{"id":65710,"date":"2019-05-08T13:40:04","date_gmt":"2019-05-08T20:40:04","guid":{"rendered":"https:\/\/redfindevelop.wpengine.com\/blog\/?p=65710"},"modified":"2025-07-01T05:52:18","modified_gmt":"2025-07-01T12:52:18","slug":"redfin-direct-unrepresented-buyers","status":"publish","type":"post","link":"https:\/\/www.redfin.com\/news\/redfin-direct-unrepresented-buyers\/","title":{"rendered":"Back to the Future: The Buy-It Button Comes to Redfin.com"},"content":{"rendered":"

On March 28, a real estate reporter in midtown Manhattan asked me over coffee what company was going to be the next great disruptive force in real estate. \u201cIt couldn\u2019t be you,\u201d she explained apologetically, \u201cbecause you have agents.\u201d That same day, Redfin had started a Boston-area pilot of Redfin Direct<\/a>\u2122<\/span>, for people to buy Redfin listings through our site without an agent.<\/span><\/p>\n

We had decided against publicizing Direct until it led to a few sales, but as of today, it has: of the 127 Boston listings that have accepted an offer since March 28, five have been Direct offers. Another 12 of those listings rejected a Direct offer, most of which could easily have won; 77% were within 5% of asking price; 31% were cash offers.<\/span><\/p>\n

A Total Commission of 2%<\/b><\/h3>\n

Our goal all along was to get more offers for the customers who hired us to sell their homes, and more money in their pockets. We\u2019ve long charged home-sellers in Boston 1% for our own service, and our sellers usually offer an additional 2% to 2.5% for the buyer\u2019s agent. But now, with an offer from an unrepresented buyer, sellers pay an additional 1% to Redfin in lieu of the buyers\u2019 agent fee, for a total commission of 2%.<\/span>
\n\"Redfin<\/p>\n

What Took Us So Long?<\/b><\/h3>\n

Before now, we didn\u2019t have the market presence to make this work. The ability to pair buyers and sellers online depends on listing many homes for sale, and reaching many buyers. We listed 25,000 homes for sale last year. We now promote our listings on a website that reaches 30 million visitors per month.<\/span>
\nTo attract unrepresented buyers, we first changed the Redfin.com page that shows a Redfin listing, explaining how to make an offer online, and why that offer could be more compelling to the homeowner:<\/span><\/p>\n

\"Redfin<\/figure>\n

We then developed a 55-question online tool for preparing a Boston offer. This easy, step-by-step guide uses data that only we have, collected from other homebuyers\u2019 offers via the Fast Offers software Redfin built for our agents to generate offer paperwork for our brokerage\u2019s homebuyers:<\/span><\/p>\n

\"Redfin<\/figure>\n

This data is crucial to making unrepresented offers credible. We can tell an unrepresented buyer that 71% of recent Boston-area Redfin client offers included an inspection contingency, or that 87% included a financing contingency. We know that Boston listings sell on average for 1% less than the listing price.<\/span><\/p>\n

The software and staff we already have in place to support our brokerage customers made it easier to support Redfin Direct. Our website already lets brokerage customers schedule a tour of any listing online. A network of licensed agents gives brokerage customers on-demand access to homes, even when our employee agents aren\u2019t available. An unrepresented buyer who wants to tour a Redfin listing can now use this same system to access Redfin listings.<\/span><\/p>\n

Back to the Future<\/b><\/h3>\n

Historians of Redfin may remember that Redfin Direct was also the name of the original service<\/a> we launched in 2006, which let homebuyers make an offer on any listing, not just the homes Redfin had been hired to sell. These historians will also remember what a disaster this service was: buyers came tramping across the lawns of other brokers\u2019 listings at random times demanding property access, and put together hopelessly off-base offers, all while I re-enacted a bizarre self-destruction ritual each day with the press.<\/span><\/p>\n

We changed because we realized it wasn\u2019t fair to those brokers, and it didn\u2019t work for our homebuyers, who never seemed to win a bidding war. The problem was that we didn\u2019t get to decide how a home would be toured or bought when it wasn\u2019t listed by Redfin, and we didn\u2019t have the staff to get homebuyers into listings, nor the data to tell them what it would take to win.<\/span><\/p>\n

Everyone assumed we concluded that this was a terrible idea when in fact it was a great idea, just one that depended on our listing many homes for sale first. In interview after interview, I was asked if I\u2019d learned my lesson, and I always said that I\u2019d learned to be more respectful of other brokerages, but that we still saw ourselves as one of the heroes in a story about how real estate could change. It was just a question of when.<\/span><\/p>\n

The True Innovators at Redfin: Brokers and Lawyers<\/b><\/h3>\n

Then, last spring, at the tail end of a long meeting, our legal team said it had one more matter to discuss. An unusual number of unrepresented buyers were approaching Redfin\u2019s listing agents, trying to make an offer. It was a sign to me that homebuyers had finally begun to change, but our agents didn\u2019t know what to do.<\/span><\/p>\n

Our attorneys intervened, saying our duty was to the seller, and that we should take an offer from an unrepresented buyer. Scott Nagel, our president of real estate operations, then reminded me that two of our best field leaders, Paul Reid and Nick Boniakowski, had been campaigning for years to build online tools to get more offers from unrepresented buyers for our sellers.<\/span><\/p>\n

It was so exciting! It felt like that moment in the movie Inception, when a decrepit Leonardo DiCaprio calls out to an ancient Ken Watanabe, to take a leap of faith, to embrace a radical notion in a half-remembered dream, to destroy the old version of themselves so that they could be young again:<\/span>
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