From the Redfin Corporate Blog:

Big news! Redfin just announced a $10-million round of financing led by Greylock Partners’ James Slavet and his colleague David Thacker. Redfin’s group of existing investors — Madrona Venture Group, Vulcan Capital, DFJ, The Hillman Company — also pitched in on the round.

This new round of financing brings the total investment in the Seattle-based brokerage to just north of $30 Million. Greylock joins Madrona Venture Group, Draper Fisher Jurvertson, Vulcan Capital and the Hillman Company as investors in the firm.

Some key metrics released by Redfin in their blog post:

# Revenue exceeded a $20 million yearly run-rate and Redfin generated its first profits
# Redfin shipped the highest-rated iPhone application for real estate
# Site visits increased more than 200%
# Total dollar-value of Redfin transactions since inception exceeded $2 billion
# Redfin customer satisfaction remained at 97%

This news, coupled with the announcement that Realogy is in the black for Q3 surely means that things are starting to look up in the real estate space.

Congrats to all the Redfin crew.

More at Techcrunch.

Photo by aresauburn™

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Says CEO Glenn Kelman, via Techcrunch

…the run rate is around $15 million. 2007 revenues were $5 million, 2006 revenues were $1 million.

Congrats to all the folks at Redfin. Their model, while clearly controversial, seems to be succeeding.

Their web site is world class (see 10 Kick Ass Real Estate Search Sites) and the company has pushed a number of novel consumer-focused ideas lately; including introducing ratings for all of its agents.

Now the road to profitability has been rocky (see Redfin Downsizes To Keep Swimming) but this is definitely good news for the Seattle-based brokerage.

Hopefully we continue to hear much more from them in the future.

Photo by buildingresults

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I was out sick for most of last week so rather than regurgitate a bunch of old news; here’s a quick summary of the reaction to some of the bigger stories.

Redfin’s New (Old) Business Model

Redfin launched a referral-based business model that allows them to expand in to new markets. They also add data-rich review pages on all their agents.

Tech Crunch – Redfin Rolls Out The Welcome Mat For Foes Amidst Real Estate Crisis

With the real estate market contracting and credit tightening, Redfin has been forced to reconsider its business model. It seems that these partnerships with real estate agents was necessary for Redfin to expand throughout the country without having to hire more agents.

Redfin Corporate Blog – Redfin Creates a Marketplace for Agents

Sure, these guys work for traditional brokers like Century 21, Prudential, and Coldwell Banker, but they’re progressive: as part of the program, they agreed always to put the customer first, to let us publish all sorts of data about their performance — and to refund part of their commission too.

TechFlash – Once arch enemies, Redfin partners with real estate agents

The concept is not new. In fact, Seattle area companies such as Estately and Market Leader (Formerly HouseValues. Note: post has been updated to reflect the company’s current name) also earn money through agent referrals. But the program is a big switch for Redfin, which has always touted the customer service focus of its agents.

Rain City Guide – Redfin Circles Back to an Old Biz Model…

this is a business model that they’ve tried in the past… and it failed miserably the first time.

The Notorious R.O.B. – Redfin Transforms: The End of the Beginning?

Redfin was the pioneer of a new model, centered around a fantastic website, direct consumer engagement, and a novel refund concept. Their obsession with transparency, truly excellent user experience online, and “freakish depth” was the precursor to what the brokerage of the future might look like.

That chapter, I think, now comes to a close. The new real estate companies have found that they cannot make money directly from consumers.

Bottom line?

It sure does look like Redfin is getting back into the lead-gen game. But I think this a smart move for them. It’s a quick and easy way for them to ramp up service in areas they don’t already serve. And heck, why reinvent the wheel?

They already have the best search experience on the web (hands down) and this is the best way for them to leverage that asset.

Will it succeed? Who knows. But the agent reviews rock.

Trulia Takes On HomeFinder

Fresh from it’s recent dust up with Realtor.com (see Take the Trulia Challenge), Trulia seems to be picking a fight with another industry giant. This time it’s Classified Ventures Inc’s HomeFinder (formerly HomeScape) and last week Trulia snagged a crown jewel by snatching the Washington Post away from them.

