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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.

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