Anyone who’s followed Redfin’s meteoric rise in media share, if not in market share, must inevitably ask:
Here’s a brokerage that’s a tiny blip even on the discount brokerage radar screen, let alone the larger real estate industry screen. According to its Web site, Redfin has a grand total for four agents in California, including two here in the Bay Area. Washington state is overrun with eight Redfin-ites. There’s also a Lone Ranger in Massachusetts, which must keep the office meetings short.
Speaking of office meetings, my biggest reservation about the viability of online real estate brokerages such as Redfin and Zip (and, for that matter, the trend toward working mostly or entirely from home) is that brokerages that eschew bricks and mortar may be helping their bottom line more than their clients.
It’s not just that we’re social animals. It’s not just that it’s notoriously hard for us to stay focused and motivated while working out of our spare bedrooms. Online brokerages seem to attract mostly newer, younger agents, and the best way they’ll learn industry professionalism and etiquette is to hang with veteran agents at the office. I heard that snicker. Hey, even hanging with veteran screw-ups can be a great way to learn what not to do without having to take that eardrum-pummeling call from a client or another agent. In fact, one of the worst mistakes new agents can make (and the mistakes they can make are legion) is to avoid the office because they’re embarrassed or demoralized about not doing business. Not only do newbies gain hugely from the formal training and informal bull sessions of the bricks-and-mortar environment, but they also benefit from what I call “unstructured coaching”, also known as “discrete eavesdropping”. And will throughout their career.
As Redfin’s roster of youthful faces smiles back at me from cyberspace I’m reminded of the old real estate joke about the veteran agent who pushes back the years by using her high school yearbook photo. Redfin agents don’t need to do any of that pushing, and won’t for a long long time. In fact, these twenty-somethings might actually benefit from a few sags and wrinkles.
Redfin’s presence in California is really much larger than its Web site lets on, with seven licensed salespersons and one broker according to the California Department of Real Estate Web site. The veteran of this group has had his salesperson license since 2000. Three others go back to 2003, when real estate started taking off in California. The remaining three got their salesperson licenses in 2005, 2006 and 2007. The licensee who seems to be the supervising broker has had his broker’s license since late 2004.
Then there’s the Redfin agent apparently so new that she hasn’t been posted on the DRE Web site as this is written. The Redfin site credits her with “50+” transactions. That’s what I call “hitting the ground running”.
Redfin is apparently a blend of youth and more youth.
According to the DRE Web site, two salespersons had their conditional licenses suspended briefly, prior to joining Redfin, for failure to meet additional education requirements. That’s not a big deal, unless you’re working with clients at the time or have a transaction going at the time which, it occurs to me, is how agents make themselves useful. It does suggest that these salespersons either weren’t all that active when they were suspended, or that their supervising brokers (if any) weren’t on top of their license status. Which would make those supervising brokers mighty sloppy. (Did I mention the supervising broker from Brokerage X who didn’t recognize one of his own agents on broker’s tour? Think maybe his office recruits lots of cannon fodder?)
But none of these revelations—the youth, the conditional license suspensions—are shocking. Because it’s hard to imagine a licensee trading a good career as an established agent at a recognized full-commission brokerage for what amounts to an entry-level position with what was until the May 13, 2007 broadcast of “60 Minutes” an unknown upstart. For someone who’s used to the agent line-up of a typical going real estate concern—a few old-timers with thirty or more years experience; a “youth movement” of newbies in their thirties or forties launching second careers; the remainder usually in their forties, fifties or sixties and with ten or twenty years in the business—Redfin’s starting line-up is startling. In terms of age and experience its line up is, by the standards of the real estate industry, an AA farm team.
By now you’re thinking I’m unduly hard on Redfin because online discounters, the wave of the future, make me nervous. But I’d be nervous only if I was that former media darling and flavor of the month, Zip Realty, or if I was Help-U-Sell or the non-franchise bricks-and-mortar discounter down the street. Because there’s only so much room in the discount-commission sandbox. Besides, I’m not being hard on Redfin. I’m just wondering how a brokerage that’s a non-entity by any objective standard could bag a featured role on a leading network news show as the savior of the real estate industry. I’m also wondering what this says about leading network news shows and about the news delivery apparatus in general.
But I won’t wonder long.
I didn’t see the performance Redfin CEO and President Glenn Kelman turned in May 13 but, based on its impact, I assume he radiates irresistible charisma and magnetic salesmanship in quantities equal to Steve Jobs. Or maybe it was just the skillful packaging.
