On February 5, 2007, Redfin closed the books on its first year of Redfin Direct, a home-buying program that combines an e-commerce application with the services of a local, experienced Redfin agent.
Since we initially limited our service to buyers in the Seattle area, it was easy to tally how our service stacked up against other brokerages. According to data from the Seattle-area MLS, Redfin buyers were able to negotiate a significantly better deal on a house, on top of our 2/3rds commission refund. And the reason for it is simple: we pay agents customer satisfaction bonuses, not commissions, so our customers don't feel pressured to close at the wrong price.
The full paper is available here; or you can just scan the executive summary:
- Redfin King County customers paid on average 99.329% of the listing price while buyers with other brokerages paid 100.233% of listing price for a difference of .904%, for an average savings of $4,474;
- The total Redfin Advantage, combining the negotiating advantage and an average Washington commission refund of 1.952%, was 2.856%. The total savings for an average Washington customer was $14,134;
- 170 customers in King County bought a home through Redfin, 200 across Washington state;
- 64% of Redfin's buyers said Redfin was better or much better than a traditional agent;
- 95% would recommend Redfin to a friend; in the most recent survey, the percentage was 97%;
- 48% of Redfin buyers work in high technology;
- 90% are under 45;
- 37% are first-time home-buyers, a number that has doubled over the course of the year;
- 49% come through word of mouth; less than 2% through ads;
- 57% report that a seller's agent offered to represent both buyer and seller;
- 42% describe touring listings as their most important concern, despite a new free home-tour program from Redfin.
