2. Can a computer really generate a comparative market analysis? A computer can provide some data for a comparative market analysis, but an agent’s judgment is valuable. And without such judgment the client is likely to overprice the listing and suffer on the market. Before Redfin lists a home, two Redfin agents typically prepare two separate comparative market analyses to ensure we agree on the price range; if there is significant disagreement, we perform a third. The weakness in our approach is that the agents have not seen the home, only a set of photos, but after having visited some homes we found that this made the customer feel better without having a material effect on the outcome of the analysis. That said, preparing a CMA without having seen the home is a weakness in our approach.

3. Don’t all agents market homes online? Even if we grant as you say that the majority of agents market homes online, this is not a guarantee. With Redfin, it is a term of our service that the property will be systematically posted to other websites multiple times a week. We have measured the effect of different online tactics, and optimized our strategy. There are few other brokerages that offer a defined, regular, sustained online marketing program as a term of its service.

4. Isn’t staging an important service for the brokerage to offer? We are now changing our listing program to include with our fee professional photography; we’re also preparing an online guide to staging a home, with photos to explain how different tactics improve a home’s appearance. That said, we still feel that a professional stager with a warehouse full of furniture is likely to deliver a better result than we can alone. We try to persuade our clients to think of the commission savings as money that can be used in part to invest in material improvements to the property, through staging, landscaping and painting. Some traditional agents offer such services at no additional charge; few offer $12,000 worth of services.

5. Do buyers ask for the commission savings the seller was anticipating getting for himself? We have never seen a buyer factor into his or her pricing the seller’s commission savings. Of course, our listing almost always offer a 3% commission to the buyer’s agent; this isn’t hypocrisy on our part, only pragmatism. We don’t want to discourage any buyer’s agents from recommending the property, and we are not trying to dictate to other brokerages what fees they should reap.

6. Are sellers really saving $12,000? Yes, this is the approximate average net savings, notwithstanding whatever money the customer invested in the property that he wouldn’t have had to invest himself if he had to work with a traditional agent. If a more accurate number were $10,000, we would have used that number; the commission savings are significant in any event, and we would rather be credible than aggressive in our claims. The number may actually decline as we enter less lucrative markets, and as housing prices overall decline. And we have been trying to develop a fair way to measure if we get a better or worse outcome than other brokerages, as this of course is the ultimate arbiter of our service’s value.

Thanks again for the great questions, and thanks Joel for your excellent post. I apologize in advance for any typos or gaffes; I had to write this in a rush!

What are you looking for in terms of real estate analytics data? We’re always looking to add more.

And we definitely added the similar listings to manage pricing expectations.

Matt
Redfin Lead Product Manager – Search

Sorry for the long post, and hope to hear some engaging responses.

6. Are Redfin sellers really saving $12,000 on average when you look at the big picture on the closing statement as to the net proceeds?

And we’re glad you like the new features!

Regards,
Cynthia Pang
Redfin