Inman News – Trulia to power WashingtonPost.com searches

The Washington Post hopes a new partnership with Trulia will help the newspaper’s Web site become the “definitive source” for real estate information in and around the nation’s capital.

Local Onliner – Real Estate Coup: The Washington Post Quits HomeFinder for Trulia

The move from a Classified Ventures, Inc. (CVI) product is somewhat surprising, in part because The Washington Post Co. is a CVI shareholder, along with several other newspaper companies.

VentureBeat – Real estate sites like Trulia see record traffic and revenue

It’s yet another sign newspapers haven’t been able to figure out how to manage their once-lucrative classifieds offerings themselves. They’re dependent on startups like Trulia to do the work for them.

Bottom line?

Newspapers have, overall, done a pretty crappy job of creating a compelling online experience for consumers to replace their dead tree Sunday real estate sections.

More importantly however, they’ve done even less to attract the real estate advertising dollars that are fleeing print.

Now they’re desperate to claw back even a little bit of that revenue and help with their hemorrhaging budgets and Trulia’s offering stems the bleeding just a tiny bit.

At least it buys them a little time to figure out what they’re going to do. And they can’t beat the price (free).

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This week Redfin shuttered its hyperlocal Sweet Digs blogs in San Francisco, Boston, San Diego and Orange County.

Sweet Digs Seattle is still alive but it looks like it has turned into a more traditional brokerage blog; now just advertising Redfin’s new listings and open houses.

Sweet Digs was initially founded to replicate the formula pioneered by successful local blogs like Brownstoner and Curbed. Hire independent bloggers, blog about real estate in each market, create light yet compelling content, build a community and grow an affinity amongst consumers for the Redfin brand.

Presumably the expense of running the blogs was just too big for them to bear in this market. So they’re now retooling the blogs to focus on simply providing hard data for each of the markets they serve.

As a creative experiment in social media, it’s a shame to see them go.

[h/t 360Digest]

redfin, sweet digs, real estate 2.0

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In what is likely the first of many more of these sorts of announcements in the real estate space, Redfin is laying off 20% of their employees.

In a post on its company blog yesterday, Redfin CEO Glenn Kelman explained that the layoffs were due to the company being hit by market conditions that “wiped out prospective down-payments, tours and offers [that] dropped 30%”.

It surely must have been a tough decision, but kudos to Kelman for taking immediate and decisive steps to react to the change in the market — and for being so openly transparent about the process.

Because of the transactional nature of its business, Redfin is most certainly feeling the pain of this market much sooner than some of its contemporaries – but I suspect this is only the tip of the iceberg, as more Real Estate 2.0 startups start to feel the pinch of the slowing economy.

Case in point, in a story on Inman News today, research firm Borrell Associates is “forecasting that annual growth in real estate-related online advertising will slow to 11.3 percent in 2008 and 5.1 percent next year.” For sites pinning their hopes on advertising revenue, it looks like that might be drying up as well.

More coverage:

• agentgenius.com
• Where are John and Todd?

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by tropicdiver

Redfin’s new release is breaking new barriers, literally – they are adding bank-owned foreclosures and for-sale-by-owner inventory along side alongside their MLS listings (more from 4realz.net). The first, as far as I know, of any major brokerage to do so.

Definitely a smart move for the company which has long been out front pushing for greater innovation in real estate search experience online.

Redfin says it’s going to support the addition of these listings through a flat fee. Which means, I presume, as a buyer, if you want to put an offer on a FSBO through Redfin, they’ll help you write it up and just charge you X.

To me it signals one thing… with this news, with Roost’s recent launch, several MLS talking about or already syndicating their listings to the major search portals and others busy developing public facing web sites – it looks like we’re in the early stages of a sea change for these organizations. Who knows where that will end up.

One thing is for sure, some people don’t like change. And with this move, Redfin will either raise the ire of the MLSes or spur other brokers down a similar path. In either case, Redfin wins, securing itself in the center of another PR firestorm or being the catalyst for genuine change in the industry.

