For those of you who are curious about the going's on at Redfin I'd suggest you check out The Bloodhound blog today. Kris Berg interviewed The Company’s CEO Glen Kelman, in his "toughest interview ever."
Why is Redfin interesting to us? Greg Swann points out that "There are many discount brokerages that are much cheaper, much more obnoxious and much more intransigent than Redfin has ever been, yet they manage to persevere unmolested in the real estate marketplace." Well they've really done a great job at garnering press attention. They get the attention because they're working so hard to be different. They've floundered around looking for a model that works tuning and refining just as Zip Realty once did. They also get attention because they've got investors behind it, and they're doing it with technology. (It's interesting to note that those same investors did not use Redfin to list one of it's own development projects. They went with John L Scott.)
I'd say the company has done well getting as far as it has. I remember when this company first started out. While they were great a garnering press attention they did not seem to have any sense of how this industry works. Founded by a biochemistry major and an electrical engineer their original claim to fame was that they provided a specialized mapping tool for listings in the city of Seattle. The their mapping tool gained a lot of attention at a time when investors were looking for technology start ups in which they could invest. At that time they weren't sure what they were going to do. The first effort was to sell leads as HouseValues.com does.
Fast forward to today and they are expanding to Southern California, still without a strong understanding of how to play in this field. Kris shares a similar sentiment regarding Kelman in her post "I don’t get the impression that he entirely understands the depth of our business or of our duties as agents and fiduciaries."
For making it this long I'll have to give them kudos, and if they can keep it up they may start swimming, but in my opinion the business model is going to have to change significantly for that to happen.
Some may look at The Company's model as threatening to their livelihoods. And perhaps it is. But I would suggest that in order to stay competitive in the market place it simply requires continually learning and advancing our own productivity so that we can better service our clients. The threat is in becoming stale ourselves, in my humble opinion I'd say for the most part the competition keeps us keen.
Caleb,
As Mark and I do the walk of shame for missing this one, please accept apologies. This is a wonderful article, which I did read, unfortunately I followed the links, got wrapped up in them and didn't come back. Redfin has opened 3 offices in our area in the last week or so and I have been busy arming myself with information. The strange inquiry phone calls have already begun and I thank you for the links. This really is a wonderful post.
Thanks for the background on Redfin Caleb...I knew some of it since I have been watching them with interest (sometimes warily) for almost 2 years now. You are right that it is competition that keeps us keen, I think the idea of ever improving to keep ahead of the pack is spurred by competition. That competition is what helps to keep better agents out there helping people, and poor ones from "mis-helping" people.
Thanks Mark for sifting through the posts and finding gold!