Where Real Estate Gets Its Dirt

Behind Opendoor’s layoffs

I think I’ve told this story before, but I attended a Proptech CEO Summit a couple of years ago put on by Pete Flint and Paul Levine. One of the speakers was Glenn Kelman, CEO of Redfin. During his interview, he commented that Opendoor was the first company he thought cared about operating margins as much as Redfin.

Opendoor’s culture is one of frugality. You have to deeply care about your margins if you are in the iBuyer market because, at this stage of the game, they are razor-thin. They even have a saying at Opendoor, “We eat BIPS for breakfast”. BIPs meaning basis points (BPS), meaning 1/100th of 1%. That’s the increments Opendoor lives in. Every little expense matters.

Flash forward a couple of years and I wasn’t surprised that Redfin had partnered with Opendoor.

Last week when I read the news about the Redfin layoffs I tweeted this.

A few people on Twitter thought I was referring to other brokerages or franchisors. But, knowing how similar Redfin and Opendoor operate my first thought was Opendoor. Cuts are coming, and they are going to be deep.

Haters are gonna hate. Just as many people were crowing that Redfin’s model of employee agents doesn’t work, many are already calling the death of iBuying. Pay no attention to the haters, they are wrong. What is happening now is unprecedented.

Mr. Kelman and Mr. Wu are fighting for the survival of their companies and sometimes that means you have to make tough decisions, you have to focus, and give it everything you got.

That’s what happens when you are in the arena.

Redfin and Opendoor – Wonder Twins Activate!

Teke Wiggin for Inman News:

“Hi-tech residential real estate brokerage Redfin is partnering with Opendoor, the private Silicon Valley startup that makes cash offers on homes directly over the internet, in a move that is likely to raise the eyebrows of many competitors in both the traditional real estate and fast-growing online cash offer (or “iBuying”) space.”

So smart. I just love these kind of partnerships. To me it also represents Opendoor fully embracing agents. And I hope it will help more agents to consider what a great tool/option iBuying can be for them and their clients.

“Redfin, which maintains a highly-trafficked home search portal that includes for-sale listings from numerous other brokerages, will also offer special marketing perks on the homes listed for sale by Opendoor that appear on Redfin’s site and apps. The companies will evaluate expanding the partnership to other markets outside of Phoenix and Atlanta.

The partnership looks like a bid by Redfin and Opendoor to jointly counter Zillow Offers, Zillow Group’s iBuyer program, which also lets customers request all-cash offers on their homes over the internet.”

I’ve written about this before. The war between Zillow and Opendoor is one of workflow vs. lead flow. Zillow is obviously winning on lead flow and catching up on workflow. This move by Opendoor (and I expect others) helps them on both sides. Lead flow by putting Opendoor’s “Get a Cash Offer” button on listings (lead flow), and “special marketing” for Opendoor’s own listings on Redfin’s site (work flow – getting homes sold quicker).

“Its integration with Opendoor, however, lets the high-tech brokerage extend instant offers to many sellers whose homes Redfin Now isn’t prepared to buy yet.


Opendoor operates in 20 markets nationwide, while Redfin Now is available in only a fraction as many. For example, Redfin Now currently isn’t buying any homes in Phoenix and Atlanta, the two markets where the Redfin-Opendoor partnership is going into effect.


“Just as traditional agents are our partner for brokered sales our own agents can’t handle, Opendoor is our partner for giving customers reliable, competitive offers on homes we ourselves can’t buy,” said Redfin CEO Glenn Kelman in a statement.”

Simpatico baby! Redfin also wins by expanding iBuying services in areas it doesn’t currently cover. I also think that by expanding the number of properties it can extend a cash offer helps them with seller leads as well.

“The partnership demonstrates striking synergies between Opendoor and Redfin that a merger could fully consummate.
Opendoor CEO Eric Wu had kind words for Redfin and wouldn’t rule out a future marriage.


“What I can share is that I’ve known Glenn for years, and I have a great deal of respect for him, and from my perspective, I’m a fan of the product, use the product that’s built, and so in this chapter, we’re focused on the success of this partnership, and we’ll look for ways to deepen our relationship if it’s successful,” he said.”

