Glenn Kelman
Recent posts
January 30, 2007
BusinessWeek reported today that the area of the United States where the disparities in home prices were the narrowest were in Silicon Valley’s San Jose, Santa Clara and Sunnyvale. This wasn’t because the most expensive homes weren’t expensive; in fact the Silicon Valley homes priced in the 99th percentile were more expensive than the 99th percentile in Miami ($2.5 million vs. $2.2 million), which had the greatest disparity in home prices. What made Silicon Valley so egalitarian was that the median home price was $745,000.
July 28, 2006
After a few anxious, quiet weeks following our May 31 Bay Area launch, Redfin Direct’s California business has really started taking off, with over thirty offers submitted through Redfin Direct, and our first two deals already scheduled to close. We’ve also got a bunch of California listings.
One of our first Bay Area customers, Colleen and Scott Barneson, were on the news the other night. Lead California agent Rosemary Vo got it Tivo’d and Bahn Lee loaded it up onto the Web. Seeing it on YouTube, I kept waiting for somebody to start lipsynching. But then I remembered that real estate is a serious business…
The segment compared the service a Redfin customer gets with what the customer of a traditional agent gets. The upshot was that Redfin is a good deal if you feel comfortable picking out the property on your own (or, as we like to put it, without any pressure).
This little segment actually says a lot about what kind of person buys a house online. The traditional agent’s customer was buying as a single person, whereas the Redfin customer was actually a couple. The traditional agent’s customer was new to the area, whereas the Redfin customer knew Danville pretty well. So you can see how it probably made more sense for the couple, who could talk to each other about the property, to work with an online brokerage like us. And, we have to admit, it isn’t such a leap to understand why that nice, lonely guy might have a perfectly good reason to use a traditional agent to drive him around Berkeley.
If you’re into Redfin, and you want to make your own video — especially if you want to spice things up a bit — let us know and we’ll send our YouTube crew your way!
July 26, 2006
Inman’s big Connect conference kicked off today in San Francisco. It isn’t raining here, but the city was pretty all the same:
For starters, TechCrunch’s Michael Arrington threw Molotov cocktails for an opening keynote at the new geek side of the conference, Inman’s Connect Tech, bringing in a dump-truck of ideas about everything that is happening on the Web to open things up for consumers.
We were glad to see such a good turnout, maybe 200 people, for an event that we’d cooked up with Inman only a few months ago. One day, maybe it’ll be as big as Connect, the event for agents. Mike (pictured above at left) stayed up the night before writing his speech, confirming the impression he made earlier of being an overgrown, talented kid, shy when he isn’t being startling.
What worried me was that instead of all the industry types barfing on Mike’s ideas, as I think they would have done last winter in New York, everybody was writing down what he said, or even worse, volunteering “we’re doing that now!” (Redfin is going to have a run for its money). The best part was when somebody said the Salt Lake MLS had allowed them to combine its data with for-sale-by-owner listings, only to have the Salt Lake MLS stand up and say “Not anymore.”
I kept looking over at the mild-mannered Inman CEO Mike Edelhart, to see if he would blanch at the controversy, but he was thrilled, engaged; good journalists never die, even when they become CEO’s.
The map guys didn’t say much new, but probably gave another 50 entrepreneurs enough encouragement to put listings on a map. Redfin was on a tame standards panel. Later on, Craigslist’s Craig Newmark stood on the other side from us of a large plant but nobody had the guts to say hi. We all felt pretty glum about being so chicken until Rob McGarty, who screwed up royally converting everyone to Treo’s, said “Hey, he’s using a Treo.”
The main event, Inman Connect, was a mob scene, with people jammng the doorways of a huge ballroom. I missed Brad Inman’s keynote speech about transparency because of a meeting that ran late, but Zillow’s blog hits the high points.
Zillow’s main men, Lloyd Frink and Rich Barton, gave an utterly charming presentation about what they learned over the past six months, consisting mostly of funny pictures. They introduced a neat feature for getting Zestimates by e-mail and opened up their API, which maybe we’ll use to put more data on our map.
They said they’d never be a brokerage, which is always nice for us to hear. They showed a slide of a house with a “Buy It Now” button next to it that kind of reminded me of our site. It was supposed to be an example of what not to do. The audience roared. The lady next to me craned around to see the look on my face. Note to self that we really need to change that Buy It button to something like Start Offer…
From the forum on journalism, I really liked Lockhart Steele’s comment on community features, that you should assume people are intelligent, so much more so than computers, and not worry that they might say something crazy, vengeful or stupid (though that’s fun too).
