The engineers in Rampell’s story aren’t the ones that Redfin has been eagerly recruiting for job openings here and in Seattle. Corvallis and most of the rest of the US are in a different world than the tech centers in the Valley, Seattle, New York or Boston, which now seem more like Las Vegas: oases of fantastic wealth in the center of a desert. The agonies of this recession have hardly affected many technology companies, and we have hardly affected the course of the recession.

Reading Rampell’s statistics about rising unemployment among software engineers, I thought about Paul Graham’s argument that fewer and fewer engineers will have more and more power. Paul argued that the gap between “haves” and “have-nots” will continue to widen not because of social policy but because of the increasing importance in our economy of leverage. Leverage is what allows one very smart person to invent a new financial instrument or technology that widely propagates throughout the world. The more widely that instrument or technology propagates, the more that one smart person is worth.

And now leverage is creating divisions even among engineers, placing such a premium now on the very best that the “haves” are getting smaller in number and wealthier, while the “have-nots” swell in size. Silicon Valley will continue to head in that direction, with startups staying lean so a smaller number of employees can get a larger piece of their own pie.

Efficiency is a good trend. That said, we should stop thinking about the Valley as a panacea for unemployment. Government programs to drive down unemployment should focus on more employment-intensive work like solar panels or roads, or just educate people better so that the next generation can be on the right side of leverage.

The post Silicon Valley Is America's Wealth Engine, Not Its Job Engine appeared first on Redfin Real Estate Blog.

Once that happened, the case against the Sarbanes-Oxley law definitely got worse: at one board meeting I attended at the beginning of the crisis, a director talked of stocking up on bottled water. But the fact that the Bush & Obama governments prevented a global economic apocalypse hasn’t deterred more complaints about regulation in general — and about Sarbanes-Oxley in particular. Whenever the topic of IPOs comes up, as it did this weekend on TechCrunch, you’ll see a comment like this, which now stands as the most popular for the post:

What congress created with Sarbanes-Oxley and other regulations was a rule saying, basically: “Don’t let ordinary Americans invest in any new tech companies. Only big companies and the very rich are allowed to do that.” If you try to regulate away every risk, you regulate away the ability to do most regular things too.

Ah yes, moral hazard! Buyer beware! Let ordinary Americans take risks! Well, hey, I love risk. If Grandma wants to buy 10,000 shares of the latest incarnation of Enron or Lehman Brothers, I’m all for it. I just want her to be able to know what she’s buying. She may not care for detailed product plans or revenue forecasts. But she at least should be able to get a sense of whether, in the past, you know, the company made money or lost money.

Since that is the only object of the Sarbanes-Oxley law, I’m not sure which part of it is so objectionable. Is it the requirement that the CEO and CFO of a publicly traded company be accountable for the accuracy of its financial statements? Or the rule that “independent” auditors can’t be paid in side-deals by the business they’re supposed to be auditing?  Or is it the ban on off-balance sheet investments, which precluded investors from knowing about the very existence of liabilities that bankrupted a company like Enron?

These are the main requirements imposed by the bipartisan bill, which passed by a vote of 423 – 2 in the House and 99-0 in the Republican-controlled Senate, before being signed into law in 2002 by President George W.  Bush. Like any regulation, the law imposes some costs on a business, requiring the accounting department of a publicly traded company to institute  basic controls that can cost hundreds of thousands per year. But I think these are worth it if the company wants to sell stock to any consumer — even if it means some marginal IPO candidates delay going public to get their house in order.

I am sure there are many silly laws. I often get the feeling, walking through Washington DC, that the government is big. I agree with Fred Wilson that the development of alternative markets for startups to get liquidity is a good thing. But a law requiring the CEO to take responsibility for accurate financial statements is a good thing too. And the dearth of tech IPOs has almost nothing to do with that.

The post In Defense of Sarbanes-Oxley appeared first on Redfin Real Estate Blog.

The only speeches I’ve ever been able to remember were the ones when someone set aside her slides and just started telling stories. I remember Jason Calacanis breaking a piece of chalk while insisting — he was wrong — that markets, not products or teams, are what matter when starting a company. After Plumtree’s big layoff, I remember John Kunze turning off the projector to say he was sorry.

