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Redfin

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This is an old revision of this page, as edited by Litesand (talk | contribs) at 18:13, 13 April 2023 (Added back in ==Criticism== and ===Referral partner program===). The present address (URL) is a permanent link to this revision, which may differ significantly from the current revision.

This article is about real estate website. For Redfin perch, see European perch. For South African redfin barbs, see Pseudobarbus and Barbus.
Redfin Corporation
Company typePublic
IndustryReal estate
Founded2004; 20 years ago (2004)
Seattle, Washington, U.S.
Founders
  • David Eraker
  • Michael Dougherty
  • David Selinger
Headquarters
Seattle, Washington
,
U.S.
Area served
100+ markets in the United States and Canada as of 2021[1]
Key people
Glenn Kelman (CEO)
Bridget Frey (CTO)
Chris Nielsen (CFO)
ServicesReal estate agent
Broker
RevenueIncrease US$1.92 billion (2021)[1]
Decrease US$−110 million (2021)[1]
Decrease US$−110 million (2021)[1]
Total assetsIncrease US$2.02 billion (2021)[1]
Total equityDecrease US$310 million (2021)[1]
Number of employees
6,485 (December 2021)
SubsidiariesRentPath
Bay Equity Home Loans
Title Forward Settlement Solutions
Websitewww.redfin.com
Footnotes / references
[1]
Redfin headquarters are in the Hill7 Building, in South Lake Union, Seattle

The Redfin Corporation is a Seattle-based operator of a residential real estate brokerage and a broker-to-broker referral fee network. The company operates in more than 100 markets in the United States and Canada.[1][self-published source]

History

Redfin was founded in 2004 by David Eraker, Michael Dougherty, and David Selinger. Eraker had dropped out of medical school at the University of Washington for a career in software design and Dougherty received degrees in electrical engineering and international studies from Yale University.[2][3] David Selinger, an alumnus of Stanford University who had previously led the research and development arm of Amazon's data mining and personalization team, joined Redfin as the third founder and CTO. Selinger helped build Redfin's mapping and real estate data analytics engine.[4] The company name is an anagram of the words "finder" and "friend".[5]

In January 2006, Redfin named Glenn Kelman as CEO.[6] The company's website began to show available homes on an interactive map in 2007, which was a new concept at the time.[7]

In 2012, Redfin began an automatic agent rating system. After it drew criticism for using inaccurate data, the system was discontinued.[8]

In June 2017, the company began buying and selling houses directly under the brand Redfin Now.[9]

On July 28, 2017, Redfin became a public company via an initial public offering, raising $138 million.[10]

In June 2019, Redfin began allowing buyers to submit offers on homes listed by Redfin's selling agents without using a buyer's agent.[11] A month later, the company partnered with Opendoor, whereby visitors to the Redfin website can request an offer to buy their houses from Opendoor.[12]

In December 2021, Redfin announced it would no longer include neighborhood crime data in search results due to "inaccuracy" in Federal Bureau of Investigation crime data, and because Bureau of Justice Statistics data was "troubling" because "people reporting crimes were more likely to describe their offender as young, male, and Black".[13]

In 2021, the company had a 1.17% market share in the United States by value.[1]

In June 2022, the company announced layoffs of 8% of its staff amid a downturn in the housing market.[14]

Acquisitions

Date Acquired Description Cost Source
October 2014 Walk Score Analysis and apartment search tool N/A [15][16]
April 2021 RentPath Owner of Apartment Guide, Rent.com, Lovely, and Rentals.com $608 million [17]
January 2022 Bay Equity Home Loans Mortgage lender $137.8 million [18][19]

Fines and litigation

In May 2007, Redfin was fined $50,000 by the Northwest Multiple Listing Service, and was forced to shut down reviews of homes on the market on its website, prohibited under multiple listing service rules.[20]

