1 00:00:15,316 --> 00:00:24,756 Speaker 1: Pushkin. I always love talking about real estate. It's this 2 00:00:25,036 --> 00:00:29,596 Speaker 1: nexus where all these huge macro factors like interest rates 3 00:00:29,596 --> 00:00:35,076 Speaker 1: and demographics and technological change converge with the most personal 4 00:00:35,516 --> 00:00:39,356 Speaker 1: micro thing in the world, your house, your home, the 5 00:00:39,396 --> 00:00:42,596 Speaker 1: place where you live. And right now we are in 6 00:00:42,756 --> 00:00:46,996 Speaker 1: a particularly interesting moment to talk about real estate. We've 7 00:00:46,996 --> 00:00:49,996 Speaker 1: had a couple of years of wild price rises. Now 8 00:00:50,156 --> 00:00:52,316 Speaker 1: mortgage rates are starting to go up really fast, and 9 00:00:52,436 --> 00:00:55,356 Speaker 1: everybody is starting to get spooked. At the same time, 10 00:00:55,396 --> 00:00:58,476 Speaker 1: you've got companies buying and selling houses on the internet, 11 00:00:58,716 --> 00:01:02,276 Speaker 1: and huge sums of money slashing around, and an incredible 12 00:01:02,276 --> 00:01:10,556 Speaker 1: amount of uncertainty and change and innovation. I'm Jacob Goldstein 13 00:01:10,636 --> 00:01:13,196 Speaker 1: and this is What's Your Problem, the show where entrepreneurs 14 00:01:13,196 --> 00:01:15,356 Speaker 1: and engineers talk about how they're going to change the 15 00:01:15,396 --> 00:01:20,356 Speaker 1: world once they solve a few problems. My guest today 16 00:01:20,516 --> 00:01:24,236 Speaker 1: is Glenn Kellman, CEO of the real estate company Redfinn. 17 00:01:24,676 --> 00:01:27,236 Speaker 1: Redfinn has a website where you can look at houses 18 00:01:27,236 --> 00:01:31,516 Speaker 1: for sale, just like Zillo, but Redfin also employs real 19 00:01:31,636 --> 00:01:34,316 Speaker 1: estate agents all over the country to help people buy 20 00:01:34,316 --> 00:01:37,636 Speaker 1: and sell houses. Glenn Kelman is my favorite person to 21 00:01:37,636 --> 00:01:39,996 Speaker 1: talk about real estate with, and just one of the 22 00:01:40,036 --> 00:01:43,956 Speaker 1: most candid, thoughtful CEOs. I know his problem is this, 23 00:01:44,556 --> 00:01:47,436 Speaker 1: how do you sell a house online? You should get 24 00:01:47,436 --> 00:01:49,196 Speaker 1: a better deal, you should pay a lower fee, We 25 00:01:49,196 --> 00:01:51,716 Speaker 1: should use technology to make the whole process better. There 26 00:01:51,756 --> 00:01:53,956 Speaker 1: should be someone who's totally on your side. And I 27 00:01:53,996 --> 00:01:56,116 Speaker 1: know that sounds like a whole bunch of hocom but 28 00:01:56,236 --> 00:01:58,396 Speaker 1: it's the whole reason I got out of bed this morning, 29 00:01:58,436 --> 00:02:03,436 Speaker 1: and it's the truth. Glenn joined Redfinn in two thousand 30 00:02:03,476 --> 00:02:05,956 Speaker 1: and five. Earlier in his life he almost went to 31 00:02:05,996 --> 00:02:08,996 Speaker 1: medical school, not once, but twice, tried and failed to 32 00:02:09,116 --> 00:02:12,196 Speaker 1: write a novel, and started and sold a software company. 33 00:02:12,556 --> 00:02:14,996 Speaker 1: When he joined Redfinn, the company was a few guys 34 00:02:14,996 --> 00:02:17,196 Speaker 1: in an apartment who had just come up with the 35 00:02:17,236 --> 00:02:20,756 Speaker 1: idea of putting real estate listings on a map on 36 00:02:20,796 --> 00:02:24,636 Speaker 1: the web, which obviously was a good idea. Wildly popular 37 00:02:25,076 --> 00:02:28,356 Speaker 1: Zillo would soon follow, and before long looking at houses 38 00:02:28,396 --> 00:02:32,116 Speaker 1: online became a national pastime. But Glenn wanted to go further. 39 00:02:32,436 --> 00:02:35,476 Speaker 1: He figured, if we can put the listings online, why 40 00:02:35,476 --> 00:02:39,076 Speaker 1: can't we do everything online? Why can't people look at listings, 41 00:02:39,156 --> 00:02:43,196 Speaker 1: compare prices, make an offer, and buy a house online? 42 00:02:43,796 --> 00:02:46,516 Speaker 1: And he actually started trying to make it happen back 43 00:02:46,516 --> 00:02:49,076 Speaker 1: in the Auts, trying to get people to buy houses 44 00:02:49,116 --> 00:02:52,036 Speaker 1: on a website rather than through a real estate agent. 45 00:02:52,476 --> 00:02:54,516 Speaker 1: As he told me in our interview, it did not 46 00:02:54,716 --> 00:02:59,316 Speaker 1: go well at first. There was almost no agent. There 47 00:02:59,396 --> 00:03:01,596 Speaker 1: was someone who was willing to sign all the paperwork, 48 00:03:01,636 --> 00:03:04,756 Speaker 1: but he was actually building a winery in eastern Washington, 49 00:03:05,196 --> 00:03:08,356 Speaker 1: and he and I had a deal that, under no 50 00:03:08,476 --> 00:03:11,636 Speaker 1: circumstance would he ever actually have to talk to anyone. 51 00:03:11,676 --> 00:03:13,916 Speaker 1: He just wanted to sign the documents and be paid 52 00:03:13,916 --> 00:03:16,476 Speaker 1: a small fee for doing so every month, And whenever 53 00:03:16,516 --> 00:03:18,316 Speaker 1: I did have to call him because a customer had 54 00:03:18,356 --> 00:03:20,556 Speaker 1: some gnarly question, he would say, what was our deal? 55 00:03:21,556 --> 00:03:24,436 Speaker 1: I'm sorry he had his license or something. You needed 56 00:03:24,476 --> 00:03:26,836 Speaker 1: him because he had the license. He had a license, 57 00:03:27,196 --> 00:03:31,756 Speaker 1: and he was willing to sign all of these offers 58 00:03:31,796 --> 00:03:35,036 Speaker 1: because you need a real estate agent to authorize the offer, 59 00:03:35,076 --> 00:03:38,116 Speaker 1: if you will. But he didn't want to get into 60 00:03:38,156 --> 00:03:41,596 Speaker 1: the messy business of actually giving people advice. And so 61 00:03:42,156 --> 00:03:45,316 Speaker 1: the real issue was, first of all, people need guidance, 62 00:03:45,436 --> 00:03:48,796 Speaker 1: and second of all, their real estate agents on the 63 00:03:48,836 --> 00:03:52,676 Speaker 1: other side of the transaction. The seller's agent, the