List with Redfin, Sell Your Home Faster and For More Money

by Tim Ellis | 17 Comments

As a part of an enhanced fervor here at Redfin for giving sellers better service for less money than traditional agents, I was tasked with a research project to determine how well our listing agents have performed for sellers in recent years. The result: On average, Redfin listings sell 15 days faster and for $8,700 more than the competition.

Let me say that again…

Redfin listings sell 15 days faster and $8,700 closer to original list price.

Of course, every broker makes claims like this… but not many brokers employ a team of half a dozen analysts whose sole job is to crunch real estate data and track the company’s performance. Before we make such a bold claim, we actually run the numbers. In this case, we analyzed over 800 Redfin listings and more than 19,000 comparable listings by our competitors—20,256 listings in all.

The overall difference across all our markets was compelling, but some individual markets had an even more impressive advantage. Here are the results for every market where our calculations showed a statistical significance in the difference between Redfin listings and the local competition when it comes to sale to original list price ratio:

Redfin Listings Sell Closer to Original Price than the Competition

But the complete picture is even better for homeowners that hire a Redfin agent to sell their home, because the numbers above don’t even count the additional $5,000+ saved on average by sellers due to the fact that Redfin charges just 1.5% of the sale price for this superior service, versus the 2.5% to 3.0% charged by traditional agents.

In order to bring this superior service to even more sellers, we’re upgrading our listing service in 2012. So what does “upgrading our listing service” actually mean? Just since December, we have:

  • Unveiled our Home Price Tool to give sellers a powerful way to determine their home’s value.
  • Added prominent highlighting of Redfin listings to our map search, listing alerts, and Home Reports.
  • Released Redfin Home Report to help owners keep tabs on their neighborhood.
  • Offered $250 in matching funds to help sellers make their home shine.
  • Promoted Redfin veteran Karen Krupsaw to head up our listings efforts.
  • Hired a dozen new listing specialists to work with Karen and their local market managers.

To recap: Redfin gives sellers more free tools, more exposure, a faster sale, and a better price, all for thousands of dollars less than the competition.

If you’re thinking of selling your home, why wouldn’t you use a Redfin agent?

How did we come up with these numbers?
For each Redfin listing that came on the market in 2010 or 2011, we looked at a group of listings of the same home type (single-family, condo, etc.) in the same zip code that were similar in original list price (±10%), square footage (±25%), and list date (±3 months). All told, we looked at 20,256 listings in a dozen Redfin markets across the country: Portland, Los Angeles, San Diego, Boston, Seattle, Washington DC, San Francisco Bay Area, Phoenix, Chicago, Denver, Long Island, and Atlanta.
For the listings that sold, we calculated the days on market and sale to original list price ratio for each Redfin listing as well as its comparables. We averaged the difference in days on market across the entire sample, and multiplied the average difference in sale to original list price ratio (2.0%) by the median price in our sample ($435,000) to calculate the price advantage.
Note that in addition to the market-specific numbers quoted in the post above, we also ran individual market numbers for the other six markets: San Francisco Bay Area, Phoenix, Chicago, Denver, Long Island, and Atlanta. While Redfin listings in those markets also consistently sold faster and for more money, the sample size was not large enough for us to be comfortable publishing a number for those markets.

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Discussion

  • http://www.realestateinvesting-gurureview.com/ Julie

    Great service with all the right tools to assist in selling my real estate.  Thanks for making it easy

  • http://blog.findwell.com Kevin Lisota

    Tim,

    Can you address how you treated distressed sales in this analysis. Clearly many brokerages list short sales and REO homes, while Redfin does not. If these are in your numbers, obviously distressed properties stay on the market longer.

    Also curious how you address stats from sellers whose listings don't sell with you, but either are expired or cancelled and listed elsewhere.

    • The_Tim

      Hi Kevin,

      I did not separate REO and short sales.  In fact, distressed sales consistently sell closer to list price than non-distressed sales, so if there were a large number of distressed sales in the comps, it would only serve to make other brokers look better, not worse.

      As for listings that didn't sell, I mentioned this in the methodology at the bottom: “For the listings that sold…”  Obviously we can't calculate a days on market or sale to list ratio for a home that doesn't sell, so this analysis only included Redfin listings and comps that actually sold.

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  • Anonymous

    So, Redfin is $9K better than the average home's agent. How does Redfin compare to the best other agents?

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  • http://twitter.com/franklyrealty franklyrealty

    This is extremely misleading. 

    If you conveniently leave off the homes that are withdrawn or expired, I can see how the results can look better than reality.

    I love you guys, but I take offense when you post stuff like this. As if the numbers are real.
    I propose a blog post on what % of homes listed with Redfin actually sell. And compare that to the industry. 

    You up for it? 

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  • http://www.facebook.com/dale.arnold.52 Dale Arnold

    This is so misleading. You use comps that are 25% smaller? Of course your listing will sell for more. Use comps that are the same size and don’t be so dishonest.

  • NumbersGeek

    I disagree with your methods. First and foremost, the average price advantage should not be calculated using your MEDIAN price. The average price advantage should be just that, an AVERAGE of the price advantages observed throughout the sample. Secondly, using original list price within +/-10% will create some outliers; all too frequently we see houses listed at prices too high or too low for their neighborhood comparables. Additionally, if a house that is 25% smaller is listed within 10% of the subject property, then it’s most likely in a better neighborhood or has better features and/or finishes which would mean it’s not a true comparable.

    I understand how time consuming it would be to sift through 20,000+ listings and draw up true comps for each one but until you do that, your data is severely flawed.

    I’m sure Redfin is still competitive with the market in general; do you think there are some other ways to demonstrate this using analysis with a more solid foundation?

  • Ducksinarow

    In this market (Washington DC area), Redfin has a withdrawn/expired listings rate of nearly 40% – which you can equate with a listing failure rate. Which is pretty bad. Certainly if you choose to draw data from only those listings that reflect favorable data, the results of the “analysis” are going to in turn be favorable.

  • Chris Dawkins

    It sounds to me like RedFin hand picked their best listings (best homes, remodeled condition, priced well) and compared them to average to below average condition homes in the same size and price range that they also hand picked. Doing that, it’s very easy to show $8700 higher sales prices and shorter market times (if you just pick the better-than-average-condition homes that are worth more per SF and sell faster b/c they’re move-in-ready). They didn’t compare ALL Redfin listings to ALL competitor listings. +/- 25% on SQFT??? A home that’s 25% larger or smaller is not a good comp. I mean, they looked at 900 Redfin listings in 12 markets over all of 2010 and 2011. That’s just 75 listings in one major city over 2 years. You could just take all of MY listings in Portland in 2010 and 2011 (approx 75) and compare them to the market average and skew the numbers marketly. Does Redfin only have one agent in each metro area? I think not. Why not do a comprehensive analysis and report the real numbers?

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  • Nick

    The headline should read: Redfin is better at convincing seller’s to list their homes at market value which in turn makes them sell for “more” (closer to list price) and faster. That is still something to brag about. 99% of the sales in Real Estate sales takes place in the conversation between the seller and seller’s agent. Redfin is apparently skilled at using data to give seller’s accurate information to make sound decisions to set the right price from day 1.

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