Redfin Redux

Redfin just got another $70M to open up new markets and to further their attempt to break the real estate business and to change it into their vision of how the game should be played. Changing the current model of the sales agent as servant and facilitator in a service business and trying instead to change agents into order takers and to make a house a commodity, seems to be their end game, and by slowly rebating and refunding the venture capital back to buyers and sellers, they continue devaluing their service and chasing their discount fees lower and lower.

Their buyer refunds and discount listing fees are “loss-leaders”, but there’s no other way to make up those lost profits, as that’s the only product they’re selling. If the scenario plays out the way they hope, they will have broke the current system of real estate sales and force everyone to severely discount their fees until there’s no profit for anyone.

Like the gas station wars of yore, they lower their prices and continue to under-cut their competition in order to destroy them.

But as they are finding out, it’s hard to make a profit when refunding half of it right off the top. There is no “extra” to refund…. after paying their sales staff their salaries, cell phone bills and health benefits and paying their upper management millions of dollars, they have to go after more and more cash infusions to keep the business afloat. If that was not the case, they would have already gone public. And now that their total funding is over $165M, no one will be able to buy them out. Why would anyone buy an unprofitable company for that much money, one with no hope of ever turning a profit in their present incarnation.

While they may issue press releases about their “profitability”, just because the didn’t lose money in one particular quarter does not mean their profitable, not with that $165M+ equity financing on their books.

Redfin Hooks $70.9 Million for Software-Powered Home Sales
Redfin raises $70.9M to continue national real estate expansion

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Hey, Dude! Don’t let your real estate career go up in smoke.

From Cannabis Culture on Flickr
From Cannabis Culture on Flickr

July 8th, 2014

In 2013, Washington State passed Initiative 502 which legalized marijuana the possession of marijuana for adults age 21 and older. The only marijuana that would be legal to sell in this state would be grown by specially-licensed Washington farmers and sold in standalone, marijuana-only stores operated by private Washington businesses licensed and regulated by the state.

Today a number of new marijuana stores opened up in the state of Washington and with them, an unlimited number of questions and concerns.

What does this law mean to real estate professionals and Realtors who wish to help someone buy or lease a growing farm or retail space for selling marijuana? Growing, distributing and selling marijuana is still a federal crime. It is still a state crime, but with a few new exceptions. How can a Realtor protect themselves in assisting those clients who are looking for properties to grow or sell pot?

According to Washington Association of Realtors attorney Attorney Annie Fitzsimmons, if a clients seeks to purchase or lease a property for these 502 activities, even if legal in Washington state, it still violates federal law and the Federal Government has broad authority to seize the real estate used in a commission of a crime that violates the Controlled Substances Act.

A Realtor should always refer a client to an attorney in a situation such as this, but be aware that there are few attorneys who will represent your clients as lawyers are prohibited in assisting clients in the commission of a crime.

In addition, 502 businesses are prohibited from opening bank accounts, so most transactions will have to be done in cash. 502 businesses will be unable to get bank financing, nor open an account with the proceeds of their business. This will make any receipt of earnest money awkward and unsafe, to say the least. Landlords will be unable to legally deposit their rent checks they receive, in their own bank accounts without violating money-laundering laws.

If you know that a client of yours has made money selling marijuana, and you know he is using some of that money to purchase a house, even if it’s a home that will be lived in and not related to drug sales, you and he may be accused of money laundering, may be subject to prosecution and he may lose the home and you could go to jail.

If a landlord rents a storefront to a marijuana dispensary or other type of 502 business, the landlords underlying bank loan could be called, at the mortgage holder’s option, as these properties could possibly be seized by the Federal Government in violation of the Controlled Substances Act. Insurance for this type of business is also difficult, which could also threaten the landlords and the mortgage holders interest.

For more details about this new legislation and what it means to Washington State Realtors, check out Annie Fitzsimmons article in Washington Realtors Magazine.

Marijuana-related Businesses Pose High Risks For Landlords

Family faces prison for pot farm

Legalized marijuana and the real estate finance dilemma

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Foreclosure film “American Winter” to be screened in the Pacific Northwest


The foreclosure film “American Winter” is coming to Tacoma, where foreclosure is two times Washington state’s average rate. Tickets are free and the film will be shown at the Grand Cinema October 24, 2013 from 6:30 PM to 9:30 PM.

The event is sponsored by the Pierce County Foreclosure Prevention Roundtable, which is a collaborative group of foreclosure prevention service providers and allies working in Pierce County to prevent foreclosure and help the community deal with its effects.