At Redfin, we recently ran a board meeting without slides. Or we used slides, but only for the 45 minutes it took to summarize the basic facts of last month’s business: hiring, traffic growth, customer satisfaction, engineering schedule, revenues, earnings. Almost every slide was a number or a graph of a number, which freed us to talk about why costs increased faster than headcount, or what we thought of the 12 people we hired last month. We were done with the deck by 9 a.m.

And then we set aside the slides entirely. As we raised the blinds to begin the rest of the meeting, a panic rose in my throat that I was about to lose control. It felt like having a party without a keg or even a bowl of guacamole for people to stand around. What would we say?

My problem is that I don’t like talking about a problem unless we have a solution. This results in a tendency to manage board conversations as set pieces, where we carefully structure challenges that can be neatly addressed within the allotted time, almost as if we were plotting a sit-com. At some deep level, I’ve long  felt that the real Redfin was beyond anyone’s ability to help us. I can never encapsulate the messiness of the company — the myriad ways we could fail, my crazed conviction that we won’t, my pride, my embarrassment, my terror — into any one statement, so everything I say seems like an approximation or a simulation of the truth.

But recently at board meetings we’ve dug into problems for which we weren’t sure there was a solution, or where the solution was in dispute. What could we do to drive market-share in Seattle above 5%? Why don’t we have more listings? How can we build our agents’ careers without creating a bloated hierarchy? One executive led the discussion and everybody else participated.

We got ideas I didn’t expect, like Paul Goodrich’s suggestion that we tell our sellers’ how many home-buyers we’re working with in their neighborhood, or James Slavet’s idea of correlating interviewers’ ratings of a new hire with his year-end reviews. It finally felt like we had the board meeting my old boss at Plumtree, John Kunze, once told me were the best kind, where you focus only on one question: what’s really going on in this business?

To answer this question, you have to take it seriously as a question, without jumping to the same conclusions over and over again. This means allowing yourself the time and space for what the poet John Keats called negative capability: “being in uncertainties, mysteries, doubts without any irritable reaching after fact & reason.” The modern phrase for negative capability is “awkward silences,” which is sometimes just the sound of everyone thinking.

There were a few awkward silences in our last board meeting, but probably not enough.

Just this week, a senior executive at one of the world’s most-admired technology companies asked me about our board meetings. I told him about our heads-up format. Then he told me that his company doesn’t use slides at all, instead relying on the old-fashioned memo.

“Whoa,” I said. “How long does that take?”

“A long time,” he said, sounding almost proud.

“What are we talking about here, like one pa-”

“Five pages.”

I wondered if he understood the speed at which startups had to move. Meanwhile, he explained that the time it took to write a memo forced the author to think through what she was proposing; the time it took to read guided the meeting’s participants through the same process.

If the meeting participants hadn’t read the memo, the opening twenty minutes of the meeting were set aside for that, just like in a naughty 8th-grade language-arts class. In reading the document through, no one got side-tracked for half an hour on the first slide of a presentation, without ever getting to the main argument. The first words spoken in the meeting would come from the memo’s author: “any questions?” And then the fur would fly.

Now I know that long memos are usually a waste of time, salvos in an argument that could be settled quickly face to face, or Bartleby manifestos that nobody has asked for or expects to act on. But the best reason for people to meet is to make a decision, and if the decision is important enough for a whole room full of people to meet, then a memo seems worth the time.

The people you need to pin down the most are the executives. The worst executives are often the best speakers: we are good at sounding good. Why think when you can PowerPoint? You can throw together a presentation the night before. You can issues a series of intelligent-sounding statements, fill in the blanks between your bullets with what people want to hear, nod wisely and defer a decision ‘til the next meeting. It is a completely provisional format. Or you can take a stand, develop a point of view, write it all out and then nail it to the church door.

It’s hard to say whether that will slow us down or speed us up, but it seems worth a try.

The post Why Think When You Can PowerPoint? appeared first on Redfin Real Estate Blog.

If you are planning to take advantage of the Federal Home Buyer Tax Credit, you must have a mutually accepted offer signed by both the buyer and the seller by midnight on Friday, April 30th.

Are we repeating ourselves? You bet we are. There is no leeway in this rule whatsoever, so we want to be absolutely clear. There will be no way to backdate or “fudge” dates, or get an exception, or appeal to the Supreme Court, or fly really fast around the world to reverse time. This is a hard, government-mandated deadline. There is zero wiggle-room.