I did read Inman Real Estate News’ June 14, 2007 interview of Kelman, plugging him as speaker at their Real Estate Connect. It was then that I began to understand that this guy is exactly what the media wants and needs (and rarely gets) from an industry spokesperson.
This guy has no fear of the media—yet. This guy doesn’t believe his own press releases—yet. This guy has no pretensions. This guy is one business leader who doesn’t sound like he’s stealing his lines from Sinclair Lewis or running for chairman of the Iowa City Decency League. Personality leaks out from him all over the place. Or maybe it’s pumped out: this guy wants you to think he’s different, wacky.
He’s a vegetarian. He’s crashed and been kicked out of the Seattle Times. Once he was paid to dance. Woo-hoo! This guy has hints of color!
And he’s hip: Kelman wanted to put listings and tax records on a map online “because we just thought it was cool”. With Glenn it’s all about the music. Cool!
The strangest thing he’s ever packed into a suitcase? “A girlfriend.” A real swinger!
In fact, about the only thing this wild and crazy guy hasn’t done is sell real estate. I wonder if you’ll find another real estate executive this close to the front lines—how many layers of management can there be between Kelman and his fifteen or so agents?—who doesn’t have industry experience…and is as extensively quoted…as someone who knows what he’s talking about…as the anointed prophet of the new real estate.
Kelman says his biggest challenge is “figuring out how to stand up for the consumer without antagonizing the industry”. Based on the howls of industry outrage, Glenn, you can cross that noble but thankless task right off your to-do list. Call it the payback from that Faustian bargain you struck with “60 Minutes”: they gave you your fifteen minutes, but the only way they could use you was by packaging you as loathsome to the industry. As Jake Barnes would say, you exchanged one thing of value for another.
Well, I could keep gushing, but let’s wrap up this part by asking Kelman, Who is your hero? Answer: “Ezra Pound, only because he thought for himself.”
Now if the faintly Biblical name Ezra Pound conjures up an image of some stern-faced, bewhiskered Victorian pillar of rectitude, you’d be completely one-hundred percent wrong. If, however, the name Ezra Pound stirs vague memories of an erratic and infuriating big-haired boy genius megalomaniac who instead of growing up morphed into a certifiable paranoid convicted of treason and sentenced to years in a mental institution, you would be completely one-hundred percent right. This probably explains Kelman’s qualifying “only (emphasis mine) because he thought for himself”.
Oh yes he did.
Of course, it would be unfair to condemn Kelman for the high crimes of his guiding star. I happen to have a sneaking admiration for someone who did ground-breaking work developing the role of rock’n’roll renegade, Keith Richards, and Keith Richards is no Ezra Pound. Ezra Pound was most certainly a remarkable and charismatic figure, a powerful and pioneering poet of the early twentieth century, a tireless unpaid literary promoter and occasionally paid critic, an original thinker whose thinking had by the 1930s gotten so original (and so under the spell of Italian Fascism) that it took him right off the rails and by 1945 landed him right in an American Army detention cell. Where he suffered a nervous breakdown and did some of his best work.
Another colorful guy, so colorful he makes a certain vegetarian once escorted out of the Seattle Times look like he’s filmed in black and white. Even better, Pound, enfant terrible circa 1910, is still relevant. How so?
What I find relevant about Pound now, in this age of arrant bloggery, is his obsession with scurrilous economic theories. What I find relevant about Pound now, in this age of entitlement, is his stubborn belief that he’d uncovered a monolithic economic conspiracy (involving, unfortunately for his legacy, the usual suspects) that kept him from getting the financial rewards rightfully his. What I find relevant about Pound now, in an age when anyone with blogging software can set up shop as an expert on anything, is his naive and megalomaniac faith in his Renaissance-man mastery of a complex subject without any training, experience or apparent aptitude.
In “Ezra Pound and His World”, Peter Ackroyd illustrates this less-appealing aspect of Pound’s personality by relating that one day Pound announced “I’ve found the lowdown on Elizabethan drama!” “He was always finding the ‘lowdown'”, Ackroyd quotes writer Malcolm Cowley as saying, “the inside story and the simple reason why”. How relevant to today! Later Ackroyd asserts that Pound’s “role as a ‘village explainer’ [Gertrude Stein’s dismissive critique of Pound] had a certain authenticity when it came to the appreciation of literature, since his instinctively good ear kept him from making crucial mistakes. ‘The simple reason why’ works when there is judgment of genius behind it. But Pound’s attempts to transfer the same modes of judgment from literature to political and economic matters were quite inadequate. He assumed that human beings, like words, could be easily freed from ’emotional slither’…People as such never really existed for him…but a politics without people is both willful and inappropriate.” To this I’ll add that a theory of the real estate marketplace without people, a theory born not of the marketplace but in the rarefied air of spreadsheets and in the arid wastes of wishful thinking, is also “both willful and inappropriate”.
