For the past five years, Redfin has sought to build the perfect site for folks to preview, visit and ultimately buy homes for sale. But in 2012, we have opened a second major front, to serve owners and sellers of homes.
In just the past three months, Redfin launched Home Report, a personalized monthly email monitoring sales near your home, and Open Book, a reviews site for Redfin’s trusted real estate partners that will one day include handymen, general contractors and stagers. Not coincidentally, our listing business has shot up 81% year over year and we expect it grow even faster as we add more agents focused on listings, and provide better exposure for our listings on our own site.
The most important initiative on that front just became available on Redfin.com this morning: the revolutionary, beautiful Home Price Tool, which gives you as the customer the same information used by real estate agents to develop a comparative market analysis. Our hope is that you will be able to price homes more accurately and with greater confidence than ever before, in an open process that can involve your spouse or real estate agent.
For any home, the new online tool automatically assembles a list of potentially comparable recent sales, drawn directly from the Multiple Listing Service (MLS) databases used by agents to record sales. By reviewing pictures of each home sold, you as the customer can decide which are actually comparable, adding and removing sales to and from the list.
The Home Price Tool then calculates a likely price range for the home you want to buy or sell, allowing you to share your analysis with your mom, your Redfin agent, even with the other side in a negotiation. We just posted a YouTube video to guide customers through the entire process.
Sometimes, the price range will be broad, because the home in question is one of a kind. Other times, especially when the home is part of a larger development, the price range will be narrow. If your house includes, as mine someday will, a giant ping-pong pleasure dome, the comparables will be sparse and the price range will be very broad. This isn’t a limitation of the Home Price Tool; it is a limitation of life itself, and one serious buyers and sellers can’t ignore. You have to buy the ping-pong pleasure dome on faith.
We do not pretend that Redfin’s valuation tool is as simple or as immediately gratifying as seeing a price-tag on every property in America, a feature that Zillow has long had, and which Trulia — by some freak coincidence — also launched today.
Zestimates, restimates and testimates are popular and cool, and will always be included in our site for fun, but it’s a way we at Redfin can never go as real estate agents. Our goal is to be credible and transparent rather than provocative or easy, explaining exactly when our pricing is likely to be accurate and well-informed — and when it isn’t. If we think a home is worth $300,000 instead of $350,000, we should we be able to say exactly why, using the same Home Price Tool to show our work to our client.
Since we have a fiduciary responsibility as agents to get it right, we can’t embrace a purely algorithmic approach to pricing. A computer using a secret formula to price your home doesn’t have eyes and so it can’t see that one property looks nothing like another. You can say what you like about its estimate but you can’t really see what it’s thinking.
The truth is that pricing a home is not a science reserved for the high priests of mathematics. If you’ve walked through all the houses in the neighborhood and noticed what each sold for, you can price a home far more accurately than a computer simply because you have much, much better information.
This is the experience Redfin has tried to bring to the web, because in fact we have much, much better information. Only real estate agents have full and complete access to the local MLSs agents use to list properties and record sales. And only Redfin has incorporated that sales data, with all the pictures used to market the property, into an online tool for pricing a home.
Whereas public records takes weeks and usually months to record a sale, we know within 15 – 30 minutes of the property going off market what it looks like and how much it sold for. That we even have this information is because of a seismic turn of events in 2008, when the National Association of Realtors and the Department of Justice agreed that a real estate agent can publish any information on the web that she can share in person with her customers.
It took the MLSs a year or two to share all the data, and then Redfin a year or two more to incorporate that data from each MLS, but now that we’ve done it, customers on the web have access to the same prices and pictures that agents do, and we can all work together in a more informed way. Revolutions sometimes occur so slowly they hardly seem like revolutions, but this is exactly what the Home Pricing Tool is.
Over the coming years, we will work just as hard on perfecting the experience of pricing a home as we have at previewing listings. For now, take the Home Price Tool for a spin and see what your home might be worth!