Kelman said it was a tough decision to sell, but one that ultimately will empower the company to better compete with portal giants like Zillow, Realtor.com and Homes.com while continuing to focus on customer service.
This spring, Rocket Companies purchased Redfin in a $1.75 billion all-stock deal that made waves in the industry.
Redfin CEO Glenn Kelman shared with Inman founder Brad Inman details on the thought process behind the transaction and how it’s going so far during an interview on Thursday at Inman Connect San Diego.
As the joint companies move forward, Kelman said that he plans to stick with the business and continue to build Redfin at Rocket.
Glenn Kelman | Credit: Redfin
“It was hard for me to agree to sell the company, but Rocket believes in technology and Rocket believes in service,” Kelman said. “There aren’t many companies that believe in that dual commitment.”
The deal empowers Redfin to do “bigger and better” things, Kelman added.
But the CEO admitted that, prior to the acquisition, Redfin had been struggling to acquire enough funds to compete with the huge marketing power behind Zillow, Realtor.com and Homes.com.
Now, it has the financial power behind Rocket at its fingertips, “a huge balance sheet” and a commitment to building.
Kelman added that Rocket’s response to the deal was to bring a “we’re here to win” mentality to Redfin’s competition with other portals.
But even with that competitive mentality, Kelman said he has been amazed by how much each business decision is based on its impact to the company’s employees.
“I’m really speaking my truth that if you talk to them about a way to get more efficient, their immediate reaction is … how will that affect our employees?” Kelman said.
Inman recalled the more “brash, controversial” personality of a younger Kelman who, just a few years after launching Redfin, confronted Inman at an event.
“I’ll never forget, two or three years later, you said, ‘I don’t tell my agents to come to Inman because you’re not about customer service, and that’s what Redfin is all about.’ And I was like, ‘Woah,’ but it made me think.”
Kelman acknowledged that his tone about industry issues has mellowed out over the years, even if the substance of what he’s fighting for remains the same, including consumer service and improving the industry.
“So we’re here because we want to make things better,” Kelman said. “The difference is, now, I don’t think I’m the only one trying to do that. I think everyone’s trying to do that in their own way.”
Brad Inman
Inman wondered how Kelman, a known critic of some big companies and industry entities, felt about the current state of the industry.
“I think there’s a flight to size,” Kelman said. “Compass is becoming a larger brokerage, Zillow is becoming a larger portal … there are economies of scale now in this industry.”
Kelman added that he feels better about Zillow these days because he believes the company has aligned itself with the agent.
“When you think about what model is prevailing, I think Zillow and Redfin have become more alike over time,” he said.
“Mostly, I think we’re all trying to make real estate better in our own way.”
Kelman’s advice for entrepreneurs was that they truly have to believe in their business idea in order to succeed.
“If you’re just trying to make a buck, you’re not going to make it,” Kelman said. “What got me through it was, I really believed in what we’re doing. If you don’t have that, the highs and lows will really break your heart.”
During a brief question and answer period with the audience, Kelman said that Redfin has been experimenting with AI in order to strengthen its consumer relationships. The company is using AI to track everything consumers are doing on their website, and then generating conversations based on their website behavior.
At that time, Bob Hale, president and CEO Of the Houston Association of Realtors, approached the stage to ask a question — but Inman brought him on stage to be recognized in a preliminary announcement that Hale is the recipient of this year’s Nate Ellis award, an award that honors real estate professionals for giving back to the community.
Hale said he will be retiring from his position at HAR in January, which he announced at the tail end of 2024.
Email Lillian Dickerson