Archive for October, 2007
October 22, 2007
Hi, I’m the Redfin intern that apparently asked our CEO’s wife out. I wanted to share my experience here at Redfin in hopes of helping fellow college students find out what they want to do with their lives. I’m a senior this year at the University of Washington studying Computer Engineering.
This summer marks my sixth internship. I worked at Northrop Grumman Space Technologies (NGST) doing software for four summers and KB Home doing e-marketing for another. I can very confidently say that I learned a lot at each one of them. It’s really hard to get a good feeling for something without first trying it, so interning will at least tell you what you don’t like. If all you learn is that you don’t like something, then hopefully you at least got paid well. 
I started interning thinking I’d go into software. I had the incredible experience of being a snowboarding, surfing, skateboarding, snowmobiling, soccer-playing teenager trapped in a cubicle for 40 hours a week, and I quickly decided that I didn’t want a desk job. I explored other industries such as investment banking, medicine, and marketing only to find that each of these industries would push me into a desk as well. For a long time I thought that fun at work could only be achieved away from a desk, until I started here at Redfin. Not only did I learn an insane amount about web development, product managing, etc, but I also finally figured out what I want in a career.
I need a work place that I can become a part of. A work place that lets me be myself and lets me share a connection with my work and my coworkers. A work place where my coworkers can become my friends. A work place that doesn’t confine me or limit me. A work place where I can use the fun I have as energy to spend late nights at the desk. In my opinion, this place is a startup. For me, knowing that I’m working hard with and for the people around me makes working behind a desk easy. All of us here at Redfin are working hard to stir things up, and it feels great even when sitting behind that desk.
Before I go any further, I should say that Redfin is the only startup I’ve worked at, but I’ve heard about others’ experiences at startups as well. Startups have to prove that they can survive. They have to thrive when others say they will fail. That knowledge in and of itself is enough to rally me to kick some ass, sitting or standing.
If you’re a college student, then try interning at a startup. Had it not been for Redfin, I would have continued to think that all desk jobs suck. Perhaps I could have had a similar experience at a larger company, but this scenario seems less likely to me. Now, I just have to figure out if I’m ready to start my post-college life in Seattle (I’m originally from Los Angeles).
Bonus story: Working for a startup also means you get your hands dirty in lots of different places. At Redfin I’ve shipped code, managed products, organized company trips, answered tech support emails, contributed to a focus group, and last but not least, conducted a Redfin photo shoot on the streets of downtown Seattle. Here’s a photo of our marketing dude, Bahn, trying to avoid getting hit by a bus while carrying a Redfin sign in downtown Seattle.
Seattle kudos to those of you that know what building this is in front of.
October 17, 2007
Redfin just wrapped up its first big day of on-campus recruiting, in Palo Alto. Since we didn’t actually reserve a room on Stanford’s campus, this involved sitting in a café for nearly seven hours straight and guzzling hot chocolates made from asphalt by surly French baristas.
Listening to the students’ poised recitation of accomplishments in robot-programming competitions and other obscure academic Olympics, it was hard not to think of my own summers spent mowing lawns and washing dishes, and my post-collegiate ambition to get a girlfriend, and to work in a climate-controlled facility (I became a bike messenger).
We met a national chess champion, a drum major, a fencer, an entrepreneur starting her second company, an Israeli diplomat, the daughter of a Mongol shepherd, a documentary film aficionado and, most tragically, a one-time vegetarian now addicted to Jack in the Box.
One student wore a nice little suit. Everyone else came in shorts, or a baseball cap turned backwards, or sandals (but not without explaining that he would have worn socks if any had been clean). Of course, one of us was wearing a t-shirt, so we could hardly complain.
We asked the students how they liked school, and instead of seeming beaten down by the question as a Berkeley student would, they all brightened up. We offered to buy them a warm drink b
ut several insisted on paying, furrowing their brow kindly at my slowly drawn wallet.
And then we tried to ask about their classes, but instead they asked us: how will we attract customers to our site, when do we expect to make profits, which investors are supporting us? It made me feel like Kareem Abdul-Jabbar in “Airplane,” accosted by a nine-year old about his defense against the Celtics.
