Suburban Phoenix Real Estate Broker

Author website

Altos Research on Redfin.com and other real estate business models:

Sales guru Jeffery Gitomer puts it this way, “if you have to compete on price, You Suck!”

We all invoke financial services as the analog for real estate. What isn’t commonly noted is that as technology swept through the financial services biz, two things happened: prices went down (e-trade et al) and prices went up (hedge funds). Why did prices go up? The same reason they always do. When you provide more value to a customer, you can (and should) charge more. I for one am looking for the real estate agents/brokers/sites that blow away their clients so completely with service, that they’re happy to pay more than 6%. Those are the innovators to watch.

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September 4, 2006

Remarks from Redfin.com Broker Glenn Kelman . . .

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Suburban Phoenix Real Estate Broker

Author website

Glenn Kelman, chief executive and broker of Redfin.com, posted a comment to one of my entries about that company. I replied to him there, but I’m posting the exchange here, as well, frankly because I consider it Big News.

Here is Mr. Kelman’s remark:

Thanks for this thoughtful comment Greg. Many Redfin customers decide to refund part of the commission to the seller, but this is their choice: the money we refund is theirs, so the choice is theirs. Regards, Glenn

And here is my somewhat lengthier reply:

There we go! Truliamazing, times two!

> the money we refund is theirs, so the choice is theirs.

I agree with this, of course, but I wonder if you would be willing to address the larger issues I have raised here and here (and elsewhere for that matter).

I believe as an Arizona State licensed real estate broker that Redfin.com’s (and BuySideInc.com’s) policy of sending buyers unattended to listed homes is an abandonment of agency, a clear break in the chain of representation. Your company in particular has proved very successful at portraying reluctant listing agents as the bad guys, but, in fact, I believe that cooperative effort is the reason that listing agents recommend that sellers provide compensation for cooperating brokers. You are certainly free to do as you choose with your earned commissions, but my argument would be that you have not earned them by any standard of procuring cause that would be applied to any other real estate brokerage. Can you defend your company’s representation of its clients and therefore defend its having earned the commissions it has disbursed?

Another way of asking the same queston: How much commission would Redfin.com have earned if it sent a client unattended to a new home subdivision?

All that having been said, I think you will get away with what you are doing. But if you do, it seems very reasonable that listing agents will either stop offering co-broke commissions altogether or will condition those commissions on true cooperative effort. No doubt the New York Times will deem this unfair, but in fact the sales price of the home will be lower Read more

September 4, 2006

Labor Day Linkathon: Catching up with real estate topics raised here and elsewhere . . .

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Suburban Phoenix Real Estate Broker

Author website

From a comment here, here is the full context of Marlow Harris’s remarks to the New York Times:

“The only complaints I hear about are those noted on the official Redfin blog or talked about by their CEO in newspapers. As I mentioned in my previous email, they have such a tiny -.00001% of the market, I’m sure no one takes them very seriously.

“However, someone may be trying to manufacture controversy, even going so far as to bait other real estate practitioners, invite “war stories” on their blog, and whine to Congress and to newspaper reporters, that they’re being treated unfairly.

“With such dismal sales, if you’re hearing stories from a certain Redfin CEO, I’d take them all with a grain of salt. He can’t blame all his problems on other real estate brokers.”

There is much, much more from Marlow on Redfin.com at 360Digest. Which is not to imply that reaction to the New York Times article is universally negative: The Real Estate Bloggers loved it.

Ardell has ideas on training agents to negotiate commissions equitably. In contrast to Redzilla, a matinee monster at best, Ardell’s ideas combined with the innovations outlined by Eileen Tefft at Rain City Guide suggest a truly new business model for real estate brokerage.

Stephen Jagger at Ubertor raises some additional points on the subject of building custom web sites for home listings. I promise to come back to this topic sometime soon. There are four categories of clients for these custom web sites, and so far we’ve only talked about two of them. In the mean time, though, I think Ubertor builds gorgeous web sites.

ZillowTalk: ChitownLiving on the Sellsius&176; poll results. Michael Daly at the Hamptons Real Estate Blog explores the consequences of hubris in business. My own name is mud on both coasts, so I’ll do what I can to make things worse. Here’s what Michael Daly says:

It will take a number of lawsuits or perhaps even a class action suit against Zillow before they put the appropriate disclaimers on their site.

I’m kinda thinking that they’re on the verge of something like this right now. Take note of Read more

September 3, 2006

If Bill Clinton ran Redfin.com . . .

