How has technology changed the real estate industry? Well, it has made it more entertaining, for one thing. Or at least Glenn Kelman has.

That much was apparent here this afternoon at the Seattle Interactive Conference, during a panel on the state of the online real estate industry. Tricia Duryee of AllThingsD moderated the discussion among Charlie Walsh, CEO of ValueAppeal; Stan Humphries, chief economist of Zillow; and Kelman, CEO of Redfin, whose business model has shaken up the industry.

Tricia Duryee, Glenn Kelman, Stan Humphries and Charlie Walsh.

Dale Chumbley, a Prudential agent from Vancouver, Wash., was listening in the front row and took exception to what he perceived as negative statements from Kelman about traditional real estate agents.

In the process of trying to explain himself, Kelman said that without agents as part of Redfin’s business, it would be boring. Humphries then felt compelled to defend Zillow as not boring. And when Walsh chimed in saying it was important for tech companies to “throw a bone” to the traditional real estate industry even as they disrupt it, Kelman chided him for his “condescending attitude.”

Entertainment value aside, the exchanges provided insights into the mindset of the different players in the industry. It started with Kelman talking about his philosophy on commissions and deal volume in the real estate business.

Continue reading for excerpts.

Kelman: A lot of people come up to me and say, “I paid that fat bastard 6 percent … and I know that you hate him the way that I do.” And I’m like, “I’m not with you, brother. I am not with you.” And the reason I’m not is I just don’t like calling anyone bastard. And the other reason is that I know that agent worked hard but only got to handle five or six deals. That’s the average for an agent year-to-year. When you meet those agents, because they apply to work at Redfin, you can ask them, how many deals would you like to be working on? They want to be working all the time. They want to be doing five deals a month, four deals a month. And so it’s not that the folks don’t want to be more productive and to deliver more value to the consumer, it’s just that it’s a dog-eat-dog world.

Duryee: Can this problem be solved through technology?

Glenn Kelman

Kelman: Not through technology alone. When I first started working at Redfin, I did not want anything to do with a real estate agent. I wanted to build a real estate website. The best thing that ever happened to me is that I had to learn that to really make a difference, and to deliver what we hope will be better service, we had to become real estate agents. The most valuable employees at Redfin are probably real estate agents. Certainly the most numerous class of employees. And so I do feel that it can’t just be one thing or the other. What I like about Redfin — I’m not saying other people have to do it, I hope nobody does — but what I like about Redfin is that we have real relationships with our customers, we’re able to control the quality of the agent we work with, um …

Kelman (to the audience): What’s so funny? Would you like to come on up? You should.

Chumbley (from the audience): As a practicing realtor, I have extremely real relationships with every customer of mine. You just said that your agents have relationships with customers and that other agents that don’t work under the Redfin model don’t, and that’s not a true statement.

Kelman: Oh, that’s not what I meant to say at all.

Chumbley: That’s what you said.

Kelman: Oh, then I apologize. It’s a pure mistatement.

Chumbley: Can you restate, please?

Kelman: Yeah, sorry guys. Woah! What I was trying to say is that if we had just built a website and we didn’t have real estate agents, we would never have met homebuyers and home-sellers. I apologize. And originally when I began working at Redfin, I’d only worked in software. So that seemed fine. But now I feel like, if we had made that choice, and we hadn’t met real, living homebuyers and sellers and walked a mile in their shoes, it would have been such a more boring business, and it would have been a lot worse for me, too.

Stan Humphries of Zillow

Humphries: I’m not sure what the original question was …

Duryee: Can technology solve …

Humphries: We’re not in a boring business. We’ll have Glenn over and tour him around the office. It’s definitely not a boring business.

Our pitch is to create a marketplace where we’re providing compelling content to consumers and professionals that helps them understand the marketplace a little bit better. In that process, we’re trying to foster consumers who are interested in coming to that marketplace to understand the market better … and professionals who are operating in that marketplace, be they real estate brokers or agents, or mortgage brokers or stagers or whatever that are interested in advertising to those customers and interacting in that marketplace. So that’s really our business.