Finally at 6:15, we finished up. On the drive along 101, in a borrowed Suzuki Samurai whose door handle drooped down halfway home, we compared notes. My colleague, Sasha Aickin, himself a terrifyingly precocious Stanford graduate, an award-winning documentary film-maker and an aspiring cookbook author, said the students seemed pretty good. They were ok, I mumbled. “For Stanford students, I mean.”
Truth be told, you were all wonderful. If there are any of you at Stanford or elsewhere whom we missed, especially in the often-overlooked liberal arts, let us know. We had a really nice time talking to you all and would have enjoyed it even more if we hadn’t had to listen to ourselves say the same things over and over again.
October 16, 2007
Attention Redfin customers, would-be customers, job-seekers, students, start-up junkies, bloggers, real estate quibblers, grudge-holders and anyone else who would like to meet: legendary Redfin engineering leader Sasha Aickin and I will be in Palo Alto today from 3:15 – 3:45 at Caffe del Doge, and again at around 6, for as long as people want to meet!
Feel free to come by and ask us for a job, or a free cup of hot chocolate, or suggest how our search site could be better, or ask about the model we posted on Guy’s blog, or find out how using our service to buy a home really works. We’d love to meet you all. This should be an improvement over our last meet-up, a chimichanga night at a flooded Azteca. Email glenn (at) redfin (dot) com if you plan on joining us, so we don’t leave without you.
We’ll spend the rest of the time kicking off our Stanford recruiting rampage, which involves sitting in a café all day, bloated with muffins, trying to seem hip enough to talk to college students, but also sufficiently stern to recover some of the authority we lost when we begged the students to meet us in the first place. Which we have always had to do.
(Photo credit: bnm_72 on Flickr).
October 15, 2007
For those of you who like to track our daring exploits around the web, Redfin has posted a generic version of its financial model along with a brief overview of what might be useful about it on Guy Kawasaki’s blog. Whereas the initial post provided a few actual data-points, this one offers only sample data, but hey! there is an entire model that you can use for formulas and formats.
We published the generic model because so many people asked for it, not to make a statement about whether our actual projections are accurate or not. We’re not so smart as to believe our projections are any better than anyone else’s.
Thanks again to Guy for hosting us.
We also owe folks an answer to the question we posed a few weeks ago as to which blog sent the most people to Redfin, on a week where we appeared not only on Guy’s blog but also on TechCrunch (a brief but kind mention), and Slashdot, which gave our new devblog its first big hit. In fact, the most traffic came from Lifehacker, which wrote about Redfin later in the week. We had never appeared on Lifehacker before, and we were featured there as “the ultimate window-shopping tool” and “a terrific map mash-up,” so that probably explains it. Guy came close behind, in part because that post was linked on sites like del.icio.us more than 800 times. The most traffic we have ever gotten from any one website was our debut on TechCrunch.
Our bonus link today is a video of the Chicago marathon’s closing moments:
At second 24, the commentator talks about how the then-leader will remember this moment for the rest of her life, just as you glimpse a maniac sprinting around the corner.
October 11, 2007
Yesterday, the Department of Justice published a website that focuses on the importance to consumers of competition in real estate. There’s a good summary on the InmanNews blog. They found that that commissions have risen along with home prices, which is no surprise to anyone who’s been in the market. But the data are interesting, and the DoJ also adds specific information on regulations by state.
The DoJ estimates that the median commission paid by consumers so far in 2007 is $11,302. This includes both buyers’ and sellers’ commissions. (The buyers’ agent is usually paid half of the sellers’ agent’s commission, so while buyers’ agents may charge no direct fee, they are still receiving up to 3% of the total costs paid by a buyer at closing.)
As a point of comparison, we looked at commissions paid by Redfin customers who bought in 2007. We focused on buyers’ commissions only, where we have the most data. Redfin’s average commission was $15,071, and because we refund 2/3 of our commission back to the buyer, $10,194 of that went back to consumers. By market, Redfin’s refund to buyers breaks down as follows:
This tells us a couple of things:
- Redfin buyers are buying expensive homes. Assuming a total commission of 6%, which is typical in our markets, our buyers paid a little over $500,000 for their homes. That’s much higher than the median home price of $218,184, but Redfin is also in some of the most expensive housing markets in the country.
