An Open Letter to Glenn Kelman, Redfin CEO, on the “Discount Real Estate Broker” Model

Post Updated 5/20/15:

P.S. Glenn, more than a year has gone by. I’ve busted my you-know-what trying to build a better Redfin-style mousetrap. And a couple of months ago, I said to myself: Wait a sec. I don’t think that sort of mousetrap is EVER going to work. I think technology and modern business practices have rendered that old type of mousetrap obsolete. The world is just waiting for somebody to invent something different entirely. Real estate isn’t immune to evolution. It just takes real change and a new way of doing things before it evolves.

So yesterday, I announced my imminent withdrawal from the NWMLS. A move made possible, in part Glenn, by Redfin’s devotion to solid data quality. Via FSBO platforms, I will be able to list homes for sale on Redfin – exactly where most buyers are looking in Seattle – without having to list on the NWMLS. And thus without having to pay a cooperating broker commission in the first place. But unlike Redfin and every other real estate firm – whether traditional or alternative – I won’t be on the NWMLS.

So this is where we part company – for now! 🙂  I suspect Redfin still has room to evolve…


The original letter to Glenn dated February 18, 2014:

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Redfin adds “feedback” comments to site features

Yesterday Redfin announced the launch of a new site feature that introduces the concept of “agent feedback” on a broader and more transparent scale.

As with anything new, it will take a bit of time for things to “shake out” on this new feature, as we as an industry continue to balance the obligations to home sellers “IN” an mls system, and the wants and needs of home buyers who do not have any contractual rights within an mls system, the way that sellers do.

I will describe how this new feature appears to function at present, and as I understand it after having tested it.

When you search for property on Redfin and the little house icons appear on the map, some will have a yellow star to denote which properties have been “toured” by a Redfin agent AND the Redfin agent has noted their and/or their buyer client’s thoughts on the property.

If the house has no yellow star, it doesn’t mean it wasn’t EVER “toured” by a Redfin agent, only that the agent did not input a comment to the system after doing so.


If you click on the house icon with the yellow star, the address will appear in a link box. If you click on the link, you will get the property detail, but you will not yet SEE the comment made by the “field” agent. (“Field” agent is the term used by Redfin for agents who view property with prospective home buyers. (Agents “out in the field”.) Redfin “partner” agents also have access to posting comments, even though they are not employees of Redfin. Not sure if they can do that for all of the property they show, or only the property they show to a home buyer who was referred to them “by Redfin”. But I do know they have some access to this new feature as to leaving comments.

What you will see above the map of the parcel, and below the home detail specifics, is this: “Notes About (123 main street) from Redfin Agents Toured (X) Times” along with a Button you press that says “Email Notes to Me”.

Again, I don’t think it is accurate yet as to how many “Times” the home was toured by Redfin, but I’m confused on this issue. I have a listing toured by Redfin at least 2 times that does not have a yellow star, nor does it denote in the detail that it was ever toured by a Redfin “field” agent with a buyer (or Redfin “partner” agent). So I’m pretty sure ALL “tours” are not registering. I thought maybe “Toured 2 Times” meant there were 2 comments, but there is only 1 comment, so maybe that one agent toured it 2 times before making the comment.

Perhaps they should say “1 Comment” vs “Toured 2 Times” in the interest of “accuracy”, as “transparency” carries an obligation of a reasonable degree of accuracy as to factual content. As I said earlier, this is a minor point that will “shake out” vs “shake up” as time goes on.

When you click on the “Email Notes to Me” button, you will fairly instantaneously receive an email with the comment(s).

There is also a feature to receive new notes as they are added later on this property. That appears to be automatic, except if you click on the same property that sent you notes and hit that button again, it will give you an option to receive new notes. So not entirely sure on that one.

To receive these notes you DO NOT have to be a Redfin “CLIENT”. You simply have to be a “registered user” of the Redfin site, as I and most of my clients are.



1) The most notable problem is that at least two of the comments shown publicly in blog posts contain what we call “inappropriate language”. For example the one in this post from Glenn’s post says “ideal for a family” and one of the two comments posted on 1000Watt Consulting Blog by Brian Boero says “not for families with small children”.

The guideline for agents is we must talk ONLY about property and not make broad statements about who should live IN them. Both of those comments mention people vs home attributes, long considered taboo under HUD guidelines.

There are massive writings on this topic, but a good rule of thumb is:


Talk about the home and it’s attributes, and not the people.

A long standing “rule” for real estate advertisements, or most any statements made by licensed agents, is talk about the house and not people.

HOWEVER I often will tell a specific client that a home is not right for them “and their small children” if the house has a master bedroom only on the 2nd floor, and the only other bedrooms are IN the basement, especially if we have already discussed that the master bedroom must on the same floor as their children’s bedrooms.