Walsh: … It’s easy for a technology company to enter into what has traditionally been an opaque industry and try to flip on the light. Technology companies have to be careful that they don’t end up entering a new space like a bull in a china shop. In a lot of ways I think to play nicely, to be successful, you have to throw a bone to the incumbents. In a lot of ways that’s what we’re doing …

Kelman: That’s a really condescending attitude. I don’t want to throw anyone a bone. We work every day with Windermere agents, ReMAX agents, Coldwell Banker agents. If we don’t handle our side of the transaction in a respectful, professional way, we’re going to have serious problems. I do think I could probably give a seminar on how to be a bull in a china shop. That’s good advice, but there’s just sort of a cynicism to this idea that you’re playing nice so that you can later gut them like a fish. I don’t think our goal is 100 percent market share. We long ago recognized that we’re going to be working with the agents in this town and the other towns where we operate for the rest of my natural life unless we go out of business.

Comments

  • Jkim98

    Actually I was in the audience and feel that this article’s headline is misleading. I suggest folks to read the transcript to make up their own mind.

    • http://geekwire.com Todd Bishop

      Thanks for the feedback. Not sure if you talked to the real estate agent in the audience afterward, as I did, but suffice it to say that he wasn’t happy.

      In a bigger sense, I don’t understand why it’s perceived as a negative. Whenever someone comes in and disrupts a traditional industry, as Redfin has, it’s going to piss some people off in the process. It seems only natural and actually somewhat healthy for there to be this tension as things change.

      • http://www.ClarkCountyRealEstateGuide.com DaleChumbley

        Thanks Todd. You are correct that I wasn’t happy with Glenn’s original statement which is why I said something. As for shaking up the real estate industry, I’m all for things not always being done “the way they always have”. Change can be a good thing and I’m always open minded about these changes. The most important thing is: will they help make a better, smoother consumer experience, and will they help us as real estate professionals do a better job for our clients?

  • NG

    What’s the big deal? He represents his company. It’s his job to argue that it’s better than the competition.

  • http://blog.redfin.com GlennKelman

    I did my very, very best to be boring in this panel. I thought I had completely succeeded. I actually looked at you during the proceedings Todd and felt a wave of pity, that you had come so far for nothing.

    The worst part about being a CEO is the importance of being boring. Not just serious, but absolutely devoid of any opinions whatsoever. I actually think I could teach Mitt Romney or Harry Reid how to be more boring.And no, I wasn’t trying to say Zillow’s business is boring. 100% growth is very exciting. Buying companies is fun. An IPO is a big deal.I was trying to say that meeting customers has made Redfin’s business more exciting for me than one that is purely digital.If you’re the kind of person who really, really likes computers, a little flesh-and-blood interaction can save you from becoming a total weirdo. Redfin saved me. 

    • http://geekwire.com Todd Bishop

      Thanks, Glenn. If this was boring, I’d love to see the real fireworks. :) 

      The panel was actually very interesting, and I thought this exchange was illuminating in the way it brought out all the different philosophies and approaches. 

  • Timreha

    Where is the sound guys? Cant hear it.

    • http://geekwire.com Todd Bishop

      Hey Tim. Sound is coming through fine on my end.

  • http://blog.findwell.com Kevin Lisota

    Seems that Glenn “poked” Dale Chumbley today :) Sorry, a little inside Dale Chumbley humor for those who know him.

    • http://www.ClarkCountyRealEstateGuide.com DaleChumbley

      LOL Kevin! That’s funny! *poke*

      • http://twitter.com/spencerrascoff Spencer Rascoff

        Hey Dale, sorry I missed you yesterday. Stan says it was a good time though.

  • Spot on

    Zillow is a fraud.

    Stan, you know not of what you speak. It is a house of cards you represent.

    • http://twitter.com/spencerrascoff Spencer Rascoff

      Um, huh?
      In what way is Zillow a fraud, and in what way does Stan or Zillow represent a house of cards?

      • Spot on

        Just my opinion of course.

        Zillow does not have a product. Is is simply an aggregator of information, leveraging off the efforts of others. Some cool technology, but nothing that cannot be replicated.

