A home-search Web site has added a feature that allows prospective buyers to submit a purchase offer with the click of a button.
Seattle-based real estate brokerage company Redfin announced that the new online offer system, called Redfin Direct, is now available in the Seattle market and will soon be offered in additional markets as the company expands. The company is known for its Web-based mapping technology, which allows site visitors to view detailed property information and find information on for-sale and recently sold properties.
The new electronic offer system is intended to take the mystery out of making offers on homes by providing detailed information about the process, said Glenn Kelman, Redfin CEO.
“There’s no doubt this is a tectonic shift in the industry,” Kelman said. Launched in 2002, Redfin has plans to expand to California’s San Francisco Bay Area, Los Angeles and San Diego markets this year, and also to add two East Coast markets.
The new service provides information to users about the purchase process and allows them to click on links to read more detailed information. A Web-based form enables users to fill in the blanks with the amount of their offer.
They can choose to include an “escalator cause” to accompany the purchase offer, to include earnest money, and to set an expiration date and time for their offer, for example. Users can also set a down-payment amount and choose the type of loan that they will use to purchase the home.
Buyers making an electronic offer cannot be working with another agent, Kelman said. Buyers who participate in the system work with a Redfin agent who assists with other aspects of transaction, and the company keeps one-third of the real estate commission for the buyer’s side of the transaction while the consumer receives two-thirds of the commission as a rebate. The system has already been used to make a handful of offers, he said.
Redfin can offer this cost savings because the customers are doing a lot of the home-searching homework on their own rather than relying on an agent, he said. “They are doing home-discovery online. They are getting in to see the homes themselves.”
Some real estate professionals may not be pleased to see that Redfin is offering a discount real estate service, Kelman said, though he said it is just one of the options that the company offers. Redfin also offers to link consumes to a network of outside real estate agents who can assist them with the sale or purchase of homes. If consumers choose to work with an affiliated agent they do not receive the discount and their agent handles the offers.
“We are going to offer customers a choice. Either they work directly with us or with a traditional agent,” he said, and the company has a “no poaching policy” so that it will not attempt to steal clients who are already working with other agents. “For many people the best choice is working with a traditional agent.”
Just as a pizza restaurant would not be considered “anti-pepperoni” because it offers pepperoni as an option and not a requirement, Redfin should not be considered to be a discounter just because it offers a discount model as an option, he said. “Don’t think of this as limited-service or discount service – just think of this as a choice.”
Redfin’s users are typically young, tech-savvy people. “Engineers love this site,” Kelman said, and a company survey showed that a majority of users would be interested in making electronic offers on homes, he added.
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