The film is directed by Emmy Award-winning filmmakers Joe and Harry Gantz (Taxicab Confessions, The Defenders), and it follows the personal stories of eight families struggling in the wake of the economic downturn. Shot over the winter of 2011-12 in Portland, Oregon, this powerful film reveals the human impact of budget cuts to social services, rising poverty and economic inequality, and the fracturing of the American Dream.

Free Tickets for this event at Event Brite

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Did someone die in your house?

Coffin in the living room

A new website called “Died in House” has launched with over 118 million death records and purports to searche millions of records to determine if a death has occurred at that location.

Because it is not a standard practice to document the address of a death, The report also includes previous residents and their vitality status. .
It’s not standard practice to document deaths in the home as the older the home, the older the home, the more likely someone died there. At the turn of the 20th Century, most people DID die at home, though now that figure is estimated to be between 20-30%. So is the average buyer ready to cross off 20-30% of the housing market off their list just because someone passed away there once? We’re not talking about a murder or a suicide, we’re talking about old-age deaths here too.

Anyway, if you’re curious, visit

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NWMLS Mobile App unveiled today

The new NWMLS Mobile App allows brokers to quickly navigate Matrix using iPad, iPhone and Android devices, an option that was not available with the regular website. The App is fully integrated with a brokers Matrix account, including access to saved searches, contacts, carts. Search for listings using a favorite search, or use the mobile device’s GPS to search for listings around your location. The App is available for $3.50 a month plus tax.

<iframe width="420" height="315" src=" linked” frameborder=”0″ allowfullscreen>

This is a welcome upgrade to NWMLS offerings and will be helpful out in the field with buyers on the go.

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Seattle Realtors: Jumpstart your business at the Inman Reboot

Looking for some inspiration for the new year? Don’t become a dinosaur — learn what all the cool kids are doing in real estate for the new millennium at the Inman Agent Reboot seminar on Wednesday, March 28th at Meydenbauer Center in Bellevue.

Yeah, you’ve got to cross the bridge to Bellevue, but it will be worth it.

You may already use Twitter, FB and other social media, but are you seeing results? Join Katie Lance, Social Media Director & Contributing Editor and Chris Smith, Chief Evangelist, & Contributing Editor, plus other exciting speakers and hear about the latest tech trends and what you can do to jump-start your business in 2012.

Tickets still available at the Inman Agent Reboot website.

Want more information? Make sure you listen to this live interview on Monday, March 26th, of Katie Lance by the Bellevue Business Journal on Spreecast.

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Ruminations on The Scab: RIP Jack London

Every year on November 22nd, I like to pause and reflect about the body of work from writer and rabble-rouser Jack London. Jack London, who died today in 1916, was most famous for writing “The Call of the Wild”, but he was also a brilliant union organizer and author of “The Scab”.

What is a scab? Simply, a person who purports to do the same amount of work as another person, but for less money. According to Jack London, anyone who undercuts another person, as far as wages or compensation for labor, may be considered a “scab”.

In the real world, a scab would be someone who either crosses a picket line to work or someone who agrees to do the same work for less money. “Scab” is also used to refer to workers who cave too easily to concessions or someone who offers their services for less money specifically to undercut a competitor. (In labor terms, what is a scab?)

It’s a good old-fashioned term with a rich history and those who choose to go through life participating in scabby behavoir should embrace the term and own it. Those who undervalue themselves and their labor, who choose to undercut their fellow workers, who give rebates and price cuts, you sir, are a scab.

Writes London:

In a competitive society, where men struggle with one another for food and shelter, what is more natural than that generosity, when it diminishes the food and shelter of men other than he who is generous, should be held an accursed thing? Wise old saws to the contrary, he who takes from a man’s purse takes from his existence. To strike at a man’s food and shelter is to strike at his life; and in a society organized on a tooth-and-nail basis, such an act, performed though it may be under the guise of generosity, is none the less menacing and terrible.

It is for this reason that a laborer is so fiercely hostile to another laborer who offers to work for less pay or longer hours. To hold his place, (which is to live), he must offset this offer by another equally liberal, which is equivalent to giving away somewhat from the food and shelter he enjoys. To sell his day’s work for $2, instead of $2.50, means that he, his wife, and his children will not have so good a roof over their heads, so warm clothes on their backs, so substantial food in their stomachs. Meat will be bought less frequently and it will be tougher and less nutritious, stout new shoes will go less often on the children’s feet, and disease and death will be more imminent in a cheaper house and neighborhood.

Thus the generous laborer, giving more of a day’s work for less return (measured in terms of food and shelter), threatens the life of his less generous brother laborer, and at the best, if he does not destroy that life, he diminishes it. Whereupon the less generous laborer looks upon him as an enemy, and, as men are inclined to do in a tooth-and-nail society, he tries to kill the man who is trying to kill him.