So I think if Redfin notes a specific “deficiency” of the property in that regard, without mentioning people, like “Master up; children’s bedrooms two floors below and in the basement”. That would be OK. But to simply say “not for families with small children”…well, that’s more about HOW you say it than what you say. Not a huge deal. Just another example of “shake out” of this new feature to come, IMO. What you can say TO a buyer client is different than what you can say “publicly”, and this new feature blurs the lines from a “Fair Housing Guidelines” standpoint.

2) That raises another issue. Let’s say Redfin Agents can say anything because they are speaking to Redfin site “registered users” only. Not saying that is the case, but let’s consider that as potentially the case.

Then the issue of Brian Boero, or any other “registered user”, POSTING those private email comments PUBLICLY becomes a problem.

Can he take a private email and display it publicly? I think Brian can, because I don’t think Brian is a licensed agent. I don’t think I can, unless I am linking to a public place (as I did) and it is not an email I personally received from the site.

If the rationale is ONLY “registered users” can see the comments, then shouldn’t there be an agreement with registered users that they will not publicly post those emailed comments? I think so.

3) The benefit generally is that Redfin continues to try to strike a good balance between the rights of buyers and sellers. But, the seller has a contract as to what their conditions are with regard to an mls being able to display their property information via the mls system. Buyers have no rights in that regard, as they have no written contract with “an mls system”.

I think most mls systems will allow the seller to block this feature, and will recommend that sellers do that, given the seller and the seller’s agent have very limited, if any, control or access to the function. That is generally against most any Listing Contract provision signed by a seller to gain access to the mls system. They are many and varied, but most require the Listing Agent and/or Listing Brokerage to have full control over information on “member” sites, which often limits the info to that available via an “mls” feed, with some and often many restrictions.

Time will tell, but that is my expectation. I think we will be seeing some NEW “mls rules” with regard to this new feature.

OpenSearch is beyond cool – it’s the new cold

I was reading Redfin’s Developer Blog and the IE blog a few months ago and I got this desire to write my own OpenSearch provider. OpenSearch was originally created by (an company) and was primarily designed as a way for web developers to publish search results in a standard and accessible format. This turns out to be a good idea because different types of content require different types of search engines. The best search engine for a particular type of content is frequently the search engine written by the people that know the content the best. Google is great at searching unstructured content on the internet, but when it comes to structured search on a single web site there are much better options (Endeca, FAST, Autonomy, Solr, my favorite SQL database, etc). The other benefit of OpenSearch providers is that it shifts the balance of power away from Google and back toward web browser vendors & web site developers.

Both of the major web browsers support the OpenSearch Referrer extension. IE 7+, Firefox 2+ & Chrome allows you to add search engines to your browser without leaving the web page. The best place to get started is from the browsers vendors themselves. You can add search providers from Microsoft’s site or you can add search providers from Firefox’s add-ons site. In the interest of full disclosure, Opera allows you to add search engines manually, and Safari currently does not support this feature in any form (unless you count using vi to edit the Safari executable or changing your OS’s hosts file as support, which I do not recommend).

Anyway, our developer friends at Redfin wrote a blog post about their OpenSearch provider on their dev blog some time ago. Of course, they took the easy way out by not developing an OpenSearch Suggestions extension (slackers). I decided that a search provider without suggestion support is lame, so I took a stab at creating one. I think what inspired me to write an OpenSearch suggestions provider is that the IE 8 team blogged about their new Visual Search feature (which embraces & extends the OpenSearch suggestions work that Firefox pioneered) and I could leverage the work to improve the search experience for both IE 8 & Firefox 2+ users. (And the satisfaction of having a cool feature that Redfin & Estately haven’t implemented yet was probably another factor).

This functionality is typically exposed to users, via the search engine bar, next to the address bar in your web browser. So in your page markup, you’ll add something like this that tells the browser that your web site has a search service.

<link title="RPA Real Estate Search" type="application/opensearchdescription+xml" rel="search" href=""/>

The above element points to your site OpenSearch Description XML file which describes your search service in a way the browser can understand. When you visit RPA’s site, the browser will read RPA’s OpenSearch Description file located here and unobtrusively let you add the site’s search providers.

Assuming everything is working correctly, the user should be able to visit RPA’s web site, click on the browser’s search bar to add our search provider like so… (IE’s screen captures are on the left, Firefox’s are on the right).

I’ve also added a button in RPA’s search bar (see above right) in case site visitors don’t discover our search provider via the browser (I suspect most users would miss it otherwise).

After you’ve registered RPA’s search provider with your web browser, you can select it and just start typing. Since I’ve implemented a suggestions service, it will auto complete cities, school districts & neighborhoods as you type them (Didn’t I say this was cool?). I should note that although IE 7 & Chrome support OpenSearch, only IE 8 and Firefox currently support the suggestions providers. Anyway, if you wanted to look for listings in Bellevue, here’s what it currently looks like.

