Redfin is going to be hugely successful and kick the pants off of it's competitors. They are going to achieve this not because there is anything special about their pricing model but because they are executing flawlessly in a wholey consumer centric way and are developing the best online experience bar none.
Glenn published a great post today about usability testing (It was later removed. Only guessing that they took it down because it could be construed as being disrespectful to their clients/testers.)
Here are some of my favorite lines from the post: (I quoted liberally from the article because so much of it was valuable.)
A web designer couldn’t figure out our website. A former brokerage customer didn’t seem to realize we were a brokerage. Someone used Google to search Redfin’s search site.
Every time we tried to give the usability subjects a marketing message about how great we are, they didn’t merely dismiss it or bypass it. They didn’t even ignore it. They never saw it in the first place, because they were so engrossed in our real estate search application.
...We would blast them with a huge graphic about our customer service, right in the middle of the screen, and then, after asking them if they saw anything about customer service, watch as their cursor orbited the graphic in a long, fruitless search.
...When we exposed a button for scheduling a home tour, the usability subjects jumped all over it, because it was part of the application. The ... users were suddenly making quantum leaps of deduction: “you have a tours button, so you must have agents in addition to a website, so you must make money as a brokerage, probably splitting the commission since it’s partially on the web.”
What that means for us is that we’re going to have keep working to build a home-buying application that guides people all the way through escrow, rather than building a search site that reels customers in, then shows them an ad for our brokerage business.
Wow. They must be using some of my clients as guinea pigs then :) Too bad the original post got whacked...
I agree, their search application rocks! But, I can see and understand their implicit frustration with "capturing" the business and holding it through escrow. There's plenty of people smarter than I am when it comes to site useability, but I believe Brokers need more than a portal or a platform to excel. It's another piece of the branding process that fosters trust and credibility.
Jonathan,
I went to the Redfin website and checked them out after reading your post. I agree that they are executing flawlessly. Quite frankly, I'm impressed. However, I believe that their business model will violate all kinds of laws if and when they ever try to come to my state.
I have a couple of questions also. Who in the world would work for them as an agent and get so little pay for it. That's nuts - especially when they say that they give 2/3 of the commission back to the seller.
If Redfin is hiring agents to do their on site work, they're under NAR and local board guidelines. I see a myriad of problems from state to state here...
Perhaps I'm wrong, but surely they're wading into a quagmire. Let's hope so, because if they aren't, the end of the traditional real estate agent is in sight...
Jonathan, I guess to each his own. In our town, they would be laughed out of business. The market here is not condusive to the hands off approach to real estate and agents who work at Redfin because they feel like they were making TOO much money as traditional agents.
Redfin's home search is really fantastic. I've always admired it and thought it was great. There is business for all types of models. Redfin used to not do any showings, but realized that a good chunk of their target audience really wanted a Redfin agent to show the home. So they morphed and offered the service. To me that is a much more important indication of the health of a company is the ability to see what customers really want and they adapt.
Redfin has a killer search and I find it exciting to see a company keep playing around with their online presence, fine tuning it, tweaking it and perfecting it. Shows a real commitment to their customers and their agents.
Exciting times. Can't wait to see what they roll out next while others are stuck in status quo.
Oh I think they are way ahead of their time. They cater to a very specific group of people who know how to get around on the internet better than most agents. My daughter LOVES their website and is thrilled their business model exists. There are plenty of people who want the traditional agent and then there are people who don't and they should be given a choice and an alternative. There's enough business to go around.
This is so interesting! I'm very curious to see how Redfin evolves. They certainly have my attention. I've had 3 separate (and serious) inquries on 2 of my listings over the past 10 days - all from buyers who found my listings on Redfin. In looking at the site, they are presenting data in a way that makes sense to the buyer - it's impressive. I'm very interested to see how they continue to strengthen the relationship with the "searcher" and convert that to sales represented by Redfin. One of the buyers that contact me said they used Redfin to find the property, but were only interested in dealing directly with the listing agent. So, in this case, I guess I should say "thanks Redfin!".
Redfin is very impressive. Bob Haywood is on to something...
Jonathan, I'll agree that their search tool is pretty much second to none. However, it seems that their business model is bleeding money. I can't imagine that their business model contains much more than build this up and sell it before we go bankrupt or need another round of financing.
Hmm, I wonder though if it's possible to have it all. As Pamela stated above, they cater to a certain group of people. But it will be interesting to see if they are able to broaden that appeal through branding and marketing. They have a great search product, no doubt. I've closed several sales this year with buyers and sellers who have used it.
Redfin just came to Chicago, and I haven't heard a thing about them? Business model aside, their website is definitely something to take note of. They have really done a good job of building it based on consumer actions, and them A/B testing further proves that they will stay this course.
I wonder though if their findings are really that unique to real estate advertising. Seems that any site who makes their money off advertising (from your site to mine to big players like yahoo) have a big task in front of them on how to make their advertising relevant and important enough for the user to notice to ensure the advertiser is getting a return. Because of this advertising will continue to get smarter and more targeted to be as relevant as possible- which I think is a good thing.
Definitely an interesting company to watch. Thanks for posting, I hadn't seen Glenn's original post.
This is interesting. I like the name. I read the post then got into a 40-yr timewarp, looking for my old neighborhood in Chicago that I've never returned to... now, 20 minutes later, I'm back to comment. REDFIN is not in my state yet, but it looks very cool. And the mapping feature is just wild, tempting, seductive ...LOL! (If they use signs at houses, a 2' high red fin, flush with the grass, could look like a shark in green water... that might be eyecatching?) Thanks for sharing this.
I think RedFin is an interesting model...and will attract a certain segement of Realtors. But by nature, out business tends to attract individualists - people who believe they can and will do better running their own business. For their model to work - it would have to start pulling more "employees" to this field than entrepreneurs.
Hi Jonathan, As a new business model, it would behoove each of us to take the time and make observations and try out their site for functionality as well and how they position on Google. We can all learn to be more competitive with our online approach and the best way is to fully understand the dynamics of their approach. Thanks for bringing this forward to us.