Today we announced the launch of the Redfin Comparative Market Analysis (CMA), a tool that harnesses Redfin’s technology, data science and agent expertise to give Redfin’s home-selling clients more accurate and transparent home pricing recommendations.
For the uninitiated, a CMA is an assessment of the value of a home based on other recently sold comparable homes in the neighborhood, or “comps.” Sellers rely on their agent to provide an accurate and clear CMA as they consider their home pricing and listing strategy.
Accurate pricing is critical to a home’s successful debut and sale. We estimate a house listed for sale gets three-and-a-half times more web traffic in the first seven days than it does a month later. If a home is overpriced when it hits the market, many buyers will dismiss it and won’t look again.
Agents use the CMA to guide discussions they have with their clients, helping sellers determine a smart listing price and helping buyers decide on a competitive offer price.
The Redfin CMA:
- incorporates real-time demand data, including the number of Redfin buyers actively looking for a home like the seller’s, to help the selling customer understand the current market trends that will influence their home sale.
- is built on the algorithm that powers the Redfin Estimate, Redfin’s automated home valuation tool, helping agents easily and quickly develop an accurate pricing recommendation.
- allows for complete customization, so that the final product is tailored to the particular client and their unique home.
- gets smarter as agents interact with the tool, using agent input on comparable homes to refine the suggestions in a continuous feedback loop. This saves agents time and in turn, sellers can move and act faster.
- is mobile-friendly, allowing an agent to quickly and easily create a CMA for their client immediately following a home tour to help inform a smart offer strategy.
- is integrated into the Redfin Agent Tools platform, a suite of technologies built for Redfin agents that help them serve their customers efficiently.
Like every new technology we develop, the Redfin CMA tool is the result of months of collaboration between Redfin engineers and real estate agents working together to build a better experience for our customers. This type of collaboration between people of otherwise distinct professional backgrounds is what makes Redfin unique, so we thought it’d be interesting to share more about the development process.
I asked Roddy de la Garza, a Redfin agent in Los Angeles who was a beta-tester and advisor on this project, for his insights into the tool and its creation.
First of all, why was it important to have a Redfin CMA tool?
My home-selling clients wanted more accurate, data-driven and agent-analyzed information to support the home prices I was recommending. Agents needed better, faster tools with a more elegant final product. Speed is important to stay competitive in today’s real estate market, so we needed faster tools that created a more elegant final product so we could quickly, but accurately, turn around a pricing recommendation for a listing consultation.
This tool gives our customers the best information about homes and the local market so we can help them make informed decisions. It helps us work more efficiently so we can spend our time working with our clients.
What were you using before?
Prior to the rollout of the Redfin CMA, Redfin agents were creating CMAs using a variety of tools and formats: some products available via our multiple listing service (MLS) membership and some through paid subscriptions. These tools were a huge improvement from the old days of making grids on a spreadsheet, but they lack the additional homebuyer demand data Redfin is able to provide, as well as the ability to customize it with my own insights. I’m excited to have a product I can really delight my clients with.
What’s your favorite thing about Redfin CMA?
It’s hard to choose one! It is so cool to go into a meeting with a potential seller and be able to say, ‘there are 357 people looking for a house like yours right now.’ And I can tell them the number of agents on my team who are currently working with buyers who may be interested in their home. They are just so wowed by that, and this kind of information has been extremely valuable in setting marketing strategies and determining when to list.
The way the tool pulls in suggested comps using the algorithm behind the Redfin Estimate has also helped me make better pricing recommendations. The comps are not always the same ones that I would have initially selected, but are often more aligned with the subject property in some way. At the same time, the tool gives me full control to choose my own comps. It even learns from the comps I suggest, so it gets smarter with every CMA.
How did your involvement influence the development of the tool?
Because Redfin employs agents and engineers, we are uniquely able to bring those two disciplines together to quickly iterate and hone a product. The entire development process was driven by input from agents, based on the feedback from our clients.
No one is more in tune to what is going on in the market than the people who are sitting at sellers’ kitchen tables having pricing conversations. In that way, Redfin has the best beta testers. The product we created is directly influenced by what the customer is telling us that they want.
To that end, agents requested that the tool be as customizable as possible, giving us flexibility to add and remove content to tailor the presentation to the specific client.
My role in the process was testing the tool out in the field. Just by using it and presenting it to clients, I was able to identify bugs and suggest things to adjustments and improvements.
The engineers took my feedback and rapidly integrated it, making improvements along the way. How the engineers went about taking feedback and integrating it so rapidly is beyond my understanding. It was quite a fun process to see the tool become more fully realized.
Tell me about Redfin’s approach to agent technology?
Redfin is passionate about improving the homebuying and selling process for our clients. We incorporate technology into every part of the process to give our clients a competitive edge in the market and to help our agents be more efficient. We use technology to streamline the process and reduce costs, so that we can pass those savings onto our customers.
I’ve been in the real estate industry for more than 20 years and the approach to technology is different at Redfin. I used to constantly think about what new thing I might have to buy and what new expense I’d have to incur to stay ahead. What’s great about Redfin is that we’re all invested in each other’s success.
It’s liberating to work for Redfin and know that I have all of these engineers and technology experts behind me. I can focus on serving my clients while feeling confident that my colleagues in Seattle and San Francisco are continuously building amazing and free tools for me.
What is the next step? Where do we go from here?
Now that we’ve rolled out the new tool to our agents across the country, the work doesn’t stop. The team is continuing to refine the technology, collecting input from our customers and agents in the field and integrating that feedback to help us all save time, work smarter and continue to delight our customers. It’s the Redfin way.
Click here to get in touch with a local Redfin agent to give you a professional estimate of your home’s value and tell you more about the home selling process.