Redfin Releases Market Data Showing Its Home Buyers Fare Better in Negotiations

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A F REDFIN LOGO REDFIN LOGO Redfin Corporation. (PRNewsFoto/REDFIN CORPORATION)[TK] SEATTLE, WA UNITED STATES 08/12/2008

    SEATTLE, March 25 /PRNewswire/ -- Online real estate broker Redfin
 Corporation today published an analysis of the last 12 months' public real
 estate records in Seattle and the San Francisco Bay Area that shows its
 buyers and their Redfin agents negotiated a better price than buyers who
 used other brokerages. Redfin's average negotiating advantage was $5,048.
 The company also reported a 95 percent customer satisfaction rate for users
 of its home-buying service, and an average commission refund of $10,520.
 
     (Logo: http://www.newscom.com/cgi-bin/prnh/20070426/SFTH054LOGO)
 
     As the real estate downturn has increased pressure on all brokers to
 negotiate prices, this year's report documents a larger Redfin advantage
 over other brokers. This negotiating advantage is consistent across
 different Redfin agents and different counties, and in markets that were
 healthy and slumping alike. Redfin first published this report at this time
 last year, to measure the result of its first year serving Seattle as an
 online real estate brokerage. For the new report, Redfin had been in two
 markets for a full year, both of which had a statistically significant
 number of Redfin transactions.
 
     "Why do Redfin customers consistently tend to negotiate a better price,
 in different markets and different market conditions?" said Redfin CEO
 Glenn Kelman. "Last year, we concluded it was because of our agents, whom
 we pay bonuses based on customer satisfaction rather than commissions.
 Others argued that it was because of our deal-savvy customers, who benefit
 from Redfin's transparency to take a more active role in the deal. Today,
 we think it's both: great agents paid to focus on customer satisfaction and
 more-engaged customers. Statisticians call this selection bias. We call it
 a partnership. Customers have more skin in the game, so they are a huge
 asset in our efforts to negotiate a good result."
 
     The original report, The Redfin Advantage, was the first data-driven
 analysis of broker performance in the industry. To measure its negotiating
 performance, Redfin used Multiple Listing Service (MLS) records to compare
 a listing's asking price to the final price that the buyer paid, segmenting
 buyers by brokerage to determine how Redfin buyers fared in negotiations
 compared to buyers working with other brokers. Based on the date of
 Redfin's original launch in February 2006, the period under consideration
 this year was Feb. 6, 2007 to Feb. 5, 2008.
 
     Because the records and methodology were available to others and the
 results were widely discussed, last year's report was validated by other
 brokers, with one correction made of .01%, for a difference of $54. Redfin
 also estimated its average commission refund over and above the negotiating
 savings, for a total savings in this year's report of $15,568. Both reports
 are available at http://www.redfin.com/advantage.
 
     95% Customer Satisfaction
 
     Redfin also released results of more than 1,200 customer-satisfaction
 surveys from customers who signed an offer with Redfin in 2007, regardless
 of whether the offer was successful. Redfin's customer-satisfaction rate
 across all the markets it serves was 95 percent. In addition, 72 percent
 said Redfin was better or much better than a traditional agent. The company
 also found that the demographic profile of Redfin customers has become more
 diverse: this year 33 percent of Redfin's potential buyers worked in
 technology compared to 48 percent last year.
 
     The Redfin Advantage Saves Buyers More Than $5,000
 
     Redfin buyers paid on average 0.928 percent less than the average
 homebuyer over the same time period, saving an average of $5,048. This is
 up from $4,420 last year. The total Redfin Advantage, combining the average
 negotiating advantage and the average commission refund of 1.934 percent,
 was 2.862 percent. The total savings for the average Redfin customer was
 $15,568.
 
     San Francisco Sees Highest Negotiating Advantage, Savings
 
     Redfin home buyers in San Francisco County paid on average 100.771
 percent of the listing price, while buyers with other brokerages paid
 102.406 percent. The 1.635 percent difference represents an average savings
 of $13,635.
 
 

     --  The average commission refund was $14,402, 1.727 percent of the final
         sales price.
     --  The total Redfin Advantage was 3.362 percent, for an average total
         savings of $28,037.
 
     Santa Clara Receives Biggest Commission Refund
 
     The average commission refund for Redfin home buyers in Santa Clara
 County was $16,107, 1.858 percent of the final sales price.
 
 

     --  Redfin Santa Clara buyers paid on average 98.755 percent of the
         listing price, while buyers who used other brokerages paid 99.834
         percent. The 1.079 percent difference represents an average savings of
         $9,354.
     --  The total Redfin Advantage was 2.937 percent, for an average total
         savings of $25,461.
 
     Seattle Gets Largest Commission Refund, as a Percentage of Sale Price
 
     King County's Redfin home buyers received an average commission refund
 of 1.954 percent of the final sales price, representing $9,772.
 
 

     --  Redfin King County buyers paid on average 98.885 percent of the
         listing price, while buyers who used other brokerages paid 99.383
         percent. The difference of 0.498 percent represents an average savings
         of $2,490.
     --  The total Redfin Advantage was 2.452 percent, for an average total
         savings of $12,262.
 
     About the Study and Customer Survey
 
     For this study, Redfin looked at the two markets in which the company
 has offered its home-buying service for at least one full year since Feb.
 6, 2007: the San Francisco Bay Area and Seattle area. Redfin compared the
 final-sale price to the list price at the time of sale for all condominiums
 and residential houses sold between Feb. 6, 2007 and Feb. 5, 2008.
 
     The analyses presented in this report incorporated information from
 Redfin's financial records of 537 home-buyer refunds in California and
 Washington state, excluding customers who received a complete refund as
 part of Redfin's satisfaction guarantee or employee home-buying program.
 The report also analyzed data from three MLSs: San Francisco Multiple
 Listing Service, MLS Listings Inc. and Northwest Multiple Listing Service.
 Redfin reported results from counties where the observed results were
 statistically significant.
 
     The company did not investigate whether there is a Redfin Advantage for
 people who sold homes through Redfin. This is because comparing the
 final-sale price to the listing price at time of sale is not a useful
 metric since the seller's agent has a major role in setting the listing
 price.
 
     The customer survey data is comprised of 1,263 responses from all
 markets where Redfin offered service in 2007. Redfin sends out
 customer-satisfaction surveys to all customers whom signed an offer,
 regardless of whether the offer is successful. The full analysis is
 available at http://www.redfin.com/advantage, including instructions on how
 to re-create the data set.
 
     About Redfin
 
     Redfin (http://www.redfin.com) is the real estate industry's first
 online brokerage, currently available in Greater Boston; the San Francisco
 Bay Area; Greater Seattle; Southern California, including Los Angeles,
 Orange County and San Diego; and the Washington, D.C area, including
 Baltimore. By combining maps, listings, tax records and analytics, 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; to keep track of our
 daring exploits via our blog, go to blog.redfin.com.
 
 
 

SOURCE Redfin Corporation