Redfin has corrected a mistake that was discovered by a broker who reviewed data that the company used in a report released this week on the company’s first year in business, the company has announced.
While the company had reported that its buyers in King County, Wash., received a final price of 99.33 percent below the list price and the customers of other brokerages paid 100.23 percent above the list price, there was an error discovered in the reporting of one of the company’s 170 King County transactions that were included in the report.
“The source of the error was obscure,” company CEO Glenn Kelman stated in a Thursday blog post. “One, and only one, of our 170 King County customers offered to allow the seller to keep Redfin’s 2 percent commission refund if the seller would lower the price an additional 2 percent (on top of the 2 percent commission savings factored into the price, the house in question still sold for nearly 2 percent below listing price).”
The company had claimed a negotiating advantage of 0.904 percent compared to other brokerage companies, though the error adjusted that to 0.893 percent. “This reduces Redfin’s negotiating advantage by $54, from $4,474 to $4,420, Kelman reported. “This advantage is still financially meaningful and statistically significant, but we are nonetheless unhappy with ourselves for the error.”
The report found that Redfin agents negotiated a better price on properties, on average, compared to agents at other brokerage companies — even before considering the deep discounts that the company offers to buyers compared to typical commission rates.
Kelman said the company would revise the report to reflect the error.
Also, the company reported this week that it was unable to duplicate results reported by the Northwest Multiple Listing Service, which found that the ratio of the selling price to listing price of single-family homes in King County was 81.61 percent — a major difference from the Redfin findings for a similar period (February 2006 to February 2007).
The page (page 27) in the NWMLS report with that statistic has apparently been deleted from the report and had not been replaced as of Friday afternoon.