RainTV - Glenn Kelman - CEO of Redfin

I can't say that I'm all that familiar with Redfin, but I do think that Bryant is right. Traditional real estate companies aren't going away and discount real estate companies are here to stay.

Bob Mitchell

ValueList Real Estate Services, Inc. 

I think there is plenty of room in the market for all types of business plans.  I do wonder what their long term survivability is though, if they don't plan on turning a profit for at least another year and a half.  They are going to burn a LOT of cash to get there.  And their market niche, while profitable, is small... and then their margins aren't that high, either. 

I think a lot may depend on other discount brokerages.  If they start to fall by the wayside while business is slow, I think it might help Redfin.  If discounters stay strong in the weak market, it could be bad for Redfin.  Of course, it their business model doesn't produce results, or worse creates bad results, they could crash regardless of the remainder of the market. 

If one of their "rich nerds" finds out that the neighbor sold his home and got a higher net, they might cool to the model. 

I do not profile my clients before I work with them. Everyone is created equal.

That's not really true, is it?  i discriminate all of the time.  I won't target borrowers with less than a 620 credit score.  I won't target borrowers with dubious income documentation.  I won't target borrowers who want to borrow less than $200,000.

That doesn't mean I won't help those borrowers if they come to me. I discriminate and so should you.  Businesses of all kinds discriminate.  McDonald's discriminates against healthy people.  Insuarance companies discriminate against smokers.  Hell, Active Rain discriminates against Luddites.

There is nothing wrong with discrimination- its called niche marketing.  Glenn's problem, in my opinion, is that his niche is too small to be profitable. 

They just got another $12m in VC funding, I guess they burned the first $10m. I seriously question their business model and I'm one of those discounters. We focus on the listing and marketing side as opposed to the buyer side. I can't see how reducing your take by 66% and basically running a traditional office model (yes,  I know they don't have local offices, but they do have local agents that need paid) will work. Today's offices are finding it harder and harder to get by and are diversifying into auxillary servides such as mortgage, title etc to pay the bills.

Time will tell, but I think they have issues. Buyers will always need representation and someone to show them around and provide local knowledge. I say cut the listing commission but maintain a fair selling side, be it a percentage or flat fee large enough to survive on.

Dale Rainey Broker 1.877.854-7848 x114 dale.rainey@ulistit.com http://www.ulistit.com/

Brian,

Ok...maybe it should have been worded differently...you are right ...his niche is way too small. But as far as far as discrimination goes..there is a fine line as to what it entails...yes...we do it but I certainly do not think of it that way. I do not think about it that way when I speak to clients as to whether or not I am discriminating..but I am sure when they decide who they want to use they might pick based on discrimination.

I don't understand why even a "rich nerd" as Glen puts it, would make the largest investment/committment of their lifetime without ever stepping foot in the home - or as an alternative, agree to pay $250 to view more than one home.

I also wonder how sellers feel about giving a large split of the commission to the buyer.  In the 60 Minutes interview, they cited an example where the buyer walked away with $20,000.00 (2%) at closing.  How did that make the seller feel?  In my mind, if anyone gets a discount on the commission, it should be the one who is paying it - the seller.

Redfin's sellers have to do their own open houses and show their home to prospective buyers themselves.  In my opinion, this is not in the seller's best interest and is not adequate representation.

This "virtual" approach works OK for mass produced items like books or DVDs, but homes are all different, even new ones.  Would you hire a lawyer, a doctor, or other professional who wants to "phone it in"?

The smells, sights, and sounds of a particular area simply cannot be accurately depicted over the internet.  Real estate is all about "Location, Location, Location" and there are many things about a home that you simply can't tell from a picture or a description.  In my area, buyers want to know what the area/home smells like,  how the water tastes, what the mosquitos are like, how much highway noise is present, and so on.  Does charging the buyer for multiple private showings discourage them from viewing the property before they make a committment?  Are they actually purchasing homes without first viewing them in person?

While I don't begrudge Glen's right to try a new business model, I am concerned with the track record of the company and the attitude they displayed in the 60 Minutes interview towards traditional REALTORS®.  I understand that his company was fined $50,000.00 for denegrating the listings of others by the Northwest MLS (Wall Street Journal article 5/15/07 by James R. Hagerty).

Redfin has at least one misleading statement on their website.  They claim that traditional REALTORS® do not give their clients post-close guarantees (scroll down to the bottom of the chart).  That is simply not true!  Many of us do give our clients guarantees.

If Redfin wants to relinquish their ability to access MLS data - OK, but don't use MLS data and then refuse to adhere to MLS standards and rules.  They can't have their cake and eat it too.

When I became a REALTOR®, I agreed to follow the code of ethics.  Without our ethics, we are nothing!  I don't view Redfin's MLS violations as mere "mistakes" - I take them seriously.  In my opinion, the actions of Redfin promote a negative attitude towards all professional REALTORS®.  It seems they want the advantages, but not the responsibilities.

Hi Sara!

Great, great job!  I guess we don't have to "worry" about Redfin in Miami!

I am soooooo lost on this what

HUH??

Thanks for the post,

They've opend up shop here in Chicagoland & aren't really doing any business. I think ultmately it will fail....at least here anyway.

It may be a moot point now.  Deathwatch is on for Redfin, as they just laid off 20% of their employees.

This is November 2009 and it's the first time that I have seen this video.  I hope they are doing well.  I actually think Mr. Kelman did a great job in his interview.  Thay are focusing on a certain niche market and by so doing they are pricing out a vast majority of potential client. I think they should consider repackaging their brand and franchise it to small independent brokers across the USA.  This will definitely be a good revenue source for them

This interview is MUCH better!