A Very Tough Day

Pour one for my homies.

Hi Glenn, you are reporting activity dropping 30%. Isn’t that in line with normal seasonality that comes at the of the summer?

Glenn,

My heart goes out to you today, my friend. Kim and I send big hugs your way, and to all at Redfin, both those leaving and those staying.

As I have always said, both to you personally and publicly, Redfin has created a change in how agents view buyer clients. The rights of buyers, the fact that they DO pay their agent…all things that you have accomplished have not been behind your closed doors.

Always be proud to be part of that change, and we wish you the best. If there is ever anything I can do…just whistle.

Glenn,
My thoughts go out to those who were let go. Hopefully they will all land on their feet quickly. They should look back at this experience and be proud of the seeds of change they have helped plant into this industry so in dire need of change.

My thoughts go out to you as well in trying to bring everyone left together. It will be challenging, but just remember the good stuff you are doing for the industry. Your comments on adapting is spot-on.

Chin up, keep on fighting the good fight.

I’m sorry your team is having to go through this. I wish everyone, leaving and staying the best of success going forward.

Not surprised. You should have fired that ass of a CTO a long time ago.

Glenn,

Hang in there. It’s a tough time right now and when the times are tough is when we find out who the class acts are. Integrity is hard when you have to make decisions like that. I hope that everyone can land on their feet and that those who are still there keep on keeping on…..

Tom

Couldn’t happen to a nicer guy!

did someone die?

From my viewpoint this setback pales in comparison to your innovation and ongoing success. Life happens and this was among the toughest business decisions anybody will ever have to make. Like so many recent hurdles for so many real estate professionals, this is behind you now … shake it off as soon as you can and get busy. See you in the trenches!

Glenn,

As someone who has been keenly observing Redfin from afar (can’t get much further than NZ!) – I admire the professional yet human way you address all aspects of the operation of the company.

You speak openly, you are passionate and totally transparent. These are rare qualities and I can see that they are valued highly by your team and your customers as witnessed by the prior comments.

I know what you have done – had to be done, for the security of the company and its long term viability – the consumer needs Redfin – we are heading into tough times and for those that can see this coming and adapt there will be a very bright future. Keep providing a great service and a great role model for other leaders!

I’m a big fan and I always will be. It is my opinion Red Fin and MLS 4 Owners helped pave the way for 500 Realty and many others. Red Fin isn’t going anywhere!!! Like any great company they will run lean for awhile and snap right back as the market turns.

The “mantra” of home ownership has changed though. In my travels it seems the “lead weight” of owning a home has become very negative. When this lifts and we run through the course of foreclosures and shortsales the time will be right again for the education/value that you provide to the consumer.

Until then preserve capital, perfect the model, and as I always say……..Time is on the side of the companies that truly make a difference and bring value to the consumer.

Ray Pepper
Broker
http://www.500Realty.net

Sorry to read about the layoffs. No matter the reason, they always suck since the people that are let go feel bad, the people doing the “letting go” feel bad, and those left behind still working feel bad. But, sometimes the tough decisions need to be made in order to build strength for the future. All the best as your team works through these tough times.

George

Those who know me know I have no love loss for Redfin or anyone that models the discount/flat fee/rebate business plan. That said, with as many actual working agents and REALTORS…not just those who took orders at Redfin calling themselves agents…in various stages of starvation if not out right extinction, perhaps a clearer ‘Law of the Jungle’ message is being sent. In tough economic times such as these, there are incredible opportunities for those agents and REALTORS who choose to SHIFT with the market. Blaming the market for your deals not staying together is simply a convenient excuse!
As we all continue to feel the angst of Glenn and the rest of his peers who made a clear choice to devalue the real estate industry by offering the “Paying less means saving more” montra…Brokers, agents and REALTORS who offer real value, service and results are going to continue to offer the same great PROFESSIONAL STANDARD OF CARE smart buyers and sellers have come to expect…and gain market share doing it! P.S. Any ex-Redfin employees that would like to try their hand at being an actual real estate professionaL…give me a shout.
Sorry Glenn, you had to know this day was coming!