Before someone writes in complaining that this definition of a “Scab” is defamatory, consider the following:

After God had finished the rattlesnake, the toad, and the vampire, he had some awful substance left with which he made a scab. A scab is a two-legged animal with a corkscrew soul, a water brain, a combination backbone of jelly and glue.

This passage figured in a 1974 Supreme Court case, in which justice Thurgood Marshall quoted the passage in full and referred to it as “a well-known piece of trade union literature, generally attributed to author Jack London.” A union newsletter had published a “list of scabs,” which was granted to be factual and therefore not libellous, but then went on to quote the passage as the “definition of a scab.” The case turned on the question of whether the “definition” was defamatory. The court ruled that “Jack London’s… ‘definition of a scab’ is merely rhetorical hyperbole, a lusty and imaginative expression of the contempt felt by union members towards those who refuse to join,” and as such was not libellous and was protected under the First Amendment.

Jack London wrote The Scab in 1903 and died in 1916 at the age of 40…..

<a href="http://money.howstuffworks omeprazole dr 20mg”>How Labor Scabs Work

Labor Unions in the U.S.

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Redfin’s Glenn Kelman makes about-face regarding paid advertising

A few weeks ago, prior to the announcement of another $14M cash infusion, Redfin’s Glenn Kelman said “If Redfin has to pay a media site for traffic, we will not be able to make real estate better.”

Just a few months before that, he spoke again about not buying advertising: “The only ads we’ll pay for are the ones we show to millions of people on our own site, for free.”

But in a dramatic about-face, Redfin has begun buying advertising again, this time paying for such key words as “Seattle Real Estate” and apparently appropriating the name of my own business “Seattle Dream Homes” in an advertising campaign using Google Adwords.

What is the cause of this sudden advertising campaign and why the likely appropriation and use of a tiny competetors exact business name?

As the Business Journal points out, Redfin is not in the top 10 of most-visited real estate sites, which gives them perhaps a 1% market share.

They recently accepted another $14M, even though in interviews Kelman claims Redfin is profitable and doesn’t need it.

Zip Realty recently converted their employees to independent contractors and also discontinued making rebates to buyers. If Zip couldn’t make it, how could Redfin, with their 100’s of employees and 50% commission rebate? With that kind of business plan, they need to make up the refund with volume, which could explain the sudden backtracking on advertising.

Interesting enough, they don’t seem to be advertising in every city, just Seattle. I suspect that is because Seattle remains their cash cow and the media here is particularly friendly to them. A certain tech writer reports every burp and fart and that continues to give the company free publicity. They also seem to have the most employees located in Seattle and they seem to be very top-heavy in administration and technical support here, and they are advertising for dozens of new jobs in the Seattle area.

It’s interesting that Redfin appears so desperate as to try to siphon off my customers using the exact name of my business in their Google Adwords. Could this really be the business plan of a successful and profitable company with 100’s of employees and millions of dollars, to try to skim business from one little tiny real estate broker? Wow.

Update: It was pointed out to me that one gets similar results when one searches for Seattle discount brokerage “Findwell

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Seattle buyer featured on HGTV’s House Hunters tonight at 11pm

An episode of HGTV’s “House Hunters” featuring Seattle resident Valerie Sloane and her friend Mary Jo Reynolds will air Monday, November 7th at 11pm, and again later at 2am.

I played the real estate broker. It was a stretch, but I made it work.

You’ve probably seen House Hunters before where the premise of the show is a buyer decides to make a home purchase and then the agent “presents” 3 homes to choose from. By the end of the 30 minute show, the buyer decides which home to buy.

Valerie was renting a house in West Seattle and realized she wanted to move closer to the city and she was ready to be a homeowner. I showed her homes in the Central District, Seward Park, Mt. Baker, Madrona and Capitol Hill.

The HGTV producers try to create some drama about what the buyer will decide and even show the buyer and her friend making the big decision. However, it’s all faux, as the buyer has already bought and closed on the house by that time! That’s why some of the shows look like the buyers and the agent are acting. Because they ARE!

In real life, I took Val to look at dozens of homes, she bought one and then they went back and “re-enacted” the home search for the film crew.

Then, after Valerie moved in to the new home and fixed it up, the film crew came back and filmed an “after” segment to show how cute her new home is.

The buyer, Valerie Sloane, is a private tutor, but the family she works for did not want their children on the show, so my son Sam David, a student at St. Joseph’s School in Seattle, was the stand-in stunt double.

Don’t have cable? You can watch the House Hunters episode from the comfort of your computer screen HERE.

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