- Of course, where house prices are high, consumers pay much more than the median for commissions. Again assuming a 6% commission, total commissions (both buyers’ and sellers’) would have been over $30,000 on average for these homes, much higher than the $11,302 that concerned the DoJ.
Redfin buyers are successfully searching our MLS listings to find properties on their own, then working with our local agents to negotiate and close the deal. They’re buying expensive houses and saving a lot of money. And the DoJ would seem to think that’s a good thing.
October 6, 2007
With more than 70% of home-buyers looking on the Web for real estate to buy, we wondered if it made sense when pricing a house to take into account the parameters used on most real estate search sites. For example, since every site lets folks filter on price in increments of $25,000 at lower price ranges and increments of $50,000 at higher price ranges, wouldn’t a property priced at $549,999 get seen by more Web shoppers than one priced at $550,001?
The answer is maybe, just a little.
How so? Enter Mose Andre, Redfin’s ace statistician, who analyzed the logs of the Redfin site to determine how often Seattle users of our site see properties in different price ranges, between September 10, 2007 and September 24, 2007. His findings:
- About 30% of searches don’t even filter on price. But the number of searches that don’t filter on price is exaggerated on Redfin’s site because Redfin.com price filters aren’t easy for users to find.
- For most neighborhoods, the maximum percentage of Redfin searches you are likely to lose by moving from one price band to the next is 6.5% . For most Seattle neighborhoods, this band occurs for homes costing more than $550,000.
Based on these findings, we would only recommend taking into account how search sites filter on price in cases where a property is priced very near one of the popular threshold amounts. In other words, if you were going to price a house at $570,000, you shouldn’t price at $549,000 just to have it show up in 6.5% more price-filtered searches; but we would consider it if you you were going to price a house at $551,000.
You can see how this plays out on Mose’s graph of search exposure and listing count for Bridle Trails:
The red line represents the percentage of Redfin’s Bridle Trails searches filtering on price that include Bridle Trails properties at different price points; use the numbers on the left axis to measure the percentage of searches that return a result at the prices appearing along the bottom axis. As you can see, less than 20% of Redfin’s Bridle Trails searches filtering on price include properties costing more than $800,000.
The black line represents the density of listings in the area; more precisely it is a curve fitted to the shape of a histogram representing the number of listings at different prices. You can use the numbers at right to track the number of listings at different price ranges. The most common price is the one where demand becomes scarce: $800,000.
The biggest drop in buyer exposure in Bridle Trails occurs at $550,000. One reason drops tend to occur at this point is that Redfin, like many other real estate search sites, only allows price filtering at $50,000 increments for prices greater than $500,000. So the first $50,000 steps are doozies.
Let’s look at a few more graphs, this one of Capitol Hill:
Here most of the inventory is clustered at a price just below $400,000, probably because there is a glut of condominiums on the market, and most of the price-filtered searches are in that range. There is a little hump around $700,000 for houses and townhouses in the neighborhood.
One more graph, this time for stuffy, old Queen Anne…
And here is a table of the price-points where the biggest drop in search activity occurs, and how large that drop is:
| Neighborhood |
Greatest Drop in Searches Occurs at $ |
% Drop in Searches |
| Ballard |
$550,001 |
-5.0% |
| Belltown |
$550,001 |
-4.3% |
| Bridle Trails |
$550,001 |
-5.0% |
| Capitol Hill |
$550,001 |
-4.5% |
| Columbia City |
$425,001 |
-4.4% |
| Georgetown |
$425,001 |
-5.1% |
| Green Lake |
$500,001 |
-5.5% |
| Klahanie |
$2,000,001 |
-5.6% |
| Laurelhurst |
$550,001 |
-4.9% |
| Newport Hills |
$550,001 |
-4.9% |
| Phinney Ridge |
$550,001 |
-5.3% |
| Rainier Valley |
$425,001 |
-4.4% |
| Ravenna |
$550,001 |
-5.4% |
| Windermere |
$550,001 |
-4.9% |
If you want to see how demand compares to inventory for your neighborhood, download a package of all our graphs for the Seattle area. If you want these graphs for another market like San Francisco or Boston, just let us know. Thanks to Mose Andre for the stats and analysis; if there are other analyses you’d like to see us perform, just leave a comment for that too.