        The unique visitors might not be unique. In this day and age of wondering what a house is worth, many go to Zillow as there are not many options, even though the data provided is beyond suspect.

        I would like to see how much time  a”unique” visitor is on the site. I would suggest not long.

        The fact that the ratings of many of your advisors is 5 stars, across the board, indicates the syetem really does not work. Your advisors simply figured out how to work your system.

        Advertising dollars are allocated according to perceived value. As your value drops, the dollars go elsewhere.

        That is just a start, but I admire you for asking.

        • http://twitter.com/spencerrascoff Spencer Rascoff

          Hi spot on,
          Thank you for your comment.

          1. We don’t just aggregate information; we (and our community of tens of millions of users) build upon it. We’re probably best known for our “Zestimate”, which is entirely proprietary. We now have Zestimates on over 100 million homes, and Rent Zestimates on over 100 million homes. And over 25 million of the homes in our database have been improved upon by our community of users. I could go on, but the point is: we’re not simply an information aggregator.

          2. You’re right that time on site, along with other metrics which measure user engagement, are very important. We have approximately 25 million monthly unique users across web and mobile, and of those, around 2/3 of them are in the market for a home either now or in the near future. So Zillow is not just a site for lookey-loos (sp.?).

          3. We in no way bias the over 80,000 consumer reviews of real estate agents or ~9,000 reviews of mortgage lenders based on whether or not they are paying advertisers.

          Best regards,
          Spencer

  • Guest

    Kudos to Glenn for continuing to remain stalwart. Redfin will continue to win and traditional brokers will continue to misunderstand them. As with any cartel, traditional Realtors who fail to add value will disappear. Those who understand investing will use technology to locate a good investment and a minimal number of people to acquire it.

    Remember stock brokers? Booksellers? Car dealers? Insurance salesmen? By 2030 they’ll all be gone except in films that Realtors will be watching on Netflix.

    • Laura

      ^ pufferdoodles! 

      • Laura

        I guess I should be more specific than ‘pufferdoodles.’  Personal service, expertise and experience in complicated matters/arenas will never go out of style completely.

  • http://www.facebook.com/profile.php?id=1067951623 Steve Hirsch

    Disrupting industries pisses people off. Oh well.

  • Howard

    I too was at the presentation and was actually sitting behind Dale & company.  I also am a real estate agent and was a little surprised by the hyper-defensive attitudes of some in the industry.  Glenn and Redfin do a great job and I thought he was more than thoughtful as he presented his views.  Keep up the great work! (I have no affiliation w/Redfin)

    As for Dale & Co., it was clear they were waiting to jump on Glenn and misconstrue his message. I believe, without companies like Redfin to challenge the existing models in a very opaque industry, that the incumbents would not be compelled to adopt change and ultimately create a more efficient transaction flow which benefits all involved not just the consumer and not just the agents/brokers.

    As an agent, I took no offense to Glenn’s comments and found them to be very true and to the point.  

    • Maureen McCabe

      Dale & company?  Dale & Co. such an interesting way to refer to Dale!   From a distance I always thought “Everyone Loves Dale Chumbley.” but “Dale & company” sounds like bitterness?  Jealousy?  I only have this post to go on and “Howard” and Dale Chumbley and “& company” were all there. 

      I think Dale may not have understood 100% what Glenn Kelman was saying, but it must have kept it from being boring… 

  • Howard

    I too was at the presentation and was actually sitting behind Dale & company.  I also am a real estate agent and was a little surprised by the hyper-defensive attitudes of some in the industry.  Glenn and Redfin do a great job and I thought he was more than thoughtful as he presented his views.  Keep up the great work! (I have no affiliation w/Redfin)

    As for Dale & Co., it was clear they were waiting to jump on Glenn and misconstrue his message. I believe, without companies like Redfin to challenge the existing models in a very opaque industry, that the incumbents would not be compelled to adopt change and ultimately create a more efficient transaction flow which benefits all involved not just the consumer and not just the agents/brokers.

    As an agent, I took no offense to Glenn’s comments and found them to be very true and to the point.  

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