How is Redfin Doing?

I am asking agents/brokers in Seattle & San Fran to provide me with some data – or maybe the good folks at Redfin can stop by and let us know.  I want to find out how Redfin is doing.  Does anyone have any current numbers?  How many properties are currently listed through Redfins $2k flat fee?  How many deals has redfin closed (either side)?  What are the numbers?

If you have any info, you can leave it here (as a comment) or send me an email at realestate20@gmail.com

Maybe I could find this data at the Redfin site…but the have made some changes (I have not been to their site in a while) – I cannot even figure out how to find the “for sale” listings anymore.

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26 Responses to “How is Redfin Doing?”

  1. Glenn Kelman Says:

    Redfin is doing well in some areas, not in others. Demand for our service has been strong, and transaction volume has continued to grow, in both Seattle and the Bay Area, as you can easily verify by querying the various MLS’s. We still do more business on the buy side than the sell side. We are glad to have hired Dave Wilner to run real estate operations, as this will allow us to serve customers better at scale. In other areas we have not done as well as we would have liked: expansion to new markets is behind schedule because we have had to make changes in how we build our site. We have had difficulty getting early direct marketing trials to yield results, and still depend on the appeal of the site and the service to draw customers. This is not a criticism of the Redfin employees working in these areas, just an acknowledgment that our difficulties there have been greater than we originally anticipated.

  2. realestate20 Says:

    Glenn,

    Thanks for stopping by – I appreciate you taking the time to give us some insight. If you could, I would very much appreciate some specifics (that are probably on your desk or in a drawer behind you).

    1. How many deals has Redfin closed (either side) in each market you serve?

    2. How many active listings do you currently have?

    3. Do you feel that Redfin has “disrupted” the industry in your markets?

    I can appreciate the difficulties you have encountered. In my experience, the old “3x longer, 3x more expensive” adage is optimistic.

    Thanks again Glenn. I hope you can answer these questions for me.

  3. Ardell DellaLoggia Says:

    Without giving detail, as I feel that would at this point be an abuse of mls privelege, I can tell you they are growing in leaps and bounds.

    The first half of this year it was still slow, though sales were almost 4 times what they were for all of 2005 in the first half of this year.

    From July 1 to date, they have really kicked butt with an increase in sales of almost 300% over the sales in the first half of the year, as to both number of sales and dollar volume of sales.

    People want to go back to day one to evaluate their sales. Not fair. They weren’t fully funded until recently and their figures have grown immensely since they were funded.

    I don’t know any company that advertises its specifics.

  4. Trevor Smith Says:

    Ardell – You Rock – you’re always so classy and objective. I’ve been reading your blog and Seattle Bubble. You have a great Blog presence.

    Back on topic… Ardell is right, there is certain info (ie Sold Data) which is proprietary. However, given that active data is public info, I can tell you that as of 11/22/06 Redfin had 30 active listings. This is not a huge amount. However, we must remember Redfin’s focus on the listing side is more recent than the buying side.

    Without giving too much away…the closed deals stats are much more impressive then the active listing stats.

  5. Simeon Syttle Says:

    How many listings does Redfin have in California?

  6. Phillipe Says:

    Zip Realty now has all the Redfin bells and whistles. It seems this is just a keep up with the Jones’ business and no possible sustainable competitive advantage.

  7. Dave Says:

    I agree with you Phillipe. I live in the seattle area and being here in the land where the majority of these listing services are starting up and where online real estate portals are hyped…..you cant stop yourself from thinking how are these companies going to sustain revenue streams? Redfin is somewhat different as they are a brokerage…but if you look at Trulia, Zillow, Google Base, all of the search engines, etc what REAL compettiive advantages do they have? Other than spending lots of money on having a more technologically enabled site, they all provide the same service. Now some may focus on other pieces of the selling and buying process (Zillow’s emphasis is on valuation as opposed to listing right now, etc) but there wil no doubt be some major consolidation with some going out of business. This hits right on what i actualy just started a blog about to understand more in depth.

  8. Mark Says:

    Seems Redfin will have higher technology costs spread across a lower revenue base. First, because Redfin is just starting out and second because Redfin only keeps a small percentage of the commission. Just scaling the company will be difficult because each new agent is a paid employee.

    Also, what incentive does the employee have to make new transactions if they are paid a salary? Government employees aren’t really motivated to create new paperwork for themselves if they are going to get the same paycheck no matter what.

  9. Todd Kolber Says:

    I don’t believe just having lots of listings is a good indicator of sales. Everyone now has listings. C21 offices with 250 agents here in So. Cal. have a lot of listings, but I have also seen some of the listings end up at three different brokerage offices before they sell. So, just because Redfin only has 30 listings doesn’t mean they are doing poorly. I have zero listings and I’m doing deals.

    Also, the salary pay for real estate employees is exactly how I will hire. The benefit to them will be flexible hours and no responsibility for bringing in clients. They will just handle transactions and still have time for a family. They won’t be working all hours of the night driving clients here and there, so I think that has great value too.

    Our site is not fancy like Redfin and Zillow. It just has links to the public versions of the local MLS’s here in Southern California if they are available. I’ve checked traditional broker sites and they don’t have all the listings like the MLS’s do. I believe people want robust information before they have to commit to an agent and that means giving them every listing. I have to use an IDX for Orange County and eventually will ad some others, but I do not make clients give me personal information to use it. This country was founded and is about freedom and so is U.S. Real Estate Depot.

