Redfin is arming buyers and sellers with insight into the negotiations that take place when the firm’s clients submit winning — and losing — offers to buy a home.
The Seattle-based brokerage is now displaying "Offer Insights" along with home search results for listings its buyer’s agents place offers on in the 20 markets the firm operates in. Buyers can opt out of the program, and no addresses are revealed before closing.
Before closing, Offer Insights will show the listing’s location down to the neighborhood level, its offer status, the approximate "offer-to-list ratio" and down payment size (both provided within ranges) offered by Redfin buyers, and the number of competing offers.
After closing, the offer-to-list price ratio will become exact, but down payment info will remain broad. Upon closing, the "Offer Insights" will also include the listing’s address and notes from Redfin agents about how the offer process went — whether negotiation favored buyer or seller and other details about why or why not an offer was accepted, for example.
Redfin buyers can opt out of the program, and should be made aware of the possible risks of participating, said Brian Larson, an attorney with Larson/Sobotka PLLC in Minneapolis.
"I think that a broker disclosing information about her buyer’s offer during the negotiation process should have the buyer’s permission after having informed the buyer of any possible or likely negative consequences of the disclosure," Larson said.
Redfin says it sees no negative consequences of the disclosure, mainly because of the precise differences between information it makes available pre- and post-closing.
"It’s structured in such a way that there’s no way to identify a specific property," said Jani Strand, a spokersperson for Redfin.
For example, if there aren’t enough "Offer Insights" or listings in a neighborhood, the pre-closing info would show at ZIP code or even city level to ensure that savvy individuals couldn’t guess which "Insights" corresponded with which specific listings, Strand said.
"Offer Insights," which Redfin touts as a "first-of-its-kind" feature, will show up in searches for 90 days after closing. Today, with the service’s launch, Redfin says about 8,000 "Offer Insights" are in the system.
Screen shot of some Redfin post-close "Offer Insights."
"Our long-term strategy is to combine the expertise of local agents on the ground with powerful technology running in the Internet cloud," said Redfin CEO Glenn Kelman, in a statement. "The source of all our strength is that we are both a service company and a software company."
"Offer Insights" will be integrated into Redfin’s search results. Depending on where users are on the site, five to 10 insights will appear automatically, matching the user’s search parameters, Strand said. Users will not be able to search for the offer data or see a complete set for a certain area, she said.
Though currently not part of the program, Redfin is considering adding its seller’s agents offer info, and providing instant alerts to users who want to keep track of offer activity in a certain area.
As of now, "Offer Insights" will come only from Redfin’s employee-agents, who currently number about 500. The firm’s partner agents will not participate, Strand said. Unlike many brokerages, Redfin employee-agents don’t work on commission, but on salary, and receive bonuses based on customer reviews.
Redfin also works with non-employee partner agents, who work for other brokerages but fill in when business falls outside of Redfin’s core operating area, a listing comes in below the firm’s minimum operating price, or is in an area experiencing high demand.
In December, Redfin launched "Collections," an image-sharing tool that allows users to build Pinterest-like pages with images from multiple listing services (MLS), with MLS-compliant attribution attached to them.
Currently, Redfin, which invests heavily in technology and rebates a portion of its agents’ commissions to buyers and sellers, is active in the following markets: Atlanta; Austin, Texas; Boston; Chicago; Dallas; Denver; Houston; Las Vegas; Long Island and Westchester County, N.Y.; Oregon; Philadelphia; Phoenix; Sacramento, Calif.; San Francisco Bay Area; Seattle; Southern California; and Washington, D.C.