agent 64 00:03:52,716 --> 00:03:55,156 Speaker 1: who was listing the house. Yeah. And so if you 65 00:03:55,196 --> 00:03:58,036 Speaker 1: want to do something disruptive and cool and get into 66 00:03:58,076 --> 00:04:01,636 Speaker 1: wired or fast company, you have to make sure that 67 00:04:01,676 --> 00:04:04,076 Speaker 1: the the listing agent is cool with it. And we 68 00:04:04,116 --> 00:04:08,316 Speaker 1: had not done that. So we had this revolt in 69 00:04:08,436 --> 00:04:11,796 Speaker 1: Seattle all the real estate agents because suddenly thousands of 70 00:04:11,836 --> 00:04:14,116 Speaker 1: people were on our website clicking a button to see 71 00:04:14,116 --> 00:04:16,356 Speaker 1: a property, and the listing agent was being told that 72 00:04:16,396 --> 00:04:18,636 Speaker 1: he had to show it and then later we would 73 00:04:18,676 --> 00:04:21,876 Speaker 1: send him an electronic offer that was forty thousand dollars 74 00:04:21,956 --> 00:04:25,196 Speaker 1: under the asking price, with no rationale and expect him 75 00:04:25,236 --> 00:04:28,676 Speaker 1: to accept it, and that would tick him off. So 76 00:04:29,236 --> 00:04:32,396 Speaker 1: for a bunch of reasons, it wasn't working. So what 77 00:04:33,316 --> 00:04:38,036 Speaker 1: did you do? I just decided that whatever people want 78 00:04:38,756 --> 00:04:41,596 Speaker 1: is what we will give them. And it doesn't matter 79 00:04:41,676 --> 00:04:45,156 Speaker 1: whether the company's categorized as a technology company. What matters 80 00:04:45,556 --> 00:04:47,516 Speaker 1: is that you got into real estate to make it 81 00:04:47,556 --> 00:04:51,996 Speaker 1: better for people, and if what you're delivering isn't better, 82 00:04:52,596 --> 00:04:54,556 Speaker 1: then you need to change it. And is what you 83 00:04:54,636 --> 00:04:58,356 Speaker 1: realize that people want a real estate agent. I realized 84 00:04:58,436 --> 00:05:01,996 Speaker 1: that some of what a real estate agent does people 85 00:05:02,036 --> 00:05:05,116 Speaker 1: really love. They like it when somebody picks up the phone, 86 00:05:05,116 --> 00:05:07,756 Speaker 1: they like it when somebody's really committed to selling their house. 87 00:05:07,836 --> 00:05:09,796 Speaker 1: But there are parts of it that they absolutely hate. 88 00:05:09,796 --> 00:05:12,356 Speaker 1: They hate the fee, They think it's a total rip off. 89 00:05:12,356 --> 00:05:14,636 Speaker 1: They worry that the agent is trying to get an 90 00:05:14,636 --> 00:05:17,236 Speaker 1: easy sale instead of doing what's in their best centrists 91 00:05:17,916 --> 00:05:21,036 Speaker 1: And even now I am an unreconstructed hippie about that. 92 00:05:21,156 --> 00:05:24,316 Speaker 1: It may be that there's a different way to serve customers, 93 00:05:24,356 --> 00:05:27,116 Speaker 1: but I've never lost sight of the idea that you 94 00:05:27,116 --> 00:05:29,236 Speaker 1: should get a better deal, you should pay a lower fee, 95 00:05:29,276 --> 00:05:31,676 Speaker 1: we should use technology to make the whole process better. 96 00:05:31,756 --> 00:05:33,956 Speaker 1: There should be someone who's totally on your side. And 97 00:05:33,996 --> 00:05:35,756 Speaker 1: I know that sounds like a whole bunch of hocum, 98 00:05:36,156 --> 00:05:37,956 Speaker 1: but it's the whole reason I got out of bed 99 00:05:37,996 --> 00:05:40,636 Speaker 1: this morning, and it's the truth. So Glenn decides that 100 00:05:40,756 --> 00:05:44,116 Speaker 1: Redfinn should do what technology companies try very hard not 101 00:05:44,236 --> 00:05:48,116 Speaker 1: to do. Hire lots of people, not just programmers to 102 00:05:48,156 --> 00:05:51,916 Speaker 1: make Redfin's website better, but thousands of real estate agents 103 00:05:52,036 --> 00:05:54,996 Speaker 1: to put up lawn signs and drive actual human beings 104 00:05:54,996 --> 00:05:58,436 Speaker 1: around in actual cars to tour actual homes for sale 105 00:05:58,796 --> 00:06:01,316 Speaker 1: where you know they can whatever, turn on the faucets 106 00:06:01,316 --> 00:06:05,236 Speaker 1: and talk about the water pressure, Glenn figures Redfin can 107 00:06:05,316 --> 00:06:08,676 Speaker 1: use technology to help agents be more efficient, and that'll 108 00:06:08,676 --> 00:06:12,076 Speaker 1: allow Redfinn to charge customers a fee that's about half 109 00:06:12,196 --> 00:06:17,316 Speaker 1: what traditional agents charge, and very slowly it starts to work. 110 00:06:17,716 --> 00:06:21,596 Speaker 1: Redfinn hires thousands of employees, revenue rises to hundreds of 111 00:06:21,596 --> 00:06:24,396 Speaker 1: millions of dollars per year. The company goes public in 112 00:06:24,436 --> 00:06:27,876 Speaker 1: twenty seventeen, and the whole time, Glenn is waiting for 113 00:06:27,916 --> 00:06:31,636 Speaker 1: some cinematic moment when he'll know that he and Redfinn 114 00:06:31,636 --> 00:06:35,316 Speaker 1: have finally made it. And by cinematic, I mean, in particular, 115 00:06:35,636 --> 00:06:37,716 Speaker 1: he thought it would be like a Bruce Willis movie 116 00:06:37,716 --> 00:06:39,636 Speaker 1: from the nineties. I used to have a model in 117 00:06:39,716 --> 00:06:45,596 Speaker 1: my head, inspired by Diehard, that these guys are drilling 118 00:06:45,636 --> 00:06:49,956 Speaker 1: through seven layers of security and a vault in Nakatomi Plaza, 119 00:06:50,076 --> 00:06:55,996 Speaker 1: and the final layer is destroyed by the FBI because 120 00:06:56,036 --> 00:06:57,996 Speaker 1: they knock out the power grid, and these guys are 121 00:06:58,116 --> 00:07:02,676 Speaker 1: dancing around throwing money everywhere. And I just thought that 122 00:07:02,756 --> 00:07:05,236 Speaker 1: someday Redfinn would feel like that, that I would have 123 00:07:05,236 --> 00:07:07,356 Speaker 1: this one moment where it went from feeling like an 124 00:07:07,356 --> 00:07:10,836 Speaker 1: embarrassing failure to a total success us. But instead we've 125 00:07:10,876 --> 00:07:14,236 Speaker 1: just kept drilling. The seventh seal is broken the way 126 00:07:14,316 --> 00:07:19,836 Speaker 1: the other seals are broken by just continued drilling. And 127 00:07:19,876 --> 00:07:23,036 Speaker 1: as a result, I couldn't say when Redfinn went from 128 00:07:23,036 --> 00:07:25,196 Speaker 1: being a failure to a success, and I'm not sure 129 00:07:25,196 --> 00:07:30,876 Speaker 1: it's a complete success now because we're still drilling. Redfinn 130 00:07:30,916 --> 00:07:34,036 Speaker 1: still drilling, still doing new things, trying to figure it out. 131 00:07:34,556 --> 00:07:37,836 Speaker 1: One of those new things is a business called I buying. 