    Redfin is still doing deals based on percentage. Even if it is only 1/3 of the selling office commission, have you seen the prices of properties in Cupertino? We are different in that all deals are $5000 flat fee and for you flat fee bashers, we don’t disappear after the contract has been written, negotiated, and accepted. Usually the listing agent will make more trips to the property, but we do discuss it and mostly it is because of logistics. The buyer has to do a little more work and doesn’t get the fancy site, but it’s a choice they get to make and that’s freedom.

    There is plenty of room for other business models to enter the $65bil real estate commission pool. Best of luck to them all!

  10. Garth Says:

    They just released a PDF that discloses that they have sold 200 houses in Seattle.

  11. Todd Kolber Says:

    Redfin puts out all these press releases, but a lot of them aren’t making sense to me. Someone stated that Redfin is losing money, but they have completed over 200 transactions just in Washington. They claim they have no advertising costs in this latest disclosure, so how could they be losing money? Also, their move into Southern California isn’t all truthful. By their own admission, all of their agents have completed at least 25 transactions, but they have a guy that has had his license for only a few weeks. There is no address yet for a Southern California office. The employing broker is Redfin San Francisco. Maybe what they claim is happening in Washington, but I’m not seeing it happen here in Southern California because there is so much competition. There is my company U.S. Real Estate Depot, Inc. covering most all parts of Southern California. There is BuySide Realty in San Diego and then there is Catalist Homes covering the coastal regions of Southern California and they have a fancy website, lots of experience and enough capital to crush Redfin at the blink of an eye. I just don’t see it, but maybe I’m missing something. I think these guys are just good at getting newspapers to write about them. I haven’t found newspapers to produce information in the best interest of consumers. I have seen newspapers (LA Times and Robert Bruss) write articles that have the realtor’s best interest promoted. This may be because the realtors and brokers are buying those full page ads???

  12. George Says:

    How about buysiderealty.com – I heard they they are backed by Etrade and Paul Allen of Microsoft.

  13. tkolber Says:

    I think Buysiderealty.com came from Chicago. I don’t think the public is ready for absolutely no interaction with a realtor yet. They are definitely capable of doing the search on their own, shouldn’t be hounded and should share in the compensation for doing that work. I also don’t think there are enough people that are ready to just buy. Most people have to sell properties first. My company is a flat fee brokerage on voth sides of the transaction. People love it and I am hoping that it takes off without having to flush it full of V.C. money. I like having total control of this company and having hold steady to its core business model; flat fee commission; no referral fees; and no obligation until you are ready to make an offer. No 6 month contracts holding people hostage unwillingly whether they are buying or selling. Robust information without obligation, that’s U.S. Real Estate Depot.

  14. kevin Says:

    Absolutely right – the internet is re-shaping real estate! We at http://www.sellitfreenow.com think it is completely unacceptable that people still hand over 5 or 6 percent of their hard earned money to real estate agents – ESPECIALLY in this current market!

    Selling on the internet means saving 15-30 THOUSAND dollars and i hope more people think of this when they go to sell!

    best of luck to everyone and keep up the good work!

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  16. James Says:

    I’m a NMLS multiple member that can track redfin in Seattle, and here’s what I’ve found:

    When will Redin Go out of Business? Who knows for sure but here are some numbers:

    Employees: 42 agents (listed on MLS) + unknown number of support staff (who are not counted in this analysis, also not counted are executives/management and investors who want a return on their money)

    Worst Case Pay per Employee (Average): $8 per hour with 35 hour work weeks, and no benefits: $14,560 per employee per year, or $611,520 per year for all NWMLS listed agents

    Better Case Pay Scenario (Average): $13 per hour with 40 hour work weeks, and 5,000 per employee benefits per year: 32,040 per employee per year, or $1,345,680 in payroll expenses.

    Daily Business Expenses: Unknown – lets say only $30,000 per year for example.

    Insurance Costs: Unknown – lets say only $30,000 per year again.

    So, hyper conservatively speaking with slave labor level wages, Redfin’s business expenses per year are at least: $671,520 per year and potentially more than $1,405,680 per year.

    How much are they making however?

    Redfin Sold Units in 2006

    Listing Office: 62 @ $3000 listing price = ~$186,000

    Selling Office: 173 @ 1% average sale price of a home $350,000 (estimated) = ~$605,000

    Pre-tax profit: $791,000

    Expenses: $671,520 – 1,405,680 per year.

    FYI, To Date, Redfin has closed on (Selling or listing side) 945 transactions

  17. scott dennis Says:

    check out these guys..better then red fish

  18. scott dennis Says:

    http://www.500realty.net

  19. REHound Says:

    Anyone still listening?

    Well, convergence is occurrring. On the sell side, Redfin has twice raised listing fees, first to $5000 and now to $7000 for what they call “premium” service. They further recommend a minimum 2.5% or 3% to buyer’s agent.

    On the buy side, service has increased, and so have fees. They will now show a buyer up to 6 homes. The mimum fee on the buyers side is also now $5000; the much-heralded rebate has been reduced to 1.5% (only on properties priced above $666,666 with a full 3% comission); buyers of entry-level properties are instructed to find an agent elsewhere.

    I’m guessing that venture capital has become harder to raise, and operating expenses will have to come from fees rather than gamblers (like Microsoft’s Paul Allen). Each change makes Redfin more like the traditional RE firms they made fun of in the beginning. Redfin just has a better website!

  20. REHound Says:

    We have it from the horse’s mouth: updated info from Redfin

    http://forums.redfin.com/rf/board/message?board.id=LA_OC&message.id=3968#M3968

    today, 1:08pm:

    …”As for how Redfin is doing, with your continued support we think we’re doing pretty well. We’ve completed over 2,500 transactions representing approximately 1.5 billion dollars.

    Matt

    Director of Online Marketing”

    ______________________________________________________

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