Inman News was really baiting both Kelman and Wu on this merger question. In my opinion I don’t think a merger would ever happen. We are all still in the first inning of this game.

As I said in the beginning, this to me is the first real deal representing iBuying going “main stream” in organized real estate. While Redfin isn’t your typical broker, it could be the sign of things to come.

The worry I would have at Redfin is if this move would jeopardize any current relationships, à la the RE/MAX kerfuffle around Redfin Direct.


Listing Bits Episode 45: Mission-Driven to Make Real Estate Better for Consumers with Glenn Kelman of Redfin

Recorded live at this week’s T3 Summit!

Glenn Kelman has always had the ambition to make real estate better for consumers. But it took him a while to realize that he wasn’t the only one who wanted to do that. He came into the game with an US vs. THEM mentality, assuming that all of Redfin’s competitors were villains and snake oil salesmen. To his relief, it turned out that his industry rivals were actually good people. And while that doesn’t make him any less driven, he does concede that this shift in perspective has made him ‘not quite so insufferable.’ 

Glenn Kelman is the President and CEO of Redfin, a technology-powered brokerage designed to redefine real estate in the customer’s favor. Prior to Redfin, Glenn cofounded the startup Plumtree Software and served as its VP of Marketing & Product Management until its acquisition in 2005. Glenn has been the CEO of Redfin for the past 13 years, and under his leadership, the company was twice named Innovator of the Year by Inman News. Redfin went public in July of 2017, and today, its market cap is $1.82B.

Today, Glenn explains why he still feels like an underdog, despite Redfin’s success. He weighs in on running a mission-driven company, discussing his aim to ‘do something good for real estate consumers’ whether Redfin makes money or not. Glenn also covers the civil nature of the relationship between Redfin and Zillow, Redfin’s new partnership with Re/Max, and the impetus behind Redfin’s ‘buy without an agent’ feature. Listen in for Glenn’s insight on cultivating agent professionalism and learn how his perception of the competition has changed over time.

What’s Discussed: 

Why Glenn still feels like an underdog despite Redfin’s success

Glenn’s aim to ‘do something good for real estate consumers’

Glenn’s take on the tribal nature of American politics

How becoming a father has made Glenn a better leader

The learning culture Glenn works to cultivate at Redfin

How Glenn’s perspective of his competitors has changed

Glenn’s solutions-based approach to candor with employees

How Glenn is driven by the desire to live up to his potential

The civil nature of the relationship between Redfin and Zillow

How Redfin addresses the idea of agent professionalism

The impetus behind Redfin’s new partnership with Re/Max

What inspired Redfin’s new ‘buy without an agent’ feature

Resources:

T3 Summit

Glenn’s ‘Once and Future King’ Post

Vendor Alley

Andreesen Horowitz Real Estate Stats

Connect with Glenn:

Redfin

Glenn on LinkedIn

The tangled web of Redfin’s link proposal

Great and detailed post by Andrea Brambila of Inman News.

Redfin wants to change listing displays across the industry

Redfin’s proposal would require every website that gets listings from one of the hundreds of multiple listing services (MLSs) owned by Realtor associations to feature the broker or agent representing each listing more prominently and provide a link back to their brokerage website that search engines can easily understand ….

It would impact big home search sites including Zillow and realtor.com (which do link back to listing broker sites when links are provided, but often not in a format Redfin says is easily indexed by Google) and even Redfin.com (which itself currently does not link back to the rival brokerages representing listings that appear on its website).

There is so much here to unpack here. What seems like a pretty straight forward proposal on listing attribution is really rife with consequences on many levels. I think Glenn is a bit hyperbolic with many of his statements but do understand Redfin’s frustration.

What I also think should be considered is how listing attribution will be handled with new emerging technologies such as voice search, AR and VR. Yes, these technologies may seem far in the future but any changes to data policy should consider these as well. Andy Woolley moderated a panel at a recent CMLS conference on this very issue.

That being said the issues are complicated. Which leads me to this excerpt in the Inman post.