Patrick Flynn
Team Leader/Designated Broker
Certified Real Estate Instructor
Keller Williams Realty
206.228.1900
pflynn@kw.com

I’m glad that Redfin shedded it’s work force by 20% b/c this will help home buyers and sellers look for better value than just saving money. Somethings are actually worth more than money such as service and the experience of dealing with a professional face-to-face. As a consumer and a homeowner, I definitely would rather work with a Realtor in person than saving money and speak to someone over the phone who I will never meet or even know anything about except what the company tells me. I think we’ve lost that human contact to a certain extent which is so important in business and in life. Not to preach, but this is what I think.

And as for those employees who lost their jobs, well, go find another job or career. Everyone has been through this before and this is no different. I’ve seen much tougher times than this and I made it through just fine. Stop whining and start working.

Lastly, I think Redfin and other companies like it have ruined the Real Etate Market in certain regions and have actually caused prices to decline because their promotion of savings on realtor fees and commissions has given many people the illusion that they can afford a home when they really can’t afford to make the mortgage payments. Saving on commissions and fees will not help pay the mortgage.

Hi Glenn,
I have been a big fan of your site for the past year. It has been a big enabler for buyers who wish to make an informed buy in the real estate market that was dominated by deviousness. I seriously hope you don’t plan on impacting your technical team.

I am sure your exec team is looking at this, but can’t help suggesting that you could consider a slight shift in your model where you generate revenue through the website itself, not just through finalized sales.

As an example, I have used the site quite a bit in the last few months and I would be fine with paying a reasonable subscription fee for the great content and comparative data that you provide.

More analysis, more what-if scenario calculators, more charting and user generated reports could help generate subscription revenue not just from the users but also other real estate professionals.

Also, an image makeover is needed from “discount broker” to “cost-effective-due-to-advanced-tech service”. A more aggressive campaign highlighting that you offer every one of the value points that a “real” broker claims to bring to the table, difference being your fair pricing model.

Look at other industries for examples for what it has taken for the cheap-due-to-tech model to work out(securities brokerage industry for example)

You are reasonably well positioned and it would be a huge disappointment if you lost the plot from here. I have big hopes that you will be able to leverage adversity to make tough choices and set yourself up for phenomenal success when the markets improve.

Exclusive agency listing agreements (as we know them today) first appeared around 1995 and I vividly recall my first mentor at CB-HP warning listing agents that major changes to traditional listing businesses were inevitable. Gary, you were oh sooo right!

The vast majority of REALTORS are precious, good and honorable people with a strong spirit of tenacity and independence. I expect resistance to change, especially in these stressful times. But negative public venting and stepping across lines set by ethics rules, anti-trust and agency laws … these things will help no one.

Real estate has always been a competitive business and there has always been enough for everybody that is willing to work hard. Some Buyers and Sellers will always require “Full Service” but the rest are entitled to freely choose any available “Alternative Service”. Hampering freedom of choice just drives another nail in Capitalism and the American way of life. Be the best at what you do and you’ll be fine.

Larry Wright

Okay, firstly, I’m sorry for Redfin – they’re a fantastic business model and I hope they bounce back when things turn around.

Secondly, to the trolls around here, stop being dicks. Seriously.

Thirdly, to the real estate agents who actually think “Realtor” deserves the all-cap treatment, I hope you’re happy. This housing bubble you relentlessly cheerleaded has now popped and is taking the whole friggin economy down with it. Yes, I know there’s a gigantic chain of people responsible, but YOUR old spokesman wrote a book titled “Why the Housing Boom Will Not Bust”, YOUR organization ran ads saying “home prices double every 10 year” as things were circling the drain, YOUR organization has a gag order on members keeping anyone from admitting that things were actually getting worse anywhere, and YOUR new spokesman has called for a recovery every single quarter (until recently).

