Can friendly neighbourhood @Redfin spin the web to save Real Estate

Published in

Proptech

11 min readAug 18, 2014

The process of buying or selling a home is perilous. Yet everyone who has tried to make fundamental improvements has failed.

And then you have Redfin who are quietly beating a contrarian trail across the United States.

In a digital marketing world of landing page optimisation, you’d be forgiven for thinking Redfin is ‘just another brokerage’. Redfin’s home page displays a simple property search, a value statement and that’s about it. Nice, unassuming disguise.

But under the surface lies a growing culture of super-hero-like change.

It is important to remember Redfin as the map-search pioneers that Zillow and Trulia copied on their way to aggressive property portal expansion. It’s like being bitten by the radioactive spider, but someone else got the superpowers.

There’s a true underdog story of an organisation trying to do good, but being beaten to capital and mind-share by more aggressive players.

And that’s the key with Redfin: they are nice. It’s the most uncommon, left of field company in US Real Estate.

Redfin Real Estate Agents are employed on a salary, with no cut-throat commission incentives. If they sell a home, their bonus isn’t based on value, but on customer satisfaction.

This alien strategy surely seems doomed to fail, as it did when Urban Compass copied the approach, with the propensity of better agents to think the grass is greener if they jump ship in the notorious brokerage-hopping that is the norm.

But Redfin are growing, and boast paying agents consistently more than the average of top 15% of Real Estate Agents.

But being nice, incentivising customer service and above average pay aren’t what make Redfin special.

Technology that will blow the socks of every other brokerage is the Redfin special sauce.

Why they don’t advertise this front and centre is obvious: the public don’t care about what technology an agent uses. A property owner wants someone who is going to get the job done.

Here are some of the mind boggling things that Redfin Agents have access to (yes, I am very jealous):

1. Scouting Reports — imagine being able to view the stats of any US Real Estate Agent on a map? Then couple that with insights on whether they lower prices more often than not and how well they perform.

This, my friends, is the holy grail of real estate data. Screw Zestimates. This is the juicy stuff that rules all else.

If Redfin felt confident enough to release this data onto the public internet, they could objectively rank Real Estate Agents by performance. And every journalist, consumer and Real Estate Agent would look nowhere else for insights.

There was a lot of ‘buzz’ about this in 2011, when some agents campaigned to blacklist Redfin for daring to publish the Scouting Report. There were some inaccuracies that were quickly fixed, but ultimately doomed the service. Redfin still shows stats on its own agents, and this post from Redfin CEO Glenn Kelman explains the take down decision.

Its far more interesting to compare others and see who you can truly trust, so here’s a plea to bring back Scouting Reports: Mr. Kelman, Zillow’s credibility hasn’t been damaged by the wildly inaccurate Zestimates they publish, so you should show the public your data on Real Estate Agent performance, regardless of which brokerage they are members of.

2. Offer Insights — that local knowledge that good agents acquire through experience is rooted in the making and receiving of offers on homes. Offer writing reveals much about the local market and its participants.

Redfin publish, in real-time, stats and details of the offers their agents write. Why? So everyone can learn and be an informed buyer.

This, above the compensation quirk, really sets Redfin apart. A traditional Real Estate Agent on commission would die before revealing such competitive information.

This is why Redfin should be loved, if only things like this were clearly communicated, front and centre, on their damned homepage.

3. Deal Room — basically a ‘Dotloop’ purpose built for Redfin Agents and Customers, to see and sign docs when buying a home.

4. Home Dashboard — surely this should be merged with Deal Room, but it shows how there is very little in common between a listing/selling agent and a buying agent.

The Home Dashboard allows a seller to track how their agent is selling their home, including view stats of their online listing and the number of tours conducted, as well as comparison data on similar homes (is another home in the neighbourhood getting more exposure?).

Although the onboarding user experience is tailored for lead generation, the underlying premise is certainly a cut above most ‘valuation tool’ methods of gaining customer loyalty. Shame about the clunky UX, but this is a new release, so hopefully will improve.

5. Hiring Nela Richardson as Chief Economist — OK, this isn’t strictly a tech tool, but it is potentially more impactful.

The market is missing data-informed thought leadership. Redfin have proved they have the data, they just need to give those insights a voice. And now they have just that with the former Bloomberg economist.

By the way, Nela, it would be better if your voice wasn’t buried in the ‘Research’ section of Redfin’s website.

Not all Redfin tech is great. The ‘Price Whisperer’ is a real user experience dud, but the kernel of inspiration that produced it has to be commended.

Companies live and die by their leadership. Redfin CEO Glenn Kelman used to be in the public eye more often. Although maybe it is good for Redfin’s growth that he focuses on the details inside, what with a recent fundraising and persistent rumours of an IPO to fuel expansion.

He’s also recently invested in Dwellable, a travel accommodation start-up. The former Plumtree Software founder joined Redfin in 2005 when original founder David Eraker had failed to make disruptive headway.

Plus, you’ve got to love someone who can quote, with a straight face, Bane from The Dark Knight Rises: “you think the darkness is your ally, but I was born in the darkness” — the quote is in reference to the hard slog Redfin has gone through.

The slow and steady rebuilding of Redfin to around 1,000 Real Estate Agents today is both good and bad: a safe, steady company that doesn’t need to lay off staff from over-expansion, is also the company that is missing the boat by raising too little capital and not giving its technological advantage the reach to hire enough agents.

Zillow and Realogy are doing the big deals, while Redfin goes for organic growth.

By the way, more people (agents) = more listing relationships. Controlling supply is the golden rule of making money in real estate. And so far, Redfin has been too focused on buyers.

Redfin agents rely on technology to serve them buyer leads, allowing them to offer their customers more time and care than an agent who is busy trying to drum up new business. But new business is what Redfin need to successfully save the world from bad real estate experiences.

There is a way for Redfin to stay friendly, and yet aggressively increase their ability to attract listing customers: expand socially, instead of geographically.

What does that mean? People are loyal to their friends; people aren’t at all loyal to their local Real Estate Agent.

Who do we trust? The solution to that question will dominate real estate for the next age.

Read more from the Real Estate Pundit on US Start-ups

Featured

Jun 3, 2015

Can friendly neighbourhood @Redfin spin the web to save Real Estate

Read more from the Real Estate Pundit on US Start-ups

Written by Ray at Free.co.uk