132 00:07:38,396 --> 00:07:41,516 Speaker 1: Redfinn got into I buying a few years ago. It's 133 00:07:41,556 --> 00:07:45,596 Speaker 1: this business where a few big companies will basically buy 134 00:07:45,636 --> 00:07:49,516 Speaker 1: your house for cash over the Internet, then turn around 135 00:07:49,596 --> 00:07:52,116 Speaker 1: and try and sell it for a profit. I buying 136 00:07:52,276 --> 00:07:54,876 Speaker 1: was in the news last fall when Zillo said they 137 00:07:54,956 --> 00:07:57,836 Speaker 1: had lost hundreds of millions of dollars in just a 138 00:07:57,876 --> 00:08:00,356 Speaker 1: few months in the iBuying business, and we're getting out 139 00:08:00,356 --> 00:08:03,156 Speaker 1: of it. Later in the conversation, Glenn and I talk 140 00:08:03,276 --> 00:08:06,636 Speaker 1: about what happened with Zillo and the risks Redfinn is facing, 141 00:08:07,316 --> 00:08:09,516 Speaker 1: But before we got to that, we start out with 142 00:08:09,556 --> 00:08:13,236 Speaker 1: some eyebuying basics. First off, who sells their houses to 143 00:08:13,436 --> 00:08:15,996 Speaker 1: eyebuyers Like Redfin. There are people who want to sell 144 00:08:16,036 --> 00:08:18,116 Speaker 1: a house while having to clean it up every day 145 00:08:18,196 --> 00:08:20,756 Speaker 1: so that someone could tour it. They just want the 146 00:08:20,796 --> 00:08:24,716 Speaker 1: money right away, and some of that is about convenience. 147 00:08:25,036 --> 00:08:27,396 Speaker 1: You just want someone to buy at lockstock and barrel 148 00:08:27,716 --> 00:08:30,876 Speaker 1: on the spot. Another reason that people do this is 149 00:08:30,956 --> 00:08:34,236 Speaker 1: because they see the home of their dreams. They're bidding 150 00:08:34,276 --> 00:08:38,276 Speaker 1: against cash investors, which has become increasingly prevalent, and they 151 00:08:38,356 --> 00:08:40,596 Speaker 1: get the money out of their old place in three 152 00:08:40,636 --> 00:08:46,116 Speaker 1: hours on a Sunday afternoon. And these eyebuyers provide that liquidity. 153 00:08:46,356 --> 00:08:49,316 Speaker 1: We are the ones who say, listen, your house is 154 00:08:49,316 --> 00:08:52,356 Speaker 1: worth about seven hundred thousand dollars. I think if we 155 00:08:52,436 --> 00:08:54,516 Speaker 1: fix it up, we could probably sell it for seven 156 00:08:54,356 --> 00:08:56,316 Speaker 1: hundred thirty seven hundred and forty. But we'll give you 157 00:08:56,396 --> 00:09:02,916 Speaker 1: the seven hundred right now. And that has been wonderful 158 00:09:03,116 --> 00:09:06,316 Speaker 1: for some people. But it's a trade off. You get 159 00:09:06,356 --> 00:09:11,076 Speaker 1: a little less money for same day sale or a 160 00:09:11,116 --> 00:09:14,356 Speaker 1: near same day sale. So when an eyebuyer buys a house, well, 161 00:09:14,396 --> 00:09:16,356 Speaker 1: when Redfinn buys a house, is an eyebuyer, what do 162 00:09:16,396 --> 00:09:17,956 Speaker 1: you do with it? We fix it up, get it 163 00:09:17,996 --> 00:09:21,236 Speaker 1: back on the market, and sell it to another home buyer. 164 00:09:21,756 --> 00:09:24,676 Speaker 1: So being an eyebuyer, you don't affect inventory you don't 165 00:09:24,716 --> 00:09:28,436 Speaker 1: affect the amount of homes net that are for sale 166 00:09:28,476 --> 00:09:30,756 Speaker 1: for people who want to buy houses and live in them, 167 00:09:30,796 --> 00:09:32,836 Speaker 1: not at all. We're not going to sell the homes 168 00:09:32,836 --> 00:09:35,396 Speaker 1: that we own to institutional investors. We're only going to 169 00:09:35,436 --> 00:09:37,436 Speaker 1: sell them to families, so we're going to live in 170 00:09:37,436 --> 00:09:40,156 Speaker 1: those homes. So I want to just kind of step 171 00:09:40,196 --> 00:09:43,116 Speaker 1: back for a minute and recognize that I buying, this 172 00:09:43,236 --> 00:09:46,836 Speaker 1: thing that you're doing is something that just suddenly appeared 173 00:09:46,876 --> 00:09:49,156 Speaker 1: in the world a few years ago, and I want 174 00:09:49,156 --> 00:09:52,796 Speaker 1: to ask you, like, why why did this come into existence? 175 00:09:52,996 --> 00:09:55,756 Speaker 1: You know when it did. There's two or three things 176 00:09:55,876 --> 00:09:57,756 Speaker 1: that kind of had to happen for IE buying to 177 00:09:57,796 --> 00:10:01,356 Speaker 1: come into existence. Number one, all the pictures of houses 178 00:10:01,356 --> 00:10:03,916 Speaker 1: had to be available on a website, because if you're 179 00:10:03,956 --> 00:10:06,276 Speaker 1: going to price a property without ever setting food on it, 180 00:10:06,316 --> 00:10:08,436 Speaker 1: you at least need to be able to preview all 181 00:10:08,476 --> 00:10:10,996 Speaker 1: the photos. So step one is sort of the first 182 00:10:11,156 --> 00:10:14,556 Speaker 1: wave of like what ordinary people I think think of 183 00:10:14,596 --> 00:10:16,556 Speaker 1: when they think of real estate online. They think of 184 00:10:16,676 --> 00:10:18,916 Speaker 1: redfin and Zillo and truly and just being able to 185 00:10:18,916 --> 00:10:21,476 Speaker 1: go online, look at a map and click and see 186 00:10:21,476 --> 00:10:23,196 Speaker 1: the house and click through the pictures. So that's the 187 00:10:23,236 --> 00:10:26,556 Speaker 1: first thing, Yeah, okay, then step two and so the 188 00:10:26,596 --> 00:10:30,516 Speaker 1: second step was just machine learning to process all this 189 00:10:30,596 --> 00:10:34,916 