Redfin Enters the Great Southland Empire (& Runs Faster Too)

A friend descending into Southern California once looked down on the vast grid of tinkling lights and said it was as terrifying to see as the mind of God.

I used to dislike the way LA made me feel insignificant, but now it’s almost a relief. If Gertrude Stein once complained that the problem with Oakland is that “when you get there, you’re there,” she might have said about Southern California that you when you get there, you feel like you’re not there at all. What makes all the taco trucks, the Korean strip malls, the freeways, the birdbath pools and look-alike houses not only bearable but actually and suddenly quite beautiful is the ocean on the other side of it all, serene as far as the eye can see.
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Now Redfin is launching in Southern California, the largest real estate market in the world. In one magnificent land-grab, we’ve more than tripled the area we have to cover: Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura counties. To start, we’ve hired three new agents, who (if SoCal is anything like San Francisco was) will probably spend their first few months on the job waiting for action from the Web site, and e-mailing the rest of us to tell us they’re going loco.

Or maybe things will pick up a little faster: we’re closing a whopper deal in San Diego today, and we’ve already got a few others in progress. We’re supposed to show up on TV tonight in San Diego, and the LA Times published a nice spread about us today (smiling picture; intensely regretted & insanely provocative quote, which Kevin Boer has already called me out on); we got on the radio and a podcast too. Another positive development is the Southern California bloggers already are talking trash about us.

As usual, they call us discounters, when we’re not offering a discount on a traditional service, we’re offering an online service at a different price, with a different business model and 95+% customer satisfaction. Amazon.com is not a discount bookstore. Redfin.com’s goal is to be different and better too, not just cheaper.

And hey, did you notice that Redfin.com has smaller icons, and it’s running faster today? We put some serious hardware on company plastic, squashed our file sizes and got down and dirty optimizing our code. Some day, we’re going to have to write a post on the tradeoffs between Flash and AJAX, which we’ve had to learn about as we go. The big issue we’re still working on — crucifixion by comments, please — is Safari support, which we lost when we switched to Virtual Earth.

For now, please tell your Southern California friends about us, and thanks for all your support.

Discussion

  • http://sandiegohomeblog.com Steve Berg

    Glenn:

    I am not trashing you or your one agent in San Diego County. I simply don’t agree with your business model (and the way Redfin spins it). The questions I pose in my post are but a few of many examples of issues that must be addressed in many transactions. There are hundreds more. They are not rhetorical, but real questions that clients need answered. Instead of providing answers, your response is that I’m “trashing” Redfin. Sorry, that’s not a fair response.

    Similarly, suggesting that your business model is anything other than a reduced service/reduced fee service (i.e., discount) is nothing but a smokescreen, plain and simple. Call a spade a spade. It’s okay! We have successfully competed for years with the various discount models and have no problem with them because we simply do not see them as a threat.

    With regard to the one agent in San Diego County, since there is not yet a bio on your website, a quick check of SANDICOR, our local MLS, revealed that since 2002, he has completed a total of 19 transactions (total career experience consists of 4 listings and 15 buy-side transactions in about 5 years). If this is incorrect, I’m sure I’ll hear about it. This is not about whether or not I am giving your agent enough credit. He may be great. I really don’t know. It will be the customer who will ultimately decide this for themselves, and it will be revealed in your results.

  • http://www.bluecurrenthomes.com Franz

    Nice plug in the LA Times!

    It’s still taking a loooong time for your map page to load for me. As in, 30 seconds on my laptop with IE6, 20 seconds on my desktop with IE7 or Firefox.

  • http://redfin.com Matt Goyer

    Hi Franz, we’re continuing to work on performance. Can you e-mail me at matt.goyer *at* redfin.com? I’d like to ask you a few more questions about your setup to make sure we’re solving the right problems.

  • http://www.activerain.com/caleb Caleb Mardini

    Glenn,

    Congratulations on your expansion. It’s great to see the company is growing.

    I took a look at Steve’s post and I didn’t see any trash-talk, so I’m not sure what you mean.

