Finds .904% Negotiating Advantage, 1.952% Average Commission Refund, 95%
Customer Satisfaction; The Most Common Type of Redfin Buyer is a
First-Timer
SEATTLE, Feb. 26 /PRNewswire/ -- Online real estate broker Redfin
Corporation today released a market analysis that shows its Seattle-area
buyers' agents negotiate a price that is on average lower than the listing
price, while other area brokerages negotiate a price on average above the
listing price. Based on Northwest Multiple Listing Service (NWMLS) data,
the analysis surveys all King County transactions completed in the year
since Redfin launched its e-commerce program for home-buyers, Redfin
Direct. The market analysis is available at
http://www.redfin.com/advantage.
Available now in major metropolitan areas of California and Washington
state, Redfin Direct is a home-buying program that combines an e-commerce
application with the services of a local, experienced Redfin agent who
handles home tours, pricing advice, offer presentation, negotiations,
inspections and the closing process. Home-buyers who can find a home to buy
on their own get two-thirds of Redfin's commission refunded at closing.
Because Redfin initially launched Direct for home-buyers in King
County, the NWMLS analysis focuses on King County home-buyers completing a
purchase from the date of the launch on Feb. 6, 2006 through Feb. 5, 2007.
The negotiating analysis does not include Redfin's service for sellers,
which launched in September 2006, or its California business, which opened
in May 2006. To date, more than 300 customers have bought or sold
properties through Redfin; 170 are King County buyers included in the
analysis.
In Seattle, where Redfin's home-buying service has been available for a
year, Redfin buyers on average paid 99.329 percent of the listing price,
while buyers with other brokerages paid 100.233 percent of the listing
price, for a difference of .904 percent, or an average savings of $4,474.
Redfin's negotiating advantage was most pronounced for condominiums,
where it is easiest to make the price comparisons used in negotiations,
with Redfin averaging 1.351 percent below the listing price, and other
brokerages averaging .366 percent above the listing price, for a total
difference of 1.718 percent.
For the same time period, Redfin's average commission refund for
Washington customers was 1.95 percent of the home price; combining the
refund percentage with the negotiating advantage yields a total savings
over the past year of 2.86 percent. This amounted to an average total
savings of $14,134 per customer.
As part of the same analysis, Redfin also published the results of nine
customer satisfaction surveys distributed to each person who attempted to
buy a property through Redfin, regardless of whether the attempt was a
success. From Feb. 6, 2006 to Feb. 5, 2007, Redfin's customer satisfaction
rate across both California and Washington markets was 95 percent; 37
percent of its home-buying customers were first-time home-buyers; 64
percent said Redfin was better or much better than a traditional agent.
The NWMLS analysis challenges industry arguments that traditional
agents offset higher commissions by negotiating a lower price for their
buyers. This argument is difficult to settle for a seller's agent. Because
the seller's agent sets the listing price, the seller's agent can
under-price the property and then claim to have negotiated for a higher
price. Evaluating a buyer's agent is more straightforward, because the
buyer's agent is negotiating a price set by the other side. For each deal,
the listing price set by the seller's agent may be too high or too low, but
this averages out over a large number of deals.
"No analysis is perfect, but the best available data shows that our
customers pay lower than listing price on average, and other brokerages'
customers pay higher than listing price on average," said Redfin CEO Glenn
Kelman. "We attribute our negotiating advantage to how we structure our
business: Redfin pays its agents bonuses based on customer satisfaction,
whereas a traditional buyer's agent earns a percentage of the sale when the
deal closes, regardless of price. People do what they are paid to do, and
we pay our agents to get the deal the customer wants."
About the Study and Customer Survey
Redfin's analysis compared the listing and final prices for King County
homes as reported by the NWMLS for sales closed between Feb. 6, 2006 and
Feb. 5, 2007. The full analysis is available at
http://www.redfin.com/advantage, including instructions on how to re-create
the NWMLS data set.
Redfin calculated the average commission refund based on the company's
financial records for all customer refunds in Washington between Feb. 6,
2006 and Feb. 5, 2007, excluding customers who got a complete refund as
part of Redfin's satisfaction guarantee or employee home-buying program.
The customer survey data is comprised of 247 responses from nine
surveys distributed by a Redfin executive at regular intervals from Feb. 6,
2006 to Feb. 5, 2007 to every buyer or would-be buyer who signs a Redfin
offer, regardless of whether the offer succeeds or fails.
About Redfin
Redfin (http://www.redfin.com) is the real estate industry's first
online brokerage, currently available in Greater Seattle, the San Francisco
Bay Area and Southern California, including Los Angeles, Orange County, the
Inland Empire and San Diego. By combining maps, listings, tax records,
analytics and eyewitness property reviews, Redfin has become one of the
most popular brokerage sites. Customers who use Redfin.com to buy or sell
properties earn a refund of most of the commission traditionally due their
broker, and get full support in paperwork, offer presentation, negotiations
and closing. Redfin has one of the highest customer satisfaction rates in
the industry, and is the only brokerage with a 100 percent customer
satisfaction guarantee. To give the Redfin service a try, visit
http://www.redfin.com, or keep track of our daring exploits via our blog,
at blog.redfin.com.
SOURCE Redfin Corporation
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Related links:
http://www.redfin.com/
CONTACT:
Cynthia Pang of Redfin Corporation,
+1-206-859-2834, cynthia.pang@redfin.com
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