I ran into anti-realtor legal gadfly extraordinaire David Barry, wearing another scintallting shirt open at the chest, who said he felt “so energized coming to tradeshows.” I looked at him, not for the first time, with wonder.
We won an award for most innovative business model, which we’ll announce tomorrow. Winners in other categories included Trulia, Zillow, RE/MAX, Urban Digs, Cell Signs. I had set aside my laptop and patted my hair down when the envelope for our category was being opened, only to see Rob and Eric Heller jump up like Academy Award-winners on hearing our name, and take the stage to get their photos taken with Jessica Swesey. This was awesome.
We got invited to a swanky party at an expensive house up for sale but I didn’t go.
July 25, 2006
Redfin’s day in Congress was like a lot of days at Redfin: filled with swashbuckling controversy and juicy intrigue, unavoidably goofy and improvisational, tinged with a Quixotic sense of futility.
Mostly it felt like a schoolday field-trip without a chaperone. Going to Congress was fun. The whole place seemed set to a music we couldn’t hear. The halls are filled with handsome young people in impeccable suits, and the clocks are outfitted with lights and alarms to warn of impending votes.
The staffers often seemed elaborately bored by the droning testimony but eager to pounce. Everywhere, everyone seems to know everything that’s going on, tracking bills coming to vote by BlackBerry, watching hearings by Webcast, whispering in one another’s ear.
The whispering was constant and congenial, with the ranking liberal Democrat Maxine Waters and the stolidly Republican chairman Bob Ney sharing a joke while the local yokel-dokels and the legal stiffs rattled on about Grand Rapids, Michigan or obscure points of law. I felt bad for them having to listen to this stuff, day after day, and was relieved to see how well they got on, despite all the reports of increasing partisanship.
It was also hard not to feel a little awe. Most public buildings I’ve been in, usually to argue traffic tickets, are a combination of old-train-station grandeur and the run-down, cut-rate decor of a high-school classroom. I was worried the hearings would be all the latter, with card-tables and government-issue plastic chairs, and a gigantic clock on the wall.
But the hearing rooms are grand, with tiers of committee members arranged in concentric semi-circles above the testimony table. The gallery behind the witnesses was packed to capacity with realtor-pin-wearing supporters and staff attorneys toting binders of committee-member profiles. There were overflow rooms, photographers with gigantic lenses that they still managed to put right in your face, and remote-controlled TV cameras.
Two panels spoke. The first consisted of Department of Justice & FTC anti-trust attorneys and an analyst from the non-partisan General Accounting Office, who were polite but firm in their findings that realtors and listing services violate anti-trust laws designed to protect consumers. The second, which Redfin was on, consisted of six members of the industry, including the President-Elect of the National Association of Realtors.
Each witness read a prepared five-minute statement, getting the gong the second he or she went over (lights on a small display controlled by the chairman and visible only to the speaker turned yellow then red). Surprisingly, many witnesses were cut off with pages of testimony unread. A carbuncular Texas discount broker, talking a mile-a-minute, finished 1:30 early and then looked around for a second as if he couldn’t believe it.
For our statement, which you can read here, we copied the intro off the script of the Lending Tree lady next to me, because we’d forgotten to include the pro-forma niceties to “Chairman Ney, Ranking Committee-Member Waters” and all the rest.
While I spoke, I tried to look deeply into the congressmen’s eyes for effect, then lost my place and kept talking anyway. So I have no idea what I really said. After I was done, it seemed like a long way to go for a speech that was already over. Except it was far from over.
Every congressman except the powerful but soon-to-be-retired Congressman Oxley was ferociously pro-realtor. And once Oxley was gone the entire hearing became a bloodsport, with Redfin in its customary position at the center of the fray. All the congressmen directed most of their questions towards us. As each one lit into Redfin, the realtor crowd moaned with pleasure.
The Democrats of all people cited states’ rights in their refusal to act, while the Republicans seemed intent on protecting the realtors rather than free markets. Their opposition was impenetrably uniform but also outlandishly varied: do online brokers discriminate against those who lack Internet access? Since realtors are often divorced women starting second careers, aren’t we hurting those who need jobs the most? If lawyers’ fees have increased recently why shouldn’t realtors’? If your service is so great, why isn’t your business bigger? Since you’re not out of business, how could you complain?
The Grand Inquisitor was Congressman Artur (yes, that’s how it’s spelled) Davis, a brilliant former prosecutor whom other committee members gave their time to so he could sustain his attack. No one seemed remotely disturbed by the fact that consumers who buy online can be discriminated against without legal recourse, or that MLS rules limit competition.
It was all political theater, as everyone knew what we never figured out: that Congress would leave it to the DoJ to go after the realtors. An FTC lawyer told me before the hearing started that just having companies like Redfin testify was already alarming to the realtor lobby. “They did a big letter campaign,” he said (the committee members often waved letters at us from concerned realtors in their districts).
Everyone was very nice to us afterwards. Chairman Ney came by to ask if we’d ever testified before, and Cindy Chetti, the fantastic staffer who hooked us up in the first place, said that the congressmen were talking among themselves about how fun we were as a witness. A DoJ attorney gave us her card.
This would all be cause for unmitigated celebration if the fellow witnesses hadn’t been so solicitous of us afterwards: “Are you OK? Really? Really? Wow. I mean wow.” Even the intern in the committee office who was watching my luggage looked up from his Webcast when I came in and said, “Oh man.” Only then did it dawn on me we’d gotten into an argument we couldn’t win. The Lending Tree legal team of six lawyers and PR experts felt so bad when they saw I was by myself that they offered a lift to the airport by chartered van.
We drove past the Washington Monument, encircled by 50 pretty flags, and the Jefferson Memorial, lonely in its perfection, and soon we were enveloped in the dense green of FDR Drive along the upper Potomac. It was very beautiful. But we were all already so immersed in our BlackBerries that we could not see to see.
P.S. One weird, funny note. In mangling the answer to one question, we explained how we came to testify before Congress. “We didn’t make any donations, Democrat or Republican,” I said, “We just read an NYT article and called Clinton to tell him we wanted to come.”
The whole room froze, thinking I was casually referring to President Clinton rather than the urbane, knowing attorney/consigiliere for the subcommittee, Clinton Jones (whose name we found on a Web site and who seemed to find it quaint that I wanted to shake his hand before the hearings began).
Puzzled, oblivious, we all just moved on. Mr. Jones whispered into Chairman Ney’s ear, and both of them had a big laugh…
June 27, 2006
There are times when traditional agents’ mania to defend 6% becomes psychotic. Oddly, this is when I feel the deepest connection to the industry.
Take for example, Bernice L. Ross, author of a 300+ book called “Waging War on Real Estate’s Discounters.” The book promises to teach agents “tired of having to defend your commission at every turn” how to “defeat your foes,” the discounters, which she describes as “well-funded giants… waging war on traditional brokerage.”
Bernice’s Table of Contents is stunning:
–> Chapter 19, Trouncing Traitors within Your Ranks: Hanging “Benedict Arnold”
–> Chapter 24, The Ultimate Secret Weapon: The “A-bomb”
–> Chapter 25, Crouch in Cowardice or March Nobly Into Battle
Who wouldn’t be intrigued to meet this woman?
Our founder, David Eraker, ordered Bernice’s 80+ script cards off eBay, but we hesitated to blog about them because we aren’t really a discounter. Just as E-Trade isn’t a discount stock brokerage, we’re not a discount real estate brokerage. We’re an online realtor, offering a different service at a radically different price, not the same service at a slightly lower price.
But the truth is, the script cards are just too fun to pass up:
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For those who don’t mind the “crouching in cowardice,” the book and the flash cards are available at a discount.
June 27, 2006
Redfin’s customers made the front page of the Seattle Post-Intelligencer last Saturday, in an article that turned out to be the paper’s most e-mailed story.
Phuong Cat Le, the very sharp PI reporter, interviewed us in a warm conference room crammed with AV equipment, beginning with “your competitors don’t seem to like you very much” and going downhill from there. I tried to act like a CEO, but instead became intensely self-conscious of my bodily functions, then fantasized about lunch. I came back and told Rob McGarty, “We’re going down.”
But the story came out dandy. There was a picture of a happy couple, standing in front of their Redfin-purchased home with their daughter in a pink baseball cap. There was a disgruntled executive from a traditional brokerage, who worried that Redfin customers couldn’t win in competitive situations, followed by a Redfin customer who beat out four other offers.
There was even a colorful quote, from a Redfin customer who complained that the “current real estate model seems like an all-you-can-eat buffet… The people who eat a lot get a deal. The people who eat very little get the short end of the stick.” (According to a 2005 study of California home-buyers, folks who search for homes on the Internet use two weeks of an agent’s time instead of the standard five, even if they pay the same price.)
The story also publicized a new Redfin service, where our Project Gotham Racing champion will be driving people around on private home tours for $250 per half-day. If you can’t get into a property through an open house or by contacting the listing agent, call us: 877-9-Redfin.
June 23, 2006
Grumbling about sub-audible ring-tones used by teenagers, The New Yorker’s Louis Menand (pictured below) this week writes about real estate as one of the final stages in the aging process: “it’s not long until you find that you are unable to stop talking about real estate, which is the first step down an increasingly rocky and overgrown path that leads, almost always — all right, always — to death.”
Cheery sentiments to discover in the Redfin bathroom. But it got me thinking about a question we’re often asked at Redfin, which is “Why are all the Internet real estate companies in Seattle?” Our theory: real estate prices are so high in Silicon Valley that only somebody well on his way to death can afford to buy a house. By that time it’s too late to start a company. So Internet real estate companies have shown up in another high-tech spot where the entrepreneurs can afford to buy houses, Seattle.
June 18, 2006
A New York Times editorial (”Commission Accomplished“) by a very sober but friendly looking Brookings Institution senior fellow, Robert E. Litan, highlights the model that Redfin pioneered, an online real estate brokerage, and discusses the anti-competitive forces arrayed against it.
The article makes a comparison that has long been a Redfin favorite, between the stock market and the real estate market. The market for stocks and bonds is regulated by the SEC, the NASD and state laws. As a result, it is easy for E-Trade to have the same access to inventory that Merrill Lynch enjoys. But Mr. Litan notes that the market for listings has “no state or federal oversight.” The difficulty of getting access to listing data is a big reason why Redfin is in only two states, not 50.
The article proposes that the Federal Trade Commission pre-empt laws and regulations that are ostensibly designed to protect consumers but which in fact only maintain realtors’ monopoly. It also mentions that there are hearings on the matter scheduled next month in Washington, D.C., led by Ohio Congressman & fair-competition-crusader Michael Oxley, co-author of the Sarbanes-Oxley bill that brought higher standards of accountability to publicly traded businesses.
If you want to let Mr. Oxley know how you feel, you can drop him a line in less than a minute, just by filling out an online form (the Web site only accepts comments from residents of Findlay and its surroundings, postal code 45839).
June 15, 2006
Today’s most clicked-on Redfin Bay Area property is a nice little Milpitas house with a mostly paved front yard: 2 bedrooms, 2 bathrooms, 1,215 square feet, $549,888.
I like the back yard, which reminds me of the old California, before everything became well-sculpted squares of over-fertilized grass. And one bathroom seems to be built in the center of an old Redwood tree:
The neighborhood is typical Milpitas, known for its Taco Bells and Tom Shane stores:
It’s close to the mall, between 880 and the Montague Expressway. A 3-bedroom, 2-bathroom place just across the street sold in November 2005 for $312,000.
June 14, 2006
Today’s most clicked-on Redfin property is a “bijou pied a terre” in San Francisco’s Noe Valley listed at $355,000. Bijou means “jewel” and “pied a terre” means second residence (why doesn’t the Seattle MLS use any fancy French terms?). A better translation would be that the place is ridiculously small, but charming; with only a kitchenette rather than a full kitchen, one bathroom, and a living room you can sleep in after everyone leaves. The broker’s open was yesterday; the open house is this Sunday from 1 - 4.
The building was originally four 1-bedroom apartments, but the two upper units were converted into a 2-bedroom apartment and a studio, with the studio becoming our Sweet Dig. The listing brokerage isn’t sure — or isn’t saying — how many square feet this little Sweet Dig is, and since it was just split up, there’s no sales history.
I lived around the corner from here for many years, and it’s a beautiful neighborhood: good Chinese at Eric’s, burritos at Papalote, sushi at Hamano. If you like to run, you can haul yourself up the hill to Sutro Tower and see the whole city spread out before you, and the ocean too. If you like the neighborhood, there are a few bigger places for a little more money but with less charm.