Speaker 1: information and spit out a price. So redfin Zillo many 190 00:10:34,916 --> 00:10:38,556 Speaker 1: other parties have these automated valuations that they publish on 191 00:10:38,556 --> 00:10:41,596 Speaker 1: a website. And if you're able to do that for 192 00:10:41,676 --> 00:10:44,236 Speaker 1: almost every address in America, sooner or later the question 193 00:10:44,236 --> 00:10:46,716 Speaker 1: comes out, would you pay for it? Would you put 194 00:10:46,756 --> 00:10:51,716 Speaker 1: your money? And then the third big change is that 195 00:10:51,796 --> 00:10:55,396 Speaker 1: the cost of capital just radically changed, meaning it got 196 00:10:55,516 --> 00:11:00,316 Speaker 1: cheaper for big tech companies to get money from investors. Right, yes, 197 00:11:01,316 --> 00:11:05,316 Speaker 1: you told me a few years ago a story that 198 00:11:05,396 --> 00:11:09,236 Speaker 1: I still think about all the time, not just in 199 00:11:09,276 --> 00:11:11,796 Speaker 1: the context of I buying, but in the context of 200 00:11:13,436 --> 00:11:17,236 Speaker 1: the economic world that exists. Now, do you know the 201 00:11:17,276 --> 00:11:20,756 Speaker 1: story I'm talking about. I was talking to somebody I 202 00:11:20,836 --> 00:11:26,156 Speaker 1: think representing money on the Middle East, and he said, well, 203 00:11:26,196 --> 00:11:28,796 Speaker 1: we'd have you do some paperwork and then we'd give 204 00:11:28,836 --> 00:11:31,796 Speaker 1: you this money, and we wouldn't really need an interest rate, 205 00:11:32,476 --> 00:11:34,756 Speaker 1: we wouldn't really need an ownership stake in the company. 206 00:11:36,916 --> 00:11:39,316 Speaker 1: And I said, well, why are you giving us this money? 207 00:11:39,356 --> 00:11:42,036 Speaker 1: And he sort of said, I don't know, And I said, well, 208 00:11:42,076 --> 00:11:44,356 Speaker 1: it's probably not even worth the paper cuts, all the 209 00:11:44,356 --> 00:11:48,036 Speaker 1: diligence you'd have to do, we kind of don't need it. 210 00:11:48,596 --> 00:11:51,076 Speaker 1: And then he said we really wouldn't need to do 211 00:11:51,116 --> 00:11:54,676 Speaker 1: any diligence either, And then I said, Okay, this is 212 00:11:54,716 --> 00:11:59,356 Speaker 1: getting seriously weird, and now, regardless of whether I'm going 213 00:11:59,396 --> 00:12:02,476 Speaker 1: to take the money, I just want to understand what 214 00:12:02,516 --> 00:12:05,276 Speaker 1: the heck is going on. Can you please just level 215 00:12:05,316 --> 00:12:08,156 Speaker 1: with me? And that's when he said, I've got a problem. 216 00:12:08,636 --> 00:12:11,396 Speaker 1: I'm getting on this pile of money. I have to 217 00:12:11,476 --> 00:12:15,596 Speaker 1: deploy it. That was the word that he used. There 218 00:12:15,596 --> 00:12:18,076 Speaker 1: are many sovereign states who have the same issue. They 219 00:12:18,116 --> 00:12:20,076 Speaker 1: want to put the money into the US because that's 220 00:12:20,116 --> 00:12:22,116 Speaker 1: considered a safe market. They want to put it into 221 00:12:22,156 --> 00:12:24,836 Speaker 1: tech because that's sexy. And I am just trying to 222 00:12:24,876 --> 00:12:27,556 Speaker 1: give you money. And it was like he wanted to 223 00:12:27,636 --> 00:12:30,836 Speaker 1: be relieved of a burden, and then I needed to 224 00:12:30,836 --> 00:12:33,716 Speaker 1: relieve him of that burden. And the reason it's important 225 00:12:33,716 --> 00:12:35,676 Speaker 1: for I buying is that for the longest time, you 226 00:12:35,756 --> 00:12:38,636 Speaker 1: never could get into the business of being a principal 227 00:12:38,716 --> 00:12:40,956 Speaker 1: where you actually own the car or own the house 228 00:12:40,996 --> 00:12:44,156 Speaker 1: that you were selling, because it's so capital intensive. And 229 00:12:44,236 --> 00:12:48,276 Speaker 1: maybe five or ten years ago, tech just surmounted that 230 00:12:48,516 --> 00:12:52,996 Speaker 1: huge obstacle. I want to own five or ten percent 231 00:12:52,996 --> 00:12:56,076 Speaker 1: of all the houses in America. There's no way you 232 00:12:56,116 --> 00:12:59,036 Speaker 1: could get the money for that, except there is. Like 233 00:12:59,116 --> 00:13:03,196 Speaker 1: that would have been inconceivable in two ten, but in 234 00:13:03,236 --> 00:13:07,716 Speaker 1: two seventeen there were people lined up to pay for it. 235 00:13:07,756 --> 00:13:10,676 Speaker 1: And it means that we're really on the market. That 236 00:13:10,836 --> 00:13:15,556 Speaker 1: suddenly we own a ton of houses, and it's very risky, 237 00:13:15,916 --> 00:13:19,876 Speaker 1: and it's very capital intensive, and it means that we 238 00:13:19,956 --> 00:13:21,836 Speaker 1: have to be right on top of the market because 239 00:13:21,876 --> 00:13:24,676 Speaker 1: we'll trade up in good times and it's going to 240 00:13:24,756 --> 00:13:29,396 Speaker 1: be a roller coaster ride to hell when the market collapses, 241 00:13:29,436 --> 00:13:34,636 Speaker 1: and it does every once in a while. Is Redfinn 242 00:13:34,716 --> 00:13:37,436 Speaker 1: about to go on a roller coaster ride to hell? 243 00:13:38,036 --> 00:13:40,396 Speaker 1: In a minute, Glenn and I talk about where the 244 00:13:40,436 --> 00:13:49,916 Speaker 1: real estate market is headed. That's the end of the ads. 245 00:13:50,396 --> 00:13:53,396 Speaker 1: Now we're going back to the show. Redfinn currently owns 246 00:13:53,716 --> 00:13:57,716 Speaker 1: hundreds of millions of dollars of houses scattered around the US. 247 00:13:58,036 --> 00:14:01,316 Speaker 1: This seems scary given both the state of financial markets 248 00:14:01,476 --> 00:14:04,076 Speaker 1: and the fact that Zillo recently lost a ton of 249 00:14:04,116 --> 00:14:06,956 Speaker 1: money in the eye buying business. So I asked Glenn, 250 00:14:07,276 --> 00:14:10,436 Speaker 1: could what happened to Zillo, happened redfin Well. The first 251 00:14:10,476 --> 00:14:12,876 Speaker 1: moral of the story is that you have to acknowledge 252 00:14:12,876 --> 00:14:15,236 Speaker 1: that it could happen to you, or it will absolutely 253 00:14:15,276 --> 00:14:19,756 Speaker 1: definitely happen to you. So if you think somehow that 254 00:14:19,956 --> 00:14:22,596 Speaker 1: your poof doesn't smell, or that you have a brain 255 00:14:22,636 --> 00:14:24,796 Speaker 1: the size of a planet, it could never happen to you. 256 00:14:25,436 --> 00:14:28,076 Speaker 1: That's the ubris that will cause you to fly two 257 00:14:28,156 --> 00:14:30,836 Speaker 1: coast to the sun and end up holding billions of 258 00:14:30,876 --> 00:14:34,036 Speaker 1: dollars in homes that you can't sell. So it can 259 00:14:34,076 --> 00:14:36,996 Speaker 1: happen to us. But our thesis for why we can 260 00:14:37,036 --> 00:14:41,596 Speaker 1: be different, it's just our ground game. So Zillo and 261 00:14:41,796 --> 00:14:45,996 Speaker 1: redfin both focus on building websites. We've both been doing 262 00:14:45,996 --> 00:14:49,396 Speaker 1: that for fifteen years. But in those fifteen years, Redfinn 263 00:14:49,396 --> 00:14:53,116 Speaker 1: has also done all the hard work to sell houses, 264 00:14:53,236 --> 00:14:58,196 Speaker 1: host inspections, attend to open houses, work with clients, and 265 00:14:58,316 --> 00:15:01,876 Speaker 1: we've been through these terrible ups and downs that just 266 00:15:01,996 --> 00:15:06,676 Speaker 1: being a website operator insulates you from. So, just to 267 00:15:06,676 --> 00:15:09,836 Speaker 1: be clear, the distinction you're drawing here is Redfinn has 268 00:15:09,876 --> 00:15:12,956 Speaker 1: real estate agents on staff all around the country and 269 00:15:13,076 --> 00:15:15,196 Speaker 1: Zelo does not. Yeah, part of the reason that I 270 00:15:15,236 --> 00:15:18,356 Speaker 1: got into eye buying. Is when I said I'm worried 271 00:15:18,516 --> 00:15:20,676 Speaker 1: that it's too risky that we could get long on 272 00:15:20,716 --> 00:15:22,956 Speaker 1: the market and own all of these houses right when 273 00:15:22,996 --> 00:15:26,276 Speaker 1: there was a downturn. It's because Adam Wine, or the 274 00:15:26,316 --> 00:15:28,796 Speaker 1: proponent of that business here at Redfinn, said, you're already 275 00:15:28,836 --> 00:15:31,156 Speaker 1: long on the market. You've got thousands of people you 276 00:15:31,236 --> 00:15:35,276 Speaker 1: have to pay, and if the market goes south, we're 277 00:15:35,276 --> 00:15:38,676 Speaker 1: going to have to deal with that anyway. I tell 278 00:15:38,716 --> 00:15:41,356 Speaker 1: the people running our eyebuying business that you are running 279 00:15:41,596 --> 00:15:44,716 Speaker 1: on a knife's edge, that you have to have your 280 00:15:44,716 --> 00:15:47,076 Speaker 1: finger on the pulse. I know I'm mixing all sorts 281 00:15:47,076 --> 00:15:49,996 Speaker 1: of metaphors, but that's what business people do. The knife 282 00:15:50,196 --> 00:15:53,396 Speaker 1: edges on the pulse of your finger sounds like a 283 00:15:53,596 --> 00:15:57,076 Speaker 1: bloody outcome. You just have to be all over the 284 00:15:57,116 --> 00:16:02,476 Speaker 1: market every single day, and you have to price in 285 00:16:02,556 --> 00:16:08,596 Speaker 1: the risk appropriately. So in some markets we've priced ourselves 286 00:16:08,636 --> 00:16:10,796 Speaker 1: out of the market where people have come to us 287 00:16:10,876 --> 00:16:13,236 Speaker 1: wanting us to buy their house and we've said no 288 00:16:13,956 --> 00:16:17,156 Speaker 1: because the price they wanted was too high. Yes, we're 289 00:16:17,196 --> 00:16:20,436 Speaker 1: not sure where that house will trade three to six 290 00:16:20,476 --> 00:16:23,116 Speaker 1: months from now. By the time those people pack up, 291 00:16:23,156 --> 00:16:25,036 Speaker 1: we get the place fixed up, we get a sign 292 00:16:25,076 --> 00:16:27,876 Speaker 1: in the yard, and we get it on the market, 293 00:16:28,676 --> 00:16:34,156 Speaker 1: it'll be a very different housing market. So housing twenty 294 00:16:34,236 --> 00:16:38,316 Speaker 1: thirty years ago was the safest investment my parents could 295 00:16:38,316 --> 00:16:40,676 Speaker 1: think of. They were unwilling to invest in the stock 296 00:16:40,716 --> 00:16:43,756 Speaker 1: market because they did want to compete against Wall Street sharps. 297 00:16:43,796 --> 00:16:46,596 Speaker 1: And they told me that housing just goes up one 298 00:16:46,676 --> 00:16:49,076 Speaker 1: or two percent every single year. It's where you should 299 00:16:49,116 --> 00:16:52,116 Speaker 1: put your money. And now I think the housing market 300 00:16:52,276 --> 00:16:57,716 Speaker 1: has more characteristics in common with the stock market. And 301 00:16:57,836 --> 00:17:01,316 Speaker 1: part of that is because there's so much institutional activity 302 00:17:01,436 --> 00:17:04,276 Speaker 1: in the housing market, and part of it is because 303 00:17:05,116 --> 00:17:11,956 Speaker 1: there are also these platforms that provide much faster liquidity, 304 00:17:12,076 --> 00:17:16,076 Speaker 1: much faster price discovery. So when we have a problem 305 00:17:16,076 --> 00:17:18,196 Speaker 1: selling a house, we don't wait two months to come 306 00:17:18,236 --> 00:17:20,796 Speaker 1: to grips with it. We mark it down right away, 307 00:17:20,916 --> 00:17:24,516 Speaker 1: and everyone else on that block is disappointed that we 308 00:17:24,596 --> 00:17:27,476 Speaker 1: move so quickly, but apart we're trying to stay ahead 309 00:17:27,516 --> 00:17:30,356 Speaker 1: of them. And that makes the housing market more volvatible. 310 00:17:30,836 --> 00:17:33,716 Speaker 1: So you have lots of real estate agents on the payroll, 311 00:17:34,036 --> 00:17:37,436 Speaker 1: and you own a lot of houses, and we're at 312 00:17:37,476 --> 00:17:41,036 Speaker 1: this moment in the housing market that seems I don't know. 313 00:17:41,156 --> 00:17:45,116 Speaker 1: Pres you tell me precarious. So how do you navigate 314 00:17:45,156 --> 00:17:49,476 Speaker 1: that potential problem with great humility if we have to 315 00:17:49,556 --> 00:17:53,996 Speaker 1: choose between losing out on tens of millions of dollars 316 00:17:54,036 --> 00:17:58,236 Speaker 1: in profits because we could have bought some houses and 317 00:17:58,316 --> 00:18:03,556 Speaker 1: sold them for a profit, but there's also this risk 318 00:18:03,756 --> 00:18:09,196 Speaker 1: that the whole market could disappear. We just decided to 319 00:18:09,236 --> 00:18:15,516 Speaker 1: be more conservative as an eye buyer. Are you buying specifically? 