Our agents in every market will do everything in their power to expedite the process for home buyers who are trying to qualify for the tax credit. If you have any concerns about not making the deadline, you should contact your agent as soon as possible. Don’t put it off until later.

Good luck!

The post Not in Contract? Federal Tax Credit Expires Friday appeared first on Redfin Real Estate Blog.

But there’s no denying what happens when a Californian can qualify for an $8,000 federal tax-credit by getting under contract on a home by April 30, then qualify for another $10,000 California tax-credit by closing on that contract after May 1. Everybody tries to buy a home right away. In the Bay Area last week, the number of folks who wrote an offer through Redfin increased 95% over the prior week.

It won’t last. And nobody seems to care that it won’t last. But for now, it’s a feeding frenzy down there…

The post Double-Dipping in California appeared first on Redfin Real Estate Blog.

As a brokerage, Redfin has some insight into what kinds of deals are being done right now, and how the balance between buyers and sellers shifts from month to month. We’re not a microcosm of the whole market, but we think if you sat where we sat, and saw what we saw, you’d learn a little about the market.

So we’re publishing monthly metrics from our customer database in a report we’re calling Redfin by the Numbers. On Monday night, Redfin’s Chris Glew put up data for the Seattle area, the San Francisco Bay Area, Southern California, Chicagoland, the Boston area and the Washington DC area.

To get a national summary, read on… (as the picture indicates, we try to be as transparent as possible)

Nearly 1 in 4 Offers was on a Bank-Owned Property
Some of the best deals are in distressed properties. 24% of the offers we submitted to listing agents in March were on bank-owned listings (also known as REOs), a percentage that has increased steadily since October; in Southern California this number was 53% whereas in Boston it was only 5%. Most everywhere else the percentage was in the mid-20′s.

Sale to List Price at 95.6%
On Redfin offers that closed in March, the average sale to list price was 95.6%, which has remained steady throughout the overall market decline. As prices weaken, sellers usually respond with price-drops pretty quickly — usually 30 days — keeping the spread between asking and final prices at less than 5%.

So what does that mean for you? Well, a lot of buyers are asking us these days to tour properties costing, say, $500,000 when they’re only pre-approved for $440,000. We do the tour and hope for the best, but that gap is still probably a bit big.

In fact, we see a lot of bank-owned properties going for over-asking, especially in California, though that is balanced by some regular home-owners being caught a little flat-footed & over-pricing.

In general, our sale-to-list price is lower than the rest of the market’s by about a point, just because our buyers tend to be a bit more deal-savvy and our agents are paid differently too — they still make money when a buyer walks from a deal, and their bonuses are based on customer satisfaction — so they drive a hard bargain rather than just driving for a close at any price.

Escrow Periods are Lengthening Slightly
Another key market indicator is the length of the escrow period. Excluding new construction — which has a long escrow period because the listing may be half-built at the time of purchase — the time between when buyers and come to terms and the close is now at 38 days for the deals we handled in March. Escrow periods are the shortest in DC at 33 days and longest in Boston (where lawyers handle escrow) at 46 days.

Usually, escrow periods lengthen as markets weaken and vice-versa but one reason escrow is a bit longer has nothing to do with demand: it’s because banks are too busy with re-financings  to prioritize new home-buyer loans. Banks have been especially overwhelmed in Seattle, where escrow periods jumped from 31 days in February to 38 days in March. It has been a lot more work to close deals on time.

But in the end, lenders are coming through with the money. Less than 2% of our deals in March failed to close due to financing problems; that compares to 11% of our deals that failed because the buyer and seller got hung up in negotiations following the inspection. Why so many failed inspections? Well, for one thing, the bank-owned properties are in sad shape and the bank won’t fix anything.

But we’re also seeing more negotiating taking place at the inspection, in part because the escrow period is lengthening and price drops occur more frequently. By the time of the inspection, buyers feel that they’re entitled to another price drop even if nothing’s wrong with the house. This drives sellers crazy, especially after they’ve already dropped their price a couple of times, once or twice while it was on the market, and again at the initial negotiation. A lot more of our deals fall apart late in the game, sometimes over less than $1,000.

Brokerage Activity Up 69%, Website Visits Up 22%
Demand meanwhile is way up. Leading indicators were very strong, with the number of listings toured increasing 69% month over month. In Chicago and Washington DC, the increase was 100% and 167%, respectively. In general, we’ve been very busy, and we’ve noticed other agents are too.