But that has not stopped Kelman from trying. For the past two years, he’s personally pushed his proposal at NAR’s midyear conference. “If it doesn’t take this time around, I’ll give the same talk next year naked, as a form of protest art,” Kelman quipped after his speech this year.

Glenn might need to get some manscaping done before next May.

Redfin smacks down MLS hit piece

Well it looks like at least Redfin isn’t blaming the MLS.

Glenn Kelman and Chelsea Goyer of Redfin published a blog post, titled, A Tragedy of the Commons, which rebukes a paper published from the Center for Data Innovation. Everyone should read the whole post. Here’s a few highlights.

“Redfin Has Not Been Hindered by the MLS

The study’s claim that it is unnecessarily cumbersome for “Redfin to be licensed brokers” in every state or to “apply for and maintain membership in every single MLS within these states” is wrong. Redfin’s expansion efforts haven’t been hindered in the slightest by MLS licensing requirements because we already require a brokerage license to employ agents and serve customers. We join the local Multiple Listing Service not only to access other agents’ listings, but to distribute our own agents’ listings to others.”

Okay.

“Local Differences Between MLSs are Not Nefarious

To be sure, the study is right that Redfin incurs costs accommodating differences in MLS data about waterfront properties in Seattle, gated communities in Phoenix, or historical registries in Richmond. These differences are cumbersome for brokerages as well as third-party portals, and, as a strong supporter of the Real Estate Standards Organization, Redfin has advocated for standardization where possible. But the local differences that exist today aren’t nefarious or anti-competitive.”

Much different tone than these guys, what could possibly be the reason??

“The MLSs Are Not Discriminating Against Low-Fee Brokers

We thus find each of the study’s claims about Redfin to be wrong. The authors of this study could have avoided making claims about Redfin that Redfin itself would dispute, just by contacting us beforehand. Our position on the MLS and data syndication is well known: we’ve stated publicly many times that we’re a strong supporter of the Multiple Listing Services’ efforts to share listing data among all brokers, especially small brokers who compete aggressively on price.”

One could argue initiatives like Upstream are more about helping larger brokers, and stifling smaller brokers or brokerages with alternative business models like Redfin.

Maybe the real reason that brokers belonging to groups like The Realty Alliance want to circumvent MLS Providers is that MLS Executives are doing their job, maintaining a fair marketplace, and doing it well.

Not so fast Redfin…

Early last year my company, W+R Studios, did an internal test to see how fast Cloud Streams listing alerts were compared to major portals. It confirmed that Cloud Streams’ listing alerts were the fastest in the industry, the second closet was Redfin. Some of our tests from last year showed we beat Redfin by about 52 minutes. Even Inman News picked up on the story.

Flash forward to today, when Redfin released the findings about independent study done by SSRS (I wonder where they got that idea?). In a blog post titled, “Redfin Notifies Customers About New Listings Hours Faster Than Other Top Real Estate Websites“.

“Redfin was faster to notify subscribers in almost all cases, with 94% of notifications delivered faster than Zillow, and 99% of notifications delivered faster than Trulia and Realtor.com.

“Evidence from recent data for 20 major metropolitan areas nationwide shows that Redfin is significantly and uniformly faster to notify its subscribers about newly listed properties than other leading websites such as Zillow.com, Trulia.com, and Realtor.com. said Dr. Aniruddha Banerjee, Senior Vice President of Advanced Analytics at SSRS.”

Thanks Doc. This basically confirmed what I already knew over a year ago, performance of listing alerts on major portals suck.

So that got me curious. Did Glenn’s whiz kids do something to their listings alerts that made them faster than Cloud Streams? A few mins later I had my answer.


Winner. Winner. Chicken dinner. Cloud Streams is still faster than Redfin listing alerts. And if Dr. Anirudda Banerjee says Redfin is faster than Zillow, Trulia and Realtor.com than that means Cloud Streams listing alerts are the fastest in the industry (see what I did there?) Boom.

One last thing. How did I know to check my email inbox about a listing alert? Because Cloud Streams sent me a text message. Does your MLS do that? Short answer, nope.