320 00:18:15,556 --> 00:18:19,556 Speaker 1: We're still buying. We're still buying properties. Are you buying fewer? 321 00:18:19,916 --> 00:18:23,116 Speaker 1: We're more selective? I mean the first change in the 322 00:18:23,156 --> 00:18:27,676 Speaker 1: housing market that you always see, and sometimes this confuses journalists. 323 00:18:28,836 --> 00:18:33,356 Speaker 1: Beautiful houses, corner lots of light, still gets three offers, 324 00:18:33,756 --> 00:18:35,716 Speaker 1: and you'll have a real estate agent say, I don't 325 00:18:35,716 --> 00:18:38,396 Speaker 1: know why anyone's saying a housing market is softened. I 326 00:18:38,556 --> 00:18:43,996 Speaker 1: just sold this house and had multiple bidders. It's the 327 00:18:44,036 --> 00:18:47,476 Speaker 1: properties that aren't so pretty that suddenly have a problem. 328 00:18:47,516 --> 00:18:50,956 Speaker 1: When you're really in a boom. The market isn't selective. 329 00:18:51,396 --> 00:18:56,476 Speaker 1: Even the dogs sell for a song. But the first 330 00:18:56,676 --> 00:19:01,196 Speaker 1: sign that the market has shifted is that middle tranche 331 00:19:01,236 --> 00:19:04,316 Speaker 1: of houses that have a few problems, where the layout 332 00:19:04,356 --> 00:19:07,556 Speaker 1: isn't perfect, where the price isn't quite right suddenly sit 333 00:19:07,836 --> 00:19:10,596 Speaker 1: on the market, and those are the houses you have 334 00:19:10,676 --> 00:19:14,276 Speaker 1: to be more careful about owning. And to be clear, 335 00:19:14,516 --> 00:19:17,396 Speaker 1: is that happening now? Are this that middle trunch of 336 00:19:17,396 --> 00:19:19,796 Speaker 1: houses sitting on the market longer? Now? Are we in 337 00:19:19,836 --> 00:19:22,636 Speaker 1: that turn now? Absolutely? Does that give you information about 338 00:19:22,676 --> 00:19:28,076 Speaker 1: what is likely to happen next? Yes? And no. So 339 00:19:29,236 --> 00:19:32,756 Speaker 1: what I'm used to is a fifty basis point increase 340 00:19:33,116 --> 00:19:36,276 Speaker 1: in mortgage interest rates. When that happened in twenty eighteen, 341 00:19:36,916 --> 00:19:40,196 Speaker 1: there was half half a percentage point. When mortgage interest 342 00:19:40,276 --> 00:19:44,796 Speaker 1: rates go up half a percent, the housing market has 343 00:19:44,996 --> 00:19:48,916 Speaker 1: a major problem. That happened in twenty eighteen. It would 344 00:19:48,916 --> 00:19:52,036 Speaker 1: have led to a housing downturn if the Federal Reserve 345 00:19:52,236 --> 00:19:55,676 Speaker 1: hadn't backed off and mortgage rates hadn't come back down. 346 00:19:56,276 --> 00:20:00,796 Speaker 1: This time, we're looking at not half a percent, but 347 00:20:01,036 --> 00:20:05,676 Speaker 1: three whole percentage points increase in mortgage rates. Huge in 348 00:20:05,796 --> 00:20:11,556 Speaker 1: relative terms, Yes, and so that is a massive shock 349 00:20:11,636 --> 00:20:13,956 Speaker 1: to the system. There's so many buyers out there who 350 00:20:13,996 --> 00:20:15,276 Speaker 1: thought they were going to be able to buy a 351 00:20:15,356 --> 00:20:19,596 Speaker 1: home and can't. And I think what many observers don't 352 00:20:19,596 --> 00:20:22,036 Speaker 1: appreciate about the housing market is how much it has 353 00:20:22,076 --> 00:20:24,676 Speaker 1: depended over the past five years. On the stock market. 354 00:20:25,316 --> 00:20:28,716 Speaker 1: We still talk about the ratio of income to home price, 355 00:20:29,436 --> 00:20:34,396 Speaker 1: but people aren't using their wages to buy house. They're 356 00:20:34,476 --> 00:20:37,876 Speaker 1: using their stock market portfolio. Some of them are paid 357 00:20:38,196 --> 00:20:41,396 Speaker 1: in stock if they work at Google or Facebook. Others 358 00:20:41,516 --> 00:20:44,596 Speaker 1: just have portfolios that are doing really well, and if 359 00:20:44,636 --> 00:20:48,596 Speaker 1: that gets wiped out, you can't afford the down payment 360 00:20:48,636 --> 00:20:50,516 Speaker 1: for a house. So we've just had a bunch of 361 00:20:50,516 --> 00:20:54,396 Speaker 1: people who are in the market no longer be in 362 00:20:54,436 --> 00:20:56,956 Speaker 1: the market. And I had always felt that even if 363 00:20:56,956 --> 00:20:59,356 Speaker 1: the market cooled down, it would be healthy because there 364 00:20:59,356 --> 00:21:02,836 Speaker 1: were so many more buyers than sellers. The price increases 365 00:21:02,956 --> 00:21:07,436 Speaker 1: were fifteen twenty percent year on year, which is obviously unsustainable. 366 00:21:09,276 --> 00:21:12,316 Speaker 1: Now there's some houses where there are no buyers, and 367 00:21:12,476 --> 00:21:16,036 Speaker 1: those houses first are the ones that, as I said, 368 00:21:16,596 --> 00:21:21,396 Speaker 1: do have problems. The perfect houses are still selling just fine, 369 00:21:21,436 --> 00:21:23,556 Speaker 1: but there aren't that many perfect houses in the market. 