In November 2020, a class-action lawsuit by several fair housing organizations accused Redfin of violating the Fair Housing Act by offering fewer services to homebuyers and sellers in minority communities and not offering to sell lower-priced homes because of the lower profits on such sales.[21][22][23] In 2022, the company paid $4 million to settle the lawsuit, changed its policies, and implemented a new internal monitoring system.[24][25]

Criticism

Referral partner program

According to Redfin Corporation Form 10-K filing with the SEC on February 10, 2022, Redfin brokerage employs on average 2,396 genuine Redfin Agents and, concurrently, maintains a series of uniform blanket customer allocation agreements with a network of 10,700 agents from other brokerages, aka Redfin Partner Agents. [26]

In 2017, out of 7,733 of Redfin's real estate transactions originated, its referral network completed 2,041. Redfin Partner Agents agree to pay Redfin 30% of their gross commissions they close referred transactions. Once Redfin refers a customer to a partner agent, that agent, not Redfin, represents the customer from the initial meeting through closing. Referral fees lead to an inefficiency known as "reverse competition", where referring agents compete not for the consumer's attention, but for the attention of Redfin, which steers the consumer toward its network of agents and away from competitors. Such steering may result in lower quality of service or higher commissions, fees, and price levels. Some real estate agents advocate that referral fee agents make consumers a commodity that the referral agent is selling to another agent.[27]

For instance, during Q4 2022 Earnings Call, Glenn Kelman, CEO at Redfin Corporation, openly admitted that farming out customers to "partner agents" perpetually is far more profitable than directly serving these customers: “[t]he percentage of homebuyers served by our partner agents instead of our employees will increase from 37% in 2022 to projected 42% in 2023. We decided to sell more demand to partners after accounting for costs that aren't directly tied to a sale, but that still grow with the number of agents we employ, like the cost of human resources support and training for agents. This decision will not only increase 2023 profits but also limit layoffs and losses in future downturns”[28]

Redfin website states: “Do I have to leave my brokerage to join the Redfin Partner Program? Nope, and that’s the whole idea. You can keep hanging your license at your current brokerage. You'll just get extra referral business from Redfin, too.” [29]

According to US-DOJ, “[h]orizontal customer allocation is an agreement among competitors at the same level of distribution of a product or service that each will service certain designated customers or classes of customers and will not attempt to compete, or will limit the manner in which they will compete, for the business of customers allocated to a competitor” [30]

Awards

In July 2006, Inman News awarded Redfin the Innovator Award for the Most Innovative Business Model.[31]

In May 2010, Redfin won the Seattle 2.0 award for "Best Startup".[32]

In October 2012, Redfin was named one of The DIGITAL 100: World's Most Valuable Private Tech Companies by Business Insider.[33]

In July 2013, Inman News awarded Redfin an award for "Most Innovative Brokerage or Franchise".[34]

In June 2014, Seattle Business magazine recognized Redfin as the best company to work for in Seattle in the Large Companies category.[35]

Redfin was named the one of the top tech companies to work for in Seattle by Hired.com.[36]

