{"id":1007,"date":"2007-02-08T07:59:59","date_gmt":"2007-02-08T14:59:59","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=1007"},"modified":"2007-05-13T20:02:11","modified_gmt":"2007-05-14T03:02:11","slug":"glenn-kelman-on-redfincoms-move-into-southern-california-ive-never-had-to-think-so-hard-in-an-interview-in-my-life","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1007\/glenn-kelman-on-redfincoms-move-into-southern-california-ive-never-had-to-think-so-hard-in-an-interview-in-my-life\/","title":{"rendered":"Glenn Kelman on Redfin.com’s move into Southern California: “I’ve never had to think so hard in an interview in my life”"},"content":{"rendered":"

Here’s the newspaper news, and we’ll come back to it in due course: Redfin.com<\/a> today opens three new offices in Southern California: Los Angeles, Orange County and San Diego. The company has expanded its web site to include listings from nine Southern California MLS systems.<\/p>\n

<\/p>\n

Here’s the real news, which emerges from a forty-five-minute podcast interview<\/a> made by BloodhoundBlog contributor<\/a> and San Diego-based Realtor Kris Berg<\/a> with Redfin.com CEO Glenn Kelman: Redfin.com is not profitable at present and may never achieve a reliable state of profitability. Most notably, Kelman’s willingness to reverse himself on unpopular but cost-saving policies may ultimately doom the company, at least in its present configuration as a discount brokerage.<\/p>\n

The immediate problem is simply the payroll<\/a>. As Kelman says in the interview:<\/p>\n

What investors worry about with Redfin is the margin in the model. So today we generate about a 50% margin out of real estate operations. So for every dollar we make, we have to pay fifty cents to one of our agents. And we have to pay our agents more than we initially thought, just because we wanted to to get good people.<\/p><\/blockquote>\n

Redfin’s agents are salaried employees, not the more typical independent contractor paid on some sort of commission sales plan.<\/p>\n

A new Realtor in a traditional brokerage offering training would expect to earn from 50% to 90% of the total available commission offered for the sale of a the home — which might be 3% of the purchase price.<\/p>\n

A more experienced Realtor working in a brokerage with no training could expect to keep 95% or more of earned commissions.<\/p>\n

Redfin concedes two-thirds of the buyer’s agent’s commission to the buyer, with half of the remainder going to compensate its agents. By this we can see that Redfin agents are being paid substantially less than successful Realtors in other types of brokerages. Even so, Kelman concedes, “We’ve got it around fifty cents, and that’s not enough to pay our developers.”<\/p>\n

Since launching as a brokerage, Redfin.com has met with considerable criticism for some of its more unorthodox business practices. At first, the company advised buyers to appeal directly to the listing Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Here’s the newspaper news, and we’ll come back to it in due course: Redfin.com today opens three new offices in Southern California: Los Angeles, Orange County and San Diego. The company has expanded its web site to include listings from nine Southern California MLS systems. Here’s the real news, which emerges from a forty-five-minute podcast […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[4,6,5,27],"tags":[],"class_list":{"0":"post-1007","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-disintermediation","7":"category-marketing","8":"category-real-estate","9":"category-redfincom","11":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":1031,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1031\/redfincoms-ceo-glenn-kelman-what-if-the-parasites-had-to-eat-the-parasites\/","url_meta":{"origin":1007,"position":0},"title":"Redfin.com’s CEO Glenn Kelman: “What if the parasites had to eat the parasites?”","author":"Greg Swann","date":"February 10, 2007","format":false,"excerpt":"It's been a Redfin week for us. Kris Berg recorded her podcast with Glenn Kelman last week and I spent much of my spare time this week dealing with it. Allen Butler dealt with the audio quality, and then Cathleen and I went through the recording, pulling out apposite quotes\u2026","rel":"","context":"In "Real Estate"","block_context":{"text":"Real Estate","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/real-estate\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1012,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1012\/podcast-with-redfincom-ceo-glenn-kelman-were-looking-for-nerds-living-in-nice-houses\/","url_meta":{"origin":1007,"position":1},"title":"Podcast with Redfin.com CEO Glenn Kelman: “We’re looking for nerds living in nice houses”","author":"Kris Berg","date":"February 8, 2007","format":false,"excerpt":"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\u2026","rel":"","context":"In "Disintermediation"","block_context":{"text":"Disintermediation","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/disintermediation\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":3154,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/3154\/what-happens-when-a-lion-of-the-industry-sticks-his-head-in-the-lions-own-mouth-glenn-kelman-joins-bloodhoundblog-as-a-contributor\/","url_meta":{"origin":1007,"position":2},"title":"What happens when a lion of the industry sticks his head in the lion’s own mouth? Glenn Kelman joins BloodhoundBlog as a contributor","author":"Greg Swann","date":"May 21, 2008","format":false,"excerpt":"This is one of those completely obvious ideas that only takes about a year to bubble up to the surface: We write about the real estate industry. We are not very shy about advocating change in the real estate industry. Redfin.com CEO Glenn Kelman is one of the key exponents\u2026","rel":"","context":"In "Blogging"","block_context":{"text":"Blogging","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/blogging\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":6907,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/6907\/video-clips-of-redfincom-ceo-glenn-kelman-from-the-bloodhoundblog-unchained-preview-event-in-seattle\/","url_meta":{"origin":1007,"position":3},"title":"Video clips of Redfin.com CEO Glenn Kelman from the BloodhoundBlog Unchained preview event in Seattle","author":"Greg Swann","date":"February 15, 2009","format":false,"excerpt":"Marlow Harris of 360Digest.com took these clips of Redfin's Glenn Kelman as he spoke with us Thursday afternoon at Zillow.com headquarters in Seattle: Technorati Tags: BloodhoundBlog Unchained, disintermediation, real estate, real estate marketing, Redfin.com","rel":"","context":"In "Disintermediation"","block_context":{"text":"Disintermediation","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/disintermediation\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":290,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/290\/dissecting-glenn-kelman-of-redfincom\/","url_meta":{"origin":1007,"position":4},"title":"Dissecting Glenn Kelman of Redfin.com . . .","author":"Greg Swann","date":"September 5, 2006","format":false,"excerpt":"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\u2026","rel":"","context":"In "Blogging"","block_context":{"text":"Blogging","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/blogging\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1574,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1574\/seven-days-of-the-dog-bloodhoundblog-is-the-real-estate-weblog-to-turn-to-for-hard-charging-hard-news-reporting\/","url_meta":{"origin":1007,"position":5},"title":"Seven Days of the Dog: BloodhoundBlog is the real estate weblog to turn to for hard-charging hard news reporting","author":"Greg Swann","date":"June 23, 2007","format":false,"excerpt":"BloodhoundBlog is celebrating its first birthday this coming Friday, so I wanted to take a little time to highlight some of the best work we've done over the last twelve months. There is a limit to how much primary reporting a real estate weblog can do. The webloggers are each\u2026","rel":"","context":"In "Blogging"","block_context":{"text":"Blogging","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/blogging\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/1007","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=1007"}],"version-history":[{"count":0,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/1007\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=1007"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=1007"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=1007"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}