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Suburban Phoenix Real Estate Broker

Author website

Of the two “innovative” cowbird brokerages discussed in this morning’s New York Times, the stronger of the two is BuySideInc.com. They’re rebating even more of the buyer’s agent’s commission than is Redfin.com, but their actual profit center is in originating the loan — a well-understood, fast, cheap, office-job function. Even this is not without complicating factors, especially RESPA. But in pure dollars, BuySideInc.com will make more money per buyer than Redfin.com.

But if Redfin.com really wanted to isolate traditional listing agents, they would triangulate Clinton-style. Instead of giving two-thirds of the buyer’s agent’s commission to the buyer, they would give one-third each to both the buyer and the seller. That way, the seller would regard Redfin.com not just as another source of buyers but as a potential small windfall at close of escrow. The interests of buyer, seller, and Redfin.com would coincide, at least to that extent, and the listing agent would feel a very strong pressure to get his own ass on board.

I still think Redfin.com is not earning its commissions, using the standards of procuring cause that would apply to any other brokerage, but a strategy like this would be much more effective, in the long run, at getting away with it than whining to the New York Times…

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September 3, 2006

Work the numbers: Redfin.com is not much of a business . . .

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Suburban Phoenix Real Estate Broker

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If the New York Times devotes 2700 words to a puff piece on Redfin.com, how many of those words would you expect represent the contrary point of view? If you said 1,350, to reflect the chimerical idea of balance, you haven’t spent much time reading the New York Times. If you said zero, you spend too much of your time reading Little Green Footballs. The Times would never, ever present a completely tendentious article without at least a feint at balance. Marlow Harris, whom I admire no end, gets to offer this extensive and comprehensive counter-argument:

Some agents say the biggest problem with Redfin is that it complains too much. “Someone may be trying to manufacture controversy, even going so far as to bait other real estate practitioners, invite ‘war stories’ on their blog and whine to Congress and to newspaper reporters that they’re being treated unfairly,” said Marlow Harris, a Seattle agent with Coldwell Banker Bain Associates who also runs the real estate blog 360digest.com.

I can’t imagine how much of Marlow’s time the Times wasted in order to stuff her mouth with a straw man, but I will bet a very tall dollar this is not all she had to say.

In reality, the piece is Redfin.com PR, but the hook is a couple who were turned away, like Mary and Joseph, by an evil innkeeper of a real estate agent. I’m going to fisk this article a little, not a lot, because it’s interesting.

First, did the Times lack the opportunity to present a contrasting point of view? Of course not:

But the seller’s agent refused to show it to them. Why would she turn away an eager buyer?

How about because she could double her legal liability for no additional compensation? Was that so hard?

“You can find out more on the Internet about an eBay Beanie Baby than you can about a $1 million house,” said Glenn Kelman, chief executive of Redfin, a licensed broker in Washington State and California.

Oh, good grief. I think the “secret” fields in an MLS listing are stupid, but there are damn few of them, and none of Read more

August 23, 2006

How to exterminate a cowbird — a comedy in three acts . . .

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Suburban Phoenix Real Estate Broker

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Act I — Why Realtors hate discount listings…

People think ordinary on-the-ground Realtors hate discount listings because of the discount. That’s may be true of many real estate brokers, but real-life Realtors have two much better reasons to hate discount listings. First, the Buyer’s Agent will have to do all the work for both the buyer and the seller. And, second, in so doing, the Buyer’s Agent might well inherit the liability of being an Undisclosed Dual Agent. The Buyer’s Agent has the choice of either answering every question from the seller by saying, “I do not represent you” — thus causing the transaction to grind to a halt (which is a violation of the Buyer’s Agent’s fiduciary duty to the buyer) — or by saying, “Even though I don’t represent you, here’s what you do.” If the seller later decides he was ill-advised, it won’t be the discount Listing Agent who gets sued.

Act II — The hidden secrets in MLS listings…

Given that IDX systems (like ours) are ubiquitous, precisely what is it that the NAR and all the brokers are fighting so hard to keep secret in MLS listings. I’m sure things differ among MLS systems, but the two big secrets the NAR wants to keep from non-MLS-members are these: 1. The number of Days on Market. That’s the Listing Agent’s secret. And 2. The contact information of the Listing Agent. That’s the Buyer’s Agent’s secret. In the latter case, you might think what is implied is that Buyer’s Agents in general believe that they stink so bad that their clients would betray them in a heartbeat if only they knew how. That’s only half the issue, though. The other half is the fear that, if the buyer knows how to approach the Listing Agent directly, the Listing Agent will make a sweetheart deal with the buyer in order to double-dip on the commission while disintermediating the Buyer’s Agent. This is why MLS systems have rules regarding Variable Commissions, since, in that circumstance, the Listing Agent is disclosing to Buyer’s Agents (but not to their clients; this is another secret datum) Read more

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