Seattle based Redfin, an online real estate startup, has raised another $10 million in a venture capital round led by Greylock Partners. Existing investors Madrona Venture Group, Draper Fisher Jurvetson, Vulcan Capital and The HIllman Company all participated in the round, and Greylock’s James Slavet joins the Redfin board of directors.
This was a safety round, as Redfin announced profitability over the summer and have now exceeded a $20 million in revenue run rate (it was just $15 million last summer). They’ve roughly quadrupled in size since 2008, even in a down real estate market.
I used Redfin as a buyer over the summer when I was looking for a house. Here’s how it works, and why it’s so attractive compared to normal real estate broker deals: As a buyer you spend a lot of time on the Redfin site, looking at available houses and a rich set of data on previous sales, comps in the neighborhood, other homes listed in the same price range, etc. (or you can use their iPhone app, which the company says is the highest rated real estate app).
If you want to view a home you schedule online. They set it up for you and meet you at the house.
In all, it isn’t much different than the standard buying a house procedure. Except at the end they refund 50% of their commission to you. On a $500,000 house, you get a check for $7,500 at closing.
Sellers who use Redfin pay a flat a $5,000 – $7,000 fee, depending on services ordered. And if you’re also using Redfin to buy a home while you are selling, that fee drops by $1,000.
As you can imagine, real estate professionals aren’t thrilled. Nor do they love CEO Glenn Kelman, who said In an interview with 60 Minutes: “Real Estate is by far the most screwed up industry in America.”
But customers clearly love the service, and they have closed more than $2 billion in home sales since launching in February 2006. The total U.S. home real estate market is around $1 trillion, so they have some room to grow.
Redfin is currently available in Boston, Chicago, Seattle, Washington DC, Baltimore, New York’s Long Island and Westchester County as well as most of California, including the San Francisco Bay Area, Southern California and Sacramento.
Good. There is a special place in hell for real estate agents.
Geez, you don’t need to be such dick. Many first-time home buyers/sellers appreciate having someone local to talk to and help guide them through the process.
“you don’t need to be such *a* …”
Sorry for the typo.
yeah, redfin does all that handholding too.
I’ve used RedFin to buy a home. You get what you pay for: professional staff, but not really on “your side” — can easily cost as much as it’s saving.
No realtor is on “your side,” heh. More power to Redfin for kicking butt
I know a guy who is in real estate and you should see how much she bitches about her “rivals.” I can see why Kelman isn’t the most popular CEO.
Should read: I know a girl.
I tried to start a realestate mapping website once. maplinkonline.com… Didn’t really take off.
I am in the process of buying and using them. They are just like a normal real estate agent but not trying to push you into fear buying and saying how great the market is now and its coming back. I love working with them
I agree with the hell comment on Real estate agents.
http://www.realestate.com does the same thing. Plus they’re connected with lenders directly so all of the financing is accessible.
You seem completely lost. You might consider reading and learning more rather than trying to “teach” people about topic in which you know little.
[I blame TC's use of Twitter for these ignoramuses presence *here*]
It would be nice spending a lot of time on the Redfin site using the Crunchpad.
with all these companies raising money recently, doesn’t anyone want to give me money for http://www.jicka.com ??
You don’t provide a valuable service, you provide a service that already exists and in a world where classifieds are shit unless a critical mass of people are using them, and you don’t seem to have the users either. Not sure what the check would be for.
Are you kidding, after looking at Jicka, I thought it was another ugly ass Craigslist knockoff. Couldn’t you have at least created a more inviting interface? I think you are going to be boostrapping along time or simply go bust.
Why use jicka when there is craigslist? Seriously dude, you are wasting your time with this.
come on guys why are you so negative. Just because there is craigslist doesn’t mean he should pack up. And his site isn’t as bad as you claim, upfront it appears to be more user friendly than craigslist, while still simple. The only thing bad about the site is that he doesn’t as much listing.
Keep it up dude. Wish you all the best.
As a Realtor, I’m obviously biased… but I will say that I like everything Redfin does aside from the buyer rebates. I’m not sure it’s sustainable in the long-run. For example, if they start giving rebates on their own listings, they take a 50% revenue cut. Other than that, I think they are great for our industry and I agree that our industry needs some change. Any industry built on profits from endless recruiting (and even recruiting based profit-share), which has lead to 80% who are part-time or worse, would need change. With that said, many have tried and have failed. I think companies like Redfin as well as other small boutiques that have quality agents and cater to the needs of their clients (not recruiting) are the future.
Just to clarify the ending above… Many have tried different models in our industry (including salaried agents) and failed, but I’d like to see companies like Redfin as well as other small boutiques that have quality agents and cater to the needs of their clients (not recruiting) succeed. I’d like to see agents act more like the professionals they should be… similar to accountants, lawyers, and other professional occupations.
Congrats to a great team. Kelman, Young, and Nagel are a great exec team.
By saying this is a safety round, is that to say there are no expansion plans nor plans to seek other revenue opportunities?
I talk about Redfin whenever real estate comes up, but they’ve been slacking in the innovation dept. of late. Realtors need more collaboration and management tools. All the realtors I know agree that they are overpaid, but they need tools to their businesses more efficient.
to make their businesses more efficient.*
Let’s hope they can tackle title insurance as well, what a scam!
I’m tempted to use Redfin to sell our place, although haven’t seen enough good data out there to determine if it’s worth it
I used Redfin as well when buying my home last summer. I didn’t use their agents, but their presentation of data was the best out there.
If you haven’t tried Redfin’s iPhone app you ought to give it a try. It has the best UI hands down of any of the real estate apps I have tried. It blows Zillows app out of the water for ease of use as well as presentation and accuracy of data.
Redfin is universally recognized by industry experts whose and economists whose incomes are not derived from the sale of homes as a breath of fresh air. Whether Redfin succeeds or someone else does doesn’t matter much, the standard Realtor model is destined to go the way of the dinosaur either way.
I hope they come to my state soon!
Yeah Redfin. You guys are hero’s.
Offering a rebate choice is good… BUT, it is important to know if the real estate agent collecting a commission which is then split with the buyer (whether Redfin or other) is, in fact, the SELLER’S agent, meaning that the rebating agent relays confidences of the buyer to the seller. Just because an agent drives a buyer around town looking at houses does not mean that broker is not the seller’s agent. Read your agreement and ask the agent. Just this lawyer’s free advice.
Redfin seems like a pretty good service, and it looks like just about everyone likes them. I can imagine that it’d be great to buy a house without having to wonder about your realtor’s motives.
Redfin represents a new model of professional p2p sales on a light-weight decentralized platform. It doesn’t take too much thinking to realize other similar innovations. Real estate is a great start. I completely agree, “Real Estate is by far the most screwed up industry in America.”
redfin is brilliant on a business level and a technical level. The website provides real estate data that the ‘industry’ hides from the public, so you can make informed decisions. With graphs and complex queries, this highly ajax-drive site is a winner. Bravo to redfin. They will do to the real estate industry what Charles Schwab did to the brokerage industry!