GFK and Spencer? Yup, I’m in. Click here to register => Virtual Panel Registration: State of the Housing Market
State of the housing market: Glenn Kelman and Spencer Rascoff
Adam Wiener leaving Redfin
Redfin’s president of real estate operations to depart
“We know with Adam’s departure what Redfin will lose. He’s one of the smartest, kindest, most hard-working and creative folks you’ll ever meet,” Kelman said in the email. “And Redfin will keep changing. We couldn’t keep doing things the way we’ve done with Adam, and we shouldn’t try. Change is necessary and good.”
A Redfin spokesperson didn’t say where Wiener is heading after Redfin. In his email, Kelman said in a year Wiener “will probably be running his own show, at another company also poised to conquer the world.”
Rick Morgan – Inno Senior Reporter
Huge loss, but happy for Adam. As our industry enters a “hunker down” mode I think you’ll see more of these departures. It’s a great time to build.
Podcast roundup
Two great podcast episodes to listen to for anyone in organized real estate
Stratechery
An Interview with Opendoor CEO Eric Wu About Building a Marketplace in a Real Estate Slowdown
“I had a chance to talk to Wu about both his and Opendoor’s origin story, competing and now partnering with Zillow, why the speed of the current slowdown caught Opendoor by surprise, acquiring customers for an infrequent transaction, and how the company will get a marketplace off of the ground.”
Ben Thompson’s Stratechery is must listen. Some of the content is behind a paywall, but do yourself a favor and subscribe.
This Week on Startups
Managing a recession, housing market insights & more with Redfin’s Glenn Kelman + OK Boomer | E1616
“Jason Calacanis and Molly Wood cover startups, tech, markets, media, crypto, and all the hottest topics in business and technology. They also interview the world’s greatest founders, operators, investors, and innovators.”
Great interview of one of my favorite CEOs in real estate, GFK, Glenn Fucking Kelman. Keep grinding Glenn we are all rooting for you.
Redfin partners with Down Payment Resource
Redfin Launches Down Payment Assistance Feature to Help Make Homeownership More Attainable
“Nearly half of Americans who have never owned a home say that saving money for a down payment is a barrier to homeownership, and many young people in particular feel like they’ll never be able to own a home,” said Christian Taubman, Redfin’s chief growth officer. “Down payment assistance programs can make homeownership more attainable, but information about them is often fragmented and hard to understand. We saw a big opportunity in partnering with Down Payment Resource to raise awareness about these programs to help more people become homeowners.”
Love this! Congrats Rob.
Redfin hires new Industry Relations rep, Joe Rath
Meet Redfin’s Head of Industry Relations
“Joe comes from a real estate family and understands the day-to-day challenges that brokers and agents face and the complicated dynamics of this industry,” said Jason Aleem, Redfin’s senior vice president of real estate sales. “He’s a clear communicator, effective relationship builder and strategic leader who will be a strong advocate for policies that improve the agent experience and help us all better serve our clients.”
Welcome to the jungle Joe!
Looking for some talent?
The industry is going through a lot right now. Both Compass and Redfin have announced layoffs. I’ve been working with Melissa King of Bright MLS and she has scored a list of those at Redfin that were recently part of the cuts. Looks like some great talent available for those companies looking to hire. Let’s do this!
Here’s the link below.
Redfin to display commission rate for buyer’s agents
From Inman News, Redfin to display buyer’s agent commissions in 65 markets
“Redfin first began publishing buyer’s agent compensation in Seattle, then began publishing the compensation on its own listings in every market where allowed in 2019. With this recent change — one that RE/MAX is also undertaking — that data will be available on every listing.”
Strategy credit or not Redfin has always been a leader in this type of transparency . I do like their implementation on this, much more evolved than remax.com
Although, displaying this information is not really a straight forward issue. Sam DeBord has an excellent Twitter thread about some of the pitfalls. Click the image below to read.
But you have to start somewhere. Great to see these two companies take the lead.
Glenn’s Choice
Is Redfin’s job to make money or create positive change?
Back to Redfin and this fair housing lawsuit: Glenn Kelman, Redfin president and CEO, is on the record showing strong support for equal rights and being opposed to housing discrimination. Redfin is arguably one of the industry leaders in this matter.
As Kelman said in the very blog post he penned in reaction to this lawsuit, “Every business has to balance employee and customer needs.” And a tricky balancing act that is. Compounding that difficulty is the need for “corporate citizenry” and “social responsibility.”
This lawsuit will likely take months, maybe years, to resolve. If you think it only affects Redfin, think again. Agents target luxury buyers all the time. They advertise based on ZIP codes. Entire brokerages cater to the needs, wants and desires of certain income levels, certain locations and certain cities. This lawsuit has the potential to impact everyone in this industry.
Great perspective from Jay Thompson.
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.
Glenn Kelman is usually ahead of the curve on these types of decisions. I would expect more companies to follow suit. Redfin is furloughing 41% of its real estate agents https://t.co/rSsg46ST0p
— Greg Robertson (@gregrobertson) April 7, 2020
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!
“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.