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Like many in the real estate blogosphere I’ve been playing around with Twitter a lot recently. (Follow me here jburslem)

I wrote a post on the Inman Blog recently where I described one application of the service; how you could use it to subscribe to news and essentially build a real time teleprinter for your desktop (using a desktop client like Twhirl).

The group blog agentgenius.com is using Twitter to integrate live feeds of all its contributors “tweets” into a rolling stream of consciousness.

But here’s the killer app for Twitter. I think Jeff Turner might have stumbled on to it in his post when he searched Twitter for the word “Realtor”. Twitter is a fantastic tool for business intelligence.

Why? Because you can use it to hear what your customers, clients, users are saying about you.

I use a site called TweetScan to search for keywords through the Twitterstream – this is what I found out in one sitting for searches on a couple of Real Estate 2.0 sites, for example.

Real-time Twitter Search – Zillow

My takeaway: People are still using Zillow – but disappointed by what they’re seeing. Will they keep coming back?

Real-time Twitter Search – Redfin

My takeaway: People are using Redfin to research the market looking for bargains. Seems like their marketing angle (see Redfin’s Business Model Better for Consumers) is bang on.

These are just a couple of examples, but you can see how you could use Twitter to keep a finger on the pulse of your customers’ feelings.

If I were working in the marketing or communications departments for either of these companies, I’d be trolling the Twitter feeds looking for these themes and answering any questions – so where’s DavidG on Twitter?

The best thing is that Tweetscan makes it easy to subscribe to an RSS search of a particular keyword (I subscribe to Inman, for example) which makes that job even easier.

Part of the challenge in marketing for many years has been trying to figure out what people think of your product or service. That’s why you often had to resort to focus groups, user questionnaires, surveys and all kinds of brute force methods to figure out what people think.

Twitter on the other hand is a real-time, real-world glimpse into the minds of your customers. Granted right now it’s a small, technologically literate slice of the population using Twitter – but if that’s your demographic, you should be paying attention.

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So the company claims. If you use its services you will save over $15K says Glenn Kelman on the Redfin Blog, quoting results of a new analysis of their business model:

• Redfin home-buyers over the past twelve months paid on average 1.015% below homes’ asking price, while customers of other brokerages paid .087% below asking price.
• This difference in negotiating results saved Redfin customers nearly 1% of the home’s final price, for an average savings of $5,048.
• In addition, Redfin refunded each of these customers an average of $10,520 in commissions.

I’ll let others debate whether or not these numbers mean anything. But their release means one thing for sure – Mike Arrington will probably write some slobberingly stupid headline. (yup, he did.)

Personally though, reading through Redfin’s release I couldn’t help but think it was a smart marketing angle for them to play up.One that I think is particularly savvy in the midst of today’s economic climate.

Let’s face it, who doesn’t want to save a buck… But rather than position Redfin as a bottom feader (we’ll do less, for less) these kinds of “studies” position them instead as the smart choice (we do more, for less). And that’s a message that I think resonates well with real estate buyers these days.

Interesting too, especially when you contrast it with Coldwell Banker’s Founders campaign (see Coldwell and Banker Back At Helm) which tries so hard to be fun, hip and cool to Gen Xers and Gen Yers, but I think is dreadfully mistimed and unfortunately way out of touch.

Rather, Redfin is appealing to the common-sense, want-to-save-a-buck DIYers out there who’re looking for a deal.

Who do you think there are more of out there shopping for homes right now?

While I think he’s totally off base when he implies it’s more effective to “use [a computer] in lieu of a buyers broker or agent when buying a house” — if he’s talking about their marketing messages, Arrington’s headline might make sense.

