Online brokerage and referral site Redfin opened shop in the Minneapolis-St. Paul, Minn., market today, bringing its unique brokerage model to its 23rd major market.
The Seattle-based firm will start out by serving clients in seven counties in the Twin Cities metro area, including Hennepin, Ramsey, Anoka, Washington, Dakota, Scott, Carver and Wright counties. Redfin says it has plans to expand its service area to 13 counties in the region.
The firm has hired Chris Prescott, who will be in charge of hiring additional agents and growing Redfin’s presence in the Twin Cities market, as its Minnesota market manager. Currently, Prescott is the only Redfin agent in the region and the firm has no set team size or hiring goals for the area at the moment, a Redfin spokeswoman told Inman News.
Redfin was on a growth tear in 2013, adding brokerage operations in Houston; New York City’s Bronx borough; Charlotte and the Raleigh-Durham area in North Carolina; the state of Delaware; Miami, Fort Lauderdale and West Palm Beach in South Florida; and California’s Inland Empire just east of Los Angeles.
Redfin is also active in Atlanta; Boston; Chicago; Denver; Las Vegas; Oregon; Phoenix; Sacramento, Calif.; San Francisco Bay Area; Seattle; Southern California; and Washington, D.C.
In June, Redfin hired Zappos vet Chris Nielsen as its first chief financial officer, and in November it closed a $50 million funding round, fueling speculation that the firm is on a fast march to an initial public offering.
In addition to providing in-depth multiple listing service-sourced data to consumers, Redfin’s model stands out from many brokerages with its agent-compensation structure. Redfin agents are salaried employees who don’t earn commissions, but receive bonuses based customer satisfaction.
In areas where it doesn’t have a salaried agent or if a home falls below a Redfin-set minimum price, Redfin refers deals to partner agents, who pay Redfin a referral fee for the business. Redfin vets its partner agents and continues working only with those who receive high marks from clients; in addition, partner agents earn more when Redfin-sourced clients rate them highly, Redfin says.
The firm also provides rebates to buyers and sellers on the commissions its agents earn on a deal. Redfin listing agents charge clients 1.5 percent of a home’s sale price as commission, at least a percentage point below the industry standard.
Late last year, Redfin was hit by a class-action lawsuit that accused Redfin of misclassifying employees as independent contractors.