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May 15, 2009
Last week we released the latest round of the Redfin By The Numbers reports. With these posts, we’re trying to give some insight into what’s going on in the market right now by looking at what our clients have been doing.
This is the national roundup, for the local numbers, check out the reports for:
19% Of Offers Are On Bank-Owned Homes
Of the offers we submitted to listing agents in April, 19% were on bank-owned homes, down from 24% in March. San Francisco Bay Area (38%) and Southern California (35%) had the highest percentages of offers on bank-owned homes. In both of these areas, listing agents are aggressively pricing bank-owned homes to attract buyers and generate multiple offers.
From what we’re hearing from our agents, this tactic is working in the Bay Area and Southern California: if you see a good home with a price that looks like a deal, so has everbody else. You should expect the home to have multiple offers that will drive the final price above the list price.
Outside of California, bank-owned homes are not nearly as prominent. In Boston, Chicago and Seattle offers on bank-owned homes made up only 5 – 7% of all the offers we submitted to listing agents. In these markets, more bank-owned properties are coming on the market, but they are still not near the levels in California.
Sale To List At 95.5%
The sale-to-list price for Redfin deals that closed in April was 95.5%. This means that Redfin customers paid, on average 4.5% below list price, up slightly from 4.4% in March. On a $500,000 home, this represents a savings of $22,500, not including the Redfin rebate.
We pay our agents to do the right thing: Redfin agents earn a salary and bonuses based on customer-satisfaction surveys, not commissions. As a result, our agents negotiate hard to get the best deal for our clients. With Redfin, there’s no sales pressure, just great service at every step from negotiation to close.
It’s Taking 40 Days To Close On Your Home
In April, it took Redfin clients an average of 40 days from when buyers and sellers agree to terms until the close of the deal, up from 39 days in March. It took our Boston clients the longest at 49 days while Seattle and DC clients had the shortest escrow periods of 36 days and 37 days respectively. A year ago, it took our clients 35 days to close.
Why is it taking so long to close on a home? Lenders are much more careful about approving loans. In addition, banks are so busy with all the refinancing they’re doing that new mortgages sometimes end up on the back burner.
The good news is our clients are getting mortgages. While escrow periods are increasing, we haven’t seen a change in the rate our clients’ deals fail to get financing. For April 2% of our deals didn’t close because of problems with financing, the same as in March. Lenders are being more careful, but not stingier.
Brokerage Activity Up 24%, Website Visits Up 15%
Our clients toured 24% more homes for sale in April than in March. In DC, the increase was 40%. We’ve hired 27 new field agents since the start of April to meet the increase in tour requests.
Visits to Redfin.com were up 15% in April. The largest increases were in Boston (19%), Seattle (18%) and the Bay Area (18%).
This indicates we’re ramping up into the busy season as more buyers are online searching and are out touring homes.
Redfin Has The Top Three Buyer’s Agents In King County, WA
For the second consecutive month since we started checking, the top three buyer’s agents for King County, WA are Redfin agents: Allie Howard, Febe Cude and Trevor Smith. Our other three agents ranked in the top 6% for King County in April based first on number of transactions, then by total dollar amount.
This means our clients work with the some of the most active and successful agents around. With the numbers of deals they work on every month, Redfin agents know what’s going on in the market right now.
97% Customer Satisfaction
Our clients love working with Redfin. In April, 156 out of 161 respondents, or 97% said they would recommend Redfin to a friend, the same as in March. This number means a lot to us because it tracks how happy our clients are and our agents get paid based on it.
We ask every customer who signs a listing or offer agreement with us to rate the likelihood he or she would recommend Redfin to a friend on a 0-to-10 scale. Customers who answered 6 or higher count as people who would recommend Redfin to a friend. We post all of the unedited responses online so clients can make informed decisions about which agent they want to work with.
Look For The May Reports
In early June, we’ll post our analysis of our May numbers. Let us know what numbers you’d like see in the next Redfin By The Numbers posts.
Here’s the spreadsheet with the April data.
(Photo credit: lrargerich on Flickr)
August 29, 2008
We’ve been experimenting with messages in various locations across Redfin.com. Recently, we placed an announcement in a message box at the top of our map page. Once the box is closed, it disappears until we run a new message.
When we released the latest version of Redfin.com, we ran our first message this space announcing our new neighborhood pages. The text was: “New! Pricing trends for every neighborhood. And more.” With “neighborhood,” we linked to a respective city page for each market. With “more,” we linked to the Redfin blog post about the features of the latest release.
We were worried that placing an announcement across the top of the map would annoy people searching for homes. We ran the message for a week and tracked how often people dismissed the box and clicked-through to the links.
Click-Through Rate
The total click-through rate (CTR) for the message box was high (1.95%), higher than any other message location on Redfin.com. For the “neighborhood” anchor text, Seattle (2.93%) had the highest CTR and Southern California (1.35%) the lowest. The anchor text linking to the blog post had a CTR of 0.15%, which is not surprising given that it was the second link in the message.
Dismissal Rate
The dismissal rate for the message box was 1.50%. DC had the highest rate (1.86%) and Boston had the lowest (1.08%). The dismissal rate was lower than we expected. The low rate is likely due to the fact that users: 1) weren’t seeing the box; 2) were unable to find the X to close the box; or 3) didn’t mind having the box on the screen.
We’re thinking about trying out a few different treatments for the box- different colors and different length messages to test how the dismissal and click-through rates change.