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Say what you like about their business model, Redfin’s real estate search tools are world class and only keep getting better.It’s why it was the only national real estate broker (I defined “national” as anyone having operations that spanned both coasts) to make my list of 10 Kick Ass Real Estate Search Sites.They’ve just released another update to their site. Inman News gives us the details on their new Listing Metrics tools for sellers. More too from Redfin press release:

The Listing Metrics dashboard, currently available only to Redfin listing customers, graphs how key marketing and pricing trends change day to day and week to week:

• Online traffic to the listing on Redfin.com as compared to the neighborhood average, so Redfin customers can determine if their listing is competing for online buyers’ attention;
• Sources of online traffic to the listing on Redfin.com, so Redfin sellers can evaluate the effectiveness of promoting their listing on other sites;
• The number of competing broker-listed properties in the neighborhood, so Redfin customers can evaluate supply and demand to determine if pricing conditions are changing; and
• The average days on market for broker-listed properties in the neighborhood, so Redfin customers can determine if their property is taking too long to sell.

Matt Goyer, Redfin developer gives us some the low down of even more features contained in this release.What I’m really excited about is Redfin is finallly using RSS to subscribe to results from a particular release. As Matt admits to, others have been doing this for a while (ZipRealty, Trulia, Estately) but Redfin’s feeds “displays a lot more information in the feed.” He goes on to detail a way to output those feeds to your blog.It’s just too bad Redfin can’t step into Oregon – our ridiculous antirebate laws prevent that. Till then I guess, I’ll be sticking with Roost for my searches.I heard many people continue to question whether Redfin’s model is viable through a downturn in the market – and while I’m not privvy to Glenn Kelman’s exit strategy, one thing’s for sure. They’ve built themselves a very valuable asset that may one day make a very attractive acquisition.

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It seems to happen like clockwork these days, Redfin launches a new feature on its website – Mike Arrington writes another fawning review on Techcrunch.

Don’t get me wrong, I like Redfin. I really admire what they are trying do. Plus, Glenn Kelman is a really nice guy and an absolute master at playing up his underdog story (see Forbes’ Swimming With Sharks). No wonder Arrington gets lured into writing nonsense like “[Redfin] is doing its best to completely remove real estate agents and brokers (and their absurd fees) from at least half of a home sale.”

Personally I’ve always felt that the fact they compensate their agents based on customer service is an intriguing idea and is long overdue change to the traditional broker model. But there’s certainly no question their discount model is a tough one to pull off, especially in this market.

That said – Redfin still has one of the best broker websites out there and the new release they pushed out overnight continues to build on their industry leading interface. A few highlights from their press release:

Redfin increased the frequency of listing updates from ten of its 16 member MLSs, allowing Redfin.com users to access new listing information as quickly as 15 minutes within a property’s being listed, re-priced or sold.

No brainer. More frequency means better search results. I doubt in most markets these days that inventory is moving as quickly as it was a couple of years ago, so having this freshness isn’t necessarily going to give buyers an edge. But it still nice to have.

Redfin also now provides for each listing:

• a set of similar listings and recently sold properties
• a complete history of any price changes since the listing became active
• a second market value estimate from eppraisal.com
• local Redfin blog and message board conversations
• photographic bird’s-eye views of the property.

I’m all for more data wrapped around listings. It’s the failing point for most brokers these days. And it’s one that search tools like Roost and DotHomes make so painfully obvious to buyers too – listing landing pages on most broker sites are absolutely horrible (see Building a New Real Estate Home Page).

(Aside – Interesting they chose to go with estimates from eppraisal and not their Puget Sound neighbors Zillow. Bad blood brewing in Seattle?)

More:

Redfin.com users now can use neighborhood outlines as search boundaries, calculating median price, price per square foot and other metrics for that neighborhood. For the first time, users can download data to a spreadsheet for an in-depth analysis. Home buyers can use the data to prepare a comparative market analysis to estimate the value of a home.

Love it.

Can I say that again? Love it.

I’m with 4realz.net; this is the killer feature in the new release. Freeing up the data is another no brainer and even more so when it’s a move you can make to court buyers. Brokers of all shades should be thinking of ways that they can engage and retain buyers on their web sites right now. The buyers are out there (especially with the recent rate cuts) and I suspect the savvy ones will flock to the sites with the best tools.

The only thing disappointing with this release is that it reminds me that Redfin won’t be coming to Portland any time soon.

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