The increase in brokerage activity has out-paced the increase in website traffic — which is unusual for us lately. Typically, we’ve seen a lot of people come onto the site to looky-loo but without taking the next step.

Visits to Redfin were up 22% in March, with the strongest growth being in Boston (31%) and Chicago (28%). Some of that growth is because Redfin is growing search share, some of it is seasonal. Last year at this time, we saw a 26% growth in visits.

Customer Satisfaction at 97%
Customer satisfaction was also very high, with 126 out of 130 home-buying customers — or 97% — who responded to a customer-satisfaction survey saying they would recommend Redfin to a friend. Everyone at Redfin is paid on this number, so it matters a lot to us. We survey anyone who signs an offer or listing agreement, regardless of whether the offer is accepted or the listing sells. We publish all of our survey responses online — together with details of the listing that each client tried to buy or sell.

Redfin is Tops in Agent-Share
We survey a lot of customers. If you look at our agents’ deal history, what you start to realize is just how active they are in the market. One thing we started doing as a result — a marketing light-bulb went off last week — is measuring our agents’ share of deals closed in a market for a particular month.

Take, for example, the top-three buyers’ agents in terms of deal volume. In Seattle’s King County, all three were Redfin agents. Our other three Seattle agents were in the top 16 for King County; they too would have been top five if we had measured the deals closed in both King and Snohomish counties.

What this means is that our agents have the deal flow to know more about what’s going on in the market than just about anybody. We think the same would be true for Redfin agents in other markets, so we’ll start reporting on that for all markets next month.

Attached is the raw data. Let us know what other metrics you’d like to see and we’ll try to add them into the mix. If you’re an agent or a broker, tell us what trends you’re seeing. We’d love to hear from you.

(Photo credit: Oh You on Flickr)

The post Redfin by the Numbers: March Brokerage Activity Way Up, Especially on Foreclosures appeared first on Redfin Real Estate Blog.

“What Are You Typing There, Wes?”
Perhaps the most terrifying transition is the one between jobs. It embarrasses us all. I still remember, at 22, printing my resume in Kinko’s after midnight so no one would see me doing it. The resume felt like a letter to Kafka’s Castle: What is it, I always wondered, that these people want?

The answer, I fervently believed, was parchment-colored stock. While I picked out resume paper that was probably designed for D&D scrolls, my twin brother Wes – our mom told him to go with me for moral support — got on a clacky IBM Selectric and filled a page with the sentence “I am the Anti-Christ.”

We were caught out by a lovely, deeply Christian high-school classmate who had once asked me to a dance but was now coming into Kinko’s to get last-minute brunch inserts printed for her wedding. She learned I was unemployed & living with my parents. Then she changed the subject: “What are you typing there Wes?”

Premature Obituaries
Now when a friend sends over a resume for proofreading, which happens nearly every week these days, I remember how completely defenseless I felt at that moment.

Resumes are horrible documents, premature and unsentimental obituaries: our lives are rarely reduced to such a small number of facts. And writing a resume is a balancing act between feeling outrageously boastful and unimpressive. Some, like Seth Godin, have questioned whether you should even have a resume. I know many people who take whatever dreadful job happens their way just to avoid writing one.

That’s silly. No one has much experience preparing a resume, but it isn’t that hard: you just have to get out of the way of yourself so your accomplishments can speak for themselves. Having reviewed thousands of resumes, I now have a better idea of what the folks in Kafka’s Castle like to see:

Here’s What I Like:

1. A direct style: use blunt, short words. Most resumes are scanned, not read.
2. Looks: like a middle-aged man’s apartment. Nice and tidy.
3. Objective: be direct; your objective is the job you’re applying for.
4. Verbs ending in “d”: shipped, launched, built, sold.
5. Results: not responsibilities or experience — but what responsibilities and experience helped you accomplish.
6. Bullets: 3 – 4 results per job.
7. Numbers: ­ increased traffic from Google 230%, decreased ad spending 40%.
8. Grades: your GPA, even if it was ten years ago, if it’s over 3.5.
9. Reviews: ratings from your last review, especially useful for Microsofties.
10. Honors: we’ll interview an employee-of-the-quarter, every time.
11. Promotions: if your role changes, highlight that as two jobs.
12. LinkedIn endorsements: persuasive, even from your friends.
13. A Link to Your  Blog: a blog gives you online street cred. For some, it is your resume.
14. Themes: whether you care about customer service or agile software, tell a consistent story from job to job.
15. Hobbies: I always want to meet people with fun hobbies. And that’s all a resume is: a request for a meeting. At Plumtree, we received a resume from a Playboy model. A colleague forwarded it to me with a note reading, “I’ve never asked you for anything before…” I feel the same way about cyclists.
16. Two page-max: if you’re under 30, one page.
17. Anything you did that showed initiative or passion. Eagle Scout. Math Olympics.
18. Email to the CEO: it takes chutzpah & resourcefulness to go straight to the top.
19. Customization: tailor your resume & especially the cover letter to the job.
20. Completed degrees: I’ve hired plenty of folks a few credits shy of a degree. Some were great; many couldn’t finish what they started. If you have time now, finish your degree.
21. Gmail address: or your own domain. Nothing says “totally out of it” like an AOL address.

Here’s What I Don’t Like:

1. Churn: stints at 2 or more employers of less than 2 years.
2. List of generic skills: just show what you actually accomplished at each job.
3. Typos or misspellings: About half the resumes I get are addressed to “RedFin.” For the other words, spell-check!
4. Photos: my favorite was of a candidate in tennis whites with a racket.
5. “Proven”: as in “proven leadership.” We all still have something to prove.
6. Printed resumes: email a Word document, web page or PDF.
7. Buzzwords: search bots love it, actual people don’t.
8. Wordiness: yes, this is the pot calling the kettle black…

But this is just one person’s (very opinionated) opinion. There are plenty of people who have more experience than I do reviewing resumes. What do you like to see?

The post How I Look at Resumes appeared first on Redfin Real Estate Blog.

It’s sunset and Daren and his client are touring a 100-year-old mansion in a posh part of town. From their first steps on the creaky, semi-rotted front porch, it was obvious that the place hadn’t been updated or well-maintained for decades. Cue Daren …  

Inside we found original wood floors that were warped and buckled, and high-vaulted ceilings that made the creaky floors echo throughout the house. We explored the house and found several issues that seemed to come from neglect – the house felt like a mausoleum that hadn’t been touched since the 70s. That, combined with the fact that it was an old house, was already starting to make me feel a little creeped out. 

We started to explore the outside of the house hoping to find an exterior basement access that might have washer and dryer hookups, and also give us a chance to see what the wiring and plumbing looked like. We found a rotted access hatch on the side of the house, and went underneath the mansion to explore the unfinished basement. The ceilings were about five-and-a-half feet high, and spider webs threatened to strangle us wherever we went; if the house hadn’t been touched in 30 years, nobody had been in the basement for about 50. 

There was no light in the basement, so I was cowering behind my four-D-cell Mag-Lite trying to see what was down there. My client had has hand on my shoulder, and was just steps behind me. The image of one of those horror movies comes to mind where you are yelling “DON’T GO IN THERE!” at the screen, but the characters in the movie are too stupid to hear your advice – in our case the curiosity was just too much. 

My flashlight caught a shadow of something interesting in the back corner of the unfinished basement. Fighting our way through the fallen insulation and spider webs, we continued further underneath the house. My flashlight caught an out-of-place wall in the basement. As we got closer we realized that it was not only a wall, but a full room. Again, curiosity got the better of me, and with my hand shaking I reached to open the door. I wasn’t sure what to expect, but I was ready to swing my flashlight like Babe Ruth. 

We found a single folding chair with a bare-naked lightbulb swinging overhead — a 40-year-old abandoned torture chamber in the basement of a mansion in a nice neighborhood (picture the James Bond torture-chair scene in Casino Royale). I felt my client’s grip on my shoulder tighten, and I quickly swung the flashlight around to make sure nobody was rushing from the shadows with some ancient medieval weapon. As far as I could tell we were alone. My client leaned over and whispered “This is f*ing creepy!!! Let’s get the hell out of here!!!” and we bolted. Finally our curiosity was satisfied, and we were able to run from the house without looking back. 

What’s your creepiest, wackiest, wildest home-tour tale? Redfin’s field agents tour homes day in, day out, so we have plenty more to share if you’re too shy. Maybe next time we’ll tell you about a tour in Wonderland, minus the hookah.

The post Field Agent Files: the Chamber of Secrets appeared first on Redfin Real Estate Blog.