Online real estate broker redfin.com has revealed the latest in a series of major changes to its website.
Described on the company’s blog as “sprawling” and “glorious”, the changes alter Redfin in two fundamental ways:
Firstly, the website now includes data-driven agent profiles showing every deal Redfin’s own agents have done and every customer review – the good, the bad and the ugly. It’s like tripadvisor for real estate agents. As the LA Times reports, agents will not be able to censor reviews, but do have the right to comment on them.
But the even bigger news is that Redfin has opened its business to partner agents and published all their deals too, surveying old customers for reviews. This allows Redfin to expand into new areas, giving them 55 agents from a dozen different brokers, where they previously had just 20 Redfin-only agents. The company has personally screened and interviewed all the new partner agents many of whom work for big name brokerages, and most of whom have a few hundred successful deals under the belt.
This referral scheme allows Redfin to become a truly national brokerage, without the cost of setting up offices.
The business model is interesting:
“Redfin only makes money when a customer completes a transaction. We don’t earn anything if the customer isn’t happy,” the company says. If the customer successfully completes a transaction, Redfin earns a fairly standard 30% of the partner agent’s fee, but half this is refunded to the consumer at closing, usually worth at least $1,000. And Redfin’s take is 5% lower if the agent builds a record of good service. There is no cost for agents to apply or have their profile on Redfin, and agents who deliver bad service get fired from the program.
“What we’re really trying to do with both initiatives is to find a way to change the real estate game on a national scale, without screwing up our commitment to customers to deliver fanatical service,” says CEO Glenn Kelman.
Fully online brokerages and agent reviews have been on the cards for some time – indeed, many are already doing both. Let us know what you think by commenting below.
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