So instead of a listing alert sitting in my inbox for hours, I was notified immediately. Boom Boom.

Redfin IPO video

My “man-crush” on Glenn Kelman continues. You can watch the video here. So good, so well done. There’s been a lot of talk about whether these guys are a technology company or just a brokerage. That’s the wrong question(s). The question is will they succeed? And the deeper question is when/if they do succeed what does that mean for organized real estate.

In my opinion Redfin’s super power is its company culture. That, more than anything will drive their success. Best of luck to Glenn and his team!

Redfin, CEO Glenn Kelman schools us all

glenn-kelman-redfin-ceo-cropped-3The Austin Board of REALTORS recently hosted a panel talking about “Topics & Technologies Affecting Brokerages”, the panel (moderated by Tracy Weir) included Cary Sylvester, VP of Industry Development Keller Williams, Russ Cafano, President and General Counsel, eXp Realty Jonathan Boatwright, CTO and Co-Owner, Realty Austin and Glenn Kelman, CEO, Redfin. You can find the video on their site.

The video has some great quotes, at one point Russ Cofano states

“The Broker Public Portal is dead on arrival”

and on Upstream…

“For a certain amount of brokers will be great, but for a significant amount of local brokers there is a big disconnect in to many ways as to the why“

Ya think?

But the real star is Glenn Kelman. I just love Glenn, he has a Walt Whitman, Mark Twain, sort of plain speak that really just makes you stop and listen. There are soooo many of these type of moments in this video. One section I really love is right around 46:42. One of his main message points is telling brokers to put their listings on a website…

“..the dirty secret, and it really has worked for us. If you put listings on a website, and you get people to link to you as the listing agent, you will get traffic. That doesn’t cost much money”

You have to watch the whole video to get his context but what he is saying (my take anyway) is that attribution matters.

Also regarding mobile (native vs. web)

“most of our resources on mobile are going to mobile web and not the apps, the apps were much more important 3 years ago. Google has kind of beat Apple. And Google much prefers mobile web over applications, it likes stuff in html that it can index in a search engine. It is punitive toward applications, it wants a good mobile website experience.”

Mind freaking blown.

And here’s what Glenn says about how MLS providers can help.

“If I were a broker I would just try to get my listings on a website and then I would make sure to get credit for the listings from the portals, from the brokers, from Redfin, from everyone. I think that is the simplest thing you can do, I think its the simplest thing the MLSs can do to give agents a better deal, is to make sure you always get credit for your listings in the modern digital way.

Here’s another quote from Glenn:

“There is no new client that is worth more than a past client”

What I also love about Glenn is his willingness to share what has worked for Redfin (and what has not). He knows that that ideas are only part of the equation, execution is what matters. He also does a great job of guiding the whole conversation when he thinks the questions being asked are not really that relevant.

Must see TV.

FYI (They have some audio problems cutting out at around 55:30 and coming back at 58:07)

REColorado sends “cease and desist” to Trelora for posting commission for all area homes.

REcolorado tells Trelora to shut down broker-commission database

“REcolorado, the Denver metro area’s multiple-listing service, has sent a cease-and-desist emailed letter directing residential brokerage Trelora to shut down a database it launched last week revealing the buyer-broker commissions of every listed home on the Denver market.”

Classic! I wonder how long before Redfin copies this! It will be interesting how this plays out.

Also in case you didn’t figure it out “Trelora” is a letter scramble of “Realtor”.

Redfin Buys Walk Score.

Looks like Kelman couldn’t let 2014 go by without doing some acquiring of his own.

Redfin Buys Walk Score

“The acquisition is Redfin’s first and the reason for it is simple: We want to give folks a complete portrait of what it would be like to live somewhere new, within the house and in the surrounding neighborhood.”

I’ve been a bug fan of Walk Score for a long time. It was one of the first APIs we integrated in to Cloud CMA. Over the years when giving demos I would ask the audience if they have heard about Walk Score, at first I would explain it. But now they have done such a great job or working with MLS that I usually just get a lot of heads nodding.

Huge congrats to Matt Lerner and the rest of the Walk Score team.

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