As you’ll notice, IE 8 & Firefox 3 displays suggestions differently on RPA’s site. This is intentional because IE 8 supports a newer version of the OpenSearch standards (Microsoft calls it Visual Search) and I designed RPA’s search provider to exploit this fact. In Firefox, the browser can only handle plain text suggestions, which can lead to ambiguous searches. For example, let’s say you search for Riverview. Riverview is both a neighborhood in Kent and a school district in Carnation / Duvall, so in Firefox there is no means for the user to tell the web site in which context they meant to search for when they typed in Riverview. I suppose one could create a “Did you mean” results page for cases like this, but I think that somewhat defeats the purpose of having suggestions support.

However, in IE 8, if a term has multiple contexts, the search provider can display them all and the user can select the one they meant. Also in IE 8, the search provider can display thumbnails next to the suggestions, which further helps the user quickly find what they are looking for. Although, I haven’t implemented that feature yet (mostly because I wasn’t sure what picture I should put up there for search terms that return multiple results), other web sites have. For example, if you wanted to buy a movie from Amazon or learn more about our 16th president from Wikipedia, the IE 8 search provider experience looks like this…

As the Redfin developers stated, implementing OpenSearch Referrer extensions are surprisingly easy (so I think users will soon request them from all web sites once the word gets out). The OpenSearch Suggestions extensions are more difficult to implement because every single keystroke is essentially a REST web service call. If you aren’t careful, you could bring your web server to its knees real quick. However, given all the AJAX map based tricks today’s real estate web sites perform, this isn’t anything that a professional software engineer can’t handle.

Call me crazy, but I think OpenSearch providers are going to become bigger than RSS feeds over the next year. If IE 8’s forth coming release doesn’t launch them into the mainstream, I think future releases of Firefox & Chrome will improve upon IE 8’s good ideas. Maybe you should think of it as browser favorites on steroids? If search is sticky, then OpenSearch is superglue and duct tape. If Firefox’s suggestions support were the tip of the iceberg, then IE 8’s implementation is cooler than Barrow, Alaska. The future of OpenSearch looks bright, even if it’s cold outside.

Redfin Circles Back to an Old Biz Model…

Redfin‘s been through so many business models over the years, I can completely understand why some folks would think that Redfin is entering a new area by working with real estate agents, but I can’t help remind folks that this is a business model that they’ve tried in the past… and it failed miserably the first time.

In only the 2nd time Redfin was mentioned on RCG, Anna was upset (to put it mildly), that Redfin had gone from being a company that did only referral business to agents (accepting a 20% cut), to including a flat-fee option for FSBO’s to get their listings in the MLS.  (Jun ’05)

A few months later, RCG agreed to give Redfin a 2nd chance after they had dropped all references to the flat-fee option for sellers from their website. (Oct ’05)

However, the Redfin evolution when Glenn Kelman took the helm of Redfin in Sept ’05.   From this article Galen published in Jan ’06, Glenn Kelman is being quoted talking about Redfin’s referral busines to agents saying:

“How do we make money now? People sign up for a real estate agent… The real estate agent and Redfin share the fruits of that.”


I SOOO wish I had a screenshot of Anna’s profile she had on the Redfin site back in early ’05 because the content on the page would be shockingly similar to the current agent profiles.     I can’t remember exactly what the profiles looked like, but I’m almost positive they listed the agent’s recent transactions and had consumer reviews (I vaguely even remember a star system for the agents).

I honestly wish no ill will on the Redfin folks and wish them the best in their latest endeavor.   It’s just that the blogger in me can’t believe so many folks are letting them get away with saying they are doing something new.   About the only thing I see new with this program is that they are charging a 30% referral fee instead of the 20% they used to charge to agents back when Anna took part in ’05.

Ruin Sity Gaide

I love this comment posted by David Losh over on Seattle Bubble.  I decided to give it it’s own post before it faded away into oblivion. 🙂

“If you do come to the internet for information about a home purchase or sale you are in the wrong place. This site (Seattle Bubble)  has excellent financial crisis dialog, but is very short on Real Estate information. It does provide much more information than a Ruin Sity Gaide, but still this is just entertainment.  The internet Real Estate sales business model is a very long way off if it will ever be viable. radfun hired the sales person to push the Real Estate sales agenda on line. Sellers with problems flock to the online Real Estate sites along with the week end warrior home shoppers. It’s a mish mash of confusion that radfun happily collects fees for. In time it will be obvious this was just a continuation of a problem rather than a solution. Be very careful of what you think you will learn about Real Estate online. These are sales people looking to collect your money for doing nothing, that’s the business model.”

