Last week I had the pleasure of meeting with Redfin CEO Glenn Kelman and his Senior Communications Director, Cynthia Pang. Let me begin by saying that I waltzed into my local Starbucks anticipating a date with the devil. While I exited no more enamored with their business model, I have to admit that both Glenn and Cynthia were a delight. No horns, no forked tails and no speaking in tongues (well, not exactly).
My impression of Glenn was one of a passionate entrepreneur who genuinely believes in his work. He struck me as honest and sincere, and I thoroughly enjoyed our brief time together. Having said that, I don’t get the impression that he entirely understands the depth of our business or of our duties as agents and fiduciaries. Some of his core premises strike me as fundamentally flawed from the standpoint of end game success or, worse, as ingredients in a recipe for future liability claims and outright failure.
I could be wrong. Divergent opinions and perspectives are what make our world go round. So, I would like to thank Glenn and Cynthia for their time. It may surprise some to know that I honestly wish them much success, as I believe their success will only be found (if it is truly realized at all) in a niche market sense.
So, Redfin, welcome to San Diego!
More: Kris Berg’s husband, Steve, has a very thorough Redfin post at The San Diego Home Blog. Los Angeles Times. Redfin.com’s weblog. (Ahem. Gertrude Stein’s ungrateful whine about Oakland was “There is no there there.”) Kevin Boer at The San Francisco Bay Area Real Estate Blog illustrates the demographics of Redfin’s move. The Future of Real Estate Marketing. More from Kevin Boer.
Technorati Tags: disintermediation, real estate, real estate marketing
Drew Nichols says:
Thank you for also posting the blog entry on your blog. That was a good piece. I’m glad we in South Carolina are watching from a distance. Redfin will never come here; our median sales price is like $170,000. 🙂
February 8, 2007 — 9:07 am
Jeff Brown says:
‘Niche market’ indeed, Kris. Does that refer to markets with median prices in excess of half a million bucks with a large portion owned by folks who share their misunderstanding of our biz?
Another great job, Kris.
February 8, 2007 — 9:31 am
Cathleen Collins says:
Wonderful interview Kris. While the mainstream media has been throwing Kelman softballs, you dug into all the areas that are truly pertinent to the Redfin model. Thank you for making him “think” for this interview! Thank you, too, for clarifying that the distaste Realtors have for Kelman doesn’t result from fear of his model, it is a natural reaction to his vilifying us, painting a broad picture of our profession, which really describes the inept agent.
February 8, 2007 — 10:11 am
Kris Berg says:
This from LATimes.com this morning:
Despite the friend-of-agents face Glenn put on at our meeting, and assuming this is an accurate quote, this is another example of that vilification, Cathleen.
February 8, 2007 — 10:21 am
Greg Swann says:
> Despite the friend-of-agents face Glenn put on at our meeting, and assuming this is an accurate quote, this is another example of that vilification, Cathleen.
He cops to the quote, remorsefully, in his post this morning. Steve gets a link. You and I are personae non gratae, apparently. Actually, this seems certain. The first-published version of the post mentioned the podcast without a link. Current version omits mention of the podcast entirely.
February 8, 2007 — 10:37 am
Kris Berg says:
Oops! Steve’s post has the podcast included as well. Wonder if his link will go away?
I actually thought I was quite respectful. 🙁
February 8, 2007 — 10:45 am
Cynthia Pang says:
Greg and Kris – I must have accidentally deleted the podcast mention when I tried to add the link for Glenn. Sorry about that! I’ll go see how I messed it up and fix it.
Cynthia
February 8, 2007 — 11:55 am
Kris Berg says:
Cynthia, I didn’t think a little healthy banter was a bad thing from a marketing standpoint. Thanks for putting the link back up. In any event, bet you’re having a busy day!
February 8, 2007 — 12:00 pm
Cynthia Pang says:
Kris, healthy banter is good! I just had to acknowledge my snafu. Good thing I’m not on the dev team :). And, yes, today is a busy day, but I love it!
February 8, 2007 — 12:19 pm
Caleb Mardini says:
Kris,
Thanks for posting this interview. It gives an interesting perspective on the company. From what I can see things haven’t changed much since they originaly started> They’re still trying to find a business model that produces.
February 8, 2007 — 12:42 pm
Phil Hoover says:
Redfin’s claims of saving buyers money reminds me of the old saying “oats are cheaper after they have been through the bull”.
When these guys run through their venture capital, they will be gone.
The only way they can survive is to trash Realtors and try to compete in high-dollar markets ~ yet, they try to cozy up to Realtors at the same time?
It is difficult to see how they can tap enough of the market to survive, especially when much of the national market is in the tank and sellers want competent, experienced, full-service Realtors with a proven track record.
If you’re a seller of a high-dollar home, are you really going to want a Redfin sign in your yard that screams that you are cheap and appeals to bargain-hunting buyers?
