Online brokerage Redfin says it turned its first ever monthly profit in June, attributing the milestone to increased market share, improved profit margins, and the seasonal boost in homebuying during the summer.
Neither the press release nor blog post by company founder and CEO Glenn Kelman provided dollar amounts for profit and revenue.
But Redfin said revenue was up 41 percent from a year ago, and that the company Web site has experienced 300 percent year-over-year growth in unique visitors. Redfin.com in May cracked a list of top 20 real estate Web sites maintained by Hitwise (see story).
The debut of online agent reviews in February increased new clients by 36 percent in one month, Kelman blogged, and a partner program launched the same month "has developed a new revenue source that has already made a small but tangible contribution to profits."
Even if Redfin’s fortunes see a seasonal decline, "we’ll always know that we can go back up," Kelman wrote. "And knowing that is a huge salve for what’s most unbearable about startup life: the aching possibility that it can never work, that the game is so stacked against you it doesn’t even matter what moves you make."
In February, Redfin launched a referral network in which it earns a 30 percent referral fee for deals closed by a network of "partner agents" (see story).
The referral network allowed Redfin to expand in April into the Long Island and Westchester County, N.Y., markets and parts of California’s Central Valley including Sacramento — the first time Redfin had moved into a new market since last summer. The company said at the time it planned to add three additional markets in 2009, bringing the total number of markets served to 13 (see story).
Other possible factors in Redfin’s move from red to black may include recent cost-cutting measures and increased charges for services.
Redfin announced the layoff of 20 percent of its workforce in October, including "senior agent" employees who represented clients in negotiations (see story).
The following month, Redfin announced a new service offering and cost structure that included an expanded network of "field agents" who do not represent clients in negotiations and are not regular employees with benefits.
The company also reduced its refund offer to buyer clients from 66 percent of the brokerage’s commission in a transaction side to 50 percent, but began offering free home tours to prospective buyers with no commitment to use Redfin as a broker.
Redfin also raised the cost of standard seller services from a flat fee of $4,000 to $5,000, offering a premium listing service for a flat fee of $7,000 that includes an in-home consultation on pricing and staging, two hosted open houses and a postcard-mailing campaign (see story).
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