    It’s great that you focus on service. In fact it’s admirable. I don’t think being labled a discounter is necessarily a bad thing. There are discount brokerages all over the place and I’m sure for many of them they have a high level of service.

    Best of luck in SoCal.

  • dontmeantobepickybut

    It’s the Inland Empire, not the Southland Empire, but oh well. Good luck.

  • http://blog.redfin.com Glenn Kelman

    Oh, hey! I know there’s an Inland Empire (Riverside, San Bernadino) but I meant the whole thing, in a general sense: I should have said Southern California empire, or galaxy or something like that…

  • http://www.bluecurrenthomes.com Franz

    Thanks Matt, I dropped you a note. Your site looks great, hope you are able to squeeze a little more speed out of it, but I understand how hard it can be to get these fancy AJAX & Flash pages to perform.

  • http://www.redfin.com Glenn Kelman

    Hi Steve,
    First off, apologies for the delayed response — I agree that you ask legitimate questions. I’ve been driving around Silicon Valley today with a broken Treo, there have been plenty of blog posts and interview requests for us to respond to, and the real estate team has been swamped. We’ll get to your post before the day is done.

    Most people would agree there is a difference between e-commerce and a simple discount. Most would agree that our business is structured differently than a regular brokerage: our agents can’t solicit clients, our agents are paid bonuses based on customer satisfaction not commissions, we guarantee customer satisfaction, we directly employ agents so we can control quality across the brokerage. Saying that the only difference between us is price seems absurd to us.

    Erik has handled about 35 deals, but a bunch of those are deals he worked on with someone else, so they’re not all in his name. It’s true that many of our agents are tech-savvy folks who are customer-service-oriented rather than sales-ey — but they must have done at least 25 deals before they can represent a customer (what other brokerage has this requirement?). Our customer satisfaction rate overall is over 95%.

    You should meet Erik before you judge him as he’s the kind of person if you were starting a new service whom you’d bet your company’s reputation on…

  • Ben

    Glenn, question for you since you’re rather adamant that Redfin is not a discounter. Why is when I enter “seattle discount real estate” in Google…the #1 sponsored link is Redfin’s Adword campaign with the following heading – “Seattle Discount Broker”?

  • http://www.redfin.com Glenn Kelman

    Good catch.

    We want people to know about us when they’re searching for a discount broker, because we’re a good alternative to a discount broker. We also buy keywords on Seattle real estate attorney, when we are not a law firm. We used to come up when people searched on traditional brokers’ names, a practice we recently discontinued at the request of those brokers (but not because it didn’t work).

    The repetition of the phrase “Seattle Discount Broker” is the result of a search engine marketing tactic whereby you repeat the phrase people are searching on, using a Google tag.

    All that said, I don’t like the ad. Every company has to negotiate what works in direct marketing vs. what reflects the values of your brand. It’s a tough line. I don’t know if this ad works or not.

  • http://delmar.typepad.com Brian Brady

    Glenn:

    I listened to the interview with Kris Berg and was impressed with you demeanor. I was so impressed that I started thinking that Redfin would peacefully coexist down here in San Diego. iPayone has been doing that for three years with the original model.

    Then…I read this???
    “Another positive development is the Southern California bloggers already are talking trash about us.”

    Why the persecution complex?

  • Jerry

    Wow. Good job. The SoCal rollout it great. Love looking at those expensive beach houses down there. Can’t wait until you expand to the Boston area.

  • Bret Hewett

    It’s so interesting to see how emotional the debate is over the semantics of terms like “discount broker” or “rebates.” There seems to be an anxiety among traditional brokers and realtors–and those who support the preservation of traditional real estate business practices–that prestige in the business is increasingly diminished with the rise of these new business models–these “discount brokerages,” so to speak.

    There’s a real fear that smarter consumers, and lower prices, somehow cheapens the profession. The law and dental professions, among others, have experienced the same anxieties.