Update: Mose cranked out some San Francisco graphs.
October 3, 2007
Did anyone see today’s Wall Street Journal article by Bob Hagerty about Countrywide’s efforts to battle bad publicity? The cast of characters includes a former San Diego Chargers offensive lineman screaming “NOW IT’S PERSONAL” on a conference call with managers, an executive earning $120 million a year describing himself as a “poor kid from the Bronx,” and a former Clinton White House spokesman having this promise to Countrywide staff show up in the world’s most widely read business newspaper: “I have brought companies through the worst type of publicity.”
Every company has good days and bad, but it is hard to imagine two more different entities colliding than the sales-driven Godzilla of mortgage banking, Countrywide, and the self-effacing former head of the Journal’s London bureau, Bob Hagerty.
Our bonus link, in memory of the audacious Herbert Muschamp, is his review of the Seattle Central Pu
blic Library. The New York Times’s architecture critic died today at the age of 59. He describes the library as “a blazing chandelier to swing your dreams upon” (whereas the EMP is “like something that crawled out of the sea, rolled over and died”). You could tell that he must have known when he was writing about the building that it would be the last one he ever reviewed. I thought of his essay all the time during my pre-Redfin days of joblessness, spent mostly on the 9th floor of that library, with its view of the courthouse across the street and the leaves falling down in the middle of a crowded city.
And while we’re on the subject of libraries, a double-bonus link, to photos of the great libraries of the world, from a friend of Redfin.
October 2, 2007
Some things are universal, such as when you click on a link you want an instant reaction. Redfin’s response time hasn’t been as fast as we’d like, so we’ve released a new version that improves performance significantly. It’s on the site today. You’ll see much faster search, especially for past sales search. John Battelle’s blog on what web users value was influential in our decision to prioritize performance.
We ran many different tests against our old user interface and the new one. The chart below shows the performance gains across three browsers. In the case of Internet Explorer 6, we display listings on our map almost four times faster with the new version of our site. The performance gains are smaller but still significant for IE7 (download it) and Firefox (download it), both of which have better overall performance than IE6.
And we’ve added a cool visual effect: during the (now shorter) search, you’ll see a progress bar and houses will progressively pop up on the map. For the techies among you, we’ll be talking in more depth about the specific things we did to improve performance, including a good bit of data and commentary on our database switch, in an upcoming post on the Redfin Developers’ Blog.
Talking about speed of information, we’ve also sped up the MLS integration (MLS systems are used by brokers to track all the open listings in an area). In many cases we load new listings faster than the real estate sites used by the brokers, so our customers are the first to see newly listed properties. In Southern California, we’ve had issues with MLS data getting onto our site too slowly and we think we’ve fixed those latency issues in San Diego, Orange County, and most parts of Los Angeles. Our goal is to have all new listings in Southern California on Redfin within minutes, which is the type of performance we have in other markets.
In this release, we’ve also added lot outlines (see below) in Boston, Baltimore, and DC and updated the outlines in Seattle and California. Finally, we’ve added new map icons and links to driving directions on the property detail pages.
Other things aren’t as universal. When I moved away from San Francisco, I wondered why it was so difficult to get a burrito the way I wanted it. In San Francisco, you tell them what to put in your burrito; everywhere else, you start with a standard burrito and add and remove ingredients. Invariably something goes wrong.
Food is local, and so is real estate. While we’re only in a few markets now, we try to go deep in those markets. We write about local real estate in Redfin’s Sweet Digs blogs, provide an online customer forum in each market, and of course hire experienced, local agents. As part of that effort, we’re rolling out local sites for San Francisco Bay Area real estate, Washington DC and Baltimore real estate, Seattle real estate, Boston real estate, San Diego real estate, Los Angeles real estate, and Orange County real estate.