What about you? Did you notice the message? Did you leave it open or click it away?
July 17, 2008
A lot of our customers ask what’s different about buying new construction.
First of all, you’re buying from the person who built it, not the person who called it home. Often, the property is just one of many they are trying to sell.
We asked our agents who specialize in new construction for the most important things to consider when buying a new house or condo.
1. Hire an agent
One that specializes in new construction and isn’t affiliated with the builder.
2. Be creative during negotiations
Builders don’t like to drop their prices. Instead, ask them to cover closing costs or upgrade the kitchen for free.
3. Get it in writing
Don’t sign until everything has been negotiated, agreed upon and written into the contract.
4. Be wary of upgrades
They’re where builders make the most profit. Don’t take upgrades you don’t want or can’t afford.
5. Research the builder
Visit other developments and talk to home-owners. Google the developer for reviews, testimonials and news.
6. Ask for a guarantee
You’re often buying a home that is not completed. What guarantees do you have the home will be ready on time?
7. Get the home inspected
New homes have problems too. Hire an inspector to make sure everytthing is safe and up to code.
8. Bumper-to-bumper coverage
New homes should come with a warranty from the builder. Know what is and isn’t covered and for how long.
9. Look to the future
Check with the city to see what is planned for the surrounding area. If you have a view, will it still be there in 5 years?
10. Find your own lender
Don’t use the builder’s lender. Shop around for the loan that is best for you, not them.
This is our list, but what do you think? If we’ve missed something, leave a comment.
Photo credit: SqueakyMarmot on Flickr.
May 20, 2008
Home-buyers may spend as much money on their real estate agent as on their car, but many will choose their agent in less than an hour. According to a California Association of Realtors report, nearly half of all home-buyers hire the first agent they meet.
This is probably because most of us would rather reject a car than a person. And some people just don’t know what to ask when evaluating an agent.As agents ourselves, we know what we’d ask. We went around the office to make a top-ten list and are now soliciting your suggestions on all the questions we avoided, rigged or just overlooked.
We’ll incorporate your comments to create a permanent page on our site, and link back to here so everyone can see the discussion.
Our top-ten list actually has fifteen questions:
1. Is this your full-time gig? How many clients have you served this year?
An active agent is more likely to be up-to-date on the market and the law.
2. How many sales have you handled in my target neighborhoods?
You want someone who knows the local market, with a few recent deals in your target neighborhoods.
3. When clients are unhappy with your service, what has gone wrong?
Asking why a client has been a bad fit for an agent can help you figure out if you’re a good fit.
4. Has a client ever filed a complaint against you?
If you’re uncomfortable asking, just check with the state licensing board.
5. What’s your fee?
The seller pays the buyer’s agent using the money you pay for the house, typically 3% of the sales price. Some buyer’s agents refund part of this fee.
6. What services do you offer beyond negotiations and escrow?
Make a list of what you’ll be paying for. Negotiations, paperwork and contingencies are the minimum.
7. When am I committed to working with you?
Many consumers start touring homes without realizing this can obligate them to work with the agent, contract or no contract.
8. How many foreclosure or short-sale transactions have you handled?
Distressed properties can be great deals, but the paperwork is complicated, and your liability is greater. The best agents have experience closing deals with banks.
9. Who else will be working with me?
An agent is often supported by a team. But the person you hire should do most of the work.
10. Will you show me all the properties for sale?
Good agents show all properties, even for-sale-by-owner properties that don’t pay a commission.
11. How quickly can you get me into a home?
Hot homes move fast. Ask how the agent handles tours on short notice.
12. Do you represent buyers and sellers on the same house?
No agent can fairly represent both. You need someone on your side.
13. What sets you apart from other agents?
Look for expertise, not just eagerness. You aren’t hiring the neighborhood kid to rake your leaves.
14. What if I’m unhappy with your service?
Agents get paid when you buy a house. But most customer complaints occur during the closing process. Ask for a guarantee.
15. Can I get references for your last five deals?
Every agent has clients he served well. But the best agents serve nearly all of their clients well. Getting an agent’s last five clients will give you a more balanced picture of his service than letting him choose his most favorable references. Call at least two of the five, asking clients some of the same questions you asked him. Look closely at these last five deals to see how they compare to similar sales in the neighborhood. Did he negotiate a good price for each customer?
So that’s our list. But let’s have all the DIY consumer mavens and Internet-savvy brokers who read our blog give the list a once-over so we can see what we missed.
And please check back next week for the questions every home-seller should ask their agent.
Photo credit: cambodia4kidsorg on Flickr.
May 5, 2008
While in general we believe that more information is better, we recently learned how the information on our website can be used for indecorous purposes. The winner of DC Metrocentric’s most recent PriceChecker competition used Redfin to look up the price of a DC condo, rather than make a guess. DC Metrocentric is a blog about housing and development in and around Washington, DC. We’re fans of their PriceChecker series in which they profile a property and ask readers to guess the price. After a few days, they reveal the listing price and a winner based on the closest guess. The property profiles are great, especially if the property has an animal skin rug.
The winner of the latest PriceChecker found the list price on Redfin. In the comments, Roy, the winner, admits he used Redfin to get the price. Fransie wants Roy’s “PriceChecker Crown revoked.” Clearly the commenters are having fun with this. While we’re glad that Roy uses Redfin and was able to find the property, we hope this doesn’t lead to the downfall of the PriceChecker series. What do you think? Cheating or smart research?
Photo credit: laffy4k on Flickr.