Do you know why no one trusts the “personal touch” of a real estate agent? Because you don’t get paid for customer service, you don’t get paid for providing information, and you don’t get paid for being trustworthy or honest; you get paid for selling as many homes as possible to as many people possible at the highest price possible. Like used car salesman, your profit motive is in the wrong place.

I’ve met some good agents, but I’ve also met enough bad ones to know that, when it comes down to it, I’m the only one I can trust. And considering some of the outright delusional pricing I’ve seen in my zip code, I think I actually have a better sense of the market than the majority of seller’s agents around here. Let’s be honest, Redfin gives me access to a lot of data that agents would rather not have me know.

PS – Tell your fellow REALTORS to use a spell-check when they post listings. Supposedly you guys get the big checks to be detail-oriented, sharp-eyed expert researchers. It breaks the illusion when they don’t even spell “ceiling” correctly.

Well Ray, clearly we both believe we are setting the bar. On top of that, I agree there are a fair number of agents and REALTORS (or realtors if it makes you feel better…I don’t need anymore misinformed rants) are woefully incompetent. I suppose one of the few positives of this correction is that a great number of those incompetent agents, REALTORS and yes, Redfin order takers (Sorry, one last jab) are getting (ran) out of the business (which was the true intent of my original message).
As my final entry, I wish all of us the strength to weather this correction so we can continue these lively and spirited debates…minus the personal attacks next time if it’s not too much to ask?

I really like redfin’s service. Sorry to hear you are in a tough situation. I hope your business will survive this hard time and become even stronger.

One suggestion: sometimes I have to check movoto.com instead of redfin.com because they have school information. If you can add this feature, it will make your business even better.

…sometimes my mind goes faster than my fingers.
I do know how to spell “Realtor”..

Patrick Flynn,

There’s a model for you, look at what happened after the demise of fixed stock trading commissions. Traditional stock brokers survived for awhile, as I’m sure you will, but now, the market has completely bifurcated into discount, electronic brokerages for “common folk” (or anyone with less than about $500,000 in investable assets), where you have no personal service. Maybe you pay a set fee for a few hours with a “financial planner,” but after that you’re on your own. The other segment–those with real assets (usually over $1M) that can be managed for a fee that will support a broker (i.e. 1%).

Same thing will happen to R.E. For your everyday move where the client is staying in the same city, etc, e-brokers like Redfin will dominate. I know the ‘hood, I know what I want, I’m not rich, i.e. I don’t need to or want to pay for much. For your cross-country move, your super-rich, your super-private, foreclosures, fixers, and other specialties, you’ll have specialty R.E. agents.

I completely disinterred brokers when I sold my house in Chicago. Only used a lawyer on my side, and the buyers didn’t use an agent either, just a lawyer. I paid a flat fee for an MLS listing, tossed up a few ads on Craigslist, and put a sign out front. Sold in about 3 weeks in a rough time.

You guys really have no special skills to offer for plain-vanilla R.E deals. You certainly don’t “deserve” 3% of a $400,000 house sale for taking a few pictures and posting it to the MLS. It took me all of a few hours to get my house to do that. Why would I pay you $12,000 for a few hours of work?

People always hate to talk about when they are laid off. But as it has become every day’s news headline since Yahoo started it with cutting 1500 of its task force last year, now a need of platform has been in demand where people can express their selves in words how they are feeling about their company, whey the got laid off was that justified or not. And every thing they want to tell anonymously.

And http://www.layoffgossip.com is providing you that platform.

I have a very close friend, who graduated from Harvard. Worked for ML for over 8 years, recently he’s been “right sized” too, despite of his outstanding performance and the increasing revenue he generated. OMG, now the banking industry is badly hurt, how long it would take for those financial background guys like him get back to the job market. Banking jobs are not there as much as before as easily seen on http://www.joboutlets.com and other job sites in the region

Hello!
Very Interesting post! Thank you for such interesting resource!
PS: Sorry for my bad english, I’v just started to learn this language ;)
See you!
Your, Raiul Baztepo

Excellent site, keep up the good work

you guys are doing great – even with 20% less employees