CBS producer Caroline Cooper contacted me last December about appearing on 60 Minutes on their Real Estate Confidential expose. I can still hear the sweet lies emanating from her lips as she tried to seduce me with whispers of face time on the show, if only I would agree to go on camera.
It was apparent that they had already figured out their angle, and they only needed a victim as a foil to Kelman’s studied calm and sensible demeanor, a windmill for him to fight, a Goliath of the real estate industry to his upstart David.
But Deborah Arends, bless her heart, tried her best. After hours of interviews and 3 days of tagging along and following her about, they edited the hours and hours of video down to the 2 or 3 sentences that would prove their point.
So, what I really want to know is, who is he sleeping with? Kelman blogs about hitting the road looking for more venture capital, within days of this 60 Minute tribute…… the timing of this homage couldn’t be more perfect. They’ve been hemorrhaging money since they started, and now they’re probably down to their last million or so, and I can almost hear Kelmans gentle puffery as he schmoozes the VC panels trying to squeeze out just another few million or so…. “We’re so close! We’ll go door-to-door! We can do 8 deals a week! No, 8 deals in a day! 8 deals in an hour!”
There are dozens, probably 100′s of discount real estate firms in the Seattle area, and probably 1000′s nationwide. But none have the combination of millions of dollars of venture capital, a charismatic CEO, and just the right amount of chutzpah and misinformation to make it all sound so plausible and right. After all, he wants to delight us!
Technology, the internet, streamlining and increasing sales volume should bring down sales commissions and Kelman said he had an agent who was able to close 8 transactions a week, “able” being the operative word.
Leslie Stahl stated that there was no way she could independently check those figures, but we can.
Our MLS allows us to easily check all closed sales by office. It also lists all agents associated with a particular office.
As of today 5/15/07, Redfin has 25 real estate agents listed with licenses in their office. Total sales in their service areas of King, Snohomish and Pierce Counties of all single family homes, condos, multi-family and vacant land is 150 closed sales.
That’s one hundred and fifty closed sales. By 25 agents. In the first 18 weeks of 2007. Please check my math, but isn’t that about 8 closed sales a week, by 25 agents? So did each agent make about 0.33 sales a week?
I’d love to be a fly on the wall at those meetings with the investors and venture capitalists. Pie charts, graphs, facts, figures. Lots of talk about disintermediation and volume of scale and that sort of thing.
When Redfin fails, they won’t blame themselves, the business model, lack of planning, poor management skills or bad judgement. They will blame the NAR, the “real estate industrial complex”, and the “real estate monopoly”.
VC’s out there reading this, please, use your head. At this rate, you will never see a dime returned on your money. It will just go down the same hole where the other $8M already went, subsidizing the 150 or so buyers who got their 2% refund from Redfin. That was YOUR money!
Redfin believes real estate agents are overpaid. They want to reduce commissions. If they succeed, THERE WILL BE NOTHING TO REFUND. Their whole M.O., their raison d’etre, their entire business model disintegrates.
According to the NAR, commissions have already fallen to 5.1%. Even that’s too high for some critics. If they continue their downhill spiral, the best agents will flee the business, leaving only the incompetent, the negligent and those unable to do anything else.
Be careful what you wish for….