Redfin

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For the Redfin Perch, see European Perch. For the South African redfin barbs, see Pseudobarbus and Barbus.
Redfin
Industry Real Estate
Founded Seattle, Washington, US (2004 (2004))
Headquarters Seattle, Washington, U.S.
Area served
Atlanta, Austin, Baltimore, Boston, Chicago, Dallas, Denver, Las Vegas, Los Angeles, Orange County, Phoenix, Portland, Sacramento, San Diego, San Francisco Bay, Seattle, and Washington, D.C
Key people
Glenn Kelman (CEO)
Sasha Aickin (CTO)
Chris Nielsen (CFO)
Scott Nagel (PREO)
Number of employees
214 as of April 2011
Website www.redfin.com

Redfin is a technology-powered real estate brokerage with agents in 25 markets throughout the United States. Redfin combines a real estate search site with employed and salaried real estate agents. The firm was a pioneer of map-based real estate search[1] for consumers, who use the site to find homes for sale, while the company's local agents host tours, attend inspections, and handle property access, legal paperwork and negotiations.

Redfin offers buyers up to a 50% rebate (except in Oregon where real-estate laws prohibit it) on the commission paid to the buyer's agent. A blend of technology and service also enables Redfin to charge a 1.5 percent listing fee for home sellers, which is less than the traditional 3 percent fee.[2]The firm is led by Glenn Kelman.

Business model[edit]

Unlike the other major real estate web portals (including Zillow, Trulia and realtor.com), which source the majority of their earnings from advertising and lead generation, Redfin operates as a brokerage and makes money when users buy or sell homes with its real estate agents. To align interests between agents and clients, the firm employs its agents directly and pays them a salary - departing from the commission-based compensation structure of traditional realtors - and ties bonuses to customer satisfaction.[3] The company's agents are reviewed after every transaction, successful or failed, with all reviews posted on the site.

The firm's service philosophy has evolved over its existence, growing from a minimalist experience suited to experienced buyers and sellers into a full-service, end-to-end brokerage model providing a level of support comparable to that of traditional agents. Redfin agents are contacted by potential clients when they use the website, removing the need to spend time on marketing and client acquisition.[4] The operating efficiencies created by the site's online tools for consumers and agents enable Redfin to rebate up to 50% of the standard commission back to its buyers and charge half the standard listing fee for sellers.[4]

Redfin's unconventional approach attracted significant attention and endured criticism from the real estate community in the early years of its existence, but other firms have since adopted the practice of paying real estate agents a salary and linking incentive pay to customer satisfaction.[5]

Tools and services for home buyers

  • Easy tour scheduling: a home tour with a Redfin agent can be can scheduled using a web browser or smartphone app. Customers can tour as many homes as they want with no obligation.
  • Redfin Matchmaker software that recommends unexpected listings to Redfin clients
  • Instant Updates: smartphone or email notifications when new homes are listed or when prices drop
  • Search by school: shows all the homes for sale served by a certain school with one easy search
  • Tour and Offer Insights: real-time statistics and notes from Redfin agents about thousands of homes and offers
  • Deal Room: real-time guide through the closing process, including milestones, deadlines and tasks[6]

Tools and services for home sellers

  • Redfin Home Dashboard: A comprehensive online resource for home sellers that provides real-time data about their home. This tool gives people who sell their home with a Redfin agent real-time data on how many people are viewing their property online, what their Redfin agent is doing to sell their home and what the next steps are in the selling process, including reminders about important tasks to complete. The dashboard adds to the digital marketing program that Redfin provides for everyone who sells their home with them, including premium placement of their listing on Redfin.com (that doubles the amount of traffic the home receives from potential buyers), targeted emails and advertisements to homebuyers who are searching for homes in the area and free professional photography for listing photos[2]
  • Redfin 3D Walkthrough- This online feature for Redfin-listed homes provides a high-resolution, interactive view from every angle inside a home and is powered by groundbreaking 3D scanning technology from Matterport. This is designed to provide prospective buyers with a deeper insight into what the home actually looks like before they go and visit it. The 3D Walkthrough is currently available for Redfin's listings in Seattle and California markets. [7]
  • Redfin Home Value Tool: A more accurate way for home sellers to find out what their home is worth using self-selected comparable homes for sale in their market.

Funding[edit]

After receiving $1 million in initial financing from Madrona Venture Group, Redfin raised $8 million in Series B funding from Vulcan Inc., the investment arm of Microsoft co-founder Paul Allen in May 2006. Redfin CEO Glenn Kelman accepted a third round of funding for $12 million from Greylock and Draper Fisher Jurvetson in July 2007.[citation needed] The firm has participated in several subsequent funding rounds, most recently raising $50 million in a mezzanine round led by T. Rowe Price and Tiger Global, bringing its total venture funding to slightly over $96 million.