370 00:21:23,996 --> 00:21:27,556 Speaker 1: So you're going to just keep buying houses? As redfinn 371 00:21:27,596 --> 00:21:29,356 Speaker 1: through this, how do we land this? Are you going 372 00:21:29,396 --> 00:21:31,036 Speaker 1: to just take a pause and say, you know what, 373 00:21:31,116 --> 00:21:32,636 Speaker 1: this is a bad time to buy houses. We're going 374 00:21:32,676 --> 00:21:34,636 Speaker 1: to stop buying houses now or now we're going to 375 00:21:34,716 --> 00:21:38,716 Speaker 1: buy houses, but with all the risk priced into the offer, 376 00:21:38,876 --> 00:21:40,756 Speaker 1: and we're going to tell the people who are approaching 377 00:21:40,836 --> 00:21:44,276 Speaker 1: us this is how we see the market. We might 378 00:21:44,316 --> 00:21:47,956 Speaker 1: be wrong about it, and if you want to try 379 00:21:47,996 --> 00:21:49,996 Speaker 1: to do better, we're here to help you with that too. 380 00:21:50,196 --> 00:21:53,716 Speaker 1: We'll list the house and we'll test the market. And 381 00:21:53,876 --> 00:21:56,676 Speaker 1: what surprised me is how many people say, actually, no, 382 00:21:56,916 --> 00:21:59,196 Speaker 1: I'll take the money. Do you think house prices are 383 00:21:59,196 --> 00:22:03,236 Speaker 1: going to fall? It depends on where, but in some 384 00:22:03,276 --> 00:22:09,316 Speaker 1: places yes. So if you look at Idaho or Austin, Texas, 385 00:22:09,396 --> 00:22:13,756 Speaker 1: sort of these secondary markets, where people leaving Seattle went 386 00:22:13,796 --> 00:22:19,076 Speaker 1: to Idaho, people leaving La went to Austin, Texas. The 387 00:22:19,116 --> 00:22:23,876 Speaker 1: home price appreciation there was twenty five thirty percent and 388 00:22:24,636 --> 00:22:28,836 Speaker 1: that is going probably to come down. There are other 389 00:22:28,876 --> 00:22:32,316 Speaker 1: places where I think it'll be more stable. There's still 390 00:22:32,316 --> 00:22:37,436 Speaker 1: these powerful demographic trends. Millennials are moving, people are now 391 00:22:37,516 --> 00:22:41,076 Speaker 1: free to work from wherever, and rents are still high. 392 00:22:41,276 --> 00:22:45,556 Speaker 1: So rents are up fifteen percent year on year, and 393 00:22:45,636 --> 00:22:49,196 Speaker 1: it doesn't give people many choices. Some folks say I'm 394 00:22:49,236 --> 00:22:51,996 Speaker 1: going to step back from the housing market. I don't 395 00:22:51,996 --> 00:22:54,476 Speaker 1: want to buy a place right now. And then they 396 00:22:54,556 --> 00:22:57,276 Speaker 1: get another notice of a rent increase, and then they 397 00:22:57,316 --> 00:23:00,916 Speaker 1: call us again. And so it's just a really tough 398 00:23:00,956 --> 00:23:05,356 Speaker 1: situation for people looking to find a place to live. Yes, 399 00:23:05,756 --> 00:23:10,316 Speaker 1: And so does that suggest that in that prices won't 400 00:23:10,316 --> 00:23:12,556 Speaker 1: fall across the boarder won't fall that much? I mean, 401 00:23:12,636 --> 00:23:15,836 Speaker 1: is that what that means? That's possible? That's not the 402 00:23:15,876 --> 00:23:23,036 Speaker 1: market we're in right now. We're still selling houses. Yeah, yeah, 403 00:23:23,076 --> 00:23:26,076 Speaker 1: I mean, is something like two seven, two thousand and 404 00:23:26,116 --> 00:23:28,836 Speaker 1: eight unlikely, Like I'm just trying to Oh, I think 405 00:23:28,876 --> 00:23:33,756 Speaker 1: that's very unlikely. Okay, So I'm proud that in two 406 00:23:33,756 --> 00:23:36,596 Speaker 1: thousand and eight, I will give you the receipts, find 407 00:23:36,596 --> 00:23:39,436 Speaker 1: the tapes. I was saying, there is a huge bubble, 408 00:23:39,636 --> 00:23:42,836 Speaker 1: it is going to crash. Yeah, this time. I don't 409 00:23:42,836 --> 00:23:47,356 Speaker 1: believe that's the case, because the people buying houses are 410 00:23:47,396 --> 00:23:51,956 Speaker 1: living in them for the most part, and they're paying cash. 411 00:23:51,956 --> 00:23:54,436 Speaker 1: It used to be that folks are getting liar loans. 412 00:23:54,516 --> 00:23:58,716 Speaker 1: You had the story of the strawberry picker buying an 413 00:23:58,716 --> 00:24:01,676 Speaker 1: eight hundred thousand dollars home in Central California that she 414 00:24:01,756 --> 00:24:05,356 Speaker 1: couldn't possibly afford unless the price kept going up. And 415 00:24:05,476 --> 00:24:09,036 Speaker 1: here it isn't a bubble in the most strict death 416 00:24:09,236 --> 00:24:12,116 Speaker 1: nition of the term, which is that someone is buying 417 00:24:12,116 --> 00:24:15,036 Speaker 1: the home only on the expectation that it will go 418 00:24:15,156 --> 00:24:18,756 Speaker 1: up purely as a matter of speculation. People are buying 419 00:24:18,796 --> 00:24:24,996 Speaker 1: homes because there's this unbridled lust for more space. People 420 00:24:25,036 --> 00:24:27,756 Speaker 1: are investing more in their houses. They want to live there, 421 00:24:27,956 --> 00:24:30,076 Speaker 1: and they are paying cash for it, so they are 422 00:24:30,116 --> 00:24:33,556 Speaker 1: just not over their skis. When we talk to sellers 423 00:24:33,996 --> 00:24:38,436 Speaker 1: about discounting their house so it can sell, that conversation 424 00:24:38,516 --> 00:24:40,916 Speaker 1: is so different now than it was in two thousand 425 00:24:40,956 --> 00:24:42,716 Speaker 1: and eight and two thousand and eight. They would say, listen, 426 00:24:43,036 --> 00:24:46,276 Speaker 1: I'm right up against my mortgage. I cannot discount more 427 00:24:46,316 --> 00:24:48,836 Speaker 1: than this because it'll be a short sale. I owe 428 00:24:48,876 --> 00:24:52,196 Speaker 1: the bank that amount of money, right right. They didn't 429 00:24:52,236 --> 00:24:54,356 Speaker 1: have anybody in the house. Yeah, now they've got three 430 00:24:54,436 --> 00:24:56,676 Speaker 1: hundred thousand dollars of equity. I'm going to make a 431 00:24:56,716 --> 00:24:59,316 Speaker 1: lot of money on this. Turns out it'll be two fifty. 432 00:24:59,356 --> 00:25:02,076 Speaker 1: It'd set a three hundred. I don't like it, but 433 00:25:02,196 --> 00:25:04,596 Speaker 1: it's still upside to me. So I do think it's 434 00:25:04,676 --> 00:25:07,836 Speaker 1: different in that sense. But I'm worried about the economy. 435 00:25:07,876 --> 00:25:10,556 Speaker 1: I'm worried about the war and train, worried about the 436 00:25:10,556 --> 00:25:14,636 Speaker 1: stock market, worried about consumer confidence and mortgage interest rates. 