    “Agents of Angst” is what the New York Times, in a recent article, (http://query.nytimes.com/gst/fullpage.html?res=9A07E5D6163FF93BA15752C0A9619C8B63&vendor=GABRIELS&partner=GABRIELS) dubs those in real estate sales who are more legitimately responsible for blackening the eyes of the profession; although, the article’s anecdotes are mostly centered around the NYC area.

    Whether we call Redfin a “discounter,” or not, is purely wordplay. The fact is, buyers now have more choices because they are more informed; and believe it or not, buyers prefer to be more informed. When they are, they have a much larger stake in their investment; plus they have a more open and honest line of communication with their agent.

    Buyers who prefer to have less control over their purchase can simply defer the process to a traditional agent, and thus pay a larger commission. It’s great now that buyers actually have that choice, that companies like Redfin are offering that choice.

    After all, isn’t this how the Internet has been transforming businesses in almost every industry?

  • http://www.redfin.com Glenn Kelman

    Hi Brian,
    I enjoyed Steve’s post. If I hadn’t thought it was good, I wouldn’t have linked to it. And if he hadn’t made worthwhile points, I wouldn’t have responded to him. That said, I don’t think it takes a persecution complex to view the post as a (legitimate, smart but also enjoyable, juicy, fun) challenge to our business. Referring to the post informally was more an attempt at levity than intemperance, but hopefully it should be clear that we like to see the fur fly on the blogs as long it’s intelligent, polite fur, which Steve’s post really was. So we meant no disrespect to Steve. What he wrote was a pretty good take-down. I stayed up late writing him back.

  • http://delmar.typepad.com Brian Brady

    Thanks for the reply, Glenn. I think you’ll find that your concept will be a welcome one in San Diego. There are plenty of “geeks with really nice homes” here.

  • wildernessman

    Glenn–

    Your friend has seen the mind of God?

  • http://www.redfin.com Glenn Kelman

    Actually, Phil doesn’t like Southern California as much as I do, and so he really said it looked like the mind of some evil god, which is a more interesting statement but less welcoming to our new friends in Southern California…

  • Lou Srinistan

    Redfin should take issue with Steve’s claim that Redfin shifts the workload of showing homes to the listing agent. This is one of the primary tenets on which he bases the limited service argument (Redfin clients rely on the listing broker to show the homes.) This argument is completely self-serving. Any newspaper advertisement taken out by a listing agent or broker advertises the number of the listing agent representing the home. Premium listings on Realtor.com list the listing agents contact information alongside their respective listing. Obviously, this is a solicitation to the buyer to contact the listing agent directly. In how many instances is a listing agent going to refuse to show a home when a prospective buyer contacts them from a newspaper advertisement or Realtor.com listing? 0% of the time. When a listing agent chooses to advertise in a newspaper or lists their properties on Realtor.com with their contact information, the listing agent is inviting the workload associated with showing the home directly to the buyer. Complaining about Redfin generating direct-buyer inquiries is the equivalent of complaining that the local newspaper provided free advertising.

  • Lou Srinistan

    Or what about Open Houses? Does a listing agent find showing houses directly to buyers during an open house to be beyond the call of duty. Other than actually showing the product for sale, listings in this case, it isn’t exactly clear what other effort could be asked of a listing agent. There is no other industry where salespeople would complain of having to show the product for sale to prospective buyers.

  • wildernessman

    I think listing agents should show buyers the mind of evil gods as well.

  • Jerry

    How is it that a redfin agent can be as knowledgable as a local agent as to specific nuances about a particular community? (i.e. schools, shopping, recreation, etc). A “local” agent seems that they would be much better able to serve the needs of a particular buyer in a particular area. Also, any way you slice it, brokers that operate on a “discount” basis, need to take somewhat of a “Wal-Mart” or “Costco” approach; volume! If Redfin is going to give away their money this quickly, how much quicker will they give away mine when negotiating? Just a thought.

  • Jerry

    The Feb 12 2:38 post is by somebody impersonating me. I did not write it. Grow up, whoever you are.