Redfin may not be enforcing a ban on private listings, but a trove of documents sheds light on outgoing CEO Glenn Kelman’s view of those listings as a strategy he believes is bad for consumers.
Kelman announced on Tuesday that he would step down from the company he has run for 20 years. The documents were unveiled as part of a lawsuit between Compass and Zillow, but also include internal communications from Redfin that clarify Kelman’s view on some of his biggest competitors and policy issues facing the industry. In fact, the documents show that Kelman and his company sat in a somewhat unique position, agreeing in part with both Compass and Zillow.
“I really agree with Compass that … listing brokers and homeowners should be able to control how a listing is marketed,” Kelman said. “I disagree that we should be able to say who a listing is marketed to.”
In a deposition included with the documents, Kelman also expressed a belief that private listings are bad for consumers, and opposed building his own network even if Redfin could potentially benefit.
“I’m a software person, and I just want to be able to build the best software and win that way instead of playing reindeer games with inventory,” he said.
Kelman also noted that he understood the desire of some owners and other brokerages to give sellers more control over whether a listing includes metrics like days on market and price history.
“We have sat in the living room of the people who are worried about that, and we understand those concerns. But that does not extend so far as ‘I want to sell my home only to this group of people and not to that group of people,'” Kelman said. “That’s the bright line.”
Those comments and others in the documents highlight the complex, nuanced position Redfin — which Rocket acquired last year — occupied as both a portal and brokerage while the debate over listing access raged in the broader real estate industry.
Redfin didn’t respond to a request for comment Wednesday.
Inside Redfin
The documents show that there were questions internally at Redfin about why it would create a policy toward private listings that was similar to Zillow’s.
Glenn Kelman of Redfin. Image By: AJ Canaria
In his deposition, Kelman noted that various leaders within Redfin had different views on how to move forward. Kelman specifically noted that Jason Aleem — Redfin’s chief of real estate services — had a different view than he did.
Joe Rath, who was senior director of brokerage operations at Redfin, asked Kelman and others in an April email why Redfin was preparing to follow Zillow’s lead.
“I’m still struggling to understand why we’re so quick to make this pledge when we could better understand the downstream impact by waiting and getting more listings on Redfin.com,” wrote Rath, who is now head of industry relations at Rocket. “The challenge in front of Compass (& Berkshire), Howard Hanna, and Douglas Elliman is how to get their listings on Zillow. While they debate next steps, we have a shot at getting those listings.”
Kelman said he understood and supported some changes to listings related to days on market and price history — stats that serve as key reasons Compass prefers starting listings as private exclusives. And he summed up Redfin’s stance in a single sentence: “Have the MLSs support controls over how a listing is marketed, not who it’s marketed to.”
Kelman additionally discussed what he believes could happen if private listings take root even in a single market.
“You could say, well, Howard Hanna has tiny national market share. What are you worried about?” he said. “It’s because you can get significant share within a market and then buyers come to a real estate website like Homes.com, Redfin.com, Zillow.com and they can’t see those listings, and that suddenly becomes unbearable.”
Diverging with Zillow
Though Redfin’s public position at the time seemed to mirror Zillow’s, Kelman indicated in his deposition that there was in fact daylight between him and other major players.
“Our position is different than Zillow’s insofar as we want more seller control over how a listing is marketed. That is, I think, very similar to the Compass position,” Kelman said. “It is similar with Zillow in that we want every buyer to see all the homes for sale. So that is the place where I knew we would be likely to diverge with the Zillow position.”
Kelman also wondered if Zillow would “bypass the MLS,” and strike listing agreements with brokerages.
“When you are the number three website, which I think we are in for-sale, you worry about that,” Kelman said.
In fact, court documents filed by Compass show that Zillow was attempting to strike agreements with brokerages while it debated how to secure the broadest possible source of listings.
While Redfin isn’t a defendant in the antitrust case that produced the documents, Compass has alleged in its complaint that Redfin conspired with Zillow on private listings policy. But Kelman rejected that claim.
“It’s a total crock,” Kelman said.
Insights into Kelman himself
Kelman’s reputation as an executive willing to take a stand for causes he felt were right also came through in his deposition. 
“A homebuyer should be able to see all the homes for sale, whether she’s using Realtor.com or Zillow.com or Redfin.com,” Kelman said at one point. “You shouldn’t have to know the secret handshake to see all the homes for sale. There is a long and [sordid] history of properties being selectively marketed to different groups of people based on the property and the person, and it’s wrong.”
“Why is that important to you as the CEO of Redfin?” the Zillow attorney asked during Kelman’s deposition.
“Well, we’re all here to make a buck, but at some point you’ve made enough money in your life, and you want to feel like your business is trying to make its industry better,” Kelman said. “Redfin has defined itself as an advocate for consumers, so I think this is an easy way to be a consumer advocate.”
Kelman has consistently said that he was looking for ways to empower consumers and save them money.
“When we ask ourselves why hasn’t technology made real estate more efficient, why are these new companies that have come along not lowered the commissions paid by real estate consumers? It’s because actually the accumulation of capital and power has made it harder for the agent to earn a living and harder for the consumer to get a good deal. And that’s why I got into this racket in the first place.”
Ultimately, he said he feared that private listings could undermine his efforts.
“You don’t want to get to the end of your career and feel that you did something to run the table as a business that actually didn’t make the industry better,” Kelman said. “I worry that pocket listings can be a strategy that is good for a business and bad for the world.”
While the deposition was taken in October, three months before he announced he would leave the real estate industry altogether, Kelman made clear the stakes of the private listings fight.
“I think what is most likely to happen over the next five years is that people will have to go to many different websites to see as many of the homes for sale as they possibly can, and they are going to have to worry that they can never see all of them,” Kelman said. “It really bums me out.”
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