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One of the big new ideas of the consumer resolutions during the past few years has been Redfin, a real estate service that provides consumers with comprehensive home buying tools and pays real estate professionals flat fees with bonuses based on the quality of their service as judged by consumers.

The company, which is in seven markets, recently suffered a round of layoffs. There have been predictions among the real estate cognoscenti that the service would have to evolve to be more like a ZipRealty discount brokerage than a customer-centric portal. And that would be bad in many ways, since discount brokerages not only provide less revenues for agents, but also have been the most seriously damaged part of the real estate ecosystem.

Founder and CEO Glenn Kelman, speaking at Inman SF Connect today, however, says the customer-centric discount model cannot change. “You have to stand for something real,” he says, noting that Redfin’s usage has grown by 200 percent to 300 percent in the past year, and sales are up 40 percent. He says the service is even in the black, but that’s probably temporary, since that reflects the summer buying season.

Kelman says the embracement of several Web trends, especially Web-based user ratings for agents, have been responsible for much of the growth and apparent stability in the business. “Nine months ago, we didn’t even have a picture of an agent on the site,” he noted. Now the site has pictures and solicits reviews, providing “full transparency” on good agents and bad agents. The site’s conversions “increased 160 percent” the day it added that feature, he said.

The Inman conference, of course, attracts a high percentage of agents. It isn’t necessarily a friendly forum for the Redfin experience, which has great customer tools but potentially undercuts agent revenues. One speaker said her experience with Redfin has, in fact, been a bad one, with house buyers pretending not to be represented by RedFin so that the transaction process would go through like a full-service sale.

Kelman apologized for the bad perception of the service, saying that it is “totally lame” if clients are not being upfront. “Sometimes they are scared that the home buyer or seller “is not going to like them,” he said. But looking at the bigger picture, “the industry is screwed up. There are too many agents, and not enough closing. Brokerages don’t have a brand that means anything. We came here to change the business.”

“The focus on better customer service also results in better business for many agents,” he said. Agents associated with Redfin earn revenues from six to eight transactions a month, compared with the industry average of six transactions per year — although that number is based on the current number of just 23 agents.

He also says the company’s social media tools have been highly popular and effective. “Half come to the site via a home tour; 15 percent from asking people a question; 13 percent come from people saying they want to make an offer.”

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