People come to Redfin for direct access to MLS listings, so we’ve left the search bar front and center on these pages. But we’ve added information that’s useful for someone searching for a new home, such as schools, census data, and local news and blogs. For example, interested in new construction in the Westchester area of LA? You can find out about it in Sweet Digs on the Redfin LA page.
We like these pages, but we also realize they’re just a start. If you’ve got any suggestions on good local links to include or other feedback on the pages, please send them. And let us know whether you like the lot outlines and new map icons, and if there’s anything else you’d like to see on the map.
October 1, 2007
After popping up on TechCrunch and BusinessWeek Friday and in Slashdot over the weekend, Redfin appeared on Guy Kawasaki’s blog today, in a post comparing our planned costs to our actual costs. For those putting together a financial model, here are a few bonus links:
1. On the amount of office space recommended by brokers.
2. On the need to get a quarterly third-party valuation of common stock, to protect employees from cheap stock charges.
3. And proof that California’s tiny payroll tax is tiny.
Thanks to Guy, who has put Redfin in the limelight before on why a startup was harder than we thought, and how you can do your own PR. It’s a huge honor to appear on such a great blog, even if Guy took out (again!) our Diddy link.
Anyone want to guess which site (Guy Kawasaki, Slashdot, Techcrunch) drives more traffic? We’ll post the answer Friday.
October 1, 2007
This is shaping up to be the winter of our discontent. High real estate prices were once a threat to the middle class; now low real estate prices are a threat to the middle class.
Reporting last Friday that new homes sales’ hit a seven-year low, USA Today’s Noelle Knox quotes an economist as saying “this is just hideous.” The same day, House Intelligence’s Jonathan Smoke notes that transaction volumes would seem healthy if we could just forget the past five years.
Inman’s Glenn Roberts brings word that discount listing brokerage Foxtons may be filing for bankruptcy. TechCrunch highlights Realtors at each others’ throats. The Wall Street Journal somehow predicts the demise of an entire real estate-mad state. Yet online real estate startups have nonetheless banked $62 million of venture capital in the past four months.
So, are we worried? OF COURSE WE ARE (but hey, we always are). After increasing revenues nearly seven-fold over the first seven months of the year, our top-line is taking its first dip in 2007. It’s too early to tell if it’s the same seasonal lull we saw last year or Apocalypse Now.
Since we pay our agents a salary and a customer satisfaction bonus, real estate’s ups and downs can affect us more than a commission-driven brokerage. So like others in the industry, we probably always wish more people were buying houses.
And yet compared to other brokerages, Redfin’s business may thrive in the coming storm. After all, we’re at the beginning of one of the greatest buyer’s markets in U.S. real estate history, and Redfin is predominantly a service for home buyers.
As inventory piles up in every market, the voodoo promised by traditional agents offering private previews of their buddies’ listings doesn’t matter much to buyers anymore; consumers know that finding a home to buy has gotten easier, even as buyer’s agent commissions have increased.
What does seem to matter to buyers in a market like this are simple services performed very well: the zeal and skill to negotiate for the best home price, an area where Redfin and its clients have outperformed the market; as well as a commitment to making the whole process as well-informed, hassle-free and cost-effective as possible, where we believe our technology can empower customers to feel in control of a transaction they once found bewildering.
So while fewer people overall may be buying a house these days, we expect more of those people to buy through Redfin. And while tougher market conditions may be crunching margins at pure discounters (which we are not), Redfin can thrive as an online broker, using technology to lower our per-transaction costs and improve our service.
Over the longer haul too, the market hasn’t changed the fundamental dynamics driving our business: a generation of home-buyers that grew up with the Internet want data, not a sales pitch, and they feel most comfortable with a real estate agent who gets paid more when they are happy with the service they received, not when they buy a more-expensive house.
This doesn’t mean we can’t screw it all up. We may fail to build the world’s best MLS-powered search site, which is how we first develop a relationship with our customers. Or, as we grow, we may struggle in our mission to use a combination of technology and personal service to generate the best results for our clients, which is the ultimate arbiter of our success.
Startups are risky that way. But it’s comforting to believe that our fate lies not in our stars but in ourselves. If you have an opinion on how the real estate downturn will affect Redfin, leave a comment and let us know.