Goodbye Yellow Brick Road

The yellow brick road heading into the Emerald City, has finally lost its shine and turned to stone this past week. If the combined dreariness of fall in the Northwest, Wamu’s funeral, and the Seahawks SLOOOOW start wasn’t enough for us to ask for Lexapro during our next doctor’s visit, the latest batch of bad news certainly is.

No sooner than the venture capitalists sound alarms bells and implore startup CEOs to save cash, slash costs, & stay alive, two of Seattle’s Real Estate 2.0 giants, Redfin & Zillow announce workforce reductions.

Zillow announced at 25% cut on Friday, while Redfin announced that it had laid off 20% of its employees last Monday. Granted, it wasn’t like things were much better in the Real Estate 1.0 world. My NWMLS database’s member table has about 3,000 fewer records than a back up from last year did. But it’s another sign that everybody expects a long & cold winter ahead.

If you were one of the few that got axed, I wish you luck finding your future life, beyond the yellow brick road.

Geekier than Geek Estate & Sweeter than Sweet Digs

Sometimes, you find something in your own back yard that’s an unexpected & pleasant surprise. Like that hole in the wall teriyaki restaurant right by the office, I recently stumbled upon Redfin Developer’s Blog. And since that day of first discovery, I’ve come back often yearning for more.

I just wanted to thank the engineers at Redfin for blogging about their day to day life as web software engineers. As a fellow software engineer, I always like knowing “how they did it that”, “what are they up to now”, or even “WTF were they thinking” (just kidding on that last one guys).

Even though I tend to prefer SQL Server for my apps (I freely admit that I am biased), I really enjoyed their MySQL to Postgress & Elephant vs Dolphin posts (perhaps I have a database fetish?). I also learned something new & valuable from their CSS Sprites + Firefox Content Preferences = Site Go Boom post. Even the folks without software engineering degrees would probably enjoy their How to search Redfin directly from IE and Firefox & Syndicate Redfin Listings in WordPress posts.

Anyway, if you’re developing a web site, (or even if you aren’t), I think their developers blog feed belongs in your feed reader. Then again, I’m biased.

PS – I can’t believe you guys don’t have Coding Horror on your blogs you like list yet.

Redfin on Guy Kawaski's Blog

[photopress:guy2_0_1.jpg,thumb,alignright]Over on Guy Kawasaki’s Blog “How to Change the World – A Practical Blog for Impractical People”, Glenn Kelman of Redfin posts their Actual Numbers against “The Redfin Model” figures in a post titled “Financial Models for Underachievers – Two Years of the Real Numbers of a Startup”

Seems the model is based on worst case scenario, to increase the odds of repeated rounds of funding.  Glenn says: “…we heeded Guy’s advice that ‘the three most powerful words you can utter at a board meeting are, We beat projections’. This convinced us to develop the worst possible financial model that could still be used to raise money.”

Hmmmm.  So you set your sights artificially low, so you can say you beat projections when asking for more money.  Had the sights not been intentionally low, maybe there wouldn’t be a new round of funding.  I guess that’s a strategy.  But it sounds a bit deceptive, doesn’t it? 

Surely people spending lots of money, aren’t totally awed when someone says “We beat projections!”.  One would hope that they would first ascertain if those projections were intentionally placed at worst case scenario, just so they could say “we beat projections!” to get more money.  One would think investors on a grand scale are a little smarter than that…or at least we hope they are.  But looks like Guy and Glenn know for fact that they are not, and are capitalizing on that fact.

It really is a great article, and Glenn is offering sanitized versions of the model for others to follow.  But if people looking for money can read this and use that model, wouldn’t the people handing out venture capital also be reading this?  Wouldn’t they in turn learn to scoff when someone says the magic words: “We beat projections!” again and again?

Yup, it’s “A Practical Blog for Impractical People” alright.  Sounds like the practical people are the ones asking for money, and the impractical ones are the people giving the money.

Other blog posts commenting on Guy Kawasaki’s post:

Sneak a Peak Inside Redfin by Joel Burslem on FoREM

Nick Bostic on Radiohead and Redfin (not quite related, but cute and noteworthy)

Greg Swann’s take on it

Tim Berry of Up and Running quotes the quote “Plan slow; Run fast”


What a week!

First Zillow releases a new version of their web site.

Then Microsoft releases a new Virtual Earth (VE 3D in Firefox).

Then the a new Beta of is released.

Galen releases new ShackPrices features.

Ardell is using her Verizon EVDO card in Vegas, probably while playing the slots and sipping drinks with umbrellas in them.

Then I discover, Redfin is merging with Move and they also just sold a home in neighborhood!

I’m feeling WAY behind the tech curve today.  I’m going curl up into a ball and read my RSS feeds in a corner now…. 😉