Redfin Listing Agents Sell Homes More Effectively, Faster, and for More Money

If you’re thinking of selling your home when the housing market is slow, a great listing agent can mean the difference between having your home sit unsold for months through repeated price drops and quickly attracting a great offer and successfully closing the deal. Today’s market is anything but slow for sellers, but according to our research, choosing the right agent still makes a big difference. Homes listed with a Redfin Agent sell faster, for more money, and are more likely to sell.

In order to measure this, we analyzed over 16,000 listings that came on the market in the first nine months of 2012. Compared to the competition, homes listed with a Redfin Agent:

  • Were 12% more likely to sell within 90 days.
  • Sold 6 days faster on average.
  • Sold for $2,700 closer to their original list price.

For the full report visit the Redfin Research Center.

Discussion

  • http://twitter.com/spencerrascoff Spencer Rascoff

    Tim,
    To what do you attribute Redfin’s purported better success as a listing broker? Did the sellers follow their Redfin agents’ advice on setting the price better? Did the Redfin agent hold more (or fewer?) open houses than other agents? Is it something about how Redfin agents are compensated that accounts for the results?

    In short, assuming for a moment that your analysis is valid, what do you think explains the results?

    • http://blog.redfin.com/ GlennKelman

      Our compensation helps us avoids over-pricing, just because the Redfin listing agent is paid to be accountable for the price he promises in the initial listing consultation. The easiest way for an agent to get a listing under contract is to be the agent promising the highest price; the most common reason a home sells for less than it’s worth is that it is over-priced on debut, and then languishes on the market.

      Because Redfin agents are paid on customer satisfaction, not commission, and our profiles show where we sold homes and where we failed to sell them, we are accountable to the client for a good result, not just any result. This makes us more likely to deliver on the price we promise in the initial listing consultation.

      The other reason we are successful is that we use our website and mobile tools to promote our listings, so that they get double the Redfin traffic that other listings get, which leads to more foot traffic and ultimately more offers. Always posting the listing to Zillow and Trulia helps, too :-).

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

    Tim, how can you guys make this comparison without including expired and cancelled listings? A broker who lists 10 properties, sells 5 instantly and has another 5 than languish and end up being cancelled will have fantastic stats based on your model, yet will have failed on 50% of the listings they took.
    Glenn, are you guys actually paying your listing agent bonuses for getting the list price really close to the sale price? That is how I read your comment, but I thought you guys just paid on a customer satisfaction score each quarter.

    • Tim_Ellis

      Hi Kevin, I’m not sure what you mean by “without including expired and cancelled listings.” We looked at every single listing that came on-market during the time frame we analyzed. To calculate how much more effective Redfin Agents were at selling homes, we absolutely considered listings that were expired or cancelled. It was a simple calculation of what percentage of listings had sold within 90 days.

      In your example the broker with 10 listings who only sold 5 within 90 days would have be 50% effective. If the Redfin Agents listing comparable homes sold 6 of 10 listings within 90 days, they were 20% more effective.

      As for the speed and price stats, you can’t calculate a sale to original list price ratio or a days on market for homes that haven’t sold, so it wouldn’t make sense to include expired and cancelled listings in those calculations.

    • http://blog.redfin.com/ GlennKelman

      A Redfin listing agent is paid based on customer satisfaction, which tends to be low when we sell below the customer’s asking price.

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  • J Philip Faranda

    Why was the New York market excluded?

    • J Philip Faranda

      I guess I answered my own question. Here is a link to one of the two Redfin listings in Westchester County, NY. Curiously, after 78 days on market, it has no property description and only one photograph.
      http://www.redfin.com/NY/Mount-Vernon/140-W-Lincoln-Ave-10550/home/20007621

      I would think that with 2 listings, someone-anyone, really- at Redfin might notice that 50% of your active inventory has one photograph (which is curiously only one quarter of the width allotted in the picture field) with only one photo uploaded on 11/18/2012, 4 days after the property was inputted onto the MLS. 30 photos are allowed, and a 500 character description is also allowed.

      Is this part of the strategy you offer to maximize exposure?

    • Tim_Ellis

      Unfortunately our listing business just isn’t large enough yet in the New York area to produce meaningful results for this analysis. Even when we have an advantage, we wouldn’t feel comfortable calling it out when the number of listings is below a certain threshold.

      • J Philip Faranda

        It is meaningful to your client with no description and 1 photo out there for 80 days, Tim.

  • Mark Scholz

    Tim, we are all aware of the numerous abuses of marketing claims in our industry which are questionably supported by accurate data. So just a few questions from a former statistician: Who did your statistical analysis – internal or outside 3rd party? How were your selection criteria established for comparable properties? And are you willing to share some or all of your data for an independent review?

    • Tim_Ellis

      Hi Mark,

      Our methodology is provided in full at the bottom of this post, under the “How did we come up with these numbers?” section. I performed the analysis myself after numerous consultations with my peers here as to what would make the most fair comparison. There were alternative approaches that we could have taken that make Redfin look even better (such as looking at all homes that sold in the year rather than those that were listed in the year), but we selected the methodology that was most conservative.

      The selection criteria were chosen based on a range that would provide us with a list of reasonably similar homes, but not such a tight criteria as to have too few comps per Redfin listing. On average there were 22 comps for each Redfin listing.

      As for reviewing the data, anyone with MLS access can run the same queries and look at the data for themselves by replicating the methodology described above. Unfortunately our data licenses don’t allow us to share the raw data.

      Thanks for the questions!

      • Mark Scholz

        Tim, thanks for the response. Yes I see the methodology section, it just leaves me with several questions so that I could accurately recreate the analysis using Portland data. And no offense, but I seen numerous analyses done by colleagues and peers within our industry, and without any additional credentials besides basic Excel or Pages knowledge, the results are highly suspect and biased. May I ask about your experience with statistical analysis? I was previously a masters level statistician at the local medical school.
        I am working on a similar analysis of agents in Vancouver WA (subset of Portland OR) and your results do not match up with what I am seeing. I will now go back and apply your methodology to see if my subsequent results are consistent with your nationwide generalization.

  • rob1699

    Since Redfin does not list either Short Sales or REO’s, please tell me you excluded those as comps. Otherwise this research is seriously flawed and purposely misleading.

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  • franklyrealty

    I’m sorry guys. I love you all, but I can’t let you get away with this. This is utter
    hogwash.

    How did you account for the # of withdrawn listings that Redfin has in Washington DC? Or were the stats run only on the homes that Redfin was able to sell?

    This blog post states “For listings that were sold, we calculated the days on market and sale,” So how did you account for the withdrawns and expireds?

    In the DC area since 2012 I found for Redfin 81 withdrawn or expireds. I found 226 Solds. 307 total listings.
    26%, over 1 in 4 did not sell. How does that compare to the average brokerage firm? How did you account for the 1 in 4 that did not sell? How many days on the market do those get? What % of list do those get?

    My firm had 91 solds. 9 expired/withdrawns. So approx 100 homes, and 90% sold. 90% vs 74%.

    You guys are the masters of data crafting.

  • Kernick Homes

    Nice to hear that!!