See also

References

  1. ^ a b c d e f g h i "Redfin Corporation 2021 Annual Report (Form 10-K)". SEC.gov. U.S. Securities and Exchange Commission. 17 February 2022.
  2. ^ Rhodes, Elizabeth (September 26, 2004). "A sit-down, flyby real-estate overview". The Seattle Times.
  3. ^ Stone, Brad (March 7, 2013). "Why Redfin, Zillow and Trulia Haven't Killed Off Real Estate Brokers". Bloomberg News.
  4. ^ "David Selinger". Entrepreneur.
  5. ^ COLVIN, GEOFF (February 10, 2022). "Redfin CEO Glenn Kelman predicts the future of real estate—from 3D scans to agents making $700,000". Fortune.
  6. ^ "Redfin raises $1.25M, names new CEO". American City Business Journals. January 9, 2006.
  7. ^ Lee, Timothy B. (August 10, 2015). "Redfin set out to change real estate. Then real estate changed Redfin". Vox Media.
  8. ^ Carrns, Ann (May 1, 2012). "New Battle on Providing Real Estate Agent Performance Data". The New York Times.
  9. ^ SOPER, TAYLOR (June 30, 2017). "Redfin testing 'Redfin Now' service that lets it buy and resell homes directly with customers". GeekWire.
  10. ^ Olick, Diana; Balakrishnan, Anita (July 28, 2017). "Real estate start-up Redfin surges over 44% in IPO: 'We are the Apple of real estate,' CEO says". CNBC.
  11. ^ Zafar, Nina (June 4, 2019). "Redfin's newest online tool cuts out the buyer's agent". The Washington Post.
  12. ^ Clark, Patrick (July 11, 2019). "Opendoor Partners With Redfin to Expand Home-Flipping Reach". Bloomberg News.
  13. ^ Sabes, Adam (December 18, 2021). "Real estate websites don't include crime data from property listings due to 'racial bias'". Fox Business.
  14. ^ Saric, Ivana (June 14, 2022). "Redfin laying off 8% of its staff". Axios.
  15. ^ "Redfin Acquires Walk Score" (Press release). Business Wire. October 22, 2014.
  16. ^ COOK, JOHN (October 22, 2014). "Redfin buys Walk Score, marking first acquisition in company history". GeekWire.
  17. ^ "Redfin Completes Acquisition of RentPath for $608 Million" (Press release). PR Newswire. April 5, 2021.
  18. ^ "Redfin Completes Acquisition of Bay Equity Home Loans for $137.8 Million" (Press release). PR Newswire. April 4, 2022.
  19. ^ Escobar, Sabrina (January 12, 2022). "Redfin's Purchase of Bay Equity Home Loans Is 'Positive Step'". Barron's.
  20. ^ Cook, John (May 17, 2007). "Redfin fined $50,000, shuts down home reviews". Seattle Post-Intelligencer.
  21. ^ Johnson, Gene (October 31, 2020). "Fair housing groups sue Redfin with allegations of 'redlining' minority communities". USA Today. Associated Press.
  22. ^ Lerner, Michele (November 2, 2020). "Housing groups sue Redfin, alleging federal discrimination violations". The Washington Post.
  23. ^ "A Progressive Real Estate Firm Faces Accusations of Discrimination". Bloomberg News. January 18, 2022.
  24. ^ BISHOP, TODD (May 2, 2022). "Redfin will implement internal fair housing monitoring system in $4M legal settlement". GeekWire.
  25. ^ "Redfin settles lawsuit alleging housing discrimination". Daily Record. Associated Press. April 29, 2022.
  26. ^ "Redfin Corporation Form 10-K for the fiscal year ended December 31, 2021" (PDF).
  27. ^ Weintraub, Elizabeth (February 15, 2017). "Should You Hire a Referral Agent?". Dotdash Meredith.
  28. ^ "Redfin (RDFN) Q4 2022 Earnings Call Transcript".
  29. ^ "Redfin Partner Program webpage".
  30. ^ "Identifying Market Allocation Activities".
  31. ^ "Redfin Wins Innovator of the Year Award From Inman News at Real Estate Connect" (Press release). PR Web. July 30, 2006.
  32. ^ Huang, Gregory T. (May 20, 2010). "Redfin, Bonanzle, TisBest Win Seattle 2.0 Awards". Xconomy.
  33. ^ Shontell, Alyson (October 3, 2012). "The 2012 Digital 100: The Complete List 1-100". Business Insider.
  34. ^ "Announcing: 2013 Innovator Awards winners". Bradley Inman. July 12, 2013.
  35. ^ Horton, Nick (July 2014). "100 Best Companies to Work For 2014: Large Companies". Seattle Business Magazine.
  36. ^ Pratini, Napala (December 13, 2019). "5 Top Employers in Seattle According to Tech Workers". Hired.com.
  • Official website
  • Business data for Redfin Corp.:
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