I find Pound relevant today also because of his lack of access to conventional media channels. Even in his salad days Pound had difficulty finding a publisher, and by the 1930s his obsession with rewriting economic history from the screwball’s point of view confined his outlets almost entirely to feverish letter writing and informal seminars at home. I wonder if access to the Internet, that ultimate safety valve and vanity press, might have kept Pound’s mind and career screwed together. (It’s a question you could ask about dozens of writers.) Based on the evidence, probably not.
Pound’s obsession with alternative economic theory led him to the Social Credit movement of C.H. Douglas, a successful British engineer always called “Major”. I’m going to postulate that Major Douglas is also relevant to the Digital Age, an age that didn’t invent engineer worship but has certainly buffed it to a high luster.
Major Douglas, who wrote ten popular books on economics starting in 1919, was trained as an engineer, not an economist. But according to one old-time true believer (a publisher and poet, not an engineer) the Major had “an engineer’s savvy for what made things work—and not work—[and] he detected flaws in the world’s economic system”.
I’ll bet he could’ve straightened out the real estate industry too, but he left that to a succeeding generation.
Now, I like engineers and other analytical types. Some of my best clients and closest relatives have been engineers and, if not for an aptitude test that took an unfortunate turn, I might be one myself. Drop in sometime and I’ll show you my spreadsheets. But anyone who’s trekked over the burning sands of the bubble blogs soon realizes that many bloggers and their fans are engineers or other numbers crunchers.
Here’s one who thumps his chest and bellows “engineers make things”, rebuking the suggestion that real estate agents or anyone else in sales might have something to contribute as well. To which I would respond, “Rube Goldberg made things too”. To which the folks in Marketing would respond, “Yeah, engineers make things. Things we can’t sell. Things with annoying little quirks. Things with fatal big quirks. Things that would get a D minus as an Intro class project. Things that fail so regularly yet unpredictably that they make horse-and-buggy technology look attractive.”
Things like the circa 1919 hot-air powered Lake Breeze fan I saw on “Antiques Roadshow” last night. Yes, a hot-air powered fan. Ingenious. Simply light the kerosene-fueled wick and a foot-long flame heats the air to turn the fan so it blows air on you. Refreshing hot air. While it burns down your house. How green is this? Takes you right off the power grid. I hear it was killed off by the big utilities monopolies.
So you’ll forgive me if I don’t attend the church of engineer worship.
I’ll end with my favorite engineer story, a story that illustrates both the strength and weakness of the type, a type not every engineer is and a type not limited just to engineers.
At an open house in late 2003 a young man approached me, concerned that I’d described the house’s foundation as “post-and-pier”. Post-and-pier, as you may or may not know and as he most certainly didn’t, is the most common type of house foundation in my area. It’s widely preferred to the second-most common type, slab, for the greater freedom it gives when repairing or expanding a home. But for some reason, post-and-pier was a red flag—anathema—to this guy. He just knew that post-and-pier would never work, even though 95 per cent of the homes built in Silicon Valley over the past sixty years sit on post-and-pier.
With over one hundred people eventually tramping through the open house I didn’t have much time to give this guy, but I spent a good ten minutes trying to convince him that a) post-and-pier is as good as it gets, and b) he might want to focus on the big picture, like whether he liked the house and could afford it. I wasn’t trying to sell him the house. I knew we’d sell it (we ended up with twenty-seven offers) and besides, I never represent buyers of my own listings. I was just trying to de-fixate him from a meaningless detail that sabotaged his chances of making a rational homebuying decision. Yes, an engineer thinking irrationally. Alert the media! Yes, I was trying to help. I guess I don’t know better.
And this guy wasn’t having any of it. This guy wouldn’t take no wooden nickels from no real estate agents.
Finally I smiled and said, “You must be an engineer”. His wife burst out laughing. He nodded sheepishly.
He probably lies awake nights wondering how I knew.
copyright © John Fyten 2007