Kenmore, WA

Redfin began it's adventure into the Real Estate world in 2004 which was a very different time than today: home sales were easy; everyone had a real estate license or was a loan officer; houses were selling quickly and an irrational exuberance permeated the world. Then Redfin came along with some new ideas about working with clients (buyers and sellers) and this model was an immediate hit with some of the public. Obviously, Redfin had found a need and filled it. Good job! Yes, and the media rewarded Redfin's CEO, Glenn Kelman, with interviews, print articles and a wonderfully provocative spot on 60 Minutes. I recall how many of my colleagues were angry and frustrated that yet another "business model" had entered the marketplace. So why would the current real estate community be so angry?

Here's the truth: Redfin stuck its, well.........red fin in the eye of a real estate establishment that has done business in much the same way for 50 years. There has always been a certain amount of public resentment against the real estate brokers and agents because selling a home can be a very expensive proposition. I can remember the venomous debates that raged in the media, on blogs and in my office about how agents don't earn their commission or how the real estate agents really don't represent the interests of their clients. Redfin touched a nerve and rightly so! Amongst these debates, one commentator said, in a moment of utter clarity, "when an industry is in decline, the players always eat their own young!"

In a brilliant PR move Redfin announced it's layoffs in a VERY PUBLIC way: in much the same way it announced its arrival four years ago. It's ironic that Redfin is getting more publicity by doing what so many other brokerages have done more quietly: reduced the size of their workforces. The larger irony is that when most agents leaving the business receive no benefits, severance pay or publicity, Redfin's CEO stands before us to say his employees are being offered severance packages and that it wasn't the business model that caused the difficulties: it's the economy! Well, it IS the economy. Pretty simple stuff.

Mr. Kelman is one smart cookie. He knows the market will come back around someday. He also knows that there will always be a market for Redfin's brand of service. More fundamentally, I believe that when the real estate industry emerges from this financial crisis, traditional brokerages and levels of representation are going to be very different than today. Already, I see signs that the consumers have taken a hammer and chisel to the components that make up a real estate transaction and have broken it into its component parts (Redfin has done this in a small way). Having done so, they have found that the traditional agent might not be what they need......no matter how hard the traditional agents say so.

In closing, I wish Redfin the best and I hope the employees who lost their jobs find something new in this tough economy.

Photo by LarimdaME

The ad above appeared in the Northwest Magazine insert of the Seattle Times today. Geoff Wood, the CEO of Windermere Real Estate has exerpted the words of his agent Leanne Finlay who wrote these timely words in her blog. The message: TAKE YOUR HOME OFF THE MARKET! When I read this, I almost dropped my coffee in my lap! Finally, a reputable real estate company coming clean and telling the truth: The market doesn't need more overpriced houses. Sellers, revisit your priorities and do the right thing. Stay put for the time being. After all, didn't you buy your home to enjoy? In my post yesterday , I suggested that both the real estate industry and the sellers need to be more honest about the current market. I'm glad to see I'm not the only one.

Read this story about Joe Sixpack and the Subprime Crisis. Then come back here and tell me who is to blame in that story.

Was it Joe...who by the end of the story becomes "Joe Sixpack"? Was it the Realtor? Was it the Lender? Was it the diappearance of the lenders who were supposed to do the re-fi in two years? Maybe it was the purchase of the puppy that broke the camel's back.

I'm sure you can all relate to this story and how it just crept along to where we are now...hard to find the villains in it. But we're all experienced professionals, so let's give it a try.

I look forward to reading your comments.

I finally had an opportunity to listen to This American Life's program entitled: "Giant Pool of Money." My friends, this should be required listening BY ALL AMERICANS. It is the most articulate explanations of this complex situation I've found. This program brings the listener right into the heads of the brokers, sales people and banks that are at the root of our current situation. Just click on the picture below...........enjoy.....

Here in the Pacific Northwest, in spite of what the media proclaims, we are experiencing a serious slump in housing sales. I like the picture above as it's emblematic of what the sellers and the real estate agents need to do: they all need a serious brain scan. As a Realtor (c), I spend a lot of time pondering the market to discover the best way to solve my clients' challenges. After taking a few moments to look at the current market in Kenmore (my home town) I'm convinced that the same old process of selling one's home (e.g. hang a sign in the front yard, putting flyers out, doing open houses, running an ad in the local paper, etc.) with or without an agent is an inadequate strategy in the current market. Allow me to point out some facts about Kenmore today:

Dear reader, please pardon my candor but both the real estate agents and the sellers are at fault. Most of the homes now languishing on the market were overpriced when they first hit the market. The market has been in decline for a year now, so there was no excuse for the inflated prices. Sellers were living a delusion and the agents were still in a "listing-equals-an-easy-paycheck" mode.

Now that the financial markets are in utter turmoil, it's incredibly important that agents be crystal clear with their clients and sellers give themselves a "check-up from the neck-up."

Brain by Liz Henry