Buying A Home In The Internet Age: Our Experience Buying a Home With RedFin

Redfin-HomepageWe bought a home through RedFin this year. In this RedFin review I’m going to walk through why we chose RedFin and how the RedFin business model is the future of Real Estate. Not only did we get 1% back from RedFin at signing, we had a friendly, fast, and convenient service team that made a huge difference for us during the closing process. I highly recommend RedFin.

I’m going to walk through what RedFin is and then how it worked for us.

A recent article Via inman.com nicely summarizes what RedFin is and their overall philosophy:
“Today, the company’s business model is a hybrid, blending traditional real estate practices with more disruptive strategies such as consumer rebates; salaried agents; bonuses tied to customer satisfaction; leads; support staff; and cutting-edge productivity tools. And the company is still willing to challenge industry sacred cows such as an announcement last month to test a 1 percent commission offer in Washington, D.C.

But its rebates have declined considerably, and agents now earn most of their money from bonuses that are tied, not just to customer satisfaction, but also to the number and price points of the deals that they close.

The brokerage also requires full-time agents to spend much more time working with clients in person than in the past, and refrain from delegating on-the-ground tasks, like home tours, too often to freelancers.

Redfin agents don’t have to spend nearly as much time drumming up business as their traditional counterparts.

They can focus on closing deals because Redfin feeds them a steady stream of leads captured through its website. Redfin boasts the most popular broker site, with around 6 million unique visitors in June 2014, according to comScore.

By maximizing efficiency in real estate brokerage, Redfin has also been able to offer buyer’s rebates to clients.”

So how did RedFin work for us?

Here’s our story:

We’ve been looking for a home for a long time. It’s tough to find a reasonably priced home in Southern California that would fit our big family so we rented for over 10 years. During the last two years, our landlords sold the homes we were renting, forcing us to move and incur the expenses of moving sooner than we wanted. After the second move we found temporary housing and hunkered down in an effort to save for the last push needed to get a home. Not only is it very expensive here, but when the market gets hot, good homes move very fast. While price is always an issue in any market, speed to issue an offer becomes critical as well. In California, you need a Realtor that will help you get an offer on the table quickly. It’s very important in this market. Our search started almost 10 years ago due to a job transfer. The change in location brought a chance to buy a home, but as we searched, we quickly realized that we weren’t interested in the homes that we could afford so we decided to sit it out and rent.

It turned out to be a very good (and lucky) decision because it was the peak of the housing bubble and a year or two later, the country was in crisis. Our Realtor at the time was very patient with us and worked hard for us. I’d recommend him again. So why didn’t we stick with him? Well, we ended up renting in a home 30 minutes away from his primary market, so it became a matter of convenience. We ended up renting for five years.

When we started looking again, we had a good recommendation from a friend for a Realtor who, in hindsight, wasn’t right for us. She tended to tell us what we wanted to hear instead of what we needed to hear. We made a few Home-Sold-Signoffers through her, but we were ultimately outbid. This was definitely not the Realtor’s fault. We’ve gone through at four sets of Realtors. Three of the four were very good and I would recommend their services, but the team at RedFin was by far the best.

When you go with RedFin, you end up working with a team of agents and then they have a lead agent who walks you through the major issues.

RedFin exists in the same space as Trulia and Zillow but is different in that it is an actual Real Estate brokerage so you can list or buy with a RedFin agent, whereas Trulia will give you the MLS listing and then help you find an independent agent. Zillow has similar opportunities to connect with independent agents. Zillow’s real strong point is the Zestimate that gives you a sense of the going market price, but know that the price is a good 3 to 6 months behind.

Just considering the websites, I’ve always liked RedFin’s ease of use the most. It is a very intuitive. Enter a zip code and get the listings in that area. You can narrow your search and then click on specific homes to see all the pictures and detail you need. They also show you what their agents are saying about the home so you’ll know before you even look at it whether it is a bit dark or too close to a busy street. They always give an honest assessment right on the site. Again, Trulia and Zillow allow similar services, but the difference with RedFin is that you can schedule a time to visit the home right from their site.

When you set up the time, you get a call from the local scheduling agent who confirms the appointment and adds any other homes to the list. We had a bunch of homes in our “Favorites” and the scheduling agent went through and helped us set up times for all of them.

During the actual visit to the home, you meet a field agent there who walks you through the home, tells you about it, and talks about the potential problems or features of the home. You may have three or four different agents walk you through various homes. For us this was a lifesaver because we had to do our visits in a compacted period of time. Normally a single agent can’t dedicate an entire weekend to a single client so it was nice to have the entire RedFin team at our disposal.

Our main agent, took us three our top three favorite homes. He helped us understand the overall market and weighed in on our favorites, guiding us to a good opportunity. When it came time to make an offer, we received the best comparative analysis that I’ve ever had from an agent. He found similar properties and noted the differences in the home we wanted and then helped us put in a competitive bid. Where he really made a difference was in the counter-offer. We felt like the home needed some work, but didn’t want to miss the chance, so we put in a solid counter-offer and had it accepted. It was well within our comfort zone.

The RedFin team then really took care of us during the next stages. RedFin has a huge database of contractors, inspectors, and everything else with ratings from other users. They also allow you to rate their agents so you know what your getting. The upside of that is that your agent is incentivized to make sure you are satisfied. Anyway, the inspection uncovered important information and repairs that got us some allowance’s from the seller. Their quick responses to the lender helped us close in less than a month. To top it off, a week after closing we received our RedFin check for our 1% back! I didn’t have to negotiate with them on a commissions. It’s just their standard practice.

We had a great experience with RedFin. The company doesn’t operate in all markets yet, but has been slowly expanding across the country.

What are the downsides of RedFin? Well, you don’t have the single agent holding your hand through everything. You have to be flexible enough to work with a team of agents. We found it to be more effective. Other downsides are if you really don’t like using technology.

Let me know if you have any questions about our experience.

All the best in your home buying experience.

 

Images from .Redfin-Homepage, .Home-Sold-Sign

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