Competition and controversy[edit]

Tradition-minded and protective of their turf, traditional realtors reacted hostilely to Redfin's attempts to change the real estate brokerage business. In 2006, CNN reported that Redfin had received threats from competitors seeking to "break their kneecaps.".[8] In Southern California Redfin’s for-sale signs are often knocked down, stolen or smashed. In Seattle a traditional realtor posted Redfin's CEO Glen Kelman’s address online, and a sturdy Redfin yard sign at his house was soon hacked down. In a national forest near Yosemite National Park someone affixed fake Redfin bumper stickers to signs, trees and rocks to make the company look like a shameless promoter and defiler of the environment. After Redfin staffers removed the stickers, which they have never used to pitch the Seattle company, the trickster started tossing the signs, attached to weights, into branches of sequoias. “I never considered how violent the reaction to us would be and what that would mean to our customers,” said Kelman at the time.[9]

In May 2007, just a few days after being featured on 60 Minutes, Redfin was fined for $50,000 by The Northwest Multiple Listing Service and was forced to shut down its "Sweet Digs" blog,[10] which used to contain reviews of the homes on the market. Northwest MLS pointed out that such reviews are not allowed under MLS rules.[11] Sweet Digs was relaunched in June 2007[12] with an analytical format, and covers all the markets Redfin serves.

Redfin, which offered an automatic agent rating system in 2012, drew criticism for using inaccurate data and pulled its tool from the market.[13]

During September 2014, Redfin changed their site's search interface to remove the full-featured table of results below the map. The change drew criticism from users, who found the loss of the table limited the site's usability. On October 8, 2014, Redfin employee Karl Garske responded saying they were in the process of designing a new combined map and table view, but as of 2015 no updates have been made.[14]

Awards[edit]

Month Association Award
July 2006 Inman News Innovator of the Year[15]
May 2010 Seattle 2.0 Seattle 2.0 Award[16]
June 2010 Lead411 Hottest Seattle Companies[17]
July 2013 Inman News Innovator of the Year[18]

See also[edit]

Sources[edit]

  1. ^ Stone, Brad (March 7, 2013). "Why Redfin, Zillow and Trulia Haven't Killed Off Real Estate Brokers". Businessweek (Bloomberg). 
  2. ^ a b Frey, Bridget (14 August 2014). "Thinking About Selling Your Home? You’ll Want to Take a Look at This". Redfin News (Press release). 
  3. ^ Redfin. "What If You Could Reinvent Real Estate?". Redfin. Retrieved 2014-04-13. 
  4. ^ a b "How Redfin Delivers The Best Service". Redfin. Retrieved 2014-03-29. 
  5. ^ Wiggen, Teke (July 8, 2013). "Next-gen Brokerages March Down Trail Blazed By Redfin". 
  6. ^ "Redfin-Brings Its Real Estate Brokerage to New Jersey" (Press release). redfin.com. 
  7. ^ Aickin, Sasha (21 August 2014). "3D Innovation Meets Home Tours: Introducing Redfin 3D Walkthrough". Redfin. Retrieved 14 January 2015. 
  8. ^ Christie, Les (2006-04-11). "A fresh attack on the 6% commission". CNN.com. Retrieved 2014-04-13. 
  9. ^ Steiner, Christopher (25 January 2008). "Swimming With Sharks". Forbes.com. Retrieved 2014-12-12. 
  10. ^ "Redfin Stops 'Sweet Digs' Property Reviews" (Press release). Seattle: Redfin. 18 May 2007. 
  11. ^ Cook, John (17 May 2007). "Redfin fined $50,000, shuts down home reviews". Seattle Post-Intelligencer. Hearst Seattle Media, LLC. Retrieved 2014-04-13. 
  12. ^ "Redfin's Sweet Digs Returns With New Analytical Format" (Press release). Seattle: Redfin.com. 2007-06-12. Retrieved 2014-04-13. 
  13. ^ Carrns, Ann (1 May 2012). "New Battle on Providing Real Estate Agent Performance Data". Bucks blog. The New York Times. Retrieved January 11, 2014. 
  14. ^ "New Search Design". Redfin. Retrieved 2014-09-17. 
  15. ^ Redfin (2006-07-30). "Redfin Wins Innovator of the Year Award From Inman News at Real Estate Connect". Redfin.com. Retrieved 2014-04-13. 
  16. ^ "Redfin, Bonanzle, TisBest Win Seattle 2.0 Awards". Xconomy.com. 2010-05-20. Retrieved 2014-04-13. 
  17. ^ "LEAD411 LAUNCHES "HOTTEST SEATTLE COMPANIES" AWARDS". Lead411.com. 2010-06-08. Retrieved 2014-04-13. 
  18. ^ News, Inman (2011-08-12). "Redfin Wins Innovator of the Year Award From Inman News at Real Estate Connect". Inman.com. Retrieved 2014-04-13. 

External links[edit]