437 00:25:14,636 --> 00:25:16,916 Speaker 1: So lions and tigers and bears, it might be a 438 00:25:16,956 --> 00:25:21,356 Speaker 1: scary summer. And all of that means worried about home prices. Yes, 439 00:25:22,156 --> 00:25:24,796 Speaker 1: And I just think that if you're going to be 440 00:25:24,876 --> 00:25:27,876 Speaker 1: in this business of running on a knife's edge, you 441 00:25:27,916 --> 00:25:30,916 Speaker 1: can't get much sleep. Like other people have given us 442 00:25:30,956 --> 00:25:33,956 Speaker 1: money to buy houses and to hire real estate agents. 443 00:25:34,756 --> 00:25:36,516 Speaker 1: And if you were to say, oh, I was at 444 00:25:36,516 --> 00:25:38,956 Speaker 1: the Bahamas this weekend, I wasn't paying attention to the 445 00:25:38,956 --> 00:25:42,516 Speaker 1: housing market. You shouldn't have my job. So it's what 446 00:25:42,636 --> 00:25:47,156 Speaker 1: I've signed up for. And you keep asking me about 447 00:25:47,196 --> 00:25:50,356 Speaker 1: my comfort level. I haven't been comfortable in fifteen years. 448 00:25:52,996 --> 00:25:55,836 Speaker 1: In a minute, the Lightning Round, including a few simple 449 00:25:55,836 --> 00:26:08,836 Speaker 1: tips for when you're buying or selling a house. Okay, 450 00:26:09,196 --> 00:26:11,116 Speaker 1: get back to the show. We're going to close with 451 00:26:11,156 --> 00:26:13,796 Speaker 1: the Lightning Room. If I'm about to sell my house, 452 00:26:13,796 --> 00:26:17,556 Speaker 1: should I redo my kitchen or my bathroom? Kitchen? What 453 00:26:17,876 --> 00:26:20,076 Speaker 1: is the one red flag I should look for when 454 00:26:20,076 --> 00:26:21,716 Speaker 1: I'm shopping for a house that you don't want to 455 00:26:21,716 --> 00:26:24,476 Speaker 1: own it for at least five years what's your favorite 456 00:26:24,476 --> 00:26:26,556 Speaker 1: trait in a coworker. I'm trying to put it into 457 00:26:26,596 --> 00:26:32,356 Speaker 1: words in a concise way, but it's being persuadable. Like 458 00:26:32,476 --> 00:26:35,316 Speaker 1: when somebody says that's an interesting idea. I'd never thought 459 00:26:35,316 --> 00:26:38,036 Speaker 1: of it before, and I actually see them change their mind. 460 00:26:39,396 --> 00:26:41,636 Speaker 1: I realize I should be that way, because the way 461 00:26:41,636 --> 00:26:44,956 Speaker 1: that I got to my position is by being very opinionated, 462 00:26:45,396 --> 00:26:48,756 Speaker 1: and that makes me hell to work with. Sometimes, in 463 00:26:48,796 --> 00:26:52,596 Speaker 1: what year will the last human real estate agent retire? Never? 464 00:26:53,716 --> 00:26:55,996 Speaker 1: If everything goes well, what's a problem you'll be trying 465 00:26:56,036 --> 00:26:59,796 Speaker 1: to solve in five years. It's so easy to imagine 466 00:26:59,796 --> 00:27:02,396 Speaker 1: hell and so hard to imagine heaven, isn't it, Jacob, 467 00:27:03,996 --> 00:27:08,276 Speaker 1: I'm sorry. What's one piece of advice you'd give to 468 00:27:08,356 --> 00:27:11,196 Speaker 1: someone trying to solve a hard problem? Make sure it's 469 00:27:11,196 --> 00:27:14,076 Speaker 1: a problem you love more than anyone else, because then 470 00:27:14,116 --> 00:27:16,836 Speaker 1: you can work on it harder than anyone else. How 471 00:27:16,836 --> 00:27:18,516 Speaker 1: do you think you'll know when it's time to retire? 472 00:27:18,916 --> 00:27:21,676 Speaker 1: So the only thing that I worry about isn't that 473 00:27:22,636 --> 00:27:25,916 Speaker 1: you know the job will get boring or anything like that. 474 00:27:26,076 --> 00:27:27,516 Speaker 1: It's that I worried I won't get to do it 475 00:27:27,556 --> 00:27:30,476 Speaker 1: anymore because there's somebody else who can do it better. 476 00:27:30,796 --> 00:27:34,276 Speaker 1: How do you think you'll know when the head of 477 00:27:34,396 --> 00:27:38,556 Speaker 1: HR shows up with the general council and they walk 478 00:27:38,596 --> 00:27:41,356 Speaker 1: in and close the door. I feel like you think 479 00:27:41,356 --> 00:27:45,276 Speaker 1: about that. Well. I have told her that you shouldn't 480 00:27:45,276 --> 00:27:47,996 Speaker 1: worry about me firing you. You're going to be the 481 00:27:47,996 --> 00:27:51,316 Speaker 1: one who fires me. But it's also you know, even 482 00:27:51,356 --> 00:27:53,516 Speaker 1: if I love the job, like if I own the company, 483 00:27:53,556 --> 00:27:54,996 Speaker 1: if it were like a hot dog stand where I 484 00:27:54,996 --> 00:27:56,636 Speaker 1: owned it, even if somebody else could run the hot 485 00:27:56,636 --> 00:27:58,516 Speaker 1: dog stand better, I would say, well, I like running it, 486 00:27:59,116 --> 00:28:02,236 Speaker 1: Kiss my Fannie, but I don't own it, and I 487 00:28:02,236 --> 00:28:04,676 Speaker 1: shouldn't own it. It's a public trust at this point. 488 00:28:05,516 --> 00:28:10,396 Speaker 1: And so not only do I worry out being fired. 489 00:28:11,756 --> 00:28:17,156 Speaker 1: I know this is weird, but I'm worried that our 490 00:28:17,276 --> 00:28:21,436 Speaker 1: board won't realize when I need to be fired because 491 00:28:21,436 --> 00:28:25,076 Speaker 1: we're also worried about not being fired. I worry about everything. 492 00:28:29,236 --> 00:28:33,436 Speaker 1: Glenn Kellman is the CEO of Redfinn. We spoke two 493 00:28:33,476 --> 00:28:36,836 Speaker 1: weeks ago. Then last week, as mortgage rates continued to 494 00:28:36,956 --> 00:28:40,476 Speaker 1: rise and home sales continued to slow, Redfinn laid off 495 00:28:40,556 --> 00:28:43,596 Speaker 1: eight percent of its employees. In an email to the 496 00:28:43,636 --> 00:28:46,276 Speaker 1: company's staff. Glenn said the company needs to prepare for 497 00:28:46,316 --> 00:28:49,476 Speaker 1: a slowdown in the housing market that could last for years. 498 00:28:52,236 --> 00:28:55,836 Speaker 1: Today's show was produced by Edith Russolo and edited by 499 00:28:55,916 --> 00:29:00,276 Speaker 1: Robert Smith. Amanda ka Wong is the engineer special thanks 500 00:29:00,356 --> 00:29:03,956 Speaker 1: to Justine Lange and Mola Board. I'm Jacob Goldstein and 501 00:29:03,996 --> 00:29:06,516 Speaker 1: I'll be back next week with another episode of What's 502 00:29:06,516 --> 00:29:09,876 Speaker 1: Your Problem five