February 8, 2007 — 4:29 pm
Josh says:
Kris –
I am interested to know what “niche” you are talking about? Is this “niche” the 77%+ home buyers using the internet to find their next home, or is this “niche” the 100% of cosumers that like saving money. WHAT NICHE MARKET?
-Josh , openthehomeblog.com
February 8, 2007 — 8:50 pm
Brian Brady says:
Kris:
Great interview. As we know, Redfin is behind the curve in San Diego; ipayone has been offering that fee model since 2004 (albeit unprofitably).
Does Glenn’s online persecution complex make you wonder if they ever really want to be in the real estate brokerage business or if they always want to be the “misunderstood ones”? What if the Realtors in San Diego treated them well? What would Glenn do to generate PR then?
February 9, 2007 — 1:26 am
Caleb Mardini says:
Brian I hadn’t thought of it that way.
February 9, 2007 — 1:36 am
Kris Berg says:
Josh, The vast majority of my clients are among both your 77% and your 100%. The niche is the small percentage of the subset that enjoy driving uninsured.
February 9, 2007 — 7:28 am
Brian Brady says:
“are you really going to want a Redfin sign in your yard that screams that you are cheap and appeals to bargain-hunting buyers”
That’s been the challenge for the discount models here in SD. “Hey, the owners are cheap and should be a mark”
February 9, 2007 — 11:33 am
Roberta Murphy says:
Kris: Despite the background noise, yours was a five- star interview. I agree with Brian that Redfin’s biggest challenge in San Diego will be other real estate “discounters” who perhaps offer more elevated levels of service.
It is also interesting that Redfin’s San Diego agent who repeats their mantra (see Redfin website), comes not from one of the discounters, but from Coldwell Banker. In fact, he is still listed on Sandicor rolls as an agent with CB (as well as Redfin).
February 9, 2007 — 2:55 pm
Kris Berg says:
Roberta,
Thank you! I saw the double Sandicor listing. Any idea how that could happen? I know from experience that when you take your license from one office to another, you cannot be activated for your new office in the MLS until you are deactivated from the other.
Second question: Why haven’t I seen your very good blog before and why haven’t you included SanDiegoHomeBlog.com in your blogroll? 🙂
February 9, 2007 — 4:08 pm
Erik van Joosten says:
Kris,
I “think” that the double listing may be a product of the local boards not being linked. Before this week I was a Broker Associate at Coldwell Banker Del Mar with membership in NSDCAR. Redfin holds its San Diego board membership at SDAR. Therefore, until CB Corporate turns in the board/MLS release forms I will have two separate login ID’s with SANDICOR.
I hope that this clears up any confusion!
February 9, 2007 — 4:38 pm
Kris Berg says:
Erik,
What an honor! How are you enjoying your celebrity? BTW, your name is spelled wrong in the Redfin entry.
Duh – Your explanation of course “explains” it. Embarrassed I missed that.
February 9, 2007 — 5:07 pm
Jeff Turner says:
“The vast majority of my clients are among both your 77% and your 100%. The niche is the small percentage of the subset that enjoy driving uninsured.”
So incredibly well said. That’s exactly how I feel. Not having good representation in the real estate transaction is liking driving without car insurance. The only difference is that there is a greater chance I’ll have an accident in the real estate transaction.
February 9, 2007 — 5:11 pm
Roberta Murphy says:
Kris: Consider it done! Your podcast lured me in; great commentary will keep me returning. Thank Brian Brady for the introduction.
February 9, 2007 — 6:00 pm
NYCJoe says:
I thought that agents were not fiduciaries, in the legal sense of the word.
Am I wrong?
February 12, 2007 — 3:24 pm
Kris Berg says:
Joe,
I’m not an attorney, so I won’t attempt to speak to the “legal sense” in the legal sense. Once agency has been established however (through a valid listing contract, BBA, through a Buyer signing the disclosure regarding agency relationships or through presumption based on conduct), the agent has:
February 12, 2007 — 6:04 pm
Kris Berg says:
And, yes, from the attorneys – In California, an agent is a fiduciary – in the “legal sense”.
February 12, 2007 — 8:15 pm
NYCJoe says:
Ah, thanks.
I think I remember now – on another thread it was Brian that told me that loan officers were not technically “fiduciaries.”
February 13, 2007 — 12:51 am
Jim says:
What’s wrong with a little competition between agents? If someone is willing to do the same work for less, so be it. If the client is willing to agree to the level of service offered, so be it. Isn’t the market the driving force for home prices? I think it might also be the driving force for commission on those prices as well. The commission should be equal to what the client is willing to pay – let the market decide…
With the commission wars in full force and rumors of agents not even showing homes that offer them less than 3% commission something has to give. Is it even ethical for an agent to not show a home to a prospective buyer because the commission offered may be lower??? I would think not, but from what I hear, it’s happening. Buyers should be shown every home that fits their criteria, even those that the agent will make less showing. Unless that happens, the agent is not performing his contractual obligations. Or at least it seems that